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UNITED STATES
SECURITIES AND EXCHANGE COMMISSION
Washington, D.C. 20549
FORM 8-K
CURRENT REPORT
Pursuant to Section 13 or 15(d) of the Securities Exchange Act of 1934
Date of Report (Date of earliest event reported) October 26, 1995
SOUTHWEST GAS CORPORATION
SOUTHWEST GAS CAPITAL I
(Exact name of registrant as specified in its charter)
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<S> <C> <C>
CALIFORNIA 1-7850 88-0085720
DELAWARE 1-7850 TO BE APPLIED FOR
(State or other jurisdiction of (Commission (I.R.S. Employer
incorporation or organization) File Number) Identification No.)
5241 SPRING MOUNTAIN ROAD
POST OFFICE BOX 98510
LAS VEGAS, NEVADA 89193-8510
(Address of principal executive offices) (Zip Code)
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REGISTRANT'S TELEPHONE NUMBER, INCLUDING AREA CODE: (702) 876-7237
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ITEM 5. OTHER EVENTS
Preferred Securities
On October 26, 1995, the Company completed the pricing for an offering of
2,400,000 Preferred Securities with respect to Registration Statement No.
33-62143. In connection therewith, the Company executed an underwriting
agreement, obtained opinions of legal counsel on the securities and finalized
documents relating to Southwest Gas Capital I. These documents are contained
herein as exhibits.
ITEM 7. EXHIBITS
1.01 Underwriting Agreement.
4.06 Amended and Restated Declaration of Trust of Southwest Gas
Capital I.
4.09 Form of Preferred Security (attached as Annex I to Exhibit
A to the Amended and Restated Declaration of Trust of
Southwest Gas Capital I included as Exhibit 4.06 hereto).
5.1 Opinion of O'Melveny & Myers as to the validity of the
securities.
5.2 Opinion of Skadden, Arps, Slate, Meagher & Flom as to the
validity of Securities issued by Southwest Gas Capital I.
8.01 Opinion of O'Melveny & Myers as to certain federal taxation
matters.
23.02 Consent of O'Melveny & Myers (included in Exhibit 5.1).
23.03 Consent of O'Melveny & Myers (included in Exhibit 8.01).
23.04 Consent of Skadden, Arps, Slate, Meagher & Flom (included
in Exhibit 5.2).
SIGNATURES
Pursuant to the requirements of the Securities Exchange Act of 1934, the
registrant has duly caused this report to be signed on its behalf by the
undersigned hereunto duly authorized.
SOUTHWEST GAS CORPORATION
Date: October 30, 1995 /s/ Edward A. Janov
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Edward A. Janov
Controller and Chief Accounting Officer
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EXHIBIT 1.01
2,400,000 PREFERRED SECURITIES
SOUTHWEST GAS CAPITAL I
(A DELAWARE BUSINESS TRUST)
9.125% TRUST ORIGINATED PREFERRED SECURITIES ("TOPRS"(SM))
(LIQUIDATION AMOUNT OF $25 PER PREFERRED SECURITY)
UNDERWRITING AGREEMENT
October 26, 1995
MERRILL LYNCH & CO.
Merrill Lynch, Pierce, Fenner & Smith Incorporated
DEAN WITTER REYNOLDS INC.
PAINEWEBBER INCORPORATED
SMITH BARNEY INC.
c/o MERRILL LYNCH & CO.
MERRILL LYNCH, PIERCE, FENNER & SMITH INCORPORATED
Merrill Lynch World Headquarters
North Tower
World Financial Center
New York, New York 10281
Ladies and Gentlemen:
Southwest Gas Capital I (the "Trust"), a statutory business
trust organized under the Business Trust Act (the "Delaware Act") of the State
of Delaware (Title 12, Chapter 38 of the Delaware Code, 12 Del. C Section 3801
et seq.) and Southwest Gas Corporation, a California corporation (the "Company"
and, together with the Trust, the "Offerors") confirm their agreement (the
"Agreement") with Merrill Lynch & Co., Merrill Lynch, Pierce, Fenner & Smith
Incorporated ("Merrill Lynch"), Dean Witter Reynolds Inc., PaineWebber
Incorporated and Smith Barney Inc. (collectively, the "Underwriters", which
term shall also include any underwriter substituted as
__________________________________
(SM) "Trust Originated Preferred Securities" and "TOPrS" are service marks
of Merrill Lynch & Co., Inc.
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hereinafter provided in Section 10 hereof) with respect to the sale by the
Trust and the purchase by the Underwriters, acting severally and not jointly,
of the respective numbers of 9.125% Trust Originated Preferred Securities
(liquidation amount of $25 per preferred security) of the Trust set forth in
Schedule A hereto (the "Preferred Securities") except as may otherwise be
provided in the Pricing Agreement, as hereinafter defined. The Preferred
Securities will be guaranteed by the Company with respect to distributions and
payments upon liquidation and redemption (the "Preferred Securities Guarantee")
pursuant to the Preferred Securities Guarantee Agreement (the "Preferred
Securities Guarantee Agreement"), dated as of October 31, 1995, between the
Company and Harris Trust and Savings Bank, as guarantee trustee (the "Guarantee
Trustee"), and entitled to the benefits of certain backup undertakings
described in the Prospectus (as defined herein) with respect to the Company's
agreement pursuant to the Supplemental Indenture (as defined herein) to pay all
expenses relating to administration of the Trust (the "Undertakings"). The
Preferred Securities and the related Preferred Securities Guarantee are
referred to herein as the "Securities".
Prior to the purchase and public offering of the Preferred
Securities by the several Underwriters, the Offerors and the Underwriters shall
enter into an agreement substantially in the form of Exhibit A hereto (the
"Pricing Agreement"). The Pricing Agreement may take the form of an exchange
of any standard form of written telecommunication between the Offerors and the
Underwriters and shall specify such applicable information as is indicated in
Exhibit A hereto. The offering of the Preferred Securities will be governed by
this Agreement, as supplemented by the Pricing Agreement. From and after the
date of the execution and delivery of the Pricing Agreement, this Agreement
shall be deemed to incorporate the Pricing Agreement.
The Company has filed with the Securities and Exchange
Commission (the "Commission") in accordance with the provisions of the
Securities Act of 1933, as amended (the "1933 Act"), a registration statement
on Form S-3 (File No. 33-55621) (the "1994 Registration Statement") under the
1933 Act for the offering from time to time of its debt securities, preferred
stock and/or common stock, having an aggregate offering price of $300,000,000
and the 1994 Registration Statement has become effective. While an aggregate
offering price of $270,112,800 of such debt securities, preferred stock and/or
common stock remained unsold, the Offerors (a) filed with the Commission a
registration statement on Form S-3 (No. 33-62143) for the registration under
the 1933 Act of up to $270,400,000 aggregate offering price of securities,
including (i) the Preferred Securities, (ii) the Preferred Securities Guarantee
and the Undertakings, and (iii) up to $270,400,000 aggregate principal amount
of Subordinated Deferrable Interest Notes (the "Subordinated Debt Securities")
to be issued and sold to the Trust by the Company, (b) have filed such
amendments thereto, if any, as may have been required to the date hereof, and
(c) will file such additional amendments thereto as may hereafter be required.
Such registration statement (as amended, if applicable) and the combined
prospectus constituting a part thereof (including, in each case, all documents
incorporated or deemed to be incorporated by reference therein pursuant to Item
12 of Form S-3 under the 1933 Act and the information, if any, deemed to be
part thereof pursuant to Rule 430A(b) of the rules and regulations of the
Commission under the 1933 Act (the "1933 Act Regulations")), as supplemented by
a Prospectus Supplement, dated October 26, 1995, relating to the Preferred
Securities, the Preferred Securities Guarantee and the Subordinated Debt
Securities, and as from time to time further amended or supplemented pursuant
to the 1933 Act, the Securities Exchange Act of 1934, as amended (the "1934
Act"), or
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otherwise are hereinafter referred to as the "1995 Registration Statement" and
the "Prospectus", respectively, except that if any revised prospectus shall be
provided to the Underwriters by the Offerors for use in connection with the
offering of the Preferred Securities, which differs from the Prospectus on file
at the Commission at the time the 1995 Registration Statement becomes effective
(whether or not such revised prospectus is required to be filed by the Offerors
pursuant to Rule 424(b) of the 1933 Act Regulations) (each, a "Revised
Prospectus"), the term "Prospectus" shall refer to such revised prospectus from
and after the time it is first provided to the Underwriters for such use. All
references in this Agreement to financial statements and schedules and other
information that is "contained," "included" or "stated" in the 1994
Registration Statement, the 1995 Registration Statement or the Prospectus (and
all other references of like import) shall be deemed to mean and include all
such financial statements and schedules and other information that are or are
deemed to be incorporated by reference in the 1994 Registration Statement, the
1995 Registration Statement or the Prospectus, as the case may be; and all
references in this Agreement to amendments or supplements to the 1994
Registration Statement, the 1995 Registration Statement or the Prospectus shall
be deemed to mean and include the filing of any document under the 1934 Act
that is or is deemed to be incorporated by reference in the 1994 Registration
Statement, the 1995 Registration Statement or the Prospectus, as the case may
be, after the time of execution of this Agreement.
The Offerors understand that the Underwriters propose to make
a public offering of the Preferred Securities as soon as the Underwriters deem
advisable after the Pricing Agreement has been executed and delivered, and the
Declaration (as defined herein), the Indenture (as defined herein), and the
Preferred Securities Guarantee Agreement have been qualified under the Trust
Indenture Act of 1939, as amended (the "1939 Act"). The entire proceeds from
the sale of the Preferred Securities will be combined with the entire proceeds
from the sale by the Trust to the Company of its common securities (the "Common
Securities") guaranteed by the Company, to the extent set forth in the
Prospectus, with respect to distributions and payments upon liquidation and
redemption (the "Common Securities Guarantee" and, together with the Preferred
Securities Guarantee, the "Guarantees") pursuant to the Common Securities
Guarantee Agreement (the "Common Securities Guarantee Agreement" and, together
with the Preferred Securities Guarantee Agreement, the "Guarantee Agreements"),
dated as of October 31, 1995, by the Company for the benefit of the holder of
the Common Securities and will be used by the Trust to purchase the
Subordinated Debt Securities issued by the Company. The Preferred Securities
and the Common Securities will be issued pursuant to the Amended and Restated
Declaration of Trust of the Trust, dated as of October 26, 1995 (the
"Declaration"), among the Company, as Sponsor, the trustees named therein (the
"Trustees"), including Harris Trust and Savings Bank, as property trustee under
the Declaration (the "Property Trustee"), and the holders from time to time of
undivided beneficial interests in the assets of the Trust. The Subordinated
Debt Securities will be issued pursuant to an indenture, dated as of October
31, 1995 (the "Base Indenture"), between the Company and Harris Trust and
Savings Bank, as indenture trustee (the "Indenture Trustee"), and a supplement
to the Base Indenture, dated as of October 31, 1995 (the "Supplemental
Indenture," and together with the Base Indenture and any other amendments or
supplements thereto, the "Indenture"), between the Company and the Indenture
Trustee.
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Section 1. Representations and Warranties. The Offerors
jointly and severally represent and warrant to each Underwriter as of the date
hereof and as of the date of the Pricing Agreement (such latter date being
hereinafter referred to as the "Representation Date") as follows:
(a) At the time the 1994 Registration
Statement became effective, at the time the 1995 Registration
Statement became effective and at the Representation Date, the 1994
Registration Statement and the 1995 Registration Statement complied in
all material respects with the requirements of the 1933 Act and the
1933 Act Regulations and the 1939 Act and the rules and regulations of
the Commission under the 1939 Act (the "1939 Act Regulations"), and
did not contain an untrue statement of a material fact or omit to
state a material fact required to be stated therein or necessary to
make the statements therein not misleading. The Prospectus, at the
Representation Date (unless the term "Prospectus" refers to a
prospectus that has been provided to the Underwriters by the Trust for
use in connection with the offering of the Preferred Securities and
that differs from the Prospectus on file at the Commission at the time
the 1995 Registration Statement becomes effective, in which case, at
the time it is first provided to the Underwriters for such use) and at
the Closing Time, will not include an untrue statement of a material
fact or omit to state a material fact necessary in order to make the
statements therein, in the light of the circumstances under which they
were made, not misleading; provided, however, that the representations
and warranties in this subsection shall not apply to statements in or
omissions from the 1994 Registration Statement, 1995 Registration
Statement or Prospectus made in reliance upon and in conformity with
information furnished to the Offerors in writing by any Underwriter
expressly for use in the 1994 Registration Statement, the 1995
Registration Statement or Prospectus.
(b) The documents incorporated or deemed
to be incorporated by reference in the 1994 Registration Statement,
1995 Registration Statement or Prospectus, at the time they were or
(to the extent deemed to be incorporated by reference in the
Prospectus) hereafter are filed with the Commission, complied and will
comply in all material respects with the requirements of the 1933 Act,
the 1933 Act Regulations, the 1934 Act and the rules and regulations
of the Commission under the 1934 Act (the "1934 Act Regulations"), as
applicable, and did not or 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.
(c) Arthur Andersen LLP, the accountants
who certified the financial statements and supporting schedules
included or incorporated by reference in the 1994 Registration
Statement and the 1995 Registration Statement, are independent public
accountants as required by the 1933 Act and the 1933 Act Regulations.
(d) The financial statements included in
the 1994 Registration Statement, the 1995 Registration Statement and
the Prospectus present fairly the consolidated financial position of
the Company and its consolidated subsidiaries as at the
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dates indicated and the results of their operations for the periods
specified; said financial statements have been prepared in conformity
with generally accepted accounting principles applied on a consistent
basis (except as otherwise specified in the notes thereto); the
Company's ratios of earnings to fixed charges included in the
Prospectus under the caption "Ratios of Earnings to Fixed Charges" and
in Exhibit 12 to each of the 1994 Registration Statement and the 1995
Registration Statement have been calculated in compliance with Item
503(d) of Regulation S-K of the Commission and the supporting
schedules included in the 1994 Registration Statement and the 1995
Registration Statement present fairly the information required to be
stated therein; and the other financial and statistical information
and data included or incorporated by reference in the 1994
Registration Statement, the 1995 Registration Statement and the
Prospectus are accurately presented and prepared on a basis consistent
with such financial statements and the books and records of the
Company and its consolidated subsidiaries.
(e) Each of the Offerors meets, and at
the respective times of commencement and consummation of the offering
of the Securities will meet, the registrant requirements for use of
Form S-3 and Rule 415 under the 1933 Act and the 1933 Act Regulations.
(f) Since the respective dates as of
which information is given in the 1994 Registration Statement, the
1995 Registration Statement and the Prospectus, except as otherwise
stated therein, (A) there has been no material adverse change, or any
development involving a prospective material adverse change, in the
condition (financial or other), business, properties, net worth or
results of operations of the Company and the Subsidiaries (as defined
herein), taken as a whole (a "Material Adverse Effect") or of the
Trust, whether or not arising in the ordinary course of business, and
(B) neither the Company, any of the Subsidiaries nor the Trust has
incurred any liability or obligation, direct or contingent, or entered
into any transaction, not in the ordinary course of business, that is
material to the Trust or the Company and the Subsidiaries taken as a
whole.
(g) 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 1994 Registration Statement, 1995 Registration
Statement and Prospectus, to enter into and perform its obligations
under this Agreement, the Pricing Agreement, the Declaration, the
Indenture and each of the Guarantees and to purchase, own, and hold
the Common Securities issued by the Trust; and the Company is duly
registered and qualified to conduct its business and is in good
standing in each jurisdiction or place where the nature of its
properties or the conduct of its business requires such registration
or qualification, except where the failure so to register or qualify
does not have a Material Adverse Effect.
(h) All the outstanding shares of
capital stock of the Company have been duly authorized and validly
issued, are fully paid and nonassessable and are free of any
preemptive or similar rights.
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(i) All the Company's subsidiaries are
listed in an exhibit to the Company's Annual Report on Form 10-K for
the year ended December 31, 1994 (the "Form 10-K"), which is
incorporated by reference into the Prospectus. Except for The
Southwest Companies and its wholly owned subsidiary, PriMerit Bank,
none of the Company's subsidiaries are "significant subsidiaries" as
defined in Regulation S-X promulgated by the Commission.
(j) PriMerit Bank has been duly formed
and is validly existing as a federal savings bank duly chartered and
in good standing under the laws of the United States. All the
outstanding shares of capital stock of PriMerit Bank have been duly
authorized and validly issued, are fully paid and nonassessable, and
are owned by The Southwest Companies directly, free and clear of any
lien, adverse claim, security interest, equity, or other encumbrance.
The Southwest Companies and Paiute Pipeline Company ("Paiute" and,
together with The Southwest Companies and PriMerit Bank, the
"Subsidiaries") are corporations duly organized, validly existing and
in good standing in their respective jurisdictions of incorporation,
with full corporate power and authority to own their respective
assets. All of the outstanding shares of capital stock of The
Southwest Companies and Paiute have been duly authorized and validly
issued, are fully paid and nonassessable, and are owned by the Company
directly, free and clear of any lien, adverse claim, security
interest, equity, or other encumbrance.
(k) The Trust has been duly created and
is validly existing in good standing as a business trust under the
Delaware Act with the power and authority to own property and to
conduct its business as described in the 1995 Registration Statement
and Prospectus and to enter into and perform its obligations under
this Agreement, the Pricing Agreement, the Preferred Securities, the
Common Securities and the Declaration and is not required to be
authorized to do business in any other jurisdiction; the Trust is not
a party to or otherwise bound by any agreement other than those
described in the Prospectus; the Trust is not and will not be
classified as an association taxable as a corporation for United
States federal income tax purposes; and the Trust is and will be
treated as a consolidated subsidiary of the Company pursuant to
generally accepted accounting principles.
(l) The Common Securities have been duly
authorized by the Declaration and, when issued and delivered by the
Trust to the Company against payment therefor as described in the 1995
Registration Statement and Prospectus, will be validly issued and
(subject to the terms of the Declaration) fully paid and
non-assessable undivided beneficial interests in the assets of the
Trust and will conform to all statements relating thereto contained in
the Prospectus; the issuance of the Common Securities is not subject
to preemptive or other similar rights; and at the Closing Time, all of
the issued and outstanding Common Securities of the Trust will be
directly owned by the Company free and clear of any security interest,
mortgage, pledge, lien, encumbrance, claim or equity.
(m) This Agreement has been, and at the
Closing Time, the Pricing Agreement will have been, duly authorized,
executed and delivered by each of the Offerors.
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(n) The Declaration has been duly
authorized by the Company and, at the Closing Time, will have been
duly executed and delivered by the Company, and assuming due
authorization, execution and delivery of the Declaration by the
Property Trustee and the Delaware Trustee (as defined in the
Declaration), the Declaration will, at the Closing Time, be a valid
and binding obligation of the Company, enforceable against the Company
in accordance with its terms, except to the extent that enforcement
thereof may be limited by bankruptcy, insolvency, reorganization and
other laws of general applicability relating to or affecting
creditors' rights and to general equitable principles (the "Bankruptcy
Exceptions") and will conform to all statements relating thereto in
the Prospectus; and at the Closing Time, the Declaration will have
been duly qualified under the 1939 Act.
(o) Each of (i) the Common Securities
Guarantee Agreement and (ii) the Preferred Securities Guarantee
Agreement has been duly authorized by the Company and, when validly
executed and delivered by the Company, will constitute a valid and
binding obligation of the Company, enforceable against the Company in
accordance with its terms (except to the extent enforcement thereof
may be limited by the Bankruptcy Exceptions) and the Guarantees and
the Guarantee Agreements will conform to all statements relating
thereto contained in the Prospectus; and, at the Closing Time, the
Preferred Securities Guarantee Agreement will have been duly qualified
under the 1939 Act.
(p) The Preferred Securities have been
duly authorized by the Declaration and, when issued and delivered
pursuant to this Agreement against payment of the consideration set
forth in the Pricing Agreement, will be validly issued and fully paid
and non-assessable undivided beneficial interests in the Trust, will
be entitled to the benefits of the Declaration and will conform to all
statements relating thereto contained in the Prospectus; the issuance
of the Preferred Securities is not subject to preemptive or other
similar rights; holders of Preferred Securities will be entitled to
the same limitation of personal liability extended to stockholders of
private corporations for profit.
(q) The Indenture has been duly
authorized by the Company and, when validly executed and delivered by
the Company, will constitute a valid and binding agreement of the
Company, enforceable against the Company in accordance with its terms
except to the extent that enforcement thereof may be limited by the
Bankruptcy Exceptions; the Indenture will conform to all statements
relating thereto contained in the Prospectus; and, at the Closing
Time, the Indenture will have been duly qualified under the 1939 Act.
(r) The Subordinated Debt Securities
have been duly authorized by the Company and, at the Closing Time,
will have been duly executed by the Company and, when authenticated in
the manner provided for in the Indenture and delivered against payment
therefor as described in the Prospectus, will constitute valid and
binding obligations of the Company, enforceable against the Company in
accordance with their terms (except to the extent enforcement thereof
may be limited by the Bankruptcy
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Exceptions), will be in the form contemplated by, and entitled to the
benefits of, the Indenture and will conform to all statements relating
thereto contained in the Prospectus.
(s) The Company's obligations under the
Preferred Securities Guarantee and the Common Securities Guarantee are
subordinate and junior in right of payment to all liabilities of the
Company and are pari passu with the most senior preferred stock issued
by the Company.
(t) The Subordinated Debt Securities are
subordinate and junior in right of payment to all Senior Indebtedness
(as defined in the Indenture) of the Company.
(u) George C. Biehl and Jeffrey W. Shaw,
as Trustees of the Trust (the "Regular Trustees"), are employees of
the Company and have been duly authorized by the Company to execute
and deliver the Declaration; the Declaration has been duly executed
and delivered by the Regular Trustees and is a valid and binding
obligation of each Regular Trustee.
(v) None of the Offerors is an
"investment company" or a company "controlled" by an "investment
company" within the meaning of the Investment Company Act of 1940, as
amended (the "1940 Act").
(w) Neither the Company nor any of the
Subsidiaries is in violation of its articles of incorporation or
charter or by-laws; the Trust is not in violation of the Declaration
or its Certificate of Trust filed with the State of Delaware on August
17, 1995 (the "Certificate of Trust"); to the best knowledge of the
Offerors after due inquiry, none of the Company, any of the
Subsidiaries or the Trust is in violation of any law, ordinance,
administrative or governmental rule or regulation applicable to the
Company, any of the Subsidiaries or the Trust the violation of which
would reasonably be expected to have a Material Adverse Effect or of
any decree of any court or governmental agency or body having
jurisdiction over the Company, any of the Subsidiaries or the Trust,
or in default in any material respect in the performance of any
obligation, agreement or condition contained in any bond, debenture,
note or any other evidence of indebtedness or in any agreement,
indenture, lease or other instrument to which the Company, any of the
Subsidiaries or the Trust is a party or by which any of them or any of
their respective properties may be bound. The execution, delivery and
performance of this Agreement, the Pricing Agreement, the Declaration,
the Preferred Securities, the Common Securities, the Indenture, the
Subordinated Debt Securities, the Guarantee Agreements and the
Guarantees and the consummation of the transactions contemplated
herein and therein and compliance by the Offerors with their
respective obligations hereunder and thereunder have been duly and
validly authorized by all necessary action (corporate or otherwise) on
the part of the Offerors and do not and will not result in any
violation of the articles of incorporation or charter or by-laws of
the Company or any of the Subsidiaries, or the Declaration or
Certificate of Trust and do not and will not conflict with or do not
and will not constitute a breach of, or a default under, any
agreement, indenture, lease or other instrument to which the Company,
any of the Subsidiaries or the Trust is a party or by Subsidiaries or
the Trust is a party or by
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which any of them or any of their respective 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, any
of the Subsidiaries or the Trust or any of their respective
properties, or will result in the creation or imposition of any lien,
charge or encumbrance upon any property or assets of the Company, any
of the Subsidiaries or the Trust pursuant to the terms of any
agreement or instrument to which any of them is a party or by which
any of them may be bound or to which any of the property or assets of
any of them is subject.
(x) There are no legal or governmental
proceedings pending or, to the best knowledge of the Company or the
Trust after due inquiry, threatened, against the Company, any of the
Subsidiaries or the Trust, or to which the Company, any of the
Subsidiaries or the Trust is subject, or to which any of their
respective properties is subject, that are required to be described in
the 1994 Registration Statement, the 1995 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 1994 Registration Statement, the
1995 Registration Statement or the Prospectus or to be filed as an
exhibit to the 1994 Registration Statement or the 1995 Registration
Statement that are not described or filed as required by the 1933 Act,
the 1933 Act Regulations, the 1934 Act or the 1934 Act Regulations.
(y) No authorization, approval, consent or other
order of or registration or filing with, any court, regulatory body,
administrative agency or other governmental body, agency or official
is necessary in connection with the issuance and sale of the Common
Securities or the offering, issuance and sale of the Preferred
Securities, the Subordinated Debt Securities or the Guarantees
hereunder, except (i) such as may be required under the 1933 Act, the
1933 Act Regulations, the 1934 Act or the 1934 Act Regulations or
state securities laws and the qualification of the Declaration, the
Indenture and the Preferred Securities Guarantee under the 1939 Act,
(ii) the authorizations of the California Public Utilities Commission
issued June 5, 1991, May 8, 1992, February 3, 1993 and August 11, 1995
(which authorizations are, to the best knowledge of the Company, not
the subject of any pending or threatened application for rehearing or
petition for modification) and (iii) the opinion and order, dated May
18, 1983, and the limited waiver, dated August 8, 1995, of the Arizona
Corporation Commission (which order and waiver are final and not
subject to appeal), all of which have been or will be effected in
accordance with this Agreement.
(z) Each of the Company and the
Subsidiaries has such permits, licenses, franchises and authorizations
of governmental or regulatory authorities ("permits") as are necessary
to own its respective properties and to conduct its business in the
manner described in the Prospectus, except where the failure to
fulfill or perform any such obligation would not reasonably be
expected to have a Material Adverse Effect; each of the Trust, the
Company and the Subsidiaries has fulfilled and performed all its
material obligations with respect to such permits, except where the
failure to fulfill or perform any such obligation would not reasonably
be expected to have a Material Adverse Effect; and no event has
occurred which allows, or after notice or lapse of time would allow,
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revocation or termination of any material permits or results or would
result in any other material impairment of the rights of the holder of
any such material permits, subject in each case to such qualifications
as may be set forth in the Prospectus.
(aa) The Offerors have not taken,
directly or indirectly, any action designed to, or that might be
reasonably expected to, cause or result in stabilization or
manipulation of the price of the Preferred Securities.
(ab) Neither the Company nor any of its
Subsidiaries is currently subject to regulation under the Public
Utility Holding Company Act of 1935, as amended.
(ac) No holder of any outstanding
security of the Company has any right to require registration of such
security because of the filing of the 1995 Registration Statement or
consummation of the transactions contemplated by this Agreement.
Section 2. Sale and Delivery to Underwriters; Closing.
(a) On the basis of the representations and warranties
herein contained and subject to the terms and conditions herein set forth, the
Trust agrees to sell to each Underwriter, severally and not jointly, and each
Underwriter, severally and not jointly, agrees to purchase from the Trust, at
the price of $25 per Preferred Security and at an annual distribution rate per
Preferred Security set forth in the Pricing Agreement, the number of Preferred
Securities set forth in Schedule A opposite the name of such Underwriter
(except as otherwise provided in the Pricing Agreement), plus any additional
number of Preferred Securities that such Underwriter may become obligated to
purchase pursuant to the provisions of Section 10 hereof.
In the event that the annual distribution rate has not been
agreed upon and the Pricing Agreement has not been executed and delivered by
all parties thereto by the close of business on the fourth business day
following the date of this Agreement, this Agreement shall terminate forthwith,
without liability of any party to any other party, unless otherwise agreed to
by the Offerors and the Underwriters. As compensation to the Underwriters for
their commitments hereunder and in view of the fact that the entire proceeds of
the sale of the Preferred Securities (together with the entire proceeds from
the sale by the Trust to the Company of the Common Securities) will be used to
purchase the Subordinated Debt Securities of the Company, the Company hereby
agrees to pay at the Closing Time (as defined below) to Merrill Lynch, for the
accounts of the several Underwriters, a commission per Preferred Security
determined by agreement between the Underwriters and the Company for the
Preferred Securities to be delivered by the Trust hereunder at the Closing
Time. The commission, when so determined, shall be set forth in the Pricing
Agreement.
(b) Payment of the purchase price for, and
delivery of certificates for, the Preferred Securities shall be made at the
office of O'Melveny & Myers or at such other place as shall be agreed upon by
the Underwriters and the Trust, at 10:00 A.M. New York time on the third
business day (unless postponed in accordance with the provisions of Section 10)
after execution of the Pricing Agreement, or such other time not later than ten
business days after such
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<PAGE> 11
date as shall be agreed upon by the Underwriters and the Offerors (such time
and date of payment and delivery being herein called the "Closing Time").
Payment shall be made to the Trust by certified or official bank check or
checks drawn in New York Clearing House funds or similar next day funds payable
to the order of the Trust to an account designated by the Trust, against
delivery to the Underwriters of certificates for the Preferred Securities to be
purchased by them. Certificates for the Preferred Securities shall be in such
denominations and registered in such names as the Underwriters shall request
not later than two full business days before the Closing Time or the relevant
Date of Delivery, as the case may be. It is understood that each Underwriter
has authorized Merrill Lynch, for its account, to accept delivery of, receipt
for, and make payment of the purchase price for, the Preferred Securities which
it has agreed to purchase. Merrill Lynch may (but shall not be obligated to)
make payment of the purchase price for the Preferred Securities to be purchased
by any Underwriter whose check has not been received by the Closing Time or the
relevant Date of Delivery, as the case may be, but such payment shall not
relieve such Underwriter from its obligations hereunder.
The certificates evidencing the Preferred Securities shall be
delivered to the Underwriters, through the facilities of The Depository Trust
Company for the account of the Underwriters with any transfer taxes payable in
connection with the transfer of the Preferred Securities duly paid, against
payment of the purchase price therefor.
At the Closing Time or the relevant Date of Delivery, as the
case may be, the Company will pay, or cause to be paid, the commission payable
at such time to the Underwriters under Section 2 hereof by certified or
official bank check or checks payable to Merrill Lynch in New York Clearing
House funds or other similar next day funds.
Section 3. Covenants of the Offerors. Each of the Offerors
jointly and severally covenant with each Underwriter as follows:
(a) The Offerors will advise the Underwriters
promptly and, if requested by the Underwriters, will confirm such advice in
writing: (i) of any request by the Commission for amendment of or a supplement
to the 1994 Registration Statement, the 1995 Registration Statement or the
Prospectus or for additional information; (ii) of the issuance by the
Commission of any stop order suspending the effectiveness of the 1994
Registration Statement, the 1995 Registration Statement or of the suspension of
qualification of the Preferred Securities for offering or sale in any
jurisdiction or the initiation of any proceeding for such purpose; and (iii)
within the period of time referred to in the first sentence of subsection (d)
below, of any change in the Company's condition (financial or other), business,
prospects, properties, net worth or results of operations, or of the happening
of any event, which makes any statement of a material fact made in the 1994
Registration Statement, the 1995 Registration Statement or the Prospectus (as
then amended or supplemented) untrue or which requires the making of any
additions to or changes in the 1994 Registration Statement, the 1995
Registration Statement or the Prospectus (as then amended or supplemented) in
order to state a material fact required by the 1933 Act or the 1933 Act
Regulations to be stated therein or necessary in order to make the statements
therein not misleading, or of the necessity to amend or supplement the
Prospectus (as then amended or supplemented) to comply with the 1933 Act or any
other law. If at any time the Commission shall issue any stop order suspending
the effectiveness of the 1994 Registration Statement or the 1995
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<PAGE> 12
Registration Statement, the Offerors will make every reasonable effort to
obtain the withdrawal of such order at the earliest possible time.
(b) During such period as a prospectus is
required by the 1933 Act to be delivered in connection with sales by any
Underwriter or dealer, the Offerors will give the Underwriters notice of their
intention to file or prepare (i) any amendment to the 1994 Registration
Statement or the 1995 Registration Statement (including any post-effective
amendment), (ii) any amendment or supplement to the Prospectus (including any
revised prospectus which the Offerors propose for use by the Underwriters in
connection with the offering of the Preferred Securities which differs from the
prospectus on file at the Commission at the time the 1995 Registration
Statement becomes effective, whether or not such revised prospectus is required
to be filed pursuant to Rule 424(b) of the 1933 Act Regulations), or (iii) any
document that would as a result thereof be incorporated by reference in the
Prospectus whether pursuant to the 1933 Act, the 1934 Act or otherwise, will
furnish the Underwriters with copies of any such amendment, supplement or other
document a reasonable amount of time prior to such proposed filing or use, as
the case may be, and will not file any such amendment, supplement or other
document or use any such prospectus to which the Underwriters or counsel for
the Underwriters shall reasonably object.
(c) The Offerors will furnish to you, without
charge (i) four copies of the 1994 Registration Statement and the 1995
Registration Statement certified by an officer of the Company to be in the form
originally filed with the Commission and of each amendment thereto, including
financial statements and all exhibits to the 1994 Registration Statement and
the 1995 Registration Statement, (ii) such number of conformed copies of the
1994 Registration Statement and the 1995 Registration Statement as originally
filed and of each amendment thereto, but without exhibits, as the Underwriters
may reasonably request, (iii) such number of copies of the documents
incorporated or deemed to be incorporated by reference therein, without
exhibits, as the Underwriters may reasonably request, and (iv) one copy of the
exhibits to the documents incorporated or deemed to be incorporated by
reference therein.
(d) As soon after the execution and delivery of
this Agreement as possible and thereafter from time to time for such period as
the Prospectus is required by the 1933 Act or the 1933 Act Regulations to be
delivered in connection with sales by any Underwriter or dealer, the Offerors
will expeditiously deliver to each Underwriter and each dealer, without charge,
as many copies of the Prospectus (and of any amendment or supplement thereto)
as the Underwriters may request. The Offerors consent to the use of the
Prospectus (and of any amendment or supplement thereto) in accordance with the
provisions of the 1933 Act, the 1933 Act Regulations and with the securities or
Blue Sky laws of the jurisdictions in which the Preferred Securities are
offered by the several Underwriters and by all dealers to whom the Preferred
Securities may be sold, both in connection with the offering and sale of the
Preferred Securities and for such period of time thereafter as the Prospectus
is required by the 1933 Act or the 1933 Act Regulations to be delivered in
connection with sales by any Underwriter or dealer. If during such period of
time any event shall occur that is required to be set forth in the Prospectus
(as then amended or supplemented) or should be set forth therein in order to
make the statements therein, in the light of the circumstances under which they
were made, not misleading, or if it is necessary to supplement or amend the
Prospectus (or to file under the 1934 Act or the
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<PAGE> 13
1934 Act Regulations any document which, upon filing, will be incorporated or
deemed to be incorporated by reference therein) in order to comply with the
1933 Act, the 1933 Act Regulations or any other law, the Offerors will
forthwith prepare and, subject to the provisions of paragraph (b) above, file
with the Commission an appropriate supplement or amendment or document which,
upon filing, will be incorporated or deemed to be incorporated by reference
therein, and will expeditiously furnish to the Underwriters and dealers a
reasonable number of copies thereof. In the event that the Offerors and the
Underwriters agree that the Prospectus should be amended or supplemented, the
Offerors, if requested by the Underwriters, will promptly issue a press release
announcing or disclosing the matters to be covered by the proposed amendment or
supplement.
(e) The Offerors will cooperate with the
Underwriters and with counsel for the Underwriters in connection with the
registration or qualification of the Preferred Securities and Subordinated Debt
Securities for offering and sale by the Underwriters and by dealers under the
securities or Blue Sky laws of such jurisdictions as the Underwriters may
designate and will file such consents to service of process or other documents
necessary or appropriate in order to effect such registration or qualification,
provided that in no event shall the Offerors be obligated to qualify to do
business in any jurisdiction where it is not now so qualified or to take any
action which would subject it to service of process in suits, other than those
arising out of the offering or sale of the Preferred Securities and the
Subordinated Debt Securities, in any jurisdiction where it is not now so
subject.
(f) The Company will, on behalf of the Trust,
make generally available to the Trust's security holders as soon as practicable
but not later than 45 days (unless such period corresponds to the Company's
fiscal year, in which case 90 days) after the close of the period covered
thereby, an earning statement of the Company (in form complying with the
provisions of Section 11(a) of the 1933 Act and Rule 158 of the 1933 Act
Regulations) covering a twelve-month period beginning not later than the first
day of the Company's fiscal quarter next following the "effective date" (as
defined in said Rule 158) of the 1995 Registration Statement.
(g) The Offerors will use their best efforts to
have the Preferred Securities listed, subject to notice of issuance, on the New
York Stock Exchange on or before the Closing Time; if the Preferred Securities
are exchanged for Subordinated Debt Securities, the Company will use its best
efforts to have the Subordinated Debt Securities listed on the exchange on
which the Preferred Securities were then listed.
(h) During a period of 90 days from the date of
the Pricing Agreement, neither the Trust nor the Company will, without the
Underwriters' prior written consent, directly or indirectly, sell, offer to
sell, grant any option for the sale of, or otherwise dispose of, any Preferred
Securities, any security convertible into exchangeable into or exercisable for
Preferred Securities or any equity securities substantially similar to the
Preferred Securities (except for Preferred Securities issued pursuant to this
Agreement).
(i) The Offerors will apply the net proceeds from
the sale of the Preferred Securities substantially in accordance with the
description set forth in the Prospectus under "Use of Proceeds."
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<PAGE> 14
(j) Except as stated in the Prospectus, the
Offerors will not take, directly or indirectly, any action designed to or that
might reasonably be expected to cause or result in stabilization or maintenance
of the price of the Preferred Securities.
(k) The Offerors will use their best efforts to
have their registration statement on Form 8-A declared effective under the 1934
Act within 31 days of the effectiveness of the 1995 Registration Statement.
Section 4. Payment of Expenses. The Company will pay all
expenses incident to the performance of each Offeror's obligations under this
Agreement, including, but not limited to, (i) the printing and filing of the
1994 Registration Statement and the 1995 Registration Statement as originally
filed and of each amendment thereto, (ii) the preparation, issuance and
delivery of the certificates for the Preferred Securities to the Underwriters,
(iii) the fees and disbursements of the Company's counsel and accountants, (iv)
the qualification of the Preferred Securities and Subordinated Debt Securities
under securities laws in accordance with the provisions of Section 3(e) hereof,
including filing fees and the reasonable fees and disbursements of counsel for
the Underwriters in connection therewith and in connection with the preparation
of any Blue Sky survey, (v) the printing and delivery to the Underwriters of
copies of the 1994 Registration Statement and the 1995 Registration Statement
as originally filed and of each amendment thereto, of each preliminary
prospectus, and of the Prospectus and any amendments or supplements thereto,
(vi) the printing and delivery to the Underwriters of copies of any Blue Sky
survey, (vii) the fee of the National Association of Securities Dealers, Inc.,
if any, (viii) the fees and expenses of the Indenture Trustee, including the
fees and disbursements of counsel for the Indenture Trustee in connection with
the Indenture and the Subordinated Debt Securities, (ix) the fees and expenses
of the Property Trustee, including the fees and disbursements of counsel for
the Property Trustee in connection with the Declaration and the Certificate of
Trust, (x) any fees payable in connection with the rating of the Preferred
Securities and Subordinated Debt Securities, (xi) the fees and expenses
incurred in connection with the listing of the Preferred Securities and, if
applicable, the Subordinated Debt Securities on the New York Stock Exchange,
(xii) the cost and charges of any transfer agent or registrar and (xiii) the
cost of qualifying the Preferred Securities with The Depository Trust Company.
If this Agreement is terminated by the Underwriters in
accordance with the provisions of Section 5 hereof or if this Agreement shall
be terminated by the Underwriters because of any failure or refusal on the part
of the Company or the Trust to comply with the terms or fulfill any of the
conditions of this Agreement, the Company shall reimburse the Underwriters for
all of their reasonable out-of-pocket expenses, including the reasonable fees
and disbursements of counsel for the Underwriters.
Section 5. Conditions of Underwriters' Obligations. The
several obligations of the Underwriters hereunder are subject to the accuracy
of the representations and warranties of the Offerors herein contained, to the
performance by the Offerors of their obligations hereunder, and to the
following further conditions:
(a) The 1995 Registration Statement shall be
effective as of the time of execution hereof; and at the Closing Time no stop
order suspending the effectiveness of the 1994
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<PAGE> 15
Registration Statement or the 1995 Registration Statement shall have been
issued under the 1933 Act or proceedings therefor initiated or threatened by
the Commission. The Prospectus shall have been filed with the Commission
pursuant to Rule 424(b) within the applicable time period prescribed for such
filing by the 1933 Act Regulations and prior to the Closing Time the Offerors
shall have provided evidence satisfactory to the Underwriters of such timely
filing.
(b) At the Closing Time the Underwriters shall have received:
(1) The favorable opinion, dated as of
the Closing Time, of O'Melveny & Myers, counsel for the Offerors, in form and
substance satisfactory to counsel for the Underwriters, to the effect that:
(i) The Company has been duly
incorporated and is validly existing in good standing under the laws
of the State of California, with corporate power to own and lease its
properties, to carry on its business as described in the Prospectus,
to enter into this Agreement and to issue and deliver the Subordinated
Debt Securities, the Guarantees and the Undertakings as provided
herein.
(ii) PriMerit Bank has been duly organized,
is validly existing and in good standing under the laws of the United
States and has been authorized by the Office of Thrift Supervision to
conduct the business of a federal savings association. All the
outstanding shares of capital stock of PriMerit Bank have been duly
authorized and validly issued, are fully paid and nonassessable, and
are owned of record directly by The Southwest Companies.
(iii) Holders of outstanding securities of
the Company are not entitled to any statutory preemptive right or to
any right under its Articles of Incorporation to subscribe to any of
the Preferred Securities or Subordinated Debt Securities.
(iv) No consent, approval, authorization
or order of any federal or California governmental authority is
required on the part of the Company for the issuance and sale of the
Common Securities or the offering of the Preferred Securities, the
Subordinated Debt Securities, the Guarantees or the Undertakings,
except (a) such as have been obtained under the 1933 Act or the 1939
Act and such as have been applied for under the 1934 Act, (b) the
authorizations of the California Public Utilities Commission referred
to in Section 1(y) of this Agreement which have been obtained, remain
in full force and effect and are, to the knowledge of such counsel,
not the subject of any pending or threatened application for rehearing
or petition for modification, and (c) such as may be required by
applicable state securities or Blue Sky laws.
(v) The Company is not a "holding
company" or an "affiliate" or "subsidiary company" of a "registered
holding company" within the meaning of the Public Utility Holding
Company Act of 1935, as amended.
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<PAGE> 16
(vi) Each of the 1994 Registration
Statement and the 1995 Registration Statement is effective under the
1933 Act and, to the knowledge of such counsel, no stop order
suspending the effectiveness of the 1994 Registration Statement or the
1995 Registration Statement has been issued under the 1933 Act or
threatened by the Commission.
(vii) The 1994 Registration Statement, at
the date of filing of the Form 10-K, the 1995 Registration Statement,
at the date it became effective, and the Prospectus, at the date it
was filed pursuant to Rule 424(b) under the 1933 Act (or, if a Revised
Prospectus, at the date it was first provided to the Underwriters for
use in offering the Preferred Securities) (other than the financial
statements and other financial information contained or incorporated
by reference therein, as to which no opinion need be rendered),
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 1933 Act, the 1933 Act Regulations, the 1939 Act and the 1939 Act
Regulations in effect as of such dates.
(viii) Each of the documents incorporated
by reference in the 1994 Registration Statement, 1995 Registration
Statement or Prospectus at the time they were filed (other than the
financial statements and other financial information contained or
incorporated by reference therein as to which such counsel need
express no opinion), 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 1934 Act and the
1934 Act Regulations, as in effect on their respective dates of
filing.
(ix) The statements (i) in the Prospectus
Supplement referred to in the third paragraph hereof under the
captions "Risk Factors", "The Trust", "Description of the Preferred
Securities" (except under the subsection "Book-Entry Only Issuance-
The Depository Trust Company"), "Description of the Subordinated Debt
Securities" and "Effect of Obligations Under the Subordinated Debt
Securities and the Guarantee", and (ii) in the combined prospectus
referred to in such paragraph under the captions "The Trust",
"Particular Terms of Subordinated Debt Securities Issued in Connection
with Preferred Securities", "Description of the Preferred Securities"
and "Description of the Guarantee", insofar as such statements
constitute matters of California and federal law applicable to the
Offerors or summaries of documents, fairly present the information
required to be included therein pursuant to the 1933 Act, the 1933 Act
Regulations, the 1939 Act and the 1939 Act Regulations.
(x) The statements set forth in the
Prospectus Supplement referred to in the third paragraph hereof under
the caption "United States Federal Income Taxation" constitute a fair
and accurate summary of the matters addressed therein, based upon
current law and the assumptions stated or referred to therein.
(xi) All of the issued and outstanding
Common Securities of the Trust are owned of record by the Company.
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<PAGE> 17
(xii) The execution, delivery and
performance of this Agreement and the Pricing Agreement have been duly
authorized by all necessary corporate action on the part of the
Company, and the Agreement and the Pricing Agreement have been duly
executed and delivered by the Company.
(xiii) The Declaration, the Indenture and
Preferred Securities Guarantee Agreement have been duly qualified
under the 1939 Act.
(xiv) The Guarantee Agreements have been
duly authorized by all necessary corporate action on the part of the
Company, and, upon payment for and the delivery of the Preferred
Securities in accordance with this Agreement, will constitute the
legally valid and binding obligations of the Company, enforceable
against the Company in accordance with their respective terms, except
as rights to indemnity may be limited by applicable law and except as
may be limited by bankruptcy, insolvency, reorganization, moratorium
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, 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.
(xv) The Indenture has been duly
authorized by all necessary corporate action on the part of the
Company, and constitutes the legally valid and binding obligation of
the Company, enforceable against the Company in accordance with its
terms, except as may be limited by bankruptcy, insolvency,
reorganization, moratorium 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, 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.
(xvi) The Subordinated Debt Securities are
in the form contemplated by the Indenture. The Subordinated Debt
Securities have been duly authorized by all necessary corporate action
on the part of the Company and, upon payment for and the delivery of
the Subordinated Debt Securities in accordance with the Agreement,
will constitute the 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 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, 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.
(xvii) The Declaration has been duly
authorized by all necessary corporate action on the part of the
Company, and constitutes the legally valid and binding obligation of
the Company, enforceable against the Company in accordance with its
terms,
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<PAGE> 18
except as rights to indemnity may be limited by applicable law and
except as may be limited by bankruptcy, insolvency, reorganization,
moratorium 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, 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.
(xviii) The Company's execution, delivery
and performance of this Agreement, the Pricing Agreement, the
Declaration, the Guarantee Agreements, the Indenture, the Subordinated
Debt Securities and the Undertakings do not violate the Company's
Articles of Incorporation, Bylaws or any applicable California law,
ordinance, administrative or governmental rule or regulation.
In connection with such counsel's
participation in the preparation of the 1994 Registration Statement,
the 1995 Registration Statement and the Prospectus (excluding the
summary financial information attached to the Form 8-K dated April 17,
1995 incorporated by reference therein), such counsel need not
independently verify the accuracy, completeness or fairness of the
statements contained or incorporated therein, and the limitations
inherent in the examination made by such counsel and the knowledge
available to it are such that such counsel need not assume any
responsibility for such accuracy, completeness or fairness (except as
otherwise specifically stated in subparagraph (ix) above); however, on
the basis of such counsel's review of the 1994 Registration Statement,
the 1995 Registration Statement, the Prospectus and the documents
incorporated by reference therein and such counsel's participation in
conferences in connection with the preparation of the 1994
Registration Statement, the 1995 Registration Statement and the
Prospectus (excluding the summary financial statement attached to the
Form 8-K dated April 17, 1995 incorporated by reference therein), such
counsel does not believe that the 1994 Registration Statement, at the
date of filing of the Form 10-K, or the 1995 Registration Statement,
at the time it became effective (in each case including the documents
then incorporated by reference and considered as a whole as of such
dates), contained an untrue statement of a material fact or omitted to
state a material fact required to be stated therein or necessary to
make the statements therein not misleading, and such counsel does not
believe that the Prospectus, at the time the Prospectus was filed with
the Commission pursuant to Rule 424(b) of the 1933 Act Regulations
(or, if a Revised Prospectus, at the date it was first provided to the
Underwriters for use in offering the Preferred Securities) and on the
date of such opinion (in each case including the documents then
incorporated by reference and considered as a whole as of such dates),
contained or contains any untrue statement of a material fact or
omitted or omits 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. However, such counsel need not
express any opinion or belief as to (x) any document filed by the
Company under the 1934 Act, whether before or after the date of the
filing of the Form 10-K or the effective date of the 1995 Registration
Statement, except to the extent that any such document is a document
incorporated by reference in the 1994 Registration Statement on the
date of the filing of the Form 10-K or the 1995 Registration Statement
at its effective date, read
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<PAGE> 19
together with the 1994 Registration Statement or the 1995 Registration
Statement, as the case may be, and considered as a whole or is a
document incorporated by reference and read together with the
Prospectus at the time the Prospectus was filed with the Commission
pursuant to Rule 424(b) of the 1933 Act Regulations and considered as
a whole, (y) the financial statements and other financial or
statistical data included or incorporated by reference in the 1994
Registration Statement, the 1995 Registration Statement or the
Prospectus or (z) those parts of the 1994 Registration Statement or
the 1995 Registration Statement that constitute statements of
eligibility of the Indenture Trustee, the Guarantee Trustee or the
Property Trustee under the 1939 Act.
(2) The favorable opinion, dated as of the
Closing Time, of Robert M. Johnson, Associate General Counsel for the Company,
in form and substance satisfactory to counsel for the Underwriters, to the
effect that:
(i) Paiute and The Southwest Companies have been
duly incorporated and are validly existing in good standing under the
laws of the State of Nevada, with corporate power to own and lease
their respective properties and with respect to Paiute to carry on its
business as described in the Prospectus.
(ii) The Company is duly qualified to do business
as a foreign corporation and is in good standing under the laws of the
States of Nevada and Arizona and neither the Company, Paiute nor The
Southwest Companies own or lease material properties or conduct
material business in any other jurisdiction which would require such
qualification. All the outstanding shares of capital stock of The
Southwest Companies and Paiute have been duly authorized and validly
issued, are fully paid and nonassessable, and are owned of record
directly by the Company free and clear of any perfected security
interest, or, to the best knowledge of such counsel after reasonable
inquiry, any other security interest, lien, adverse claim, equity or
other encumbrance.
(iii) There are no rights that entitle or will
entitle any person to acquire any capital stock of the Company upon
the issuance of the Preferred Securities by the Trust; there is no
holder of any security of the Company or any other person who has the
right contractual or otherwise, to cause the Company to sell or
otherwise issue to them, or to permit them to underwrite the sale of,
capital stock of the Company or the right to have any capital stock or
other securities of the Company included in the 1994 Registration
Statement or the 1995 Registration Statement or the right, as a result
of the filing of the 1994 Registration Statement or the 1995
Registration Statement, to require the registration under the 1933 Act
of any shares of capital stock or other securities of the Company.
(iv) There are no pending or, to the best knowledge
of such counsel after due inquiry, threatened legal or governmental
proceedings or, to the best knowledge of such counsel after due
inquiry, any statutes or regulations required to be described in the
Prospectus that are not described as required, nor any contracts or
documents of a character required to be described in the 1994
Registration Statement, 1995 Registration
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<PAGE> 20
Statement or Prospectus or to be filed as exhibits to the 1994
Registration Statement or the 1995 Registration Statement that are not
described or filed as required.
(v) To the best knowledge of such counsel after
due inquiry, neither the Company nor any of the Subsidiaries is in
violation of or is in default in the performance of any obligation
contained in any bond, debenture, note or any other evidence of
indebtedness or in any material agreement, indenture, lease or other
instrument to which the Company or any of the Subsidiaries is a party
or by which any of them or any of their respective properties may be
bound, which violation or default could reasonably be expected to have
a Material Adverse Effect.
(vi) No consent, approval, authorization or order
of any court or regulatory authority is required in connection with
the issuance and sale of the Common Securities or the offering of the
Preferred Securities, the Subordinated Debt Securities, the Guarantees
or the Undertakings except (a) such as have been obtained under the
1933 Act or the 1939 Act and such as have been applied for under the
1934 Act, (b) the authorizations of the California Public Utilities
Commission referred to in Section 1(y) of this Agreement which have
been obtained, remain in full force and effect and are, to the
knowledge of such counsel, not the subject of any pending or
threatened application for rehearing or petition for modification, (c)
the opinion and order, dated May 18, 1983, and the limited waiver,
dated August 8, 1995, of the Arizona Corporation Commission (which
order and waiver are final and not subject to appeal), and (d) such as
may be required by applicable state securities or Blue Sky laws.
(vii) The Guarantee Agreements, the Indenture and
the Declaration have been duly executed and delivered by the Company.
(viii) The Company's execution, delivery and
performance of the Agreement, the Pricing Agreement, the Declaration,
the Guarantees, the Guarantee Agreements, the Indenture, the
Subordinated Debt Securities and the Undertakings do not (i) violate,
breach, or result in a default under, any existing obligation of the
Company under any agreement, indenture, lease or other instrument to
which the Company is a party or by which it or any of its properties
is bound that is an exhibit to the 1994 Registration Statement or the
1995 Registration Statement or to any document incorporated by
reference therein or any other material agreement, indenture, lease or
other instrument known to such counsel after due inquiry, (ii) breach
or otherwise violate any existing obligation of the Company under any
order, judgement or decree of any Arizona, California or Nevada or
federal court or governmental authority binding on the Company, or
(iii) violate any applicable Arizona or Nevada law, ordinance,
administrative or governmental rule or regulation.
(ix) The Trust is not a party to or otherwise
bound by any agreement other than those listed on Schedule A attached
to such opinion; the Trust is not subject to any judgment, order or
decree of any government, governmental instrumentality or court,
domestic or foreign, or any regulatory body or administrative agency
or other
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governmental body having jurisdiction over the Trust or any of its
properties; and the Trust is not required to file an application as a
foreign corporation in Nevada.
In addition, such counsel shall include in his opinion a
statement substantially to the effect set forth in the last paragraph of
subsection (b)(1) above.
In rendering their opinions as aforesaid in Sections 5(b)(1)
and 5(b)(2) above, counsel may rely upon an opinion or opinions, each dated the
Closing Time, of other counsel retained by them or the Company as to laws of
any jurisdiction other than the United States or (x) in the case of O'Melveny &
Myers, the State of California and (y) in the case of Robert M. Johnson, Esq.,
the States of Arizona and Nevada, provided that (1) such reliance is expressly
authorized by each opinion so relied upon, (2) a signed copy of each such
opinion is delivered to the Underwriters which states that the Underwriters may
rely thereon and is otherwise in form and substance satisfactory to them and
their counsel, and (3) counsel shall state in their opinion that they believe
that they and the Underwriters are justified in relying thereon.
(3) The favorable opinion, dated as of
the Closing Time, of Skadden, Arps, Slate, Meagher & Flom, special Delaware
counsel for the Offerors, in form and substance satisfactory to counsel for the
Underwriters, to the effect that:
(i) The Trust has been duly created and is
validly existing in good standing as a business trust under the
Delaware Act; all filings required under the laws of the State of
Delaware with respect to the creation and valid existence of the Trust
as a business trust have been made; under the Delaware Act and the
Declaration the Trust has all necessary power and authority to own
property and to conduct its business as described in the Registration
Statement and Prospectus and to enter into and perform its obligations
under this Agreement, the Pricing Agreement, the Preferred Securities
and the Common Securities.
(ii) The Declaration has been duly executed and
delivered by the Trustees and is a valid and binding obligation of the
Company enforceable against the Company in accordance with its terms,
except as enforcement thereof may be limited by the Bankruptcy
Exceptions.
(iii) The Common Securities have been duly
authorized by the Declaration and are validly issued and, except as
otherwise provided in the Declaration, represent fully paid and
non-assessable undivided beneficial interests in the assets of the
Trust; and the issuance of the Common Securities is not subject to
preemptive or other similar rights under the Delaware Act and the
Declaration.
(iv) The Preferred Securities have been duly
authorized by the Declaration and, subject to the qualifications set
forth herein, when delivered to and paid for in accordance with the
terms of this Agreement, will be validly issued, fully paid and
non-assessable undivided beneficial interests in the assets of the
Trust; the holders of the Preferred Securities will be entitled to the
same limitation of personal liability extended to stockholders of
private corporations for profit organized under the General
Corporation
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<PAGE> 22
Law of the State of Delaware; and the issuance of the Preferred
Securities is not subject to preemptive or other similar rights under
the Delaware Act or the Declaration. Such counsel may bring to the
attention of the Underwriters that the Preferred Securities holders
may be obligated, pursuant to the Declaration, to (i) provide
indemnity and/or security in connection with and pay taxes or
governmental charges arising from transfers of Preferred Securities
and the issuance of replacement Preferred Securities, and (ii) provide
security and indemnity in connection with requests of or directions to
the Property Trustee to exercise its rights and powers under the
Declaration.
(v) The issuance and sale by the Trust of the
Preferred Securities and Common Securities; the execution, delivery
and performance by the Trust of this Agreement, the Pricing Agreement
and the Guarantee Agreements; the consummation of the transactions
contemplated herein and therein; and compliance by the Trust with its
obligations hereunder and thereunder have been duly authorized by all
necessary actions of the Trust (corporate or otherwise) and do not and
will not result in any violation of the provisions of its Certificate
of Trust or the Declaration or any applicable Delaware law or
administrative regulation.
(vi) No consent, approval, authorization or order
of any Delaware court or Delaware governmental authority is required
in connection with the issuance and sale of the Common Securities or
the offering of the Preferred Securities, the Subordinated Debt
Securities or the Guarantees.
(vii) The statements (i) in the Prospectus
Supplement referred to in the third paragraph hereof under the
captions "Risk Factors", "The Trust", "Description of the Preferred
Securities" (except under the subsection "Book-Entry Only Issuance-The
Depository Trust Company"), "Description of the Subordinated Debt
Securities" and "Effect of Obligations Under the Subordinated Debt
Securities and the Guarantee", and (ii) in the combined prospectus
referred to in such paragraph under the captions "The Trust",
"Particular Terms of Subordinated Debt Securities Issued in Connection
with Preferred Securities", "Description of the Preferred Securities"
and "Description of the Guarantee", insofar as they constitute matters
of Delaware law, summaries of legal matters, documents or proceedings,
or legal conclusions, have been reviewed by them and are correct in
all material respects.
(viii) The Trust is not in violation of its
Certificate of Trust or the Declaration.
(ix) This Agreement and the Pricing Agreement have
been duly authorized, executed and delivered by the Trust.
(x) Neither the Company nor the Trust is subject
to registration as an "investment company" under the 1940 Act.
(xi) The Declaration and the Preferred Securities
Guarantee Agreement have been duly executed and delivered by the
Property Trustee, and constitute the legal,
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valid and binding obligations of the Property Trustee, enforceable
against the Property Trustee in accordance with their terms, except as
enforcement thereof may be limited by the Bankruptcy Exceptions.
(4) The favorable opinions, dated as of
the Closing Time, of Seward & Kissel and internal counsel to Harris Trust and
Savings Bank, as the case may be, counsel to Harris Trust and Savings Bank, as
Property Trustee under the Declaration, and Guarantee Trustee under the
Preferred Securities Guarantee Agreement, in form and substance satisfactory to
counsel for the Underwriters, to the effect that,
(i) Harris Trust and Savings Bank is an
Illinois banking corporation with trust powers, duly organized,
validly existing and in good standing under the laws of the State of
Illinois adding necessary power and authority to execute and deliver,
and to carry out and perform its obligations under the terms of the
Declaration and the Preferred Securities Guarantee Agreement.
(ii) The execution, delivery and
performance by the Property Trustee of the Declaration and the
Preferred Securities Guarantee Agreement have been duly authorized by
all necessary corporate action on the part of the Property Trustee.
(iii) The execution, delivery and
performance of the Declaration and the Preferred Securities Guarantee
Agreement by the Property Trustee do not conflict with or constitute a
breach of the Articles of Organization or Bylaws of the Property
Trustee.
(iv) No consent, approval or
authorization of, or registration with or notice to, any Delaware or
federal banking authority is required for the execution, delivery or
performance by the Property Trustee of the Declaration and the
Preferred Securities Guarantee Agreement.
(5) The favorable opinion, dated as of the
Closing Time, of Winthrop, Stimson, Putnam & Roberts ("WSP&R"), counsel for the
Underwriters, in form and substance satisfactory to the Underwriters with
respect to the Preferred Securities, the Indenture, the Preferred Securities
Guarantee Agreement, this Agreement, the Pricing Agreement, the 1994
Registration Statement, the 1995 Registration Statement, the Prospectus and
other related matters as the Underwriters may require.
In giving its opinion, WSP&R may rely (i) as to certain
matters of California law upon the opinion of O'Melveny & Myers, counsel for
the Offerors, which shall be delivered in accordance of Section 5(b)(1) hereof,
(ii) as to certain matters of Arizona and Nevada law upon the opinion of Robert
M. Johnson, Associate General Counsel for the Company, which shall be delivered
in accordance with Section 5(b)(2) hereof and (iii) as to certain matters of
Delaware law upon the opinion of Skadden, Arps, Slate, Meagher & Flom, special
Delaware counsel for the Offerors, which shall be delivered in accordance with
Section 5(b)(3) hereof.
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<PAGE> 24
(c) Since the respective dates as of which
information is given in the 1994 Registration Statement, the 1995 Registration
Statement and the Prospectus, (i) there shall not have occurred a material
adverse change, or any development involving a prospective material adverse
change, in the condition (financial or other), business, properties,
management, net worth or results of operations of the Trust or the Company and
the Subsidiaries taken as a whole whether or not arising from transactions in
the ordinary course of business, in each case other than as set forth in or
contemplated by the Prospectus and (ii) neither the Trust, the Company nor any
of the Subsidiaries shall have sustained any loss or interference with its
business or properties from fire, explosion, flood or other casualty, whether
or not covered by insurance, or from any labor dispute or any court or
legislative or other governmental action, order or decree, which is not set
forth in the 1994 Registration Statement, the 1995 Registration Statement or
the Prospectus and which is material to the Trust or the Company and the
Subsidiaries taken as a whole, if in the judgment of the Underwriters any such
development makes it impracticable or inadvisable to consummate the sale and
delivery of the Preferred Securities by the Underwriters at the initial public
offering price.
(d) The representations and warranties of the
Company and the Trust contained in this Agreement shall be true and correct at
and as of the Closing Time as if made on and as of the Closing Time, and the
Underwriters shall have received a certificate, dated as of the Closing Time
and signed by the chief executive officer and the chief financial officer of
the Company (or such other officers as are acceptable to the Underwriters), and
a certificate of the Trustees of the Trust, dated as of the Closing Time, each
to the effect set forth in this Section 5(d) and in Sections 5(a), 5(e) and
5(f) hereof.
(e) The Company and the Trust shall have
performed or complied with their respective agreements and satisfied all
conditions which are required to be performed or complied with by them
hereunder at or prior to the Closing Time.
(f) Since the respective dates as of which
information is given in the 1994 Registration Statement, the 1995 Registration
Statement and the Prospectus, there shall have been no litigation or other
proceeding instituted against the Trust or the Company or any of the
Subsidiaries or any of their respective officers or directors in their
capacities as such, before or by any federal, state or local court, commission,
regulatory body, administrative agency or other governmental body, domestic or
foreign, in which litigation or proceeding an unfavorable ruling, decision or
finding would reasonably be expected to have a Material Adverse Effect.
(g) The Underwriters shall have received a letter
addressed to the Underwriters and dated the date hereof from Arthur Andersen
LLP, independent certified public accountants, substantially in the form
heretofore approved by the Underwriters, confirming that they are independent
accountants with respect to the Company as required by the 1933 Act and the
1933 Act Regulations, that the Trust is and will be treated as a consolidated
subsidiary of the Company pursuant to generally accepted accounting principles
and with respect to the financial and other statistical and numerical
information contained in the 1994 Registration Statement, the 1995 Registration
Statement and the Prospectus and in the documents incorporated by reference
therein. At the Closing Time, Arthur Andersen LLP shall have furnished to the
Underwriters a letter, dated the date of its delivery, which shall confirm, on
the basis of a review in accordance
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<PAGE> 25
with the procedures set forth in the letter from Arthur Andersen LLP delivered
on the date hereof, that nothing has come to their attention during the period
from the date of the letter referred to in the prior sentence to a date
(specified in the letter) not more than five days prior to the Closing Time
which would require any change in their letter delivered on the date hereof if
it were required to be dated and delivered at the Closing Time.
(h) At the Closing Time and each Date of
Delivery, if any, counsel for the Underwriters shall have been furnished with
such documents and opinions as they may require for the purpose of enabling
them to pass upon the issuance and sale of the Preferred Securities as herein
contemplated and related proceedings, or in order to evidence the accuracy of
any of the representations or warranties, or the fulfillment of any of the
conditions, herein contained; and all proceedings taken by the Offerors in
connection with the issuance and sale of the Preferred Securities as herein
contemplated shall be satisfactory in form and substance to the Underwriters
and counsel for the Underwriters.
(i) At the Closing Time, the Preferred Securities
shall be rated at least BB+ or better by Standard & Poor's Ratings Group
("S&P") and ba1 or better by Moody's Investors Service, Inc. ("Moody's") and
the Trust shall have delivered to the Underwriters a letter, dated the Closing
Time, from S&P and Moody's, respectively, or other evidence satisfactory to the
Underwriters, confirming that the Preferred Securities have such ratings; and
there shall not have occurred any decrease in the ratings of any of the debt
securities of the Company by S&P or Moody's and S&P or Moody's shall not have
publicly announced that it has under surveillance or review, with possible
negative implications, its rating of any of the debt securities of the Company.
(j) At the Closing Time, the Preferred Securities
shall have been approved for listing on the New York Stock Exchange upon notice
of issuance.
(k) The Underwriters shall have received a
reliance letter from O'Melveny & Myers, dated as of the Closing Time, to the
effect that the Underwriters may rely on the opinion of such counsel addressed
to the Company with respect to the Trust qualifying as a grantor trust for
United States federal income tax purposes as if such opinion was addressed to
the Underwriters.
(l) The Underwriters shall have received a
certificate of the Trustees of the Trust, dated as of the Closing Time, to the
effect that (i) the Trust is not a party to or otherwise bound by any agreement
other than those attached to such certificate and (ii) the Trust is not subject
to any judgment, order or decree of any government, governmental
instrumentality or court, domestic or foreign, or any regulatory body or
administrative agency or other governmental body having jurisdiction over the
Trust or any of its properties.
Any certificate or document signed by any officer of the
Company or any Trustee of the Trust and delivered to the Underwriters shall be
deemed a representation and warranty by the Company or the Trust, as the case
may be, to each Underwriter as to the statements made therein.
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<PAGE> 26
If any condition specified in this Section shall not have been
fulfilled when and as required to be fulfilled, this Agreement may be
terminated by the Underwriters by notice to the Offerors at any time at or
prior to the Closing Time, and such termination shall be without liability of
any party to any other party except as provided in Section 4 hereof.
Section 6. Indemnification.
(a) The Offerors will indemnify and hold harmless each
Underwriter, the directors, officers, employees and agents of each Underwriter
and each person, if any, who controls each Underwriter within the meaning of
Section 15 of the 1933 Act or Section 20 of the 1934 Act, from and against any
and all losses, claims, liabilities, expenses and damages (including any and
all investigative, legal and other expenses reasonably incurred in connection
with, and any amount paid in settlement of, any action, suit or proceeding or
any claim asserted), to which they, or any of them, may become subject under
the 1933 Act, the 1934 Act or other Federal or state statutory law or
regulation, at common law or otherwise, insofar as such losses, claims,
liabilities, expenses or damages arise out of or are based on any untrue
statement or alleged untrue statement of a material fact contained in any
preliminary prospectus relating to the Preferred Securities, the 1994
Registration Statement, the 1995 Registration Statement or the Prospectus or
any amendment or supplement to the 1994 Registration Statement, the 1995
Registration Statement or the Prospectus or in any documents filed under the
1934 Act and incorporated by reference into the Prospectus (when read together
with the Prospectus), or the omission or alleged omission to state in such
document a material fact required to be stated in it or necessary to make the
statements in it not misleading, provided that the Offerors will not be liable
to the extent that such loss, claim, liability, expense or damage arises from
the sale of the Preferred Securities in the public offering to any person by
such Underwriter and is based on an untrue statement or omission or alleged
untrue statement or omission made in reliance on and in conformity with
information relating to such Underwriter furnished in writing to the Offerors
by such Underwriter expressly for inclusion in the 1994 Registration Statement,
the 1995 Registration Statement, any preliminary prospectus relating to the
Preferred Securities or the Prospectus, and provided further that the Offerors
will not be liable to any Underwriter (or any person controlling such
Underwriter) from whom the person asserting any such loss, claim, liability,
expense or damage purchased the Preferred Securities which are the subject
thereof if such person did not receive from such Underwriter a copy of the
Prospectus (or the Prospectus as amended or supplemented, excluding documents
incorporated by reference therein), if the Offerors shall have previously
furnished copies thereof to such Underwriter, at or prior to the confirmation
of the sale of such Preferred Securities to such person in any case where such
delivery is required by the 1933 Act and the untrue statement or omission of a
material fact contained in the preliminary prospectus (or the Prospectus) was
corrected in the Prospectus (or the Prospectus as amended or supplemented).
This indemnity agreement will be in addition to any liability that the Offerors
might otherwise have.
(b) The Company agrees to indemnify the Trust against all
loss, liability, claim, damage and expense whatsoever, which may become due
from the Trust under Section 6(a) hereof.
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(c) Each Underwriter will indemnify and hold harmless the
Offerors, each person, if any, who controls the Offerors within the meaning of
Section 15 of the 1933 Act or Section 20 of the 1934 Act, each of their
directors or trustees and each of their officers who signed the 1994
Registration Statement or the 1995 Registration Statement to the same extent as
the foregoing indemnity from the Offerors to each Underwriter, but only insofar
as losses, claims, liabilities, expenses or damages arise out of or are based
on any untrue statement or omission or alleged untrue statement or omission
made in reliance on and in conformity with information relating to such
Underwriter furnished in writing to the Offerors by such Underwriter expressly
for use in the 1994 Registration Statement, the 1995 Registration Statement,
any preliminary prospectus relating to the Preferred Securities or the
Prospectus. This indemnity will be in addition to any liability that each
Underwriter might otherwise have.
(d) Any party that proposes to assert the right to be
indemnified under this Section 6 will, promptly after receipt of notice of
commencement of any action against such party in respect of which a claim is to
be made against an indemnifying party or parties under this Section 6, notify
each such indemnifying party of the commencement of such action, enclosing a
copy of all papers served, but the omission so to notify such indemnifying
party will not relieve it from any liability that it may have to any
indemnified party under the foregoing provisions of this Section 6 unless, and
only to the extent that, such omission results in the forfeiture of or
substantial prejudice to substantive rights or defenses by the indemnifying
party. If any such action is brought against any indemnified party and it
notifies the indemnifying party of its commencement, the indemnifying party
will be entitled to participate in and, to the extent that it elects by
delivering written notice to the indemnified party promptly after receiving
notice of the commencement of the action from the indemnified party, jointly
with any other indemnifying party similarly notified, to assume the defense of
the action, with counsel satisfactory to the indemnified party, and after
notice from the indemnifying party to the indemnified party of its election to
assume the defense, the indemnifying party will not be liable to the
indemnified party for any legal or other expenses except as provided below and
except for the reasonable costs of investigation subsequently incurred by the
indemnified party in connection with the defense. The indemnified party will
have the right to employ its own counsel in any such action, but the fees,
expenses and other charges of such counsel will be at the expense of such
indemnified party unless (i) the employment of counsel by the indemnified party
has been authorized in writing by the indemnifying party, (ii) the indemnified
party has reasonably concluded (based on advice of counsel) that there may be
legal defenses available to it or other indemnified parties that are different
from or in addition to those available to the indemnifying party, (iii) a
conflict or potential conflict exists (based on advice of counsel to the
indemnified party) between the indemnified party and the indemnifying party (in
which case the indemnifying party will not have the right to direct the defense
of such action on behalf of the indemnified party) or (iv) the indemnifying
party has not in fact employed counsel to assume the defense of such action
within a reasonable time after receiving notice of the commencement of the
action, in each of which cases the reasonable fees, disbursements and other
charges of counsel will be at the expense of the indemnifying party or parties.
It is understood that the indemnifying party or parties shall not, in
connection with any proceeding or related proceedings in the same jurisdiction,
be liable for the reasonable fees, disbursements and other charges of more than
one separate firm at any one time (plus local counsel) for all such indemnified
party or parties. All such fees, disbursements and other charges will be
reimbursed by the indemnifying party promptly as they are incurred. An
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<PAGE> 28
indemnifying party will not be liable for any settlement of any action or claim
effected without its written consent (which consent will not be unreasonably
withheld).
(e) 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 has or could have been sought
hereunder by such indemnified party, unless such settlement includes an
unconditional release of such indemnified party from all liability on claims
that are the subject matter of such action, suit or proceeding.
Section 7. Contribution. In order to provide for just and
equitable contribution in circumstances in which the indemnification provided
for in Section 6 is applicable in accordance with its terms but for any reason
is held to be unavailable from the Offerors or the Underwriters, the Offerors
and the Underwriters will contribute to the total losses, claims, liabilities,
expenses and damages (including any investigative, legal and other expenses
reasonably incurred in connection with, and any amount paid in settlement of,
any action, suit or proceeding or any claim asserted, but after deducting any
contribution received by the Offerors from persons other than the Underwriters,
such as persons who control the Offerors within the meaning of the 1933 Act,
officers of the Offerors who signed the 1994 Registration Statement or the 1995
Registration Statement and directors or trustees of the Offerors, who also may
be liable for contribution) to which the Offerors and any one or more of the
Underwriters may be subject in such proportion as shall be appropriate to
reflect the relative benefits received by the Offerors on the one hand and the
Underwriters on the other. The relative benefits received by the Offerors on
the one hand and the Underwriters on the other shall be deemed to be in the
same proportion as the total net proceeds from the offering (before deducting
expenses) received by the Offerors bear to the total underwriting discounts and
commissions received by the Underwriters, in each case as set forth in the
table on the cover page of the Prospectus. If, but only if, the allocation
provided by the foregoing sentence is not permitted by applicable law, the
allocation of contribution shall be made in such proportion as is appropriate
to reflect not only the relative benefits referred to in the foregoing sentence
but also the relative fault of the Offerors, on the one hand, and the
Underwriters, on the other, with respect to the statements or omissions which
resulted in such loss, claim, liability, expense or damage, or action in
respect thereof, as well as any other relevant equitable considerations with
respect to such offering. Such relative fault shall be determined by reference
to whether the untrue or alleged untrue statement of a material fact or
omission or alleged omission to state a material fact relates to information
supplied by the Offerors or the Underwriters, the intent of the parties and
their relative knowledge, access to information and opportunity to correct or
prevent such statement or omission. The Offerors and the Underwriters agree
that it would not be just and equitable if contributions pursuant to this
Section 7 were to be determined by pro rata allocation (even if the
Underwriters were treated as one entity for such purpose) or by any other
method of allocation which does not take into account the equitable
considerations referred to herein. The amount paid or payable by an
indemnified party as a result of the loss, claim, liability, expense or damage,
or action in respect thereof, referred to above in this Section 7 shall be
deemed to include, for purpose of this Section 7, any legal or other expenses
reasonably incurred by such indemnified party in connection with investigating
or defending any such action or claim. Notwithstanding the provisions of this
Section 7, no Underwriter shall be required to contribute any amount in excess
of the underwriting discounts
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<PAGE> 29
received by it, and no person found guilty of fraudulent misrepresentation
(within the meaning of Section 11(f) of the 1933 Act) will be entitled to
contribution from any person who was not guilty of such fraudulent
misrepresentation. The Underwriters' obligations to contribute as provided in
this Section 7 are several in proportion to their respective underwriting
obligations and not joint. For purposes of this Section 7, any person who
controls a party to this Agreement within the meaning of the 1933 Act will have
the same rights to contribution as that party, and each officer of the Offerors
who signed the 1994 Registration Statement or the 1995 Registration Statement
will have the same rights to contribution as the Offerors, subject in each case
to the provisions hereof. Any party entitled to contribution, promptly after
receipt of notice of commencement of any action against such party in respect
of which a claim for contribution may be made under this Section 7, will notify
any such party or parties from whom contribution may be sought, but the
omission so to notify will not relieve the party or parties from whom
contribution may be sought from any other obligation it or they may have under
this Section 7. No party will be liable for contribution with respect to any
action or claim settled without its written consent (which consent will not be
unreasonably withheld). The Company shall be jointly and severally liable for
all contributions which the Trust may be required to make hereunder.
Section 8. Representations, Warranties and Agreements to
Survive. The indemnity agreements contained in Section 6 hereof and
contribution agreements contained in Section 7 hereof and all representations,
warranties and agreements contained in this Agreement and the Pricing
Agreement, or contained in certificates of officers or trustees of the Offerors
submitted pursuant hereto, shall remain operative and in full force and effect,
regardless of any investigation made by or on behalf of any Underwriter or
controlling person, or by or on behalf of the Offerors and shall survive
delivery of the Preferred Securities to the Underwriters. In addition, such
indemnity and contribution agreements contained in Sections 6 and 7 shall
survive any termination of this Agreement.
Section 9. Termination of Agreement. This Agreement
shall be subject to termination in the absolute discretion of the Underwriters,
without liability on the part of any Underwriter to the Offerors by notice to
the Offerors, if prior to the Closing Time or each Date of Delivery, if any, as
the case may be, (i) trading in any of the equity securities of the Company
shall have been suspended by the Commission, the New York Stock Exchange or the
Pacific Stock Exchange, (ii) trading in securities generally on the New York
Stock Exchange, the Pacific Stock Exchange, the American Stock Exchange or the
Nasdaq National Market shall have been suspended or limited or minimum or
maximum prices shall have been generally established on such exchange, or
additional material governmental restrictions, not in force on the date of this
Agreement, shall have been imposed upon trading in securities generally by such
exchange or by order of the Commission or any court or other governmental
authority, (iii) a general banking moratorium in New York, Nevada, Arizona or
California shall have been declared by either federal or state authorities,
(iv) any material adverse change in the financial or securities markets in the
United States or in political, financial or economic conditions in the United
States or any outbreak or material escalation of hostilities or declaration by
the United States of a national emergency or war or other calamity or crisis
shall have occurred the effect of any of which is such as to make it, in the
sole judgment of the Underwriters, impracticable or inadvisable to market the
Preferred Securities on the terms and in the manner contemplated by the
Prospectus or to enforce contracts for the resale of the Preferred Securities
by the Underwriters, or (v) there shall have
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<PAGE> 30
occurred any decrease in the ratings of any of the debt securities of the
Company or of the Preferred Securities by S&P or Moody's or S&P or Moody's
shall have publicly announced that it has under surveillance or review, with
possible negative implications, its rating of any of the debt securities of the
Company or of the Preferred Securities. Notice of such termination may be
given to the Offerors by telegram, telecopy or telephone and shall be
subsequently confirmed by letter.
Section 10. Default by One or More of the Underwriters. If
one or more of the Underwriters shall fail at the Closing Time to purchase the
Preferred Securities that it or they are obligated to purchase under this
Agreement and the Pricing Agreement (the "Defaulted Securities"), the
non-defaulting Underwriters shall have the right, within 48 hours thereafter,
to make arrangements for one or more of the non-defaulting Underwriters, or any
other underwriters, to purchase all, but not less than all, of the Defaulted
Securities in such amounts as may be agreed upon and upon the terms herein set
forth; if, however, the non-defaulting Underwriters shall not have completed
such arrangements within such 48-hour period, then:
(a) if the number of Defaulted Securities does
not exceed 10% of the number of Preferred Securities, each of the
non-defaulting Underwriters shall be obligated, severally and not
jointly, to purchase the full amount thereof in the proportions that
their respective underwriting obligations hereunder bear to the
underwriting obligations of all non-defaulting Underwriters, or
(b) if the number of Defaulted Securities exceeds
10% of the number of Preferred Securities, this Agreement shall
terminate without liability on the part of any non-defaulting
Underwriter.
In the event of any such default which does not result in a
termination of this Agreement, either the non-defaulting Underwriters or the
Offerors shall have the right to postpone the Closing Time for a period not
exceeding ten days in order to effect any required changes in the 1994
Registration Statement, the 1995 Registration Statement or the Prospectus or in
any other documents or arrangements. No action taken pursuant to this Section
10 shall relieve any defaulting Underwriter from liability in respect of its
default.
Section 11. Notices. All notices and other communications
hereunder shall be in writing and shall be deemed to have been duly given if
mailed or transmitted by any standard form of telecommunication. Notices to
the Underwriters shall be directed to Merrill Lynch, Pierce, Fenner & Smith
Incorporated at Merrill Lynch World Headquarters, North Tower, World Financial
Center, New York, New York 10281-1201, attention of the general counsel;
notices to the Offerors shall be directed to them at 5241 Spring Mountain Road,
Las Vegas, Nevada 98510, attention of the chief financial officer.
Section 12. Parties. This Agreement and the Pricing
Agreement shall each inure to the benefit of and be binding upon the
Underwriters and the Offerors and their respective successors. Nothing
expressed or mentioned in this Agreement or the Pricing Agreement is intended
or shall be construed to give any person, firm or corporation, other than the
Underwriters and the Offerors and their respective successors and the
controlling persons and officers, directors and trustees referred to in
Sections 6 and 7 and their heirs and legal
-30-
<PAGE> 31
representatives, any legal or equitable right, remedy or claim under or in
respect of this Agreement or the Pricing Agreement or any provision herein or
therein contained. This Agreement and the Pricing Agreement and all conditions
and provisions hereof and thereof are intended to be for the sole and exclusive
benefit of the Underwriters and the Offerors and their respective successors,
and said controlling persons and officers, directors and trustees and their
heirs and legal representatives, and for the benefit of no other person, firm
or corporation. No purchaser of Preferred Securities from any Underwriter
shall be deemed to be a successor by reason merely of such purchase.
Section 13. Governing Law and Time. This Agreement and the
Pricing Agreement shall be governed by and construed in accordance with the
laws of the State of New York applicable to agreements made and to be performed
in said State. Except as otherwise set forth herein, specified times of day
refer to New York City time.
Section 14. Counterparts. This Agreement may be
simultaneously executed in counterparts, each of which when so executed shall
be deemed to be an original. Such counterparts shall together constitute one
and the same instrument.
-31-
<PAGE> 32
If the foregoing is in accordance with your understanding of
our agreement, please sign and return to the Trust a counterpart hereof,
whereupon this instrument, along with all counterparts, will become a binding
agreement between the Underwriters and the Trust and the Company in accordance
with its terms.
Very truly yours,
SOUTHWEST GAS CORPORATION
By: /s/ THOMAS J. TRIMBLE
------------------------
Title:
SOUTHWEST GAS CAPITAL I
By: /s/ GEORGE C. BIEHL
------------------------
Title: Trustee
By: /s/ JEFFREY W. SHAW
------------------------
Title: Trustee
<PAGE> 33
CONFIRMED AND ACCEPTED,
as of the date first above written:
MERRILL LYNCH & CO.
MERRILL LYNCH, PIERCE, FENNER & SMITH INCORPORATED
DEAN WITTER REYNOLDS INC.
PAINEWEBBER INCORPORATED
SMITH BARNEY INC.
By: MERRILL LYNCH, PIERCE, FENNER & SMITH INCORPORATED
By /s/ RUSSELL ROBERTSON
----------------------------
Authorized Signatory
<PAGE> 34
SCHEDULE A
<TABLE>
<CAPTION>
Number of
Preferred Securities
Underwriter to be Purchased
----------- -------------------
<S> <C>
Merrill Lynch, Pierce, Fenner & Smith
Incorporated . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 600,000
Dean Witter Reynolds Inc. . . . . . . . . . . . . . . . . . . . . . . . . . 600,000
PaineWebber Incorporated . . . . . . . . . . . . . . . . . . . . . . . . . 600,000
Smith Barney Inc. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 600,000
Total . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . ---------
2,400,000
</TABLE>
<PAGE> 35
EXHIBIT A
2,400,000 Preferred Securities
SOUTHWEST GAS CAPITAL I
(A DELAWARE BUSINESS TRUST)
____% TRUST ORIGINATED PREFERRED SECURITIES ("TOPRS")
(LIQUIDATION AMOUNT OF $25 PER SECURITY)
PRICING AGREEMENT
___________ __, 1995
MERRILL LYNCH & CO.
MERRILL LYNCH, PIERCE, FENNER & SMITH INCORPORATED
DEAN WITTER REYNOLDS INC.
PAINEWEBBER INCORPORATED
SMITH BARNEY INC.
c/o MERRILL LYNCH & CO.
MERRILL LYNCH, PIERCE, FENNER & SMITH INCORPORATED
Merrill Lynch World Headquarters
North Tower
World Financial Center
New York, New York 10281
Ladies and Gentlemen:
Reference is made to the Underwriting Agreement, dated ______
__, 1995 (the "Underwriting Agreement"), relating to the several purchases by
Merrill Lynch & Co., Merrill Lynch, Pierce, Fenner & Smith Incorporated, Dean
Witter Reynolds Inc., PaineWebber Incorporated and Smith Barney Inc. of the
above ____% Trust Originated Preferred Securities (the "Preferred Securities"),
of SOUTHWEST GAS CAPITAL I, a Delaware business trust (the "Trust")
Pursuant to Section 2 of the Underwriting Agreement, the Trust
and Southwest Gas Corporation (the "Company"), a California corporation, agree
with each Underwriter as follows:
1. The annual distribution rate, determined as
provided in said Section 2, shall be ___% of the liquidation amount of
$25 per Preferred Security.
<PAGE> 36
2. The compensation per Preferred Security to be
paid by the Company to the several Underwriters in respect of their
commitments hereunder shall be $_____; provided, however, that the
compensation per Preferred Security for sales of 10,000 or more
Preferred Securities to a single purchaser shall be $_____.
-3-
<PAGE> 37
If the foregoing is in accordance with your understanding of
our agreement, please sign and return to the Trust a counterpart hereof,
whereupon this instrument, along with all counterparts, will become a binding
agreement between the Underwriters and the Trust and the Company in accordance
with its terms.
Very truly yours,
SOUTHWEST GAS CORPORATION
By: _______________________
Title:
SOUTHWEST GAS CAPITAL I
By: _______________________
Title: Trustee
By: _______________________
Title: Trustee
<PAGE> 38
CONFIRMED AND ACCEPTED,
as of the date first above written:
MERRILL LYNCH & CO.
MERRILL LYNCH, PIERCE, FENNER & SMITH INCORPORATED
DEAN WITTER REYNOLDS INC.
PAINEWEBBER INCORPORATED
SMITH BARNEY INC.
By: MERRILL LYNCH, PIERCE, FENNER & SMITH INCORPORATED
By _____________________________
Authorized Signatory
<PAGE> 1
================================================================================
AMENDED AND RESTATED DECLARATION OF TRUST
SOUTHWEST GAS CAPITAL I
Dated as of October 26, 1995
================================================================================
Exhibit 4.06
<PAGE> 2
TABLE OF CONTENTS
<TABLE>
<CAPTION>
Page #
------
<S> <C>
ARTICLE I
Interpretation and Definitions . . . . . . . . . . . 2
Section 1.1 Definitions . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 2
ARTICLE II
Trust Indenture Act . . . . . . . . . . . . . . 9
Section 2.1 Trust Indenture Act; Application . . . . . . . . . . . . . . . . . . . . . . . . . 9
Section 2.2 Lists of Holders of Trust Securities . . . . . . . . . . . . . . . . . . . . . . . 9
Section 2.3 Reports by the Property Trustee . . . . . . . . . . . . . . . . . . . . . . . . . . 10
Section 2.4 Periodic Reports to Property Trustee . . . . . . . . . . . . . . . . . . . . . . . 10
Section 2.5 Evidence of Compliance with Conditions Precedent . . . . . . . . . . . . . . . . . 10
Section 2.6 Events of Default; Waiver . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 10
Section 2.7 Event of Default; Notice . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 12
ARTICLE III
Organization . . . . . . . . . . . . . . . . 13
Section 3.1 Name . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 13
Section 3.2 Office . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 13
Section 3.3 Purpose . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 13
Section 3.4 Authority . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 13
Section 3.5 Title to Property of the Trust . . . . . . . . . . . . . . . . . . . . . . . . . . 14
Section 3.6 Powers and Duties of the Regular Trustees . . . . . . . . . . . . . . . . . . . . . 14
Section 3.7 Prohibition of Actions by the Trust and the Trustees . . . . . . . . . . . . . . . 17
Section 3.8 Powers and Duties of the Property Trustee . . . . . . . . . . . . . . . . . . . . . 18
Section 3.9 Certain Duties and Responsibilities of the Property Trustee . . . . . . . . . . . . 20
Section 3.10 Certain Rights of Property Trustee . . . . . . . . . . . . . . . . . . . . . . . . 22
Section 3.11 Delaware Trustee . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 25
Section 3.12 Execution of Documents . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 25
Section 3.13 Not Responsible for Recitals or Issuance of Trust Securities . . . . . . . . . . . 26
Section 3.14 Duration of Trust . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 26
Section 3.15 Mergers . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 26
</TABLE>
i
<PAGE> 3
<TABLE>
<S> <C>
ARTICLE IV
Sponsor . . . . . . . . . . . . . . . . . 28
Section 4.1 Sponsor's Purchase of Common Securities . . . . . . . . . . . . . . . . . . . . . . 28
Section 4.2 Responsibilities of the Sponsor . . . . . . . . . . . . . . . . . . . . . . . . . . 28
ARTICLE V
Trustees . . . . . . . . . . . . . . . . . 29
Section 5.1 Number of Trustees . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 29
Section 5.2 Delaware Trustee . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 29
Section 5.3 Property Trustee; Eligibility . . . . . . . . . . . . . . . . . . . . . . . . . . . 29
Section 5.4 Qualifications of Regular Trustees and Delaware Trustee Generally . . . . . . . . . 30
Section 5.5 Initial Trustees . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 31
Section 5.6 Appointment, Removal and Resignation of Trustees . . . . . . . . . . . . . . . . . 31
Section 5.7 Vacancies among Trustees . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 33
Section 5.8 Effect of Vacancies . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 33
Section 5.9 Meetings . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 33
Section 5.10 Delegation of Power . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 34
ARTICLE VI
Distributions . . . . . . . . . . . . . . . 34
Section 6.1 Distributions . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 34
ARTICLE VII
Issuance of Trust Securities . . . . . . . . . . . . 35
Section 7.1 General Provisions Regarding Trust Securities . . . . . . . . . . . . . . . . . . . 35
ARTICLE VIII
Termination . . . . . . . . . . . . . . . . 36
Section 8.1 Termination of Trust. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 36
ARTICLE IX
Transfer of Interest . . . . . . . . . . . . . . 37
Section 9.1 Transfer of Trust Securities . . . . . . . . . . . . . . . . . . . . . . . . . . . 37
Section 9.2 Transfer of Certificates . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 37
Section 9.3 Deemed Trust Security Holders . . . . . . . . . . . . . . . . . . . . . . . . . . . 38
Section 9.4 Book Entry Interests . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 38
Section 9.5 Notices to Depositary . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 39
Section 9.6 Appointment of Successor Depositary . . . . . . . . . . . . . . . . . . . . . . . . 39
</TABLE>
ii
<PAGE> 4
<TABLE>
<S> <C>
Section 9.7 Definitive Preferred Security Certificates . . . . . . . . . . . . . . . . . . . . 39
Section 9.8 Mutilated, Destroyed, Lost or Stolen Certificates . . . . . . . . . . . . . . . . . 40
ARTICLE X
Limitation of Liability of Holders
of Trust Securities, Trustees or Others . . . . . . . . . 41
Section 10.1 Liability . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 41
Section 10.2 Exculpation . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 41
Section 10.3 Fiduciary Duty . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 42
Section 10.4 Indemnification . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 43
Section 10.5 Outside Businesses . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 44
ARTICLE XI
Accounting . . . . . . . . . . . . . . . . 44
Section 11.1 Fiscal Year . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 44
Section 11.2 Certain Accounting Matters . . . . . . . . . . . . . . . . . . . . . . . . . . . . 44
Section 11.3 Banking . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 45
Section 11.4 Withholding . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 46
ARTICLE XII
Amendments and Meetings . . . . . . . . . . . . . 46
Section 12.1 Amendments . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 46
Section 12.2 Meetings of the Holders of Trust Securities; Action by Written Consent . . . . . . 48
ARTICLE XIII
Representations and Warranties of
Property Trustee and Delaware Trustee . . . . . . . . . . 50
Section 13.1 Representations and Warranties of Property Trustee . . . . . . . . . . . . . . . . 50
Section 13.2 Representations and Warranties of Delaware Trustee . . . . . . . . . . . . . . . . 51
ARTICLE XIV
Miscellaneous . . . . . . . . . . . . . . . 52
Section 14.1 Notices . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 52
Section 14.2 Governing Law . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 53
Section 14.3 Intention of the Parties . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 53
Section 14.4 Headings . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 54
Section 14.5 Successors and Assigns . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 54
Section 14.6 Partial Enforceability . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 54
</TABLE>
iii
<PAGE> 5
<TABLE>
<S> <C>
Section 14.7 Counterparts . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 54
EXHIBIT A . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . A-1
ANNEX I . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . I-1
ANNEX II . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . II-1
</TABLE>
iv
<PAGE> 6
AMENDED AND RESTATED DECLARATION OF TRUST
AMENDED AND RESTATED DECLARATION OF TRUST ("Declaration") dated and
effective as of October 26, 1995, by the undersigned trustees (together with
all other Persons from time to time duly appointed and serving as trustees in
accordance with the provisions of this Declaration, the "Trustees"), Southwest
Gas Corporation, a California corporation, as trust sponsor (the "Sponsor"),
Harris Trust and Savings Bank, an Illinois banking corporation, as property
trustee (the "Property Trustee") and by the holders, from time to time, of
undivided beneficial interests in the Trust to be issued pursuant to this
Declaration;
WHEREAS, the Trustees and the Sponsor established a trust (the
"Trust") under the Delaware Business Trust Act pursuant to a Declaration of
Trust dated as of August 17, 1995, (the "Original Declaration") and a
Certificate of Trust filed with the Secretary of State of Delaware on August
17, 1995, for the sole purpose of issuing and selling certain securities
representing undivided beneficial interests in the assets of the Trust and
investing the proceeds thereof in certain Notes of the Note Issuer (as
hereinafter defined);
WHEREAS, as of the date hereof, no interests in the Trust have been
issued;
WHEREAS, all of the Trustees and the Sponsor, by this Declaration,
amend and restate each and every term and provision of the Original
Declaration; and
NOW, THEREFORE, it being the intention of the parties hereto to
continue the Trust as a business trust under the Business Trust Act and that
this Declaration constitute the governing instrument of such business trust,
the Trustees declare that all assets contributed to the Trust will be held in
trust for the benefit of the holders, from time to time, of the securities
representing undivided beneficial interests in the assets of the Trust issued
hereunder, subject to the provisions of this Declaration.
1
<PAGE> 7
ARTICLE I
Interpretation and Definitions
Section 1.1 Definitions.
(a) Capitalized terms used in this Declaration but not defined in
the preamble above have the respective meanings assigned to
them in this Section 1.1;
(b) a term defined anywhere in this Declaration has the same
meaning throughout;
(c) all references to "the Declaration" or "this Declaration" are
to this Declaration as modified, supplemented or amended from
time to time;
(d) all references in this Declaration to Articles and Sections
and Exhibits are to Articles and Sections of and Exhibits to
this Declaration unless otherwise specified;
(e) a term defined in the Trust Indenture Act has the same meaning
when used in this Declaration unless otherwise defined in this
Declaration or unless the context otherwise requires; and
(f) a reference to the singular includes the plural and vice versa.
"Affiliate" has the same meaning as given to that term in Rule 405 of
the Securities Act or any successor rule thereunder.
"Authorized Officer" of a Person means any Person that is authorized
to bind such Person.
"Book Entry Interest" means a beneficial interest in a Global
Certificate, ownership and transfers of which shall be maintained and made
through book entries by a Depositary as described in Section 9.4.
"Business Day" means any day other than a day on which banking
institutions in New York, New York, Los Angeles, California or Chicago,
Illinois are authorized or required by law to close.
2
<PAGE> 8
"Business Trust Act" means Chapter 38 of Title 12 of the Delaware Code,
12 Del. Code Section 3801 et seq., as it may be amended from time to time.
"Certificate" means a Common Security Certificate or a Preferred
Security Certificate.
"Closing Date" means October 31, 1995.
"Code" means the Internal Revenue Code of 1986, as amended from time
to time, or any successor legislation.
"Commission" means the Securities and Exchange Commission, as from
time to time constituted, created under the Exchange Act or, if at any time
after the execution of this instrument such Commission is not existing and
performing the duties now assigned to it under the Trust Indenture Act, then
the body performing such duties at such time.
"Common Security" has the meaning specified in Section 7.1.
"Common Securities Guarantee" means the guarantee agreement to be
dated as of October 31, 1995, of the Sponsor in respect of the Common
Securities.
"Common Security Certificate" means a definitive certificate in fully
registered form representing a Common Security substantially in the form of
Annex II to Exhibit A.
"Corporate Trust Office" means the principal office of the Trustee at
which at any particular time its corporate trust business shall be administered
which office at the date of execution of this Declaration is located at 311
West Monroe Street, 12th Floor, Chicago, Illinois 60606, Attention: Indenture
Trust Division.
"Covered Person" means: (a) any officer, director, shareholder,
partner, member, representative, employee or agent of (i) the Trust or (ii) the
Trust's Affiliates; and (b) any Holder of Trust Securities.
"Delaware Trustee" has the meaning set forth in Section 5.2.
"Definitive Preferred Security Certificates" has the meaning set forth
in Section 9.4.
"Depositary" means an organization registered as a clearing agency
pursuant to Section 17A of the Exchange Act that is acting as depositary for
the Preferred Securities and in whose name or
3
<PAGE> 9
in the name of a nominee of that organization shall be registered a Global
Certificate and which shall undertake to effect book entry transfers and
pledges of the Preferred Securities.
"Depositary Participant" means a broker, dealer, bank, other financial
institution or other Person for whom from time to time the Depositary effects
book entry transfers and pledges of securities deposited with the Depositary.
"Direction" by a Person means a written direction signed:
(a) if the Person is a natural person, by that Person; or
(b) in any other case, in the name of such Person by one or more
Authorized Officers of that Person.
"Distribution" means a distribution payable to Holders of Trust
Securities in accordance with Section 6.1.
"DTC" means The Depository Trust Company, the initial Depositary.
"Exchange Act" means the Securities Exchange Act of 1934, as amended
from time to time, or any successor legislation.
"Event of Default", in respect of the Trust Securities, means an Event
of Default (as defined in the Indenture) has occurred and is continuing in
respect of the Notes.
"Global Certificate" has the meaning specified in Section 9.4.
"Holder" means a Person in whose name a Certificate representing a
Trust Security is registered on the books and records of the Trust, such Person
being a beneficial owner within the meaning of the Business Trust Act,
provided, that, in determining whether the holders of the requisite percentage
of Preferred Securities have given any request, notice, consent or waiver
hereunder, "Holder" shall not include the Sponsor, as guarantor of the Trust
Securities, or any Affiliate of the Sponsor.
"Indemnified Person: means (a) any Trustee or the Property Trustee;
(b) any Affiliate of any Trustee or the Property Trustee; (c) any officers,
directors, shareholders, members, partners, employees, representatives or
agents of any Trustee or the Property Trustee; or (d) any employee or agent of
the Trust or its Affiliates.
"Indenture" means the Indenture dated as of October 31, 1995 among the
Note Issuer and the Note Trustee as supplemented by the
4
<PAGE> 10
First Supplemental Indenture dated as of October 31, 1995 and any other
indenture supplemental thereto.
"Investment Company" means an investment company as defined in the
Investment Company Act.
"Investment Company Act" means the Investment Company Act of 1940, as
amended from time to time, or any successor legislation.
"Legal Action" has the meaning set forth in Section 3.6(g).
"Ministerial Action" has the meaning set forth in the terms of the
Trust Securities as set forth in Exhibit A.
"Majority in liquidation amount" means, except as provided in the
terms of the Trust Securities and the Trust Indenture Act, Holder(s) of
outstanding Trust Securities voting together as a single class or, as the
context may require, Holders of outstanding Preferred Securities or Holders of
outstanding Common Securities voting separately as a class, who are the record
owners of more than 50% of the aggregate liquidation amount (including the
stated amount that would be paid on redemption, liquidation or otherwise, plus
accrued and unpaid Distributions to the date upon which the voting percentages
are determined) of all outstanding Trust Securities of the relevant class.
"Note Issuer" means the Sponsor in its capacity as issuer of the Notes.
"Note Trustee" means Harris Trust and Savings Bank, as trustee under
the Indenture until a successor is appointed thereunder, and thereafter means
such successor trustee.
"Notes" means the series of Notes to be issued by the Note Issuer
under the Indenture to be held by the Property Trustee.
"Officers' Certificate" means, with respect to any Person, a
certificate signed by two Authorized Officers of such Person. Any Officers'
Certificate delivered with respect to compliance with a condition or covenant
provided for in this Declaration shall include:
(a) a statement that each officer signing the Certificate has read
the covenant or condition and the definition relating thereto;
(b) a brief statement of the nature and scope of the examination
or investigation undertaken by each officer in rendering the
Certificate;
(c) a statement that each such officer has made such examination
or investigation as, in such officer's
5
<PAGE> 11
opinion, is necessary to enable such officer to express an
informed opinion as to whether or not such covenant or
condition has been complied with; and
(d) a statement as to whether, in the opinion of each such
officer, such condition or covenant has been complied with.
"Paying Agent" has the meaning specified in Section 3.8(h).
"Person" means a legal person, including any individual, corporation,
estate, partnership, joint venture, association, joint stock company, limited
liability company, trust, unincorporated association, or government or any
agency or political subdivision thereof, or any other entity of whatever
nature.
"Preferred Securities Guarantee" means the guarantee agreement to be
dated as of October 31, 1995, of the Sponsor in respect of the Preferred
Securities.
"Preferred Security" has the meaning specified in Section 7.1.
"Preferred Security Beneficial Owner" means, with respect to a Book
Entry Interest, a Person who is the beneficial owner of such Book Entry
Interest, as reflected on the books of the Depositary, or on the books of a
Person maintaining an account with such Depositary (directly as a Depositary
Participant or as an indirect participant, in each case in accordance with the
rules of such Depositary).
"Preferred Security Certificate" means a certificate representing a
Preferred Security substantially in the form of Annex I to Exhibit A.
"Pricing Agreement" means the pricing agreement between the Trust, the
Note Issuer, and the underwriters designated by the Regular Trustees with
respect to the offer and sale of the Preferred Securities.
"Property Trustee" means Harris Trust and Savings Bank, an Illinois
banking corporation in its capacity as property trustee, or any successor
trustee meeting the eligibility requirements set forth in Section 5.3.
"Property Trustee Account" has the meaning set forth in Section 3.8(c).
"Prospectus Supplement" means that certain Prospectus Supplement dated
as of October 26, 1995 relating to the 2,400,000 Preferred Securities.
6
<PAGE> 12
"Quorum" means a majority of the Regular Trustees or, if there are
only two Regular Trustees, both of them.
"Regular Trustee" means any Trustee other than the Delaware Trustee.
"Related Party" means, with respect to the Sponsor, any direct or
indirect wholly owned subsidiary of the Sponsor or any other Person that owns,
directly or indirectly, 100% of the outstanding voting securities of the
Sponsor.
"Responsible Officer" means, with respect to the Property Trustee, any
vice-president, any assistant vice-president, the secretary, any assistant
secretary, the treasurer, any assistant treasurer, any trust officer or
assistant trust officer or any other officer in the Corporate Trust Office of
the Property Trustee customarily performing functions similar to those
performed by any of the above designated officers and also means, with respect
to a particular corporate trust matter, any other officer to whom such matter
is referred because of that officer's knowledge of and familiarity with the
particular subject.
"Rule 3a-5" means Rule 3a-5 under the Investment Company Act.
"Securities Act" means the Securities Act of 1933, as amended from
time to time, or any successor legislation.
"66-2/3% in liquidation amount" means, except as provided in the terms
of the Trust Securities and by the Trust Indenture Act, Holders of outstanding
Trust Securities voting together as a single class or, as the context may
require, Holders of outstanding Preferred Securities or Holder(s) of
outstanding Common Securities voting separately as a class, representing at
least 66-2/3% of the aggregate liquidation amount (including the stated amount
that would be paid on redemption, liquidation or otherwise, plus accrued and
unpaid Distributions, to the date upon which the voting percentages are
determined) of all outstanding Trust Securities of the relevant class.
"Sponsor" means Southwest Gas Corporation, a California corporation,
or any successor entity in a merger, consolidation or amalgamation, in its
capacity as sponsor of the Trust.
"Tax Event" means the receipt by, and upon the request of, the Regular
Trustees of an opinion of nationally recognized independent tax counsel
experienced in such matters to the effect that, as a result of (a) any
amendment to, or change (including any announced prospective change) in, the
laws (or any regulations thereunder) of the United States or any political
subdivision or taxing authority thereof or therein, (b) any amendment to or
change in an interpretation or application of
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such laws or regulations by any legislative body, court, governmental agency or
regulatory authority (including the enactment of any legislation and the
publication of any judicial decision or regulatory determination on or after
the date of the Prospectus Supplement), (c) any interpretation or pronouncement
by any such body, court, agency or authority that provides for a position with
respect to such laws or regulations that differs from the theretofore generally
accepted position, or (d) any action taken by any governmental agency or
regulatory authority, which amendment or change is enacted, promulgated or
effective, or which interpretation or pronouncement is issued or announced, or
which action is taken, in each case on or after the date of the Prospectus
Supplement, there is more than an insubstantial risk that (i) the Trust is, or
within 90 days of the date thereof will, be subject to United States federal
income tax with respect to income accrued or received on the Subordinated Debt
Securities, (ii) interest payable to the Trust on the Subordinated Debt
Securities is, or within 90 days of the date thereof will, not be deductible in
whole or in part, by the Note Issuer for United States federal income tax
purposes or (iii) the Trust is, or within 90 days of the date thereof will, be
subject to more than a de minimis amount of other taxes, duties or other
governmental charges.
"10% in liquidation amount" means, except as provided in the terms of
the Trust Securities or by the Trust Indenture Act, Holders of outstanding
Trust Securities voting together as a single class or, as the context may
require, Holders of outstanding Preferred Securities or Holders of outstanding
Common Securities, voting separately as a class, representing at least 10% of
the aggregate liquidation amount (including the stated amount that would be
paid on redemption, liquidation or otherwise, plus accrued and unpaid
Distributions to the date upon which the voting percentages are determined) of
all outstanding Trust Securities of the relevant class.
"Treasury Regulations" means the income tax regulations, including
temporary and proposed regulations, promulgated under the Code by the United
States Treasury, as such regulations may be amended from time to time
(including corresponding provisions of succeeding regulations).
"Trustee" or "Trustees" means each Person who has signed this
Declaration as a trustee, other than the Property Trustee, so long as such
person shall continue in office in accordance with the terms hereof, and all
other Persons who may from time to time be duly appointed, qualified and
serving as Trustees in accordance with the provisions hereof, and references
herein to a Trustee or the Trustees shall refer to such Person or Persons
solely in their capacity as trustees hereunder.
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"Trust Indenture Act" means the Trust Indenture Act of 1939 as in
effect at the date as of which this instrument was executed, provided, however,
that in the event the Trust Indenture Act of 1939 is amended after such date,
"Trust Indenture Act" means, to the extent required by any such amendment, the
Trust Indenture Act of 1939 as so amended.
"Trust Securities" means collectively the Common Securities and the
Preferred Securities.
"Underwriting Agreement" means the Underwriting Agreement for the
offering and sale of Preferred Securities.
ARTICLE II
Trust Indenture Act
Section 2.1 Trust Indenture Act; Application
(a) This Declaration is subject to the provisions of the Trust
Indenture Act that are required to be part of this Declaration
and shall, to the extent applicable, be governed by such
provisions.
(b) The Property Trustee shall be the only Trustee which is a
Trustee for the purposes of the Trust Indenture Act.
(c) If and to the extent that any provision of this Declaration
limits, qualifies or conflicts with the duties imposed by
Sections 310 to 317, inclusive, of the Trust Indenture Act,
such duties imposed by the Trust Indenture Act shall control.
(d) The application of the Trust Indenture Act to this Declaration
shall not affect the nature of the Trust Securities as equity
securities representing undivided beneficial interests in the
assets of the Trust.
Section 2.2 Lists of Holders of Trust Securities.
(a) Each of the Sponsor and the Regular Trustees on behalf of the
Trust shall provide the Property Trustee (i) within 14 days
after each record date for payment of Distributions, a list,
in such form as the Property Trustee may reasonably require,
of the names and addresses of the Holders of the Trust
Securities ("List of Holders") as of such record date,
provided that none of the Sponsor or the Regular Trustees on
behalf of the Trust shall be obligated to provide such list of
Holders at any time the List of Holders does not differ from
the most recent List of Holders given to the Property Trustee
by the Sponsor and the Regular
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Trustees on behalf of the Trust, and (ii) at any other time,
within 30 days of receipt by the Trust of a written request for
a List of Holders as of a date no more than 14 days before such
List of Holders is given to the Property Trustee. The Property
Trustee shall preserve, in as current a form as is reasonably
practicable, all information contained in Lists of Holders
given to it or which it receives in the capacity as Paying
Agent (if acting in such capacity) provided that the Property
Trustee may destroy any List of Holders previously given to it
on receipt of a new List of Holders.
(b) The Property Trustee shall comply with the obligations of an
indenture trustee under Sections 311(a), 311(b) and 312(b) of
the Trust Indenture Act.
Section 2.3 Reports by the Property Trustee.
Within 60 days after December 31 of each year, the Property Trustee
shall provide to the Holders of the Preferred Securities such reports as are
required by Section 313 of the Trust Indenture Act, if any, in the form and in
the manner provided by Section 313 of the Trust Indenture Act. The Property
Trustee shall also comply with the requirements of Section 313(d) of the Trust
Indenture Act.
Section 2.4 Periodic Reports to Property Trustee.
Each of the Sponsor and the Regular Trustees on behalf of the Trust
shall provide to the Property Trustee such documents, reports and information
as required by Section 314 (if any) and the compliance certificate required by
Section 314 of the Trust Indenture Act in the form, in the manner and at the
times required by Section 314 of the Trust Indenture Act.
Section 2.5 Evidence of Compliance with Conditions Precedent.
Each of the Sponsor and the Regular Trustees on behalf of the Trust
shall provide to the Property Trustee such evidence of compliance with any
conditions precedent, if any, provided for in this Declaration that relate to
any of the matters set forth in Section 314(c) of the Trust Indenture Act. Any
certificate or opinion required to be given by an officer pursuant to Section
314(c)(1) may be given in the form of an Officers' Certificate.
Section 2.6 Events of Default; Waiver
(a) The Holders of a Majority in liquidation amount of Preferred
Securities may, by vote, on behalf of the Holders of all of
the Preferred Securities, waive any past Event of Default in
respect of the Preferred
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Securities and its consequences, provided that, if the
underlying Event of Default under the Indenture:
(i) is not waivable under the Indenture, the Event of
Default under the Declaration shall also not be
waivable; or
(ii) requires the consent or vote of all of the holders of
the Notes to be waived under the Indenture, the Event
of Default under the Declaration may only be waived
by the vote of all of the Holders of the Preferred
Securities.
Upon such waiver, any such default shall cease to exist, and
any Event of Default with respect to the Preferred Securities
arising therefrom shall be deemed to have been cured, for
every purpose of this Declaration, but no such waiver shall
extend to any subsequent or other default or an Event of
Default with respect to the Preferred Securities or impair any
right consequent thereon. Any waiver by the Holders of the
Preferred Securities of an Event of Default with respect to
the Preferred Securities shall also be deemed to constitute a
waiver by the Holders of the Common Securities of any such
Event of Default with respect to the Common Securities for all
purposes of this Declaration without any further act, vote, or
consent of the Holders of the Common Securities.
(b) The Holders of a Majority in liquidation amount of the Common
Securities may, by vote, on behalf of the Holders of all of
the Common Securities, waive any past Event of Default with
respect to the Common Securities and its consequences,
provided that, if the underlying Event of Default under the
Indenture:
(i) is not waivable under the Indenture, except where the
Holders of the Common Securities are deemed to have
waived such Event of Default under the Declaration as
provided below in this Section 2.6(b), the Event of
Default under the Declaration shall also not be
waivable; or
(ii) requires the consent or vote of all of the holders of
the Notes to be waived, except where the Holders of
the Common Securities are deemed to have waived such
Event of Default under the Declaration as provided
below in this Section 2.6(b), the Event of Default
under the Declaration may only be waived by the vote
of all of the Holders of Common Securities;
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provided that, each Holder of Common Securities will be deemed
to have waived any such Event of Default and all Events of
Default with respect to the Common Securities and its
consequences until all Events of Default with respect to the
Preferred Securities have been cured, waived or otherwise
eliminated, and until such Events of Default have been so
cured, waived or otherwise eliminated, the Property Trustee
will be deemed to be acting solely on behalf of the Holders of
the Preferred Securities and only the Holders of the Preferred
Securities will have the right to direct the Property Trustee
in accordance with the terms of the Trust Securities. Subject
to the foregoing provisions of this Section 2.6(b), upon such
waiver, any such default shall cease to exist and any Event of
Default with respect to the Common Securities arising therefrom
shall be deemed to have been cured for every purpose of this
Declaration but no such waiver shall extend to any subsequent
or other default or Event of Default with respect to the Common
Securities or impair any right consequent thereon.
(c) A waiver of an Event of Default under the Indenture by the
Property Trustee at the direction of the Holders of the
Preferred Securities, constitutes a waiver of the
corresponding Event of Default under this Declaration.
Section 2.7 Event of Default; Notice.
(a) The Property Trustee shall, within 90 days after the
occurrence of an Event of Default, transmit by mail, first
class postage prepaid, to the Holders of the Trust Securities,
notices of all defaults with respect to the Trust Securities
known to the Property Trustee, unless such defaults have been
cured before the giving of such notice (the term "defaults"
for the purposes of this Section 2.7(a) being hereby defined
to be an Event of Default as defined in the Indenture, not
including any periods of grace provided for therein and
irrespective of the giving of any notice provided therein);
provided that, except for a default in the payment of
principal of (or premium, if any) or interest on any of the
Notes or in the payment of any sinking fund installment
established for the Notes, the Property Trustee shall be
protected in withholding such notice if and so long as
Responsible Officers of the Property Trustee in good faith
determine that the withholding of such notice is in the
interests of the Holders of the Trust Securities.
(b) The Property Trustee shall not be deemed to have knowledge of
any default except:
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(i) a default under Sections 501(1) and 501(2) of the
Indenture; or
(ii) any default as to which a Responsible Officer of the
Property Trustee charged with the administration of
the Declaration shall have obtained written or actual
notice.
ARTICLE III
Organization
Section 3.1 Name.
The Trust is named "Southwest Gas Capital I", as such name may be
modified from time to time by the Regular Trustees following written notice to
the Holders of Trust Securities. The Trust's activities may be conducted under
the name of the Trust or any other name deemed advisable by the Regular
Trustees.
Section 3.2 Office.
The address of the principal office of the Trust is c/o Southwest Gas
Corporation, 5241 Spring Mountain Road, Las Vegas, Nevada 89102. On ten
Business Days written notice to the Holders of Trust Securities, the Regular
Trustees may designate another principal office.
Section 3.3 Purpose.
The exclusive purposes and functions of the Trust are (a) to issue and
sell Trust Securities and use the proceeds from such sale to acquire the Notes
and (b) except as otherwise limited herein, to engage in only those other
activities necessary, or incident thereto. The Trust shall not borrow money,
issue debt or reinvest proceeds derived from investments, pledge any of its
assets, or otherwise undertake (or permit to be undertaken) any activity that
would cause the Trust not to be classified for United States federal income tax
purposes as a grantor trust. All provisions of this Declaration shall be
interpreted in a manner consistent with such purposes.
Section 3.4 Authority.
Subject to the limitations provided in this Declaration, including the
provisions of Sections 3.11, 5.2 and 8.1(b), and to the specific duties of the
Property Trustee, the Regular Trustees shall have exclusive and complete
authority to carry out the purposes of the Trust. An action taken by the
Regular Trustees in accordance with their powers shall constitute the act of
and serve to bind the Trust and an action taken by the Property Trustee in
accordance with its powers shall constitute the act of
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and serve to bind the Trust. In dealing with the Regular Trustees acting on
behalf of the Trust, no Person shall be required to inquire into the authority
of the Regular Trustees to bind the Trust. Persons dealing with the Trust are
entitled to rely conclusively on the power and authority of the Trustees as set
forth in this Declaration.
Section 3.5 Title to Property of the Trust.
Except as provided in Section 3.8 with respect to the Notes and the
Property Trustee Account or as otherwise provided in this Declaration, legal
title to all assets of the Trust shall be vested in the Trust. The Holders
shall not have legal title to any part of the assets of the Trust, but shall
have an undivided beneficial interest in the assets of the Trust.
Section 3.6 Powers and Duties of the Regular Trustees.
The Regular Trustees shall have the exclusive power, duty and
authority to cause the Trust to engage in the following activities:
(a) to issue and sell the Preferred Securities and the Common
Securities in accordance with this Declaration; provided,
however, that the Trust may issue no more than one series of
Preferred Securities and no more than one series of Common
Securities, and, provided further, that there shall be no
interests in the Trust other than the Trust Securities, and
the issuance of Trust Securities shall be limited to [a
one-time], simultaneous issuance of both Preferred Securities
and Common Securities on the Closing Date;
(b) in connection with the issue and sale of the Preferred
Securities, at the direction of the Sponsor, to:
(i) execute and file with the Commission the registration
statement on Form S-3 prepared by the Sponsor,
including any amendments thereto, pertaining to the
Preferred Securities;
(ii) execute and file any documents prepared by the
Sponsor, or take any acts as determined by the
Sponsor to be necessary in order to qualify or
register all or part of the Preferred Securities in
any State in which the Sponsor has determined to
qualify or register such Preferred Securities for
sale;
(iii) execute and file an application, prepared by the
Sponsor, to the New York Stock Exchange or any other
national stock exchange or the NASDAQ
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National Market System for listing upon notice of
issuance of any Preferred Securities;
(iv) execute and file with the Commission a registration
statement on Form 8-A, including any amendments
thereto, prepared by the Sponsor relating to the
registration of the Preferred Securities under
Section 12(b) of the Exchange Act; and
(v) execute and enter into the Underwriting Agreement and
Pricing Agreement providing for the sale of the
Preferred Securities;
(c) to acquire the Notes with the proceeds of the sale of the
Preferred Securities and the Common Securities; provided,
however, that the Regular Trustees shall cause legal title to
the Notes to be held of record in the name of the Property
Trustee for the benefit of the Holders of the Preferred
Securities and the Holders of Common Securities;
(d) to give the Sponsor and the Property Trustee prompt written
notice of the occurrence of a Tax Event; provided that the
Regular Trustees shall consult with the Sponsor and the
Property Trustee before taking or refraining from taking any
Ministerial Action in relation to a Tax Event;
(e) to establish a record date with respect to all actions to be
taken hereunder that require a record date be established,
including and with respect to, for the purposes of Section
316(c) of the Trust Indenture Act, Distributions, voting
rights, redemptions and exchanges, and to issue relevant
notices to the Holders of Preferred Securities and Holders of
Common Securities as to such actions and applicable record
dates;
(f) to take all actions and perform such duties as may be required
of the Regular Trustees pursuant to the terms of the Trust
Securities;
(g) to bring or defend, pay, collect, compromise, arbitrate,
resort to legal action, or otherwise adjust claims or demands
of or against the Trust ("Legal Action"), unless pursuant to
Section 3.8(e), the Property Trustee has the exclusive power
to bring such Legal Action;
(h) to employ or otherwise engage employees and agents (who may be
designated as officers with titles) and
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managers, contractors, advisors, and consultants and pay
reasonable compensation for such services;
(i) to cause the Trust to comply with the Trust's obligations
under the Trust Indenture Act;
(j) to give the certificate required by Section 314(a)(4) of the
Trust Indenture Act to the Property Trustee, which certificate
may be executed by a Regular Trustee;
(k) to incur expenses that are necessary or incidental to carry
out any of the purposes of the Trust;
(l) to act as, or appoint another Person to act as, registrar and
transfer agent for the Trust Securities;
(m) to give prompt written notice to the Holders of the Trust
Securities and the Property Trustee of any notice received
from the Note Issuer of its election (i) to defer payments of
interest on the Notes by extending the interest payment period
under the Indenture or, (ii) to extend the scheduled maturity
date on the Notes;
(n) to execute all documents or instruments, perform all duties
and powers, and do all things for and on behalf of the Trust
in all matters necessary or incidental to the foregoing;
(o) to take all action that may be necessary or appropriate for
the preservation and the continuation of the Trust's valid
existence, rights, franchises and privileges as a statutory
business trust under the laws of the State of Delaware and of
each other jurisdiction in which such existence is necessary
to protect the limited liability of the Holders of the Trust
Securities or to enable the Trust to effect the purposes for
which the Trust was created;
(p) to take any action, not inconsistent with this Declaration or
with applicable law, that the Regular Trustees determine in
their discretion to be necessary or desirable in carrying out
the activities of the Trust as set out in this Section 3.6,
including, but not limited to:
(i) causing the Trust not to be deemed to be an
Investment Company required to be registered under
the Investment Company Act;
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(ii) causing the Trust to be classified for United States
federal income tax purposes as a grantor trust; and
(iii) cooperating with the Note Issuer to ensure that the
Notes will be treated as indebtedness of the Note
Issuer for United States federal income tax purposes,
provided that such action does not adversely affect the
interests of Holders; and
(q) to take all action necessary to cause all applicable tax
returns and tax information reports that are required to be
filed with respect to the Trust to be duly prepared and filed
by the Regular Trustees, on behalf of the Trust.
The Regular Trustees must exercise the powers set forth in this
Section 3.6 in a manner that is consistent with the purposes and functions of
the Trust set out in Section 3.3, and the Regular Trustees shall not take any
action that is inconsistent with the purposes and functions of the Trust set
forth in Section 3.3.
Subject to this Section 3.6, the Regular Trustees shall have none of
the powers or the authority of the Property Trustee set forth in Section 3.8.
Section 3.7 Prohibition of Actions by the Trust and the Trustees.
(a) The Trust shall not, and the Trustees and the Property Trustee
shall not, engage in any activity other than as required or
authorized by this Declaration. In particular, the Trust
shall not and the Trustees and the Property Trustee shall
cause the Trust not to:
(i) invest any proceeds received by the Trust from
holding the Notes, but shall distribute all such
proceeds to Holders of Trust Securities pursuant to
the terms of this Declaration and of the Trust
Securities;
(ii) acquire any assets other than as expressly provided
herein;
(iii) possess Trust property for other than a Trust purpose;
(iv) make any loans or incur any indebtedness other than
loans represented by the Notes;
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(v) possess any power or otherwise act in such a way as
to vary the Trust assets or the terms of the Trust
Securities in any way whatsoever;
(vi) issue any securities or other evidences of beneficial
ownership of, or beneficial interest in, the Trust
other than the Trust Securities; or
(vii) other than as provided in this Amended and Restated
Declaration or as set forth on Exhibit A hereto, (A)
direct the time, method and place of exercising
any trust or power conferred upon the Note Trustee
with respect to the Notes, (B) waive any past default
that is waivable under Section 513 of the Indenture,
(C) exercise any right to rescind or annul any
declaration that the principal of all the Notes shall
be due and payable or (D) consent to any amendment,
modification or termination of the Indenture or the
Notes where such consent shall be required unless the
Trust shall have received an opinion of counsel to
the effect that such modification will not cause more
than an insubstantial risk that for United States
federal income tax purposes the Trust will not be
classified as a grantor trust.
Section 3.8 Powers and Duties of the Property Trustee.
(a) The legal title to the Notes shall be owned by and held of
record in the name of the Property Trustee in trust for the
benefit of the Holders of the Trust Securities. The right,
title and interest of the Property Trustee to the Notes shall
vest automatically in each Person who may hereafter be
appointed as Property Trustee in accordance with Section 5.6.
Such vesting and cessation of title shall be effective whether
or not conveyancing documents with regard to the Notes have
been executed and delivered.
(b) The Property Trustee shall not transfer its right, title and
interest in the Notes to the Regular Trustees or to the
Delaware Trustee (if the Property Trustee does not also act as
Delaware Trustee).
(c) The Property Trustee shall:
(i) establish and maintain a segregated non-interest
bearing trust account (the "Property Trustee
Account") in the name of and under the exclusive
control of the Property Trustee on behalf of the
Holders of the Trust Securities and, upon the receipt
of payments of funds made in respect of the Notes
held by the Property Trustee, deposit such funds into
the Property Trustee Account and
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make payments to the Holders of the Preferred
Securities and Holders of the Common Securities from
the Property Trustee Account in accordance with
Section 6.1. Funds in the Property Trustee Account
shall be held uninvested until disbursed in accordance
with this Declaration. The Property Trustee Account
shall be an account that is maintained with a banking
institution the rating on whose long term unsecured
indebtedness is at least equal to the rating assigned
to the Preferred Securities by a "nationally
recognized statistical rating organization", as that
term is defined for purposes of Rule 436(g)(2) under
the Securities Act;
(ii) engage in such ministerial activities as shall be
necessary or appropriate to effect the redemption of
the Preferred Securities and the Common Securities to
the extent the Notes are redeemed or mature; and
(iii) upon notice of distribution issued by the Regular
Trustees in accordance with the terms of the
Preferred Securities and forms of the Common
Securities, engage in such ministerial activities as
shall be necessary or appropriate to effect the
distribution of the Notes to Holders of Trust
Securities upon the occurrence of certain special
events (as may be defined in the terms of the Trust
Securities) arising from a change in law or a change
in legal interpretation or other specified
circumstances pursuant to the terms of the Trust
Securities.
(d) The Property Trustee shall take all actions and perform such
duties as may be specifically required of the Property Trustee
pursuant to the terms of the Trust Securities.
(e) The Property Trustee shall take any Legal Action which arises
out of or in connection with an Event of Default or the
Property Trustee's duties and obligations under this
Declaration or the Trust Indenture Act.
(f) The Property Trustee shall not resign as a trustee unless
either:
(i) the Trust has been completely liquidated and the
proceeds of the liquidation distributed to the
Holders of Trust Securities pursuant to the terms of
the Trust Securities; or
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(ii) a Successor Property Trustee has been appointed and
has accepted that appointment in accordance with
Section 5.6.
(g) The Property Trustee shall have the legal power to exercise
all of the rights, powers and privileges of a holder of Notes
under the Indenture and, if an Event of Default occurs and is
continuing, the Property Trustee shall, for the benefit of
Holders of the Trust Securities, enforce its rights as holder
of the Notes subject to the rights of the Holders pursuant to
the terms of such Trust Securities.
(h) The Property Trustee may authorize one or more Persons (each,
a "Paying Agent") to pay Distributions, redemption payments or
liquidation payments on behalf of the Trust with respect to
all Trust Securities and any such Paying Agent shall comply
with Section 317(b) of the Trust Indenture Act. Any Paying
Agent may be removed by the Property Trustee at any time and a
successor Paying Agent or additional Paying Agents may be
appointed at any time by the Property Trustee.
(i) Subject to this Section 3.8, the Property Trustee shall have
none of the duties, liabilities, powers or the authority of
the Regular Trustees set forth in Section 3.6.
The Property Trustee must exercise the powers set forth in this
Section 3.8 in a manner that is consistent with the purposes and functions of
the Trust set out in Section 3.3, and the Property Trustee shall not take any
action that is inconsistent with the purposes and functions of the Trust set
out in Section 3.3.
Section 3.9 Certain Duties and Responsibilities of the Property Trustee.
(a) The Property Trustee, before the occurrence of any Event of
Default and after the curing of all Events of Default that may
have occurred, shall undertake to perform only such duties as
are specifically set forth in this Declaration and no implied
covenants shall be read into this Declaration against the
Property Trustee. In case an Event of Default has occurred
(that has not been cured or waived pursuant to Section 2.6),
the Property Trustee shall exercise such of the rights and
powers vested in it by this Declaration, and use the same
degree of care and skill in their exercise, as a prudent
person would exercise or use under the circumstances in the
conduct of his or her own affairs.
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(b) No provision of this Declaration shall be construed to relieve
the Property Trustee from liability for its own negligent
action, its own negligent failure to act, or its own willful
misconduct, except that:
(i) prior to the occurrence of an Event of Default and
after the curing or waiving of all such Events of
Default that may have occurred:
(A) the duties and obligations of the Property
Trustee shall be determined solely by the
express provisions of this Declaration and
the Property Trustee shall not be liable
except for the performance of such duties and
obligations as are specifically set forth in
this Declaration, and no implied covenants or
obligations shall be read into this
Declaration against the Property Trustee; and
(B) in the absence of bad faith on the part of
the Property Trustee, the Property Trustee
may conclusively rely, as to the truth of the
statements and the correctness of the
opinions expressed therein, upon any
certificates or opinions furnished to the
Property Trustee and conforming to the
requirements of this Declaration; but in the
case of any such certificates or opinions
that by any provision hereof are specifically
required to be furnished to the Property
Trustee, the Property Trustee shall be under
a duty to examine the same to determine
whether or not they conform to the
requirements of this Declaration;
(ii) the Property Trustee shall not be liable for any
error of judgment made in good faith by a Responsible
Officer of the Property Trustee, unless it shall be
proved that the Property Trustee was negligent in
ascertaining the pertinent facts;
(iii) the Property Trustee shall not be liable with respect
to any action taken or omitted to be taken by it in
good faith in accordance with the direction of the
Holders of not less than a Majority in liquidation
amount of the Trust Securities at the time
outstanding relating to the time, method and place of
conducting any proceeding for any remedy available to
the Property Trustee, or exercising any trust or
power
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conferred upon the Property Trustee under this
Declaration;
(iv) no provision of this Declaration shall require the
Property Trustee to expend or risk its own funds or
otherwise incur personal financial liability in the
performance of any of its duties or in the exercise
of any of its rights or powers, if it shall have
reasonable grounds for believing that the repayment
of such funds or liability is not reasonably assured
to it under the terms of this Declaration or adequate
indemnity against such risk or liability is not
reasonably assured to it;
(v) the Property Trustee's sole duty with respect to the
custody, safekeeping and physical preservation of the
Notes and the Property Trustee Account shall be to
deal with such property in a similar manner as the
Property Trustee deals with similar property for its
own account, subject to the protections and
limitations on liability afforded to the Property
Trustee under this Declaration and the Trust
Indenture Act;
(vi) the Property Trustee shall have no duty or liability
for or with respect to the value, genuineness,
existence or sufficiency of the Notes or the payment
of any taxes or assessments levied thereon or in
connection therewith;
(vii) the Property Trustee shall not be liable for any
interest on any money received by it except as it may
otherwise agree with the Sponsor. Money held by the
Property Trustee need not be segregated from other
funds held by it except in relation to the Property
Trustee Account maintained by the Property Trustee
pursuant to Section 3.8(c)(i) and except to the
extent otherwise required by law; and
(viii) the Property Trustee shall not be responsible for
monitoring the compliance by the Regular Trustees or
the Sponsor with their respective duties under this
Declaration, nor shall the Property Trustee be liable
for the default or misconduct of the Regular Trustees
or the Sponsor.
Section 3.10 Certain Rights of Property Trustee.
(a) Subject to the provisions of Section 3.9:
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(i) the Property Trustee may rely and shall be fully
protected in acting or refraining from acting upon any
resolution, certificate, statement, instrument,
opinion, report, notice, request, direction, consent,
order, bond, debenture, note, other evidence of
indebtedness or other paper or document believed by it
to be genuine and to have been signed, sent or
presented by the proper party or parties;
(ii) any direction or act of the Sponsor or the Regular
Trustees contemplated by this Declaration shall be
sufficiently evidenced by a Direction or an Officers'
Certificate;
(iii) whenever in the administration of this Declaration,
the Property Trustee shall deem it desirable that a
matter be proved or established before taking,
suffering or omitting any action hereunder, the
Property Trustee (unless other evidence is herein
specifically prescribed) may, in the absence of bad
faith on its part request and rely upon an Officers'
Certificate which, upon receipt of such request,
shall be promptly delivered by the Sponsor or the
Regular Trustees;
(iv) the Property Trustee shall have no duty to see to any
recording, filing or registration of any instrument
(including any financing or continuation statement or
any filing under tax or securities laws) (or any
rerecording, refiling or registration thereof);
(v) the Property Trustee may consult with counsel or
other experts and the advice or opinion of such
counsel and experts with respect to legal matters or
advice within the scope of such experts' area of
expertise shall be full and complete authorization
and protection in respect of any action taken,
suffered or omitted by it hereunder in good faith and
in accordance with such advice or opinion. Such
counsel may be counsel to the Sponsor or any of its
Affiliates, and may include any of its employees.
The Property Trustee shall have the right at any time
to seek instructions concerning the administration of
this Declaration from any court of competent
jurisdiction;
(vi) the Property Trustee shall be under no obligation to
exercise any of the rights or powers vested in it by
this Declaration at the request or direction of any
Holder, unless such Holder shall have
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provided to the Property Trustee security and
indemnity, acceptable to the Property Trustee, against
the costs, expenses (including attorneys' fees and
expenses) and liabilities that might be incurred by it
in complying with such request or direction, including
such reasonable advances as may be requested by the
Property Trustee provided, that, nothing contained in
this Section 3.10(a)(vi) shall be taken to relieve the
Property Trustee, upon the occurrence of an Event of
Default, of its obligation to exercise the rights and
powers vested in it by this Declaration;
(vii) the Property Trustee shall not be bound to make any
investigation into the facts or matters stated in any
resolution, certificate, statement, instrument,
opinion, report, notice, request, direction, consent,
order, bond, debenture, note, other evidence of
indebtedness or other paper or document, but the
Property Trustee, in its discretion, may make such
further inquiry or investigation into such facts or
matters as it may see fit;
(viii) the Property Trustee may execute any of the trusts or
powers hereunder or perform any duties hereunder
either directly or by or through agents or attorneys
and the Property Trustee shall not be responsible for
any misconduct or negligence on the part of any agent
or attorney appointed with due care by it hereunder;
(ix) any action taken by the Property Trustee or its
agents hereunder shall bind the Trust and the Holders
of the Trust Securities, and the signature of the
Property Trustee or its agents alone shall be
sufficient and effective to perform any such action
and no third party shall be required to inquire as to
the authority of the Property Trustee to so act or as
to its compliance with any of the terms and
provisions of this Declaration, both of which shall
be conclusively evidenced by the Property Trustee's
or its agent's taking such action;
(x) whenever in the administration of this Declaration
the Property Trustee shall deem it desirable to
receive instructions with respect to enforcing any
remedy or right or taking any other action hereunder
the Property Trustee (i) may request instructions
from the Holders of the Trust Securities which
instructions may only be given by
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the Holders of the same proportion in liquidation
amount of the Trust Securities as would be entitled to
direct the Property Trustee under the terms of the
Trust Securities in respect of such remedy, right or
action, (ii) may refrain from enforcing such remedy or
right or taking such other action until such
instructions are received, and (iii) shall be
protected in acting in accordance with such
instructions; and
(xi) except as otherwise expressly provided by this
Declaration, the Property Trustee shall not be under
any obligation to take any action that is
discretionary under the provisions of this
Declaration.
(b) No provision of this Declaration shall be deemed to impose any
duty or obligation on the Property Trustee to perform any act
or acts or exercise any right, power, duty or obligation
conferred or imposed on it, in any jurisdiction in which it
shall be illegal, or in which the Property Trustee shall be
unqualified or incompetent in accordance with applicable law,
to perform any such act or acts, or to exercise any such
right, power, duty or obligation. No permissive power or,
authority available to the Property Trustee shall be construed
to be a duty.
Section 3.11 Delaware Trustee.
Notwithstanding any other provision of this Declaration other
than Sections 5.2 and 8.1(b), the Delaware Trustee shall not be entitled to
exercise any powers, nor shall the Delaware Trustee have any of the duties and
responsibilities of the Regular Trustees or the Property Trustee described in
this Declaration. Except as set forth in Sections 5.2 and 8.1(b), the Delaware
Trustee shall be a Trustee for the sole and limited purpose of fulfilling the
requirements of Section 3807 of the Business Trust Act. The Delaware Trustee
shall be entitled to the benefit of all of the immunities and indemnities that
the Property Trustee is entitled to under the Declaration.
Section 3.12 Execution of Documents.
Unless otherwise determined by the Regular Trustees, and
except as otherwise required by the Business Trust Act, a majority of or, if
there are only two, both of the Regular Trustees are authorized to execute on
behalf of the Trust any documents that the Regular Trustees have the power and
authority to execute pursuant to Section 3.6; provided that, any listing
application prepared by the Sponsor referred to in Section 3.6(b)(iii) may be
executed by one Regular Trustee.
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Section 3.13 Not Responsible for Recitals or Issuance of Trust Securities.
The recitals contained in this Declaration and the Trust
Securities shall be taken as the statements of the Sponsor, and the Trustees do
not assume any responsibility for their correctness. The Trustees make no
representations as to the value or condition of the property of the Trust or
any part thereof. The Trustees make no representations as to the validity or
sufficiency of this Declaration or the Trust Securities.
Section 3.14 Duration of Trust.
The Trust, unless terminated pursuant to the provisions of
Article VIII hereof, shall have existence for 55 years from the Closing Date.
Section 3.15 Mergers.
(a) The Trust may not consolidate, amalgamate, merge with or into,
or be replaced by, or convey, transfer or lease its properties
and assets substantially as an entirety to any corporation or
other body, except as described in Section 3.15(b) and (c).
(b) The Trust may, with the consent of a majority of the Regular
Trustees and without the consent of the Holders of the Trust
Securities, the Delaware Trustee or the Property Trustee,
consolidate, amalgamate, merge with or into, or be replaced by
a trust organized as such under the laws of any State;
provided that:
(i) such successor entity (the "Successor Entity") either:
(A) expressly assumes all of the obligations of
the Trust under the Trust Securities; or
(B) substitutes for the Preferred Securities
other securities having substantially the
same terms as the Preferred Securities (the
"Successor Securities") so long as the
Successor Securities rank the same as the
Preferred Securities rank with respect to
Distributions and payments upon liquidation,
redemption and maturity;
(ii) the Note Issuer expressly acknowledges a trustee of
the Successor Entity that possesses the same powers
and duties as the Property Trustee as the Holder of
the Notes;
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(iii) the Preferred Securities or any Successor Securities
are listed, or any Successor Securities will be
listed upon notification of issuance, on any national
securities exchange, the NASDAQ National Market
System or other organization on which the Preferred
Securities are then listed;
(iv) such merger, consolidation, amalgamation or
replacement does not cause the Preferred Securities
(including any Successor Securities) to be downgraded
by any nationally recognized statistical rating
organization;
(v) such merger, consolidation, amalgamation or
replacement does not adversely affect the rights,
preferences and privileges of the Holders of the
Trust Securities (including any Successor Securities)
in any material respect;
(vi) such Successor Entity has a purpose identical to that
of the Trust;
(vii) prior to such merger, consolidation, amalgamation or
replacement, the Sponsor has received an opinion of a
nationally recognized independent counsel to the
Trust experienced in such matters to the effect that:
(A) such merger, consolidation, amalgamation or
replacement does not adversely affect the
rights, preferences and privileges of the
Holders of the Trust Securities (including
any Successor Securities) in any material
respect; and
(B) following such merger, consolidation,
amalgamation or replacement, neither the
Trust nor the Successor Entity will be
required to register as an Investment
Company; and
(viii) the Sponsor guarantees the obligations of such
Successor Entity under the Successor Securities at
least to the extent provided by the Preferred
Securities Guarantee.
(c) Notwithstanding Section 3.15(b), the Trust shall, except with
the consent of Holders of 100% in liquidation amount of the
Trust Securities, not consolidate, amalgamate, merge with or
into, or be replaced by any other entity or permit any other
entity to consolidate, amalgamate, merge with or into, or
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replace it if such consolidation, amalgamation, merger or
replacement would cause the Trust or Successor Entity not to be
classified for United States federal income tax purposes as a
grantor trust.
ARTICLE IV
Sponsor
Section 4.1 Sponsor's Purchase of Common Securities.
On the Closing Date the Sponsor will purchase all the Common
Securities issued by the Trust, in an amount equal to 3% of the capital of the
Trust, at the same time as the Preferred Securities are sold.
Section 4.2 Responsibilities of the Sponsor.
In connection with the issue and sale of the Preferred
Securities, the Sponsor shall have the exclusive right and responsibility to
engage in the following activities:
(a) to prepare for filing by the Trust with the Commission a
registration statement on Form S-3 in relation to the
Preferred Securities, including any amendments thereto;
(b) to determine the States in which to take appropriate action to
qualify or register for sale all or part of the Preferred
Securities and to do any and all such acts, other than actions
which must be taken by the Trust, and advise the Trust of
actions it must take, and prepare for execution and filing any
documents to be executed and filed by the Trust, as the
Sponsor deems necessary or advisable in order to comply with
the applicable laws of any such States;
(c) to prepare for filing by the Trust an application to the New
York Stock Exchange or any other national stock exchange or
the NASDAQ National Market System for listing upon notice of
issuance of any Preferred Securities;
(d) to prepare for filing by the Trust with the Commission a
registration statement on Form 8-A relating to the
registration of the Preferred Securities under Section 12(b)
of the Exchange Act, including any amendments thereto; and
(e) to negotiate the terms of the Underwriting Agreement and
Pricing Agreement providing for the sale of the Preferred
Securities.
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ARTICLE V
Trustees
Section 5.1 Number of Trustees.
The number of Trustees shall initially be three (3), and:
(a) at any time before the issuance of any Trust Securities, the
Sponsor may, by written instrument, increase or decrease the
number of Trustees; and
(b) after the issuance of any Trust Securities, the number of
Trustees may be increased or decreased by vote of the Holders
of a Majority in liquidation amount of the Common Securities
voting as a class at a meeting of the Holders of the Common
Securities, provided that in any case, the number of Trustees
shall be at least three (3) and a majority of the Trustees
shall be Regular Trustees.
Section 5.2 Delaware Trustee.
If required by the Business Trust Act, one Trustee (the
"Delaware Trustee") shall be:
(a) a natural person who is a resident of the State of Delaware; or
(b) if not a natural person, an entity which has its principal
place of business in the State of Delaware, and otherwise
meets the requirements of applicable law,
provided that, if the Property Trustee has its principal place of business in
the State of Delaware and otherwise meets the requirements of applicable law,
then the Property Trustee shall also be the Delaware Trustee and Section 3.11
shall have no application. Except as otherwise provided, the Delaware
Trustee's sole duty shall be to, upon the request of the other Trustees or the
Sponsor, execute any documents and maintain custody of any records required to
form, maintain the existence of, or dissolve, the Trust under the Business
Trust Act.
Section 5.3 Property Trustee; Eligibility.
(a) There shall at all times be one Trustee which shall act as
Property Trustee which shall:
(i) not be an Affiliate of the Sponsor;
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(ii) be a corporation organized and doing business under
the laws of the United States of America or any State
or Territory thereof or of the District of Columbia,
or a corporation or Person permitted by the Commission
to act as an institutional trustee under the Trust
Indenture Act, authorized under such laws to exercise
corporate trust powers, having a combined capital and
surplus of at least 50 million U.S. dollars
($50,000,000), and subject to supervision or
examination by Federal, state, Territorial or District
of Columbia authority. If such corporation publishes
reports of condition at least annually, pursuant to
law or to the requirements of the supervising or
examining authority referred to above, then for the
purposes of this Section 5.3(a)(ii), the combined
capital and surplus of such corporation shall be
deemed to be its combined capital and surplus as set
forth in its most recent report of condition so
published.
(b) If at any time the Property Trustee shall cease to be eligible
to so act under Section 5.3(a), the Property Trustee shall
immediately resign in the manner and with the effect set forth
in Section 5.6(c).
(c) If the Property Trustee has or shall acquire any "conflicting
interest" within the meaning of Section 310(b) of the Trust
Indenture Act, the Property Trustee and the Holder of the
Common Securities (as if it were the obligor referred to in
Section 310(b) of the Trust Indenture Act) shall in all
respects comply with the provisions of Section 310(b) of the
Trust Indenture Act.
(d) The Preferred Securities Guarantee shall be deemed to be
specifically described in this Declaration for purposes of
clause (i) of the first provision contained in Section 310(b)
of the Trust Indenture Act.
Section 5.4 Qualifications of Regular Trustees and Delaware Trustee Generally.
Each Regular Trustee and the Delaware Trustee (unless the
Property Trustee also acts as Delaware Trustee) shall be either a natural
person who is at least 21 years of age or a legal entity that shall act through
one or more Authorized Officers. Each of the Regular Trustees shall be an
employee or officer of the Sponsor or otherwise be affiliated with the Sponsor.
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Section 5.5 Initial Trustees.
The initial Regular Trustees shall be:
George C. Biehl
5241 Spring Mountain Road
Las Vegas, Nevada 89102
Jeffrey W. Shaw
5241 Spring Mountain Road
Las Vegas, Nevada 89102
The initial Delaware Trustee shall be:
Wilmington Trust Company
1100 N. Market Street
Wilmington, Delaware 19890
The Initial Property Trustee shall be:
Harris Trust and Savings Bank
311 West Monroe Street, 12th Floor
Chicago, Illinois 60606
Attention: Indenture Trust Administration
Section 5.6 Appointment, Removal and Resignation of Trustees.
(a) Subject to Section 5.6(b), Trustees may be appointed or
removed without cause at any time:
(i) until the issuance of any securities, by written
instrument executed by the Sponsor; and
(ii) after the issuance of any Trust Securities by vote of
the Holders of a Majority in liquidation amount of
the Common Securities voting as a class at a meeting
of the Holders of the Common Securities; and
(b) (i) The Trustee that acts as Property Trustee shall not
be removed in accordance with Section 5.6(a) until a
Successor Property Trustee has been appointed and has
accepted such appointment by written instrument
executed by such Successor Property Trustee and
delivered to the Regular Trustees and the Sponsor;
and
(ii) the Trustee that acts as Delaware Trustee shall not
be removed in accordance with this Section 5.6(a)
until a successor Trustee possessing the
qualifications to act as Delaware Trustee under
Sections 5.2 and 5.4 (a "Successor
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Delaware Trustee") has been appointed and has accepted
such appointment by written instrument executed by
such Successor Delaware Trustee and delivered to the
Regular Trustees and the Sponsor.
(c) A Trustee appointed to office shall hold office until his
successor shall have been appointed or until his death,
removal or resignation. Any Trustee may resign from office
(without need for prior or subsequent accounting) by any
instrument in writing signed by the Trustee and delivered to
the Sponsor and the Trust, which resignation shall take effect
upon such delivery or upon such later date as is specified
therein; provided, however, that:
(i) No such resignation of the Trustee that acts as the
Property Trustee shall be effective:
(A) until a Successor Property Trustee has been
appointed and has accepted such appointment
by instrument executed by such Successor
Property Trustee and delivered to the Trust,
the Sponsor and the resigning Property
Trustee; or
(B) until the assets of the Trust have been
completely liquidated and the proceeds
thereof distributed to the Holders of the
Trust Securities; and
(ii) no such resignation of the Trustee that acts as the
Delaware Trustee shall be effective until a Successor
Delaware Trustee has been appointed and has accepted
such appointment by instrument executed by such
Successor Delaware Trustee and delivered to the
Trust, the Sponsor and the resigning Delaware
Trustee.
(d) The Holders of the Common Securities shall use their best
efforts to promptly appoint a Successor Delaware Trustee or
Successor Property Trustee, as the case may be, as the
Property Trustee or the Delaware Trustee if the resigning
Property Trustee or Delaware Trustee delivers an instrument of
resignation in accordance with this Section 5.6.
(e) If no Successor Property Trustee or Successor Delaware Trustee
shall have been appointed and accepted appointment as provided
in this Section 5.6 within 60 days after delivery to the
Sponsor and the Trust of an instrument of resignation, the
resigning Property Trustee or Delaware Trustee, as applicable,
may
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petition any court of competent jurisdiction for appointment of
a Successor Property Trustee or Successor Delaware Trustee.
Such court may thereupon, after prescribing such notice, if
any, as it may deem proper, appoint a Successor Property
Trustee or Successor Delaware Trustee, as the case may be.
Section 5.7 Vacancies among Trustees.
If a Trustee ceases to hold office for any reason and the
number of Trustees is not reduced pursuant to Section 5.1, or if the number of
Trustees is increased pursuant to Section 5.1, a vacancy shall occur. A
resolution certifying the existence of such vacancy by a majority of the
Regular Trustees shall be conclusive evidence of the existence of such vacancy.
The vacancy shall be filled with a Trustee appointed in accordance with Section
5.6.
Section 5.8 Effect of Vacancies.
The death, resignation, retirement, removal, bankruptcy,
dissolution, liquidation, incompetence or incapacity to perform the duties of a
Trustee shall not operate to annul the Trust. Whenever a vacancy in the number
of Regular Trustees shall occur, until such vacancy is filled by the
appointment of a Regular Trustee in accordance with Section 5.6, the Regular
Trustees in office, regardless of their number, shall have all the powers
granted to the Regular Trustees and shall discharge all the duties imposed upon
the Regular Trustees by this Declaration.
Section 5.9 Meetings.
Meetings of the Regular Trustees shall be held from time to
time upon the call of any Regular Trustee. Regular meetings of the Regular
Trustees may be held at a time and place fixed by resolution of the Regular
Trustees. Notice of any in- person meetings of the Regular Trustees shall be
hand delivered or otherwise delivered in writing (including by facsimile, with
a hard copy by overnight courier) not less than 48 hours before such meeting.
Notice of any telephonic meetings of the Regular Trustees or any committee
thereof shall be hand delivered or otherwise delivered in writing (including by
facsimile, with a hard copy by overnight courier) not less than 24 hours before
a meeting. Notices shall contain a brief statement of the time, place and
anticipated purposes of the meeting. The presence (whether in person or by
telephone) of a Regular Trustee at a meeting shall constitute a waiver of
notice of such meeting except where a Regular Trustee attends a meeting for the
express purpose of objecting to the transaction of any activity on the ground
that the meeting has not been lawfully called or convened. Unless provided
otherwise in this Declaration, any action of the
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Regular Trustees may be taken at a meeting by vote of a majority of the Regular
Trustees present (whether in person or by telephone) and eligible to vote with
respect to such matter, provided that a Quorum is present, or without a meeting
by the unanimous written consent of the Regular Trustees.
Section 5.10 Delegation of Power.
(a) Any Regular Trustee may, by power of attorney consistent with
applicable law, delegate to any other natural person over the
age of 21 his or her power for the purpose of executing any
documents contemplated in Section 3.6, including any
registration statement or amendment thereto filed with the
Commission, or making any other governmental filing; and
(b) the Regular Trustees shall have power to delegate from time to
time to such of their number or to officers of the Trust the
doing of such things and the execution of such instruments
either in the name of the Trust or the names of the Regular
Trustees or otherwise as the Regular Trustees may deem
expedient, to the extent such delegation is not prohibited by
applicable law or contrary to the provisions of the Trust, as
set forth herein.
ARTICLE VI
Distributions
Section 6.1 Distributions.
Holders shall receive Distributions in accordance with the
applicable terms of the relevant Holder's Trust Securities. Distributions
shall be made on the Preferred Securities and the Common Securities in
accordance with the preferences set forth in their respective terms. If and to
the extent that the Note Issuer makes a payment of interest (including Deferred
Interest (as defined in the Indenture)), premium and principal on the Notes
held by the Property Trustee (the amount of any such payment being a "Payment
Amount"), the Property Trustee shall and is directed, to the extent funds are
available for that purpose, to make a distribution (a "Distribution") of the
Payment Amount to Holders.
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ARTICLE VII
Issuance of Trust Securities
Section 7.1 General Provisions Regarding Trust Securities.
(a) The Regular Trustees shall on behalf of the Trust issue one
class of preferred securities representing undivided
beneficial interests in the assets of the Trust having such
terms as are set forth in Exhibit A and incorporated herein by
reference (the "Preferred Securities") and one class of common
securities representing undivided beneficial interests in the
assets of the Trust having such terms as are set forth in
Exhibit A (the "Common Securities"). The Trust shall have no
securities or other interests in the assets of the Trust other
than the Preferred Securities and the Common Securities.
(b) The Certificates shall be signed on behalf of the Trust by the
Regular Trustees (or if there are more than two Regular
Trustees by any two of the Regular Trustees). Such signatures
may be the manual or facsimile signatures of the present or
any future Regular Trustee. Typographical and other minor
errors or defects in any such reproduction of any such
signature shall not affect the validity of any Certificate.
In case any Regular Trustee of the Trust who shall have signed
any of the Trust Securities shall cease to be such Regular
Trustee before the Certificates so signed shall be delivered
by the Trust, such Certificates nevertheless may be delivered
as though the person who signed such Certificates had not
ceased to be such Regular Trustee; and any Certificate may be
signed on behalf of the Trust by such persons who, at the
actual date of execution of such Trust Security, shall be the
Regular Trustees of the Trust, although at the date of the
execution and delivery of the Declaration any such person was
not such a Regular Trustee. Certificates shall be printed,
lithographed or engraved or may be produced in any other
manner as is reasonably acceptable to the Regular Trustees, as
evidenced by their execution thereof, and may have such
letters, numbers or other marks or identification or
designation and such legends or endorsements as the Regular
Trustees may deem appropriate, or as may be required to comply
with any law or with any rule or regulation of any stock
exchange on which Trust Securities may be listed, or to
conform to usage.
(c) The consideration shall be received by the Property Trustee
for the issuance of the Trust Securities, which consideration
shall constitute a
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contribution to the capital of the Trust and shall not
constitute a loan to the Trust.
(d) Upon issuance of the Trust Securities as provided in this
Declaration, the Trust Securities so issued shall be deemed to
be validly issued, fully paid and non-assessable.
(e) Every Person, by virtue of having become a Holder or a
Preferred Security Beneficial Owner in accordance with the
terms of this Declaration, shall be deemed to have expressly
assented and agreed to the terms of, and shall be bound by,
this Declaration.
ARTICLE VIII
Termination
Section 8.1 Termination of Trust.
(a) The Trust shall terminate on the earlier of December 31, 2050
or:
(i) upon the bankruptcy of the Holder of the Common
Securities or the Sponsor;
(ii) upon the filing of a certificate of dissolution or
its equivalent with respect to the Holder of the
Common Securities or the Sponsor; the filing of a
certificate of cancellation with respect to the Trust
or the revocation of the Holder of the Common
Securities or the Sponsor's charter and the
expiration of 90 days after the date of revocation
without a reinstatement thereof;
(iii) upon the entry of a decree of judicial dissolution of
the Holder of the Common Securities, the Sponsor or
the Trust;
(iv) when all of the Trust Securities shall have been
called for redemption and the amounts necessary for
redemption thereof shall have been paid to the
Holders in accordance with the terms of the Trust
Securities;
(v) upon the occurrence and continuation of a Tax Event
pursuant to which the Trust shall have been dissolved
in accordance with the terms of the Trust Securities
and all of the Notes endorsed thereon shall have been
distributed to the Holders of Trust Securities in
exchange for all of the Trust Securities; or
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(vi) before the issuance of any Trust Securities, with the
consent of all of the Regular Trustees and the
Sponsor.
(b) As soon as is practicable after the occurrence of an event
referred to in Section 8.1(a), the Delaware Trustee shall file
a certificate of cancellation with the Secretary of State of
the State of Delaware.
(c) The provisions of Section 3.9 and Article X shall survive the
termination of the Trust.
ARTICLE IX
Transfer of Interest
Section 9.1 Transfer of Trust Securities.
(a) Trust Securities may only be transferred, in whole or in part,
in accordance with the terms and conditions set forth in this
Declaration and in the terms of the Trust Securities. Any
transfer or purported transfer of any Trust Security not made
in accordance with this Declaration shall be null and void.
(b) Subject to this Article IX, Preferred Securities shall be
freely transferable.
(c) Subject to this Article IX, the Sponsor and any Related Party
may only transfer Common Securities to the Sponsor or a
Related Party of the Sponsor; provided that, any such transfer
is subject to the conditions precedent that the transferor
obtain the written opinion of nationally recognized
independent counsel experienced in such matters that such
transfer would not cause more than an insubstantial risk that:
(i) the Trust would not be classified for United States
federal income tax purposes as a grantor trust; and
(ii) the Trust would be an Investment Company or the
transferee would become an Investment Company.
Section 9.2 Transfer of Certificates.
The Regular Trustees shall provide for the registration of
Certificates and of transfers of Certificates, which will be effected without
charge but only upon payment (with such indemnity as the Regular Trustees may
require) in respect of any tax or other governmental charges that may be
imposed in relation to it. Upon surrender for registration of transfer of any
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Certificate, the Regular Trustees shall cause one or more new Certificates to be
issued in the name of the designated transferee or transferees. Every
Certificate surrendered for registration of transfer shall be accompanied by a
written instrument of transfer in form satisfactory to the Regular Trustees duly
executed by the Holder or such Holder's attorney duly authorized in writing.
Each Certificate surrendered for registration of transfer shall be canceled by
the Regular Trustees. A transferee of a Certificate shall be entitled to the
rights and subject to the obligations of a Holder hereunder upon the receipt by
such transferee of a Certificate. By acceptance of a Certificate, each
transferee shall be deemed to have agreed to be bound by this Declaration and
the documents incorporated by reference herein.
Section 9.3 Deemed Trust Security Holders.
The Trustees may treat the Person in whose name any
Certificate shall be registered on the books and records of the Trust as the
sole holder of such Certificate and of the Trust Securities represented by such
Certificate for purposes of receiving Distributions and for all other purposes
whatsoever and, accordingly, shall not be bound to recognize any equitable or
other claim to or interest in such Certificate or in the Trust Securities
represented by such Certificate on the part of any Person, whether or not the
Trust shall have actual or other notice thereof.
Section 9.4 Book Entry Interests.
Unless otherwise specified in the terms of the Preferred
Securities, the Preferred Securities Certificates, on original issuance, will
be issued in the form of one or more, fully registered, global Preferred
Security Certificates (each, a "Global Certificate"), to be delivered to DTC,
the initial Depositary, by, or on behalf of, the Trust. Such Global
Certificates shall initially be registered on the books and records of the
Trust in the name of Cede & Co., the nominee of DTC, and no Preferred Security
Beneficial Owner will receive a definitive Preferred Security Certificate
representing such Preferred Security Beneficial Owner's interests in such
Global Certificates, except as provided in Section 9.7. Unless and until
definitive, fully registered Preferred Security Certificates (the "Definitive
Preferred Security Certificates") have been issued to the Preferred Security
Beneficial Owners pursuant to Section 9.7:
(a) the provisions of this Section 9.4 shall be in full force and
effect;
(b) the Trust and the Trustees shall be entitled to deal with the
Depositary for all purposes of this
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Declaration (including the payment of Distributions on the
Global Certificates and receiving approvals, votes or consents
hereunder) as the Holder of the Preferred Securities and the
sole holder of the Global Certificates and shall have no
obligation to the Preferred Security Beneficial Owners;
(c) to the extent that the provisions of this Section 9.4 conflict
with any other provisions of the Declaration, the provisions
of this Section 9.4 shall control; and
(d) the rights of the Preferred Security Beneficial Owners shall
be exercised only through the Depositary and shall be limited
to those established by law and agreements between such
Preferred Security Beneficial Owners and the Depositary and/or
the Depositary Participants and receive and transmit payments
of Distributions on the Global Certificates to such Depositary
Participants. DTC will make book entry transfers among the
Depositary Participants.
Section 9.5 Notices to Depositary.
Whenever a notice or other communication to the Preferred
Security Holder is required under this Declaration, unless and until Definitive
Preferred Security Certificates shall have been issued to the Preferred
Security Beneficial Owners pursuant to Section 9.7 the Regular Trustees shall
give all such notices and communications specified herein to be given to the
Preferred Security Holders to the Depositary, and shall have no notice
obligations to the Preferred Security Beneficial Owners.
Section 9.6 Appointment of Successor Depositary.
If any Depositary elects to discontinue its services as
securities depositary with respect to the Preferred Securities, the Regular
Trustees may, in their sole discretion, appoint a successor Depositary with
respect to such Preferred Securities.
Section 9.7 Definitive Preferred Security Certificates.
If:
(a) a Depositary elects to discontinue its services as securities
depositary with respect to the Preferred Securities and a
successor Depositary is not appointed within 90 days after
such discontinuance pursuant to Section 9.6; or
(b) the Regular Trustees elect after consultation with the Sponsor
to terminate the book entry system through the Depositary with
respect to the Preferred Securities,
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then:
(c) Definitive Preferred Security Certificates shall be prepared
by the Regular Trustees on behalf of the Trust with respect to
such Preferred Securities; and
(d) upon surrender of the Global Certificates by the Depositary,
accompanied by registration instructions, the Regular Trustees
shall cause Definitive Certificates to be delivered to
Preferred Security Beneficial Owners in accordance with the
instructions of the Depositary. Neither the Trustees nor the
Trust shall be liable for any delay in delivery of such
instructions and each of them may conclusively rely on and
shall be protected in relying on, said instructions of the
Depositary. The Definitive Preferred Security Certificates
shall be printed, lithographed or engraved or may be produced
in any other manner as is reasonably acceptable to the Regular
Trustees, as evidenced by their execution thereof, and may
have such letters, numbers or other marks of identification or
designation and such legends or endorsements as the Regular
Trustees may deem appropriate, or as may be required to comply
with any law or with any rule or regulation made pursuant
thereto or with any rule or regulation of any stock exchange
on which Preferred Securities may be listed, or to conform to
usage.
Section 9.8 Mutilated, Destroyed, Lost or Stolen Certificates.
If:
(a) any mutilated Certificates should be surrendered to the
Regular Trustees, or if the Regular Trustees shall receive
evidence to their satisfaction of the destruction, loss or
theft of any Certificate; and
(b) there shall be delivered to the Regular Trustees such security
or indemnity as may be required by them to keep each of them
harmless.
then:
In the absence of notice that such Certificate shall have been
acquired by a bona fide purchaser, any two Regular Trustees on behalf of the
Trust shall execute and deliver, in exchange for or in lieu of any such
mutilated, destroyed, lost or stolen Certificate, a new Certificate of like
denomination. In connection with the issuance of any new Certificate under
this Section 9.8, the Regular Trustees may require the payment of a sum
sufficient to cover any tax or other governmental charge that may be imposed in
connection therewith. Any duplicate
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Certificate issued pursuant to this Section shall constitute conclusive evidence
of an ownership interest in the relevant Trust Securities, as if originally
issued, whether or not the lost, stolen or destroyed Certificate shall be found
at any time.
ARTICLE X
Limitation of Liability of Holders
of Trust Securities, Trustees or Others
Section 10.1 Liability.
(a) Except as expressly set forth in this Declaration, the
Preferred Securities Guarantee, the Common Securities
Guarantee and the terms of the Trust Securities, the Sponsor
shall not be:
(i) personally liable for the return of any portion of
the capital contributions (or any return thereon) of
the Holders of the Trust Securities which shall be
made solely from assets of the Trust; and
(ii) be required to pay to the Trust or to any Holder of
Trust Securities any deficit upon dissolution of the
Trust or otherwise.
(b) Pursuant to Section 3803(a) of the Business Trust Act:
(i) the Holder of the Common Securities shall be liable
for all of the debts and obligations of the Trust
(other than with respect to the Trust Securities) to
the extent not satisfied out of the Trust's assets;
and
(ii) the Holders of the Preferred Securities shall be
entitled to the same limitation of personal liability
extended to stockholders of private corporations for
profit organized under the General Corporation Law of
the State of Delaware.
Section 10.2 Exculpation.
(a) No Indemnified Person shall be liable, responsible or
accountable in damages or otherwise to the Trust or any
Covered Person for any loss, damage or claim incurred by
reason of any act or omission performed or omitted by such
Indemnified Person in good faith on behalf of the Trust and in
a manner such Indemnified Person reasonably believed to be
within the scope of the authority conferred on such
Indemnified Person by this Declaration or by law, except that
an Indemnified Person shall be liable for any such loss,
damage or
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claim incurred by reason of such Indemnified Person's gross
negligence (or, in the case of the Property Trustee,
negligence) or willful misconduct with respect to such acts or
omissions.
(b) An Indemnified Person shall be fully protected in relying in
good faith upon the records of the Trust and upon such
information, opinions, reports or statements presented to the
Trust by any Person as to matters the Indemnified Person
reasonably believes are within such other Person's
professional or expert competence and who has been selected
with reasonable care by or on behalf of the Trust, including
information, opinions, reports or statements as to the value
and amount of the assets, liabilities, profits, losses, or any
other facts pertinent to the existence and amount of assets
from which Distributions to Holders of Trust Securities might
properly be paid.
Section 10.3 Fiduciary Duty.
(a) To the extent that, at law or in equity, an Indemnified Person
has duties (including fiduciary duties) and liabilities
relating thereto to the Trust or to any other Covered Person,
an Indemnified Person acting under this Declaration shall not
be liable to the Trust or to any other Covered Person for its
good faith reliance on the provisions of this Declaration.
The provisions of this Declaration, to the extent that they
restrict the duties and liabilities of an Indemnified Person
otherwise existing at law or in equity (other than the duties
imposed on the Property Trustee under the Trust Indenture
Act), are agreed by the parties hereto to replace such other
duties and liabilities of such Indemnified Person.
(b) Unless otherwise expressly provided herein:
(i) whenever a conflict of interest exists or arises
between an Indemnified Person and any Covered Person;
or
(ii) whenever this Declaration or any other agreement
contemplated herein or therein provides that an
Indemnified Person shall act in a manner that is, or
provides terms that are, fair and reasonable to the
Trust or any Holder of Trust Securities,
the Indemnified Person shall resolve such conflict of
interest, take such action or provide such terms, considering
in each case the relative interest of each party (including
its own interest) to such conflict,
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agreement, transaction or situation and the benefits and
burdens relating to such interests, any customary or accepted
industry practices, and any applicable generally accepted
accounting practices or principles. In the absence of bad
faith by the Indemnified Person, the resolution, action or term
so made, taken or provided by this Indemnified Person shall not
constitute a breach of this Declaration or any other agreement
contemplated herein or of any duty or obligation of the
Indemnified Person at law or in equity or otherwise.
(c) Whenever in this Declaration an Indemnified Person is
permitted or required to make a decision
(i) in its "discretion" or under a grant of similar
authority, the Indemnified Person shall be entitled
to consider such interests and factors as it desires,
including its own interests, and shall have no duty
or obligation to give any consideration to any
interest of or factors affecting the Trust or any
other Person; or
(ii) in its "good faith" or under another express
standard, the Indemnified Person shall act under such
express standard and shall not be subject to any
other or different standard imposed by this
Declaration or by applicable law.
Section 10.4 Indemnification.
(a) To the fullest extent permitted by applicable law, the Sponsor
shall indemnify and hold harmless each Indemnified Person from
and against any loss, damage, liability, tax, penalty, expense
or claim of any kind or nature whatsoever incurred by such
Indemnified Person by reason of the creation, operation or
termination of the Trust or any act or omission performed or
omitted by such Indemnified Person in good faith on behalf of
the Trust and in a manner such Indemnified Person reasonably
believed to be within the scope of authority conferred on such
Indemnified Person by this Declaration, except that no
Indemnified Person shall be entitled to be indemnified in
respect of any loss, damage or claim incurred by such
Indemnified Person by reason of gross negligence (or, in the
case of the Property Trustee, negligence) or willful
misconduct with respect to such acts or omissions.
(b) To the fullest extent permitted by applicable law, expenses
(including legal fees) incurred by an Indemnified Person in
defending any claim, demand, action, suit or proceeding shall,
from time to time, be
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advanced by the Sponsor prior to the final disposition of such
claim, demand, action, suit or proceeding upon receipt by the
Sponsor of an undertaking by or on behalf of the Indemnified
Person to repay such amount if it shall be determined that the
Indemnified Person is not entitled to be indemnified as
authorized in Section 10.4(a). The indemnification shall
survive the termination of this Declaration or the earlier
removal or resignation of any of the Trustees or the Property
Trustee.
Section 10.5 Outside Businesses.
Any Covered Person, the Sponsor, the Note Issuer, the Delaware
Trustee and the Property Trustee may engage in or possess an interest in other
business ventures of any nature or description, independently or with others,
similar or dissimilar to the business of the Trust, and the Trust and the
Holders of Trust Securities shall have no rights by virtue of this Declaration
in and to such independent ventures or the income or profits derived therefrom
and the pursuit of any such venture, even if competitive with the business of
the Trust, shall not be deemed wrongful or improper. No Covered Person, the
Sponsor, the Note Issuer, the Delaware Trustee, or the Property Trustee shall
be obligated to present any particular investment or other opportunity to the
Trust even if such opportunity is of a character that, if presented to the
Trust, could be taken by the Trust, and any Covered Person, the Sponsor, the
Note Issuer, the Delaware Trustee and the Property Trustee shall have the right
to take for its own account (individually or as a partner or fiduciary) or to
recommend to others any such particular investment or other opportunity. Any
Covered Person, the Delaware Trustee and the Property Trustee may engage or be
interested in any financial or other transaction with the Sponsor or any
Affiliate of the Sponsor, or may act as depositary for, trustee or agent for,
or act on any committee or body of holders of, securities or other obligations
of the Sponsor or its Affiliates.
ARTICLE XI
Accounting
Section 11.1 Fiscal Year.
The fiscal year ("Fiscal Year") of the Trust shall be the
calendar year, or such other year as is required by the Code.
Section 11.2 Certain Accounting Matters.
(a) At all times during the existence of the Trust, the Regular
Trustees shall keep, or cause to be kept, full
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books of account, records and supporting documents, which shall
reflect in reasonable detail, each transaction of the Trust.
The books of account shall be maintained on the accrual method
of accounting, in accordance with generally accepted accounting
principles, consistently applied. The Trust shall use the
accrual method of accounting for United States federal income
tax purposes. The books of account and the records of the Trust
shall be examined by and reported upon as of the end of each
Fiscal Year by a firm of independent certified public
accountants selected by the Regular Trustees.
(b) The Regular Trustees shall cause to be prepared and delivered
to each of the Holders of Trust Securities, within 90 days
after the end of each Fiscal Year of the Trust, annual
financial statements of the Trust, including a balance sheet
of the Trust as of the end of such Fiscal Year, and the
related statements of income or loss.
(c) The Regular Trustees shall cause to be duly prepared and
delivered to each of the Holders of Trust Securities any
United States federal income tax information statement
required by the Code, containing such information with regard
to the Trust Securities held by each Holder as is required by
the Code and the Treasury Regulations, and any comparable
statements required to be provided under the law of any other
taxing jurisdiction. Notwithstanding any right under the Code
or other law to deliver any such statement at a later date,
the Regular Trustees shall endeavor to deliver all such
statements within 30 days after the end of each Fiscal Year of
the Trust.
(d) The Regular Trustees shall cause to be duly prepared and filed
with the appropriate taxing authority an annual United States
federal income tax return Form 1041 or such other form
required by United States federal income tax law, and any
other tax returns or reports required to be filed by the
Regular Trustees on behalf of the Trust with any state or
local taxing authority.
Section 11.3 Banking.
The Trust shall maintain one or more bank accounts in the name
and for the sole benefit of the Trust; provided, however, that all payments of
funds in respect of the Notes held by the Property Trustee shall be made
directly to the Property Trustee Account and no other funds of the Trust shall
be deposited in the Property Trustee Account. The sole signatories
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for such accounts shall be designated by the Regular Trustees; provided,
however, that the Property Trustee shall designate the sole signatories for the
Property Trustee Account.
Section 11.4 Withholding.
The Trust and the Regular Trustees shall comply with all
withholding requirements under United States federal, state and local law. The
Trust shall request, and the Holders shall provide to the Trust, such forms or
certificates as are necessary to establish an exemption from withholding with
respect to each Holder, and any representations and forms as shall reasonably
be requested by the Trust to assist it in determining the extent of, and in
fulfilling, its withholding obligations. The Regular Trustees shall file
required forms with applicable jurisdictions and, unless an exemption from
withholding is properly established by a Holder, shall remit amounts withheld
with respect to the Holder to applicable jurisdictions. To the extent that the
Trust is required to withhold and pay over any amounts to any authority with
respect to distributions or allocations to any Holder, the amount withheld
shall be deemed to be a distribution in the amount of the withholding to the
Holder. In the event of any claimed over withholding, Holders shall be limited
to an action against the applicable jurisdiction. If the amount required to be
withheld was not withheld from actual Distributions made to any Holder, the
Trust may reduce subsequent Distributions to such Holder by the amount of such
withholding.
ARTICLE XII
Amendments and Meetings
Section 12.1 Amendments.
(a) Except as otherwise provided in this Declaration or by any
applicable terms of the Trust Securities, this Declaration may
only be amended by a written instrument approved and executed
by:
(i) the Regular Trustees (or, if there are more than two
Regular Trustees a majority of the Regular Trustees);
(ii) if the amendment affects the rights, powers, duties,
obligations or immunities of the Property Trustee,
the Property Trustee; and
(iii) if the amendment affects the rights, powers, duties,
obligations or immunities of the Delaware Trustee,
the Delaware Trustee;
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(b) No amendment shall be made, and any purported amendment shall
be void and ineffective:
(i) unless, in the case of any proposed amendment, the
Property Trustee shall have first received an
Officers' Certificate from each of the Trust and the
Sponsor that such amendment is permitted by, and
conforms to, the terms of this Declaration (including
the terms of the Trust Securities);
(ii) unless, in the case of any proposed amendment which
affects the rights, powers, duties, obligations or
immunities of the Property Trustee, the Property
Trustee shall have first received:
(A) an Officers' Certificate from each of the
Trust and the Sponsor that such amendment is
permitted by, and conforms to, the terms of
this Declaration (including the terms of the
Trust Securities); and
(B) an opinion of counsel (who may be counsel to
the Sponsor or the Trust) that such amendment
is permitted by, and conforms to, the terms
of this Declaration (including the terms of
the Trust Securities); and
(iii) to the extent the result of such amendment would be
to:
(A) cause the Trust to fail to continue to be
classified for purposes of United States
federal income taxation as a grantor trust;
(B) reduce or otherwise adversely affect the
powers of the Property Trustee in
contravention of the Trust Indenture Act; or
(C) cause the Trust to be deemed to be an
Investment Company required to be registered
under the Investment Company Act.
(c) at such time after the Trust has issued any Trust Securities
that remain outstanding, any amendment that would adversely
affect the rights, privileges or preferences of any Holder of
Trust Securities may be effected only with such additional
requirements as may be set forth in the terms of such Trust
Securities;
(d) Section 9.1(c) and this Section 12.1 shall not be amended
without the consent of all of the Holders of the Trust
Securities;
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(e) Article IV shall not be amended without the consent of the
Holders of a Majority in liquidation amount of the Common
Securities;
(f) the rights of the holders of the Common Securities under
Article V to increase or decrease the number of, and appoint
and remove Trustees shall not be amended without the consent
of the Holders of a Majority in liquidation amount of the
Common Securities; and
(g) notwithstanding Section 12.1(c), this Declaration may be
amended without the consent of the Holders of the Trust
Securities to:
(i) cure any ambiguity;
(ii) correct or supplement any provision in this
Declaration that may be defective or inconsistent
with any other provision of this Declaration;
(iii) add to the covenants, restrictions or obligations of
the Sponsor; and
(iv) conform to any change in Rule 3a-5 or other exemption
from the requirement to register as an Investment
Company under the Investment Company Act or written
change in the interpretation or application thereof
by any legislative body, court, government agency or
regulatory authority which amendment does not have a
material adverse effect on the rights, preferences or
privileges of the Holders.
Section 12.2 Meetings of the Holders of Trust Securities; Action by Written
Consent.
(a) Meetings of the Holders of any class of Trust Securities may
be called at any time by the Regular Trustees (or as provided
in the terms of the Trust Securities) to consider and act on
any matter on which Holders of such class of Trust Securities
are entitled to act under the terms of this Declaration, the
terms of the Trust Securities or the rules of any stock
exchange, the NASDAQ National Market System or other
organization on which the Preferred Securities are listed or
admitted for trading. The Regular Trustees shall call a
meeting of the Holders of such class if directed to do so by
the Holders of at least 10% in liquidation amount of such
class of Trust Securities. Such direction shall be given by
delivering to the Regular Trustees one or more calls in a
writing stating that the signing Holders of Trust Securities
wish to
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call a meeting and indicating the general or specific purpose
for which the meeting is to be called. Any Holders of Trust
Securities calling a meeting shall specify in writing the
Certificates held by the Holders of Trust Securities exercising
the right to call a meeting and only those Trust Securities
specified shall be counted for purposes of determining whether
the required percentage set forth in the second sentence of
this paragraph has been met.
(b) Except to the extent otherwise provided in the terms of the
Trust Securities, the following provisions shall apply to
meetings of Holders of Trust Securities:
(i) notice of any such meeting shall be given to all the
Holders of Trust Securities having a right to vote
thereat at least 7 days and not more than 60 days
before the date of such meeting. Whenever a vote,
consent or approval of the Holders of Trust
Securities is permitted or required under this
Declaration or the rules of any stock exchange, the
NASDAQ National Market System or other organization
on which the Preferred Securities are listed or
admitted for trading, such vote, consent or approval
may be given at a meeting of the Holders of Trust
Securities. Any action that may be taken at a
meeting of the Holders of Trust Securities may be
taken without a meeting if a consent in writing
setting forth the action so taken is signed by the
Holders of Trust Securities owning not less than the
minimum amount of Trust Securities in liquidation
amount that would be necessary to authorize or take
such action at a meeting at which all Holders of
Trust Securities having a right to vote thereon were
present and voting. Prompt notice of the taking of
action without a meeting shall be given to the
Holders of Trust Securities entitled to vote who have
not consented in writing. The Regular Trustees may
specify that any written ballot submitted to a Holder
for the purpose of taking any action without a
meeting shall be returned to the Trust within the
time specified by the Regular Trustees;
(ii) each Holder of a Trust Security may authorize any
Person to act for it by proxy on all matters in which
a Holder of Trust Securities is entitled to
participate, including waiving notice of any meeting,
or voting or participating at a meeting. No proxy
shall be valid after the expiration of 11 months from
the date thereof unless otherwise provided in the
proxy. Every proxy shall be
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revocable at the pleasure of the Holder of Trust
Securities executing it. Except as otherwise provided
herein, all matters relating to the giving, voting or
validity of proxies shall be governed by the General
Corporation Law of the State of Delaware relating to
proxies, and judicial interpretations thereunder, as
if the Trust were a Delaware corporation and the
Holders of the Trust Securities were stockholders of a
Delaware corporation;
(iii) each meeting of the Holders of the Trust Securities
shall be conducted by the Regular Trustees or by such
other Person that the Regular Trustees may designate;
and
(iv) unless the Business Trust Act, this Declaration, the
terms of the Trust Securities, the Trust Indenture
Act or the listing rules of any stock exchange, the
NASDAQ National Market System or other organization
on which the Preferred Securities are then listed or
trading, otherwise provides, the Regular Trustees, in
their sole discretion, shall establish all other
provisions relating to meetings of Holders of Trust
Securities, including notice of the time, place or
purpose of any meeting at which any matter is to be
voted on by any Holders of Trust Securities, waiver
of any such notice, action by consent without a
meeting, the establishment of a record date, quorum
requirements, voting in person or by proxy or any
other matter with respect to the exercise of any such
right to vote.
ARTICLE XIII
Representations and Warranties of
Property Trustee and Delaware Trustee
Section 13.1 Representations and Warranties of Property Trustee.
The trustee that acts as initial Property Trustee represents
and warrants to the Trust and to the Sponsor at the date of this Declaration,
and each successor Property Trustee represents and warrants to the Trust and
the Sponsor at the time of the successor Property Trustee's acceptance of its
appointment as Property Trustee that:
(a) The Property Trustee is a banking corporation with trust
powers, duly organized, validly existing and in good standing
under the laws of the United States or the State of Illinois,
with trust power and authority
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to execute and deliver, and to carry out and perform its
obligations under the terms of, the Declaration and with its
principal place of business in Illinois.
(b) The execution, delivery and performance by the Property
Trustee of the Declaration has been duly authorized by all
necessary corporate action on the part of the Property
Trustee. The Declaration has been duly executed and delivered
by the Property Trustee, and it constitutes a legal, valid and
binding obligation of the Property Trustee, enforceable
against it in accordance with its terms, subject to applicable
bankruptcy, reorganization, moratorium, insolvency, and other
similar laws affecting creditors' rights generally and to
general principles of equity and the discretion of the court
(regardless of whether the enforcement of such remedies is
considered in a proceeding in equity or at law).
(c) The execution, delivery and performance of the Declaration by
the Property Trustee does not conflict with or constitute a
breach of the charter or By-laws of the Property Trustee.
(d) The Property Trustee, pursuant to the Declaration, shall hold
legal title and a valid ownership interest in the Notes in
accordance with the provisions hereof.
Section 13.2 Representations and Warranties of Delaware Trustee.
The trustee that acts as initial Delaware Trustee represents
and warrants to the Trust and to the Sponsor at the date of this Declaration,
and each successor Delaware Trustee represents and warrants to the Trust and to
the Sponsor at the time of its acceptance of its appointment as Delaware
Trustee that:
(a) The Delaware Trustee is either a natural person who is a
resident of the State of Delaware or, if not a natural person,
an entity which has its principal place of business in the
State of Delaware.
(b) The execution, delivery and performance by the Delaware
Trustee of the Declaration and Certificate of Trust has been
duly authorized by all necessary corporate action on the part
of the Delaware Trustee. The Declaration has been duly
executed and delivered by the Delaware Trustee and, under
Delaware law, constitutes a legal, valid and binding
obligation of the Delaware Trustee, enforceable against it in
accordance with its terms, subject to applicable bankruptcy,
reorganization, moratorium, insolvency, and other similar laws
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affecting creditors' rights generally and to general principles
of equity and the discretion of the court (regardless of
whether the enforcement of such remedies is considered in a
proceeding in equity or at law).
(c) The execution, delivery and performance of the Declaration and
Certificate of Trust by the Delaware Trustee does not conflict
with or constitute a breach of the charter or By-laws of the
Delaware Trustee.
ARTICLE XIV
Miscellaneous
Section 14.1 Notices.
All notices, instructions, requests and demands provided for
in this Declaration shall be in writing, duly signed by the party giving same,
and shall be delivered, telecopied or mailed by registered or certified mail,
as follows:
(a) if given to the Trust, in care of the Regular Trustees at the
Trust's mailing address set forth below (or such other address
as the Trust may give notice of to the Holders of the Trust
Securities):
SOUTHWEST GAS CAPITAL I
5241 Spring Mountain Road
Las Vegas, Nevada 89102
Telecopy number: (702) 876-7037
(b) if given to the Property Trustee, at the mailing address set
forth below (or such other address as the Property Trustee may
give notice of to the Holders of the Trust Securities):
HARRIS TRUST AND SAVINGS BANK
311 West Monroe Street, 12th Floor
Chicago, Illinois 60606
Attention: Indenture Trust Division
Telecopy number: (312) 461-3525
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(c) if given to the Delaware Trustee, at the mailing address set
forth below (or such other address as the Delaware Trustee may
give notice of to the Holders of the Trust Securities):
WILMINGTON TRUST COMPANY
1100 North Market Street
Wilmington, Delaware 19890
(d) if given to the Holder of the Common Securities, at the
mailing address of the Sponsor set forth below (or such other
address as the Holder of the Common Securities may give notice
to the Trust):
SOUTHWEST GAS CORPORATION
5241 Spring Mountain Road
Las Vegas, Nevada 89102
Attention: Chief Financial Officer
Telecopy number: (702) 876-7037
(e) if given to any other Holder, at the address set forth on the
books and records of the Trust.
All such notices shall be deemed to have been given when
received in person, telecopied with receipt confirmed, or mailed by first class
mail, postage prepaid except that if a notice or other document is refused
delivery or cannot be delivered because of a changed address of which no notice
was given, such notice or other document shall be deemed to have been delivered
on the date of such refusal or inability to deliver.
Section 14.2 Governing Law.
This Declaration and the rights of the parties hereunder shall
be governed by and interpreted in accordance with the laws of the State of
Delaware and all rights and remedies shall be governed by such laws without
regard to principles of conflict of laws.
Section 14.3 Intention of the Parties.
It is the intention of the parties hereto that the Trust not
be characterized for United States federal income tax purposes as an
association taxable as a corporation or a partnership but rather that the Trust
be characterized as a grantor trust or otherwise in a manner such that each
Holder of Trust Securities will be treated as owning an undivided beneficial
interest in the Notes. The provisions of this Declaration shall be interpreted
to further this intention of the parties.
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Section 14.4 Headings.
Headings contained in this Declaration are inserted for
convenience of reference only and do not affect the interpretation of this
Declaration or any provision hereof.
Section 14.5 Successors and Assigns.
Whenever in this Declaration any of the parties hereto is
named or referred to, the successors and assigns of such party shall be deemed
to be included, and all covenants and agreements in this Declaration by the
Sponsor and the Trustees shall bind and inure to the benefit of their
respective successors and assigns, whether so expressed.
Section 14.6 Partial Enforceability.
If any provision of this Declaration, or the application of
such provision to any Person or circumstance, shall be held invalid, the
remainder of this Declaration, or the application of such provision to persons
or circumstances other than those to which it is held invalid, shall not be
affected thereby.
Section 14.7 Counterparts.
This Declaration may contain more than one counterpart of the
signature page and this Declaration may be executed by the affixing of the
signature of each of the Trustees and the Property Trustee to one of such
counterpart signature pages. All of such counterpart signature pages shall be
read as though one, and they shall have the same force and effect as though all
of the signers had signed a single signature page.
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IN WITNESS WHEREOF, the undersigned has caused these presents
to be executed as of the day and year first above written.
GEORGE C. BIEHL,
as Trustee
/s/ GEORGE C. BIEHL
------------------------------
JEFFREY W. SHAW,
as Trustee
/s/ JEFFREY W. SHAW
------------------------------
WILMINGTON TRUST COMPANY,
as Delaware Trustee
By: /s/ NORMA P. CLOSS
Name: Norma P. Closs
Title: Vice President
SOUTHWEST GAS CORPORATION,
as Sponsor
By: /s/ THOMAS J. TRIMBLE
Name: Thomas J. Trimble
Title: Senior Vice President, General
Counsel and Secretary
HARRIS TRUST AND SAVINGS BANK,
as Property Trustee
By: /s/ E. KAY LIEDERMAN
Name: E. Kay Liederman
Title: Vice President
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EXHIBIT A
TERMS OF
9.125% TRUST ORIGINATED PREFERRED SECURITIES
9.125% TRUST ORIGINATED COMMON SECURITIES
Pursuant to Section 7.1 of the Amended and Restated
Declaration of Trust, dated as of October 26, 1995 (as amended from
time to time, the "Declaration"), the designation, rights, privileges,
restrictions, preferences and other terms and provisions of the Preferred
Securities and the Common Securities are set out below (each capitalized term
used but not defined herein has the meaning set forth in the Declaration or, if
not defined in such Declaration, as defined in the Prospectus referred to
below):
1. Designation and Number.
(a) "Preferred Securities." 2,400,000 Preferred Securities
of the Trust with an aggregate liquidation amount with respect
to the assets of the Trust of SIXTY MILLION DOLLARS
($60,000,000) and a liquidation amount with respect to the
assets of the Trust of $25 per Preferred Security, are hereby
designated for the purposes of identification only as "9.125%
Trust Originated Preferred Securities" (the "Preferred
Securities"). The Certificates evidencing the Preferred
Securities shall be substantially in the form attached hereto
as Annex I, with such changes and additions thereto or
deletions therefrom as may be required by ordinary usage,
custom or practice or to conform to the rules of any stock
exchange on which the Preferred Securities are listed.
(b) "Common Securities." 72,000 Common Securities of the
Trust with an aggregate liquidation amount with respect to the
assets of the Trust of ONE MILLION EIGHT HUNDERED THOUSAND
DOLLARS and a liquidation amount with respect to the assets
of the Trust of $25 per Common Security, are hereby
designated for the
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purposes of identification only as "9.125% Trust Originated
Common Securities" (the "Common Securities"). The Certificates
evidencing the Common Securities shall be substantially in the
form attached hereto as Annex II, with such changes and
additions thereto or deletions therefrom as may be required by
ordinary usage, custom or practice.
2. Distributions.
(a) Distributions payable on each Trust Security will be fixed at
a rate per annum of [*.*]% (the "Coupon Rate") of the stated
liquidation amount of $25 per Trust Security, such rate being
the rate of interest payable on the Notes to be held by the
Property Trustee. Distributions in arrears for more than one
quarter will bear interest thereon compounded quarterly at the
Coupon Rate (to the extent permitted by applicable law). The
term "Distributions" as used herein includes such cash
distributions and any such interest payable unless otherwise
stated. A Distribution is payable only to the extent that
payments are made in respect of the Notes held by the Property
Trustee. The amount of Distributions payable for any period
will be computed for any full quarterly Distribution period on
the basis of a 360-day year of twelve 30-day months, and for
any period shorter than a full quarterly Distribution period
for which Distributions are computed, Distributions will be
computed on the basis of the actual number of days elapsed per
30-day month.
(b) Distributions on the Trust Securities will be cumulative, will
accrue from October 31, 1995, and will be payable
quarterly in arrears, on March 31, June 30, September 30, and
December 31 of each year, commencing on December 31, 1995
except as otherwise described below. The Note Issuer has the
right under the Indenture to defer payments of interest by
extending the interest payment period from time to time on the
Notes for a period not exceeding 20 consecutive quarters (each
an "Extension Period") and, during such Extension Period,
Distributions will also be deferred. Despite such deferral,
quarterly Distributions will continue to accrue with interest
thereon (to the extent permitted by applicable law) at the
Coupon Rate compounded quarterly during any such Extension
Period. Prior to the termination of any such Extension
Period, the Note Issuer may further extend such Extension
Period; provided that such Extension Period together with all
such previous and further extensions thereof may not exceed 20
consecutive quarters. Payments of accrued Distributions will
be payable to Holders as they appear on the books and records
of the Trust on
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the first record date after the end of the Extension Period.
Upon the termination of any Extension Period and the payment of
all amounts then due, the Note Issuer may commence a new
Extension Period, subject to the above requirements.
(c) Distributions on the Trust Securities will be payable to the
Holders thereof as they appear on the books and records of the
Trust on the relevant record dates. While the Preferred
Securities remain in book-entry only form, the relevant record
dates shall be one Business Day prior to the relevant payment
dates which payment dates correspond to the interest payment
dates on the Notes. Subject to any applicable laws and
regulations and the provisions of the Declaration, each such
payment in respect of the Preferred Securities will be made as
described under the heading "Description of the Preferred
Securities -- Book-Entry Only Issuance -- The Depository Trust
Company" in the Prospectus Supplement dated October 26,
1995 (the "Prospectus Supplement"), to the Prospectus dated
October 24, 1995 (together, the "Prospectus"), of the Trust
included in the Registration Statement on Form S-3 of the
Sponsor and the Trust. The relevant record dates for the
Common Securities shall be the same record date as for the
Preferred Securities. If the Preferred Securities shall not
continue to remain in book-entry only form, the relevant
record dates for the Preferred Securities, shall conform to
the rules of any securities exchange on which the securities
are listed and, if none, shall be selected by the Regular
Trustees, which dates shall be at least one Business Day but
less than 60 Business Days before the relevant payment dates,
which payment dates correspond to the interest payment dates
on the Notes. Distributions payable on any Trust Securities
that are not punctually paid on any Distribution payment date,
as a result of the Note Issuer having failed to make a payment
under the Notes, will cease to be payable to the Person in
whose name such Trust Securities are registered on the
relevant record date, and such Distribution will instead be
payable to the Person in whose name such Trust Securities are
registered on the special record date or other specified date
determined in accordance with the Indenture. If any date on
which Distributions are payable on the Trust Securities is not
a Business Day, then payment of the Distribution payable on
such date will be made on the next succeeding day that is a
Business Day (and without any interest or other payment in
respect of any such delay) except that, if such Business Day
is in the next succeeding calendar year, such payment shall be
made on the immediately preceding
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Business Day, in each case with the same force and effect as if
made on such date.
(d) In the event that there is any money or other property held by or for
the Trust that is not accounted for hereunder, such property shall be
distributed Pro Rata (as defined herein) among the Holders of the
Trust Securities.
3. Liquidation Distribution Upon Dissolution.
In the event of any voluntary or involuntary dissolution,
winding-up or termination of the Trust, the Holders of the Trust Securities on
the date of the dissolution, winding-up or termination, as the case may be,
will be entitled to receive out of the assets of the Trust available for
distribution to Holders of Trust Securities after satisfaction of liabilities
to creditors of the Trust an amount equal to the aggregate of the stated
liquidation amount of $25 per Trust Security plus accrued and unpaid
Distributions thereon to the date of payment (such amount being the
"Liquidation Distribution"), unless, in connection with such dissolution,
winding-up or termination, Notes in an aggregate principal amount equal to the
aggregate stated liquidation amount of such Trust Securities shall be
distributed on a Pro Rata basis to the Holders of the Trust Securities in
exchange for such Trust Securities.
If, upon any such dissolution, the Liquidation Distribution
can be paid only in part because the Trust has insufficient assets available to
pay in full the aggregate Liquidation Distribution, then the amounts payable
directly by the Trust on the Trust Securities shall be paid on a Pro Rata
basis.
4. Redemption and Distribution.
(a) Upon the repayment of the Notes in whole or in part, whether
at maturity or upon redemption, the proceeds from such
repayment or payment shall be simultaneously applied to redeem
Trust Securities having an aggregate liquidation amount equal
to the aggregate principal amount of the Notes so repaid or
redeemed at a redemption price of $25 per Trust Security plus
an amount equal to accrued and unpaid Distributions thereon at
the date of the redemption, payable in cash (the "Redemption
Price"). Holders will be given not less than 30 nor more than
60 days notice of such redemption.
(b) If fewer than all the outstanding Trust Securities are to be
so redeemed, the Common Securities and the Preferred
Securities will be redeemed Pro Rata and the Preferred
Securities to be redeemed will be as described in Paragraph
4(f)(ii) below.
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(c) If a Tax Event (as defined below) shall occur and be
continuing the Regular Trustees shall dissolve the Trust and,
after satisfaction of liabilities to creditors of the Trust,
cause Notes held by the Property Trustee, having an aggregate
principal amount equal to the aggregate stated liquidation
amount of the Trust Securities, to be distributed to the
Holders of the Trust Securities in liquidation of such
Holders' interests in the Trust on a Pro Rata basis, within 90
days following the occurrence of such Tax Event (the "90-Day
Period"); provided, however, that as a condition of such
dissolution and distribution, the Regular Trustee shall have
received an opinion of a nationally recognized independent tax
counsel experienced in such matters (a "No Recognition
Opinion"), which opinion may rely on published revenue rulings
of the Internal Revenue Service, to the effect that the
Holders of the Trust Securities will not recognize any gain or
loss for United States federal income tax purposes as a result
of the dissolution of the Trust and the distribution of Notes,
and provided, further, that, if at the time there is available
to the Trust the opportunity to avoid, within the 90-day
Period, the Tax Event by taking some ministerial action, such
as filing a form or making an election, or pursuing some other
similar reasonable measure that has no adverse effect on the
Trust, the Note Issuer, the Sponsor or the Holders of the
Trust Securities ("Ministerial Action"), the Trust or the
Sponsor will pursue such Ministerial Action in lieu of
dissolution.
If (i) after receipt of a Dissolution Tax Opinion (as
hereafter defined) by and upon the request of the Regular
Trustees, the Note Issuer has received an opinion of a
nationally recognized independent tax counsel experienced in
such matters (a "Redemption Tax Opinion") to the effect that,
as a result of a Tax Event, there is more than an
insubstantial risk that the Note Issuer would be precluded
from deducting the interest on the Notes for United States
federal income tax purposes even if the Notes were distributed
to the Holders of Trust Securities in liquidation of such
Holders' interests in the Trust, as described in this
paragraph 4(c), or (ii) the Regular Trustees shall have been
informed by such tax counsel that a No Recognition Opinion
cannot be delivered to the Trust, the Note Issuer shall have
the right, upon not less than 30 nor more than 60 days notice,
to redeem the Notes in whole or in part for cash within 90
days following the occurrence of such Tax Event and, following
such redemption, Trust Securities with an aggregate
liquidation amount equal to the aggregate principal amount of
the Notes so redeemed shall be redeemed by
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the Trust at the Redemption Price on a Pro Rata basis;
provided, however, that, if at the time there is available to
the Trust the opportunity to avoid within such 90-day Period,
the Tax Event by taking some Ministerial Action, the Trust or
the Sponsor will pursue such Ministerial Action in lieu of
redemption.
"Tax Event" means the receipt by, and upon the request of, the
Regular Trustees of an opinion of nationally recognized
independent tax counsel experienced in such matters to the
effect that, as a result of (a) any amendment to, or change
(including any announced prospective change) in, the laws (or
any regulations thereunder) of the United States or any
political subdivision or taxing authority thereof or therein,
(b) any amendment to or change in an interpretation or
application of such laws or regulations by any legislative
body, court, governmental agency or regulatory authority
(including the enactment of any legislation and the
publication of any judicial decision or regulatory
determination or after the date of the Prospectus Supplement
relating to the Preferred Securities of the Trust), (c) any
interpretation or pronouncement by any such body, court,
agency or authority that provides for a position with respect
to such laws or regulations that differs from the theretofore
generally accepted position, or (d) any action taken by any
governmental agency or regulatory authority, which amendment
or change is enacted, promulgated or effective, or which
interpretation or pronouncement is issued or announced, or
which action is taken, in each case on or after the date of
the Prospectus Supplement, there is more than an insubstantial
risk that (i) the Trust is, or within 90 days of the date
thereof will be, subject to United States federal income tax
with respect to income accrued or received on the Subordinated
Debt Securities, (ii) interest payable to the Trust on the
Subordinated Debt Securities is, or within 90 days of the date
thereof will, not be deductible, in whole or in part, by the
Note Issuer for United States federal income tax purposes or
(iii) the Trust is, or within 90 days of the date thereof will
be, subject to more than a deminimis amount of other taxes,
duties or other governmental charges.
On and from the date fixed by the Regular Trustees for any
distribution of Notes and dissolution of the Trust: (i) the
Trust Securities will no longer be deemed to be outstanding,
(ii) The Depository Trust Company (the "Depositary") or its
nominee (or any successor depositary or its nominee), as the
record Holder of the Preferred Securities, will receive a
registered global
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certificate or certificates representing the Notes to be
delivered upon such distribution, and (iii) any certificates
representing Trust Securities not held by the Depositary or its
nominee (or any successor depositary or its nominee), will be
deemed to represent beneficial interests in the Notes having an
aggregate principal amount equal to the aggregate stated
liquidation amount of, with an interest rate identical to the
Coupon Rate of, and accrued and unpaid interest equal to
accrued and unpaid Distributions on such Trust Securities until
such certificates are presented to the Note Issuer or its agent
for transfer or reissue.
(d) The Trust may not redeem fewer than all the outstanding Trust
Securities unless all accrued and unpaid Distributions have
been paid on all Trust Securities for all quarterly
Distribution periods terminating on or before the date of
redemption.
(e) If the Notes are distributed to holders of the Trust
Securities, pursuant to the terms of the Indenture, the Note
Issuer will use its best efforts to have the Notes listed on
the New York Stock Exchange or on such other exchange, the
NASDAQ National Market System or other organization as the
Preferred Securities were listed immediately prior to the
distribution of the Notes.
(f) "Redemption or Distribution Procedures."
(i) Notice of any redemption of, or notice of
distribution of Notes in exchange for the Trust
Securities (a "Redemption/Distribution Notice") will
be given by the Trust by mail to each Holder of Trust
Securities to be redeemed or exchanged not fewer than
30 nor more than 60 days before the date fixed for
redemption or exchange thereof which, in the case of
a redemption, will be the date fixed for redemption
of the Notes. For purposes of the calculation of the
date of redemption or exchange and the dates on which
notices are given pursuant to this paragraph 4(f)(i),
a Redemption/Distribution Notice shall be deemed to
be given on the day such notice is first mailed by
first-class mail, postage prepaid, to Holders of
Trust Securities. Each Redemption/Distribution
Notice shall be addressed to the Holders of Trust
Securities at the address of each such Holder
appearing in the books and records of the Trust. No
defect in the Redemption/Distribution Notice or in
the mailing of either thereof with respect to any
Holder shall affect the validity of the redemption or
exchange proceedings with respect to any other
Holder.
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(ii) In the event that fewer than all the outstanding
Trust Securities are to be redeemed, the Trust
Securities to be redeemed shall be redeemed Pro Rata
and, in the event Preferred Securities are held in
book-entry only form by the Depositary or its nominee
(or any successor depositary or its nominee), the
Depositary will reduce Pro Rata the amount of the
interest of each Depositary Participant in the
Preferred Securities to be redeemed; provided, that
if, as a result of such Pro Rata redemption,
Depositary Participants would hold fractional
interests in the Preferred Securities, the Depositary
will adjust the amount of the interest of each
Depositary Participant to be redeemed to avoid such
fractional interests.
(iii) If Trust Securities are to be redeemed and the Trust
gives a Redemption/Distribution Notice, which notice
may only be issued if the Notes are redeemed as set
out in this paragraph 4 (which notice will be
irrevocable), then (A) while the Preferred Securities
are in book-entry only form, with respect to the
Preferred Securities, by 12:00 noon, New York City
time, on the redemption date, provided that the Note
Issuer has paid the Property Trustee a sufficient
amount of cash in connection with the related
redemption or maturity of the Notes, the Property
Trustee will deposit irrevocably with the Depositary
(or successor depositary) funds sufficient to pay the
applicable Redemption Price with respect to the
Preferred Securities and will give the Depositary
irrevocable instructions and authority to pay the
Redemption Price to the Holders of the Preferred
Securities, and (B) with respect to Preferred
Securities issued in definitive form and Common
Securities, provided, that the Note Issuer has paid
the Property Trustee a sufficient amount of cash in
connection with the related redemption or maturity of
the Notes, the Property Trustee will pay the relevant
Redemption Price to the Holders of such Trust
Securities by check mailed to the address of the
relevant Holder appearing on the books and records of
the Trust on the redemption date. If a
Redemption/Distribution Notice shall have been given
and funds deposited as required, if applicable, then
immediately prior to the close of business on the
date of such deposit, or on the redemption date, as
applicable, Distributions will cease to accrue on the
Trust Securities so called for redemption and all
rights of Holders of such Trust Securities so called
for redemption will cease, except the right of the
Holders of such
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Trust Securities to receive the Redemption Price, but
without interest on such Redemption Price. Neither
the Regular Trustees nor the Trust shall be required
to register or cause to be registered the transfer of
any Trust Securities that have been so called for
redemption. If any date fixed for redemption of Trust
Securities is not a Business Day, then payment of the
Redemption Price payable on such date will be made on
the next succeeding day that is a Business Day (and
without any interest or other payment in respect of
any such delay) except that, if such Business Day
falls in the next calendar year, such payment will be
made on the immediately preceding Business Day, in
each case with the same force and effect as if made on
such date fixed for redemption. If payment of the
Redemption Price in respect of any Trust Securities is
improperly withheld or refused and not paid either by
the Property Trustee or by the Sponsor as guarantor
pursuant to the Preferred Securities Guarantee or
Common Securities Guarantee, as the case may be,
Distributions on such Trust Securities will continue
to accrue from the original redemption date to the
actual date of payment, in which case the actual
payment date will be considered the date fixed for
redemption for purpose of calculating the Redemption
Price.
(iv) Redemption/Distribution Notices shall be sent by the
Regular Trustees on behalf of the Trust to (A) in
respect of the Preferred Securities, the Depositary
or its nominee (or any successor depositary or its
nominee) if the Global Certificates have been issued
or, if Definitive Preferred Security Certificates
have been issued, to the Holder thereof, and (B) in
respect of the Common Securities to the Holder
thereof.
(v) Subject to the foregoing and applicable law
(including, without limitation, United States federal
securities laws), provided the acquirer is not the
Holder of the Common Securities or the obligor under
the Indenture, the Sponsor or any of its subsidiaries
may at any time and from time to time purchase
outstanding Preferred Securities by tender, in the
open market or by private agreement.
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5. Voting Rights - Preferred Securities
(a) Except as provided under paragraphs 5(b) and 7 and as
otherwise required by law and the Declaration, the Holders of
the Preferred Securities will have no voting rights.
(b) Subject to the requirements set forth in this paragraph, the
Holders of a majority in liquidation amount of the Preferred
Securities, voting separately as a class may direct the time,
method, and place of conducting any proceeding for any remedy
available to the Property Trustee, or the exercise of any
trust or power conferred upon the Property Trustee under the
Declaration, including (i) directing the time, method, place
of conducting any proceeding for any remedy available to the
Note Trustee, or exercising any trust or power conferred on
the Note Trustee with respect to the Notes, (ii) waive any
past default and its consequences that is waivable under
Section 513 of the Indenture, or (iii) exercise any right to
rescind or annul a declaration that the principal of all the
Notes shall be due and payable, provided, however, that, where
a consent under the Indenture would require the consent or act
of all of the holders of Notes affected thereby, the Property
Trustee may only give such consent or take such action at the
direction of all of the Holders of the Preferred Securities.
The Property Trustee shall not revoke any action previously
authorized or approved by a vote of the Holders of the
Preferred Securities. Other than with respect to directing
the time, method and place of conducting any remedy available
to the Property Trustee or the Note Trustee as set forth
above, the Property Trustee shall not take any action in
accordance with the directions of the Holders of the Preferred
Securities under this paragraph unless the Property Trustee
has obtained an opinion of tax counsel to the effect that for
the purposes of United States federal income tax the Trust
will not fail to be classified as a grantor trust on account
of such action. If the Property Trustee fails to enforce its
rights under the Declaration, any Holder of Preferred
Securities may institute a legal proceeding directly
against any Person to enforce the Property Trustee's rights
under the Declaration without first instituting a legal
proceeding against the Property Trustee or any other Person.
Any approval or direction of Holders of Preferred Securities
may be given at a separate meeting of Holders of Preferred
Securities convened for such
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purpose, at a meeting of all of the Holders of Trust Securities
in the Trust or pursuant to written consent. The Regular
Trustees will cause a notice of any meeting at which Holders of
Preferred Securities are entitled to vote, or of any matter
upon which action by written consent of such Holders is to be
taken, to be mailed to each Holder of record of Preferred
Securities. Each such notice will include a statement setting
forth (i) the date of such meeting or the date by which such
action is to be taken, (ii) a description of any resolution
proposed for adoption at such meeting on which such Holders are
entitled to vote or of such matter upon which the written
consent is sought and (iii) instructions for the delivery of
proxies or consents.
No vote or consent of the Holders of the Preferred Securities
will be required for the Trust to redeem and cancel Preferred
Securities or to distribute the Notes in accordance with the
Declaration and the terms of the Trust Securities.
Notwithstanding that Holders of Preferred Securities are
entitled to vote or consent under any of the circumstances
described above, any of the Preferred Securities that are
owned by the Sponsor or any Affiliate of the Sponsor shall not
be entitled to vote or consent and shall, for purposes of such
vote or consent, be treated as if they were not outstanding.
6. Voting Rights - Common Securities.
(a) Except as provided under paragraphs 6(b), 6(c) and 7, and as
otherwise required by law and the Declaration, the Holders of
the Common Securities will have no voting rights.
(b) The Holders of the Common Securities are entitled, in
accordance with Article V of the Declaration, to vote to
appoint, remove or replace any Trustee or to increase or
decrease the number of Trustees.
(c) Subject to Section 2.6 of the Declaration and only after an
Event of Default with respect to the Preferred Securities has
been cured, waived or otherwise eliminated and subject to the
requirements of the second to last sentence of this paragraph,
the Holders of a Majority in liquidation amount of the Common
Securities, voting separately as a class, may direct the time,
method and place of conducting any proceeding for any remedy
available to the Property Trustee, or the exercise of any
trust or power conferred upon the Property Trustee under the
Declaration, including
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(i) directing the time, method, place of conducting any
proceeding for any remedy available to the Property Trustee, or
exercising any trust or power conferred on the Property Trustee
with respect to the Notes, (ii) waive any past default and its
consequences that is waivable under Section 513 of the
Indenture, or (iii) exercise any right to rescind or annul a
declaration that the principal of all the Notes shall be due
and payable, provided, however, that, where a consent or action
under the Indenture would require the consent or act of all of
the holders of the Notes, the Property Trustee may only give
such consent or take such action at the direction of all of the
Holders of the Common Securities. Pursuant to this paragraph
6(c), the Property Trustee shall not revoke any action
previously authorized or approved by a vote of the Holders of
the Common Securities. Other than with respect to directing
the time, method and place of conducting any remedy available
to the Property Trustee or the Note Trustee as set forth above,
the Property Trustee shall not take any action in accordance
with the directions of the Holders of the Common Securities
under this paragraph unless the Property Trustee has obtained
an opinion of tax counsel to the effect that for the purposes
of United States federal income tax the Trust will not fail to
be classified as a grantor trust on account of such action. If
the Property Trustee fails to enforce its rights under the
Declaration, any Holder of Common Securities may after written
request to the Property Trustee to enforce such rights,
institute a legal proceeding directly against any Person to
enforce the Property Trustee's rights under the Declaration,
without first instituting a legal proceeding against the
Property Trustee or any other person.
Any approval or direction of Holders of Common Securities may
be given at a separate meeting of Holders of Common Securities
convened for such purpose, at a meeting of all of the Holders
of Trust Securities in the Trust or pursuant to written
consent. The Regular Trustees will cause a notice of any
meeting at which Holders of Common Securities are entitled to
vote, or of any matter upon which action by written consent of
such Holders is to be taken, to be mailed to each Holder of
record of Common Securities. Each such notice will include a
statement setting forth (i) the date of such meeting or the
date by which such action is to be taken, (ii) a description
of any resolution proposed for adoption at such meeting on
which such Holders are entitled to vote or of such matter upon
which written consent is sought and (iii) instructions for the
delivery of proxies or consents.
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No vote or consent of the Holders of the Common Securities
will be required for the Trust to redeem and cancel Common
Securities or to distribute the Notes in accordance with the
Declaration and the terms of the Trust Securities.
7. Amendments to Declaration and Indenture.
(a) In addition to any requirements under Section 12.1 of the
Declaration, if any proposed amendment to the Declaration
provides for, or the Regular Trustees otherwise propose to
effect (i) any action that would adversely affect the powers,
preferences or special rights of the Trust Securities, whether
by way of amendment to the Declaration or otherwise, or (ii)
the dissolution, winding-up or termination of the Trust, other
than as described in Section 8.1 of the Declaration, then the
Holders of outstanding Trust Securities as a class, will be
entitled to vote on such amendment or proposal (but not on any
other amendment or proposal) and such amendment or proposal
shall not be effective except with the approval of the Holders
of at least 66-2/3% in liquidation amount of the Trust
Securities, voting together as a single class; provided,
however, if any amendment or proposal referred to in clause
(i) above would adversely affect only the Preferred Securities
or only the Common Securities, then only the affected class
will be entitled to vote on such amendment or proposal and
such amendment or proposal shall not be effective except with
the approval of 66-2/3% in liquidation amount of such class of
Trust Securities.
(b) In the event the consent of the Property Trustee as the holder
of the Notes, the Preferred Securities Guarantee and the
Common Securities Guarantee is required under the Indenture
with respect to any amendment, modification or termination of
the Indenture, the Notes, the Preferred Securities Guarantee
or the Common Securities Guarantee, the Property Trustee shall
request the direction of the Holders of the Trust Securities
with respect to such amendment, modification or termination
and shall vote with respect to such amendment, modification or
termination as directed by a Majority in liquidation amount of
the Trust Securities voting together as a single class;
provided, however, that where a consent under the Indenture
would require the consent of all of the holders of the Notes,
the Property Trustee may only give such consent at the
direction of all of the Holders of the Trust Securities;
provided, further, that the Property Trustee shall not take
any action in accordance with the directions of the Holders of
the Trust Securities
A-13
<PAGE> 74
under this paragraph 7(b) unless the Property Trustee has
obtained an opinion of tax counsel to the effect that for the
purposes of United States federal income tax the Trust will not
be classified as other than a grantor trust on account of such
action.
8. Pro Rata.
A reference to any payment, distribution or treatment as being
"Pro Rata" shall mean pro rata to each Holder of Trust Securities according to
the aggregate liquidation amount of the Trust Securities held by the relevant
Holder in relation to the aggregate liquidation amount of all Trust Securities
outstanding unless, in relation to a payment, an Event of Default under the
Indenture has occurred and is continuing, in which case any funds available to
make such payment shall be paid first to each Holder of the Preferred
Securities pro rata according to the aggregate liquidation amount of Preferred
Securities held by the relevant Holder relative to the aggregate liquidation
amount of all Preferred Securities outstanding, and only after satisfaction of
all amounts owed to the Holders of the Preferred Securities, to each Holder of
Common Securities pro rata according to the aggregate liquidation amount of
Common Securities held by the relevant Holder relative to the aggregate
liquidation amount of all Common Securities outstanding.
9. Ranking.
The Preferred Securities rank pari passu and payment thereon
shall be made Pro Rata with the Common Securities except that, where an Event
of Default occurs and is continuing under the Indenture in respect of the Notes
held by the Property Trustee, the rights of Holders of the Common Securities to
payment in respect of Distributions and payments upon liquidation, redemption
and otherwise are subordinated to the rights to payment of the Holders of the
Preferred Securities.
10. Listing.
The Regular Trustees shall use their best efforts to cause the
Preferred Securities to be listed for quotation on the New York Stock Exchange.
11. Acceptance of Trust Securities Guarantee and Indenture.
Each Holder of Preferred Securities and Common Securities, by
the acceptance thereof, agrees to the provisions of the Preferred Securities
Guarantee and the Common Securities Guarantee, respectively, including the
subordination provisions therein and to the provisions of the Indenture.
12. No Preemptive Rights.
A-14
<PAGE> 75
The Holders of the Trust Securities shall have no preemptive
rights to subscribe for any additional securities.
13. Miscellaneous.
These terms constitute a part of the Declaration.
The Sponsor will provide a copy of the Declaration, the
Preferred Securities Guarantee or the Common Securities Guarantee (as may be
appropriate), and the Indenture to a Holder without charge on written request
to the Trust at its principal place of business.
A-15
<PAGE> 1
EXHIBIT 4.09
ANNEX I
[IF THE PREFERRED SECURITY IS TO BE A GLOBAL CERTIFICATE
INSERT - This Preferred Security is a Global Certificate within the meaning of
the Declaration hereinafter referred to and is registered in the name of The
Depository Trust Company, a New York corporation (the "Depositary") or a
nominee of the Depositary. This Preferred Security is exchangeable for
Preferred Securities registered in the name of a person other than the
Depositary or its nominee only in the limited circumstances described in the
Declaration and no transfer of this Preferred Security (other than a transfer
of this Preferred Security as a whole by the Depositary to a nominee of the
Depositary or by a nominee of the Depositary to the Depositary or another
nominee of the Depositary) may be registered except in limited circumstances.
Unless this Preferred Security is presented by an authorized
representative of the Depositary to the Trust or its agent for registration of
transfer, exchange or payment, and any Preferred Security issued is registered
in the name of CEDE & Co. or such other name as is requested by an authorized
representative of the Depositary and any payment hereon is made to CEDE & Co.
or such other entity as is requested by an authorized representative of the
Depositary, ANY TRANSFER, PLEDGE OR OTHER USE HEREOF FOR VALUE OR OTHERWISE BY
A PERSON IS WRONGFUL since the registered owner hereof, CEDE & Co., has an
interest herein.]
Certificate Number Number of Preferred Securities
CUSIP NO. 844887 20 8
Certificate Evidencing Preferred Securities
of
SOUTHWEST GAS CAPITAL I
Preferred Securities
(liquidation amount $25 per Preferred Security)
SOUTHWEST GAS CAPITAL I, a statutory business trust formed
under the laws of the State of Delaware (the "Trust"), hereby certifies that
___________________________ (the "Holder") is the registered owner of preferred
securities of the Trust representing undivided beneficial interests in the
assets of the Trust designated the 9.125% Trust Originated Preferred Securities
(liquidation amount $25 per Preferred Security) (the "Preferred Securities").
The Preferred Securities are transferable on the
I-1
<PAGE> 2
books and records of the Trust, in person or by a duly authorized attorney,
upon surrender of this certificate duly endorsed and in proper form for
transfer. The designation, rights, privileges, restrictions, preferences and
other terms and provisions of the Preferred Securities represented hereby are
issued and shall in all respects be subject to the provisions of the Amended and
Restated Declaration of Trust of the Trust dated as of October 26, 1995 as the
same may be amended from time to time (the "Declaration"), including the
designation of the terms of the Preferred Securities as set forth in Exhibit A
to the Declaration. Capitalized terms used herein but not defined shall have
the meaning given them in the Declaration. The Holder is entitled to the
benefits of the Preferred Securities Guarantee to the extent provided therein.
The Sponsor will provide a copy of the Declaration, the Preferred Securities
Guarantee and the Indenture to a Holder without charge upon written request to
the Trust at its principal place of business.
Upon receipt of this certificate, the Holder is bound by the
Declaration and is entitled to the benefits thereunder.
By acceptance, the holder agrees to treat for United States federal
income tax purposes, the Notes as indebtedness and the Preferred Securities as
evidence of indirect beneficial ownership in the Notes.
IN WITNESS WHEREOF, the Trust has executed this certificate this _____
day of _______________, ______.
George C. Biehl
as Trustee
-------------------------------
Jeffrey W. Shaw
as Trustee
-------------------------------
I-2
<PAGE> 3
ASSIGNMENT
FOR VALUE RECEIVED, the undersigned assigns and transfers this Preferred
Security Certificate to:
- --------------------------------------------------------------------------------
- --------------------------------------------------------------------------------
- --------------------------------------------------------------------------------
(Insert assignee's social security or tax identification number)
- --------------------------------------------------------------------------------
- --------------------------------------------------------------------------------
- --------------------------------------------------------------------------------
- --------------------------------------------------------------------------------
(Insert address and zip code of assignee) and irrevocably appoints)
- --------------------------------------------------------------------------------
- --------------------------------------------------------------------------------
- --------------------------------------------------------------------------------
agent to transfer this Preferred Security Certificate on the books of the Trust.
The agent may substitute another to act for him or her.
Date:
-------------------------
Signature:
-----------------------------------
(Sign exactly as your name appears on the other side of this Preferred Security
Certificate)
I-3
<PAGE> 4
ANNEX II
Certificate Number Number of Common Securities
Certificate Evidencing Common Securities
of
SOUTHWEST GAS CAPITAL I
Common Securities
(liquidation amount $25 per Common Security)
SOUTHWEST GAS CAPITAL I, a statutory business trust formed under the
laws of the State of Delaware (the "Trust"), hereby certifies that
_______________ (the "Holder") is the registered owner of common securities of
the Trust representing undivided beneficial interests in the assets of the
Trust designated the 9.125% Trust Originated Common Securities
(liquidation amount $25 per Common Security) (the "Common Securities"). The
Common Securities are transferable on the books and records of the Trust, in
person or by a duly authorized attorney, upon surrender of this certificate
duly endorsed and in proper form for transfer. The designation, rights,
privileges, restrictions, preferences and other terms and provisions of the
Common Securities represented hereby are issued and shall in all respects be
subject to the provisions of the Amended and Restated Declaration of Trust of
the Trust dated as of October 26, 1995, as the same may be amended
from time to time (the "Declaration"), including the designation of the terms
of the Common Securities as set forth in Exhibit A to the Declaration.
Capitalized terms used herein but not defined shall have the meaning given them
in the Declaration.
The Holder is entitled to the benefits of the Common Securities
Guarantee to the extent provided therein. The Trust will provide a copy of the
Declaration, the Common Securities Guarantee and the Indenture to the Holder
without charge upon written request to the Trust at its principal place of
business.
Upon receipt of this certificate, the Sponsor is bound by the
Declaration and is entitled to the benefits thereunder.
By acceptance, the Holder agrees to treat for United States federal
income tax purposes the Notes as indebtedness and the Common Securities as
evidence of indirect beneficial ownership in the Notes.
II-1
<PAGE> 5
IN WITNESS WHEREOF, the Trust has executed this certificate this _____
day of _______________, ______.
George C. Biehl
as Trustee
-------------------------------
Jeffrey W. Shaw
as Trustee
-------------------------------
II-2
<PAGE> 6
ASSIGNMENT
FOR VALUE RECEIVED, the undersigned assigns and transfers this Preferred
Security Certificate to:
- --------------------------------------------------------------------------------
- --------------------------------------------------------------------------------
- --------------------------------------------------------------------------------
(Insert assignee's social security or tax identification number)
- --------------------------------------------------------------------------------
- --------------------------------------------------------------------------------
- --------------------------------------------------------------------------------
- --------------------------------------------------------------------------------
(Insert address and zip code of assignee) and irrevocably appoints)
- --------------------------------------------------------------------------------
- --------------------------------------------------------------------------------
- --------------------------------------------------------------------------------
agent to transfer this Preferred Security Certificate on the books of the Trust.
The agent may substitute another to act for him or her.
Date:
-------------------------
Signature:
-----------------------------------
(Sign exactly as your name appears on the other side of this Preferred Security
Certificate)
II-3
<PAGE> 1
EXHIBIT 5.1
[O'MELVENY & MYERS LETTERHEAD]
October
30th
1 9 9 5
(213) 669-6000
815,040-023
LA1-682372.V1
Southwest Gas Corporation
5241 Spring Mountain Road
Las Vegas, Nevada 89102
Re: 9.125% Trust-Originated Preferred Securities of
Southwest Gas Capital I
Ladies and Gentlemen:
At your request, we have examined the Registration Statement
on Form S-3, File No. 33-62143, as amended by Amendment No. 1 filed by
Southwest Gas Corporation (the "Company") and Southwest Gas Capital I (the
"Trust") with the Securities and Exchange Commission on August 25, 1995 and
October 6, 1995, respectively (the "Registration Statement"), the Prospectus
dated October 24, 1995 (the "Prospectus") and the Prospectus Supplement dated
October 26, 1995 ("Prospectus Supplement") relating to the registration of
9.125% Trust-Originated Preferred Securities of the Trust (the "Preferred
Securities"), the 9.125% Subordinated Deferrable Interest Note of the Company
(the "Subordinated Note") and the guarantee of Preferred Securities of the
Trust, including certain back-up undertakings (the "Guarantee"). We are
familiar with the proceedings heretofore taken by the Company and the Trust in
connection with the authorization, registration, issuance and sale of the
Preferred Securities, the Subordinated Note and the Guarantee.
Based on the foregoing, it is our opinion that:
1. The Subordinated Note will, upon the execution, delivery
and payment therefor by the Trust and the authentication thereof by
Harris Trust and Savings Bank, as Trustee, constitute the legally
valid and binding obligation of the Company, enforceable against the
Company in accordance with its terms, except as may be limited by
similar laws relating to or affecting creditors' rights generally
<PAGE> 2
Page 2 - Southwest Gas Corporation - October 30, 1995
(including, without limitation, fraudulent conveyance laws) and by
general principles of equity, including, without limitation, concepts
of materiality, unavailability of specific performance or injunctive
relief, regardless of whether considered in a proceeding in equity or
at law.
2. The Guarantee will, upon the execution thereof and the
issuance and sale of the Preferred Securities and other securities to
be issued in connection therewith in the manner referred to in the
Prospectus and Prospectus Supplement, constitute the legally valid and
binding obligation of the Company, enforceable against the Company in
accordance with its terms, except as may be limited by bankruptcy,
insolvency, reorganization, moratorium or similar laws relating to or
affecting creditors' rights generally (including, without limitation,
fraudulent conveyance laws), 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,
regardless of whether considered in a proceeding in equity or at law
and by the unenforceability under certain circumstances of waivers of
rights granted by law where the waivers are against public policy or
prohibited by law.
We consent to the inclusion of this opinion in the Current
Report on Form 8-K dated October 26, 1995 which is incorporated by reference in
the Registration Statement, Prospectus and Prospectus Supplement.
Respectfully submitted,
O'MELVENY & MYERS
<PAGE> 1
EXHIBIT 5.2
[SKADDEN LETTERHEAD]
October 30, 1995
Southwest Gas Capital I
c/o Southwest Gas Corporation
5241 Spring Mountain Road
P.O. Box 98510
Las Vegas, Nevada 89153-7173
Re: Southwest Gas Corporation;
Current Report on Form 8-K
--------------------------
Ladies and Gentlemen:
We have acted as special counsel to Southwest Gas Capital I, a
statutory business trust formed under the laws of the State of Delaware (the
"Trust"), in connection with the preparation of a Registration Statement on
Form S-3 (Registration No. 33-62143), filed by Southwest Gas Corporation (the
"Company") and the Trust with the Securities and Exchange Commission (the
"Commission") on August 25, 1995 under the Securities Act of 1933, as amended
(the "Act"), and Amendment No. 1 thereto, filed with the Commission on October
6, 1995 (such Registration Statement, as so amended, being hereinafter referred
to as the "Registration Statement"), relating to the registration under the
Act, of 2,400,000 of 9.125% Preferred Securities (the "Preferred Securities")
of the Trust.
The Preferred Securities are to be issued pursuant to the
Amended and Restated Declaration of Trust (the "Declaration") among the
Company, as sponsor, Harris Trust and Savings Bank, as property trustee (the
"Property Trustee"), Wilmington Trust Company, as the Delaware trustee (the
"Delaware Trustee"), and George C. Biehl and Jeffrey W. Shaw, as regular
trustees (together, the "Regular Trustees"). Capitalized terms used but not
<PAGE> 2
Southwest Gas Capital I
October 30, 1995
Page 2
otherwise defined herein have the meanings ascribed to them in the Registration
Statement.
This opinion is being delivered in accordance with the
requirements of Item 601(b)(5) of Regulation S-K under the Act.
In connection with this opinion, we have examined originals or
copies, certified or otherwise identified to our satisfaction, of (i) the
certificate of trust (the "Certificate of Trust") filed by the Property Trustee
and the Regular Trustees with the Secretary of State of the State of Delaware
on August 17, 1995; (ii) the form of the Declaration (including the form of the
terms of the Preferred Securities annexed thereto); (iii) the form of the
Preferred Securities; and (iv) the Underwriting Agreement (the "Underwriting
Agreement"), dated October 26, 1995, between the Company, the Trust and the
representatives of the several underwriters set forth therein. We have also
examined originals or copies, certified or otherwise identified to our
satisfaction, of such other documents, certificates and records as we have
deemed necessary or appropriate as a basis for the opinions set forth herein.
In our examination, we have assumed the legal capacity of all
natural persons, the genuineness of all signatures, the authenticity of all
documents submitted to us as originals, the conformity to original documents of
all documents submitted to us as certified or photostatic copies and the
authenticity of the originals of such copies. In making our examination of
documents executed by parties other than the Trust, we have assumed that such
parties had the power, corporate or other, to enter into and perform all
obligations thereunder and have also assumed the due authorization by all
requisite action, corporate or other, and execution and delivery by such
parties of such documents and that such documents constitute valid and binding
obligations of such parties. In addition, we have assumed that each of the
Declaration and the Preferred Securities as executed will be in form reviewed
by us. As to any facts material to the opinions expressed herein which were
not independently established or verified, we have relied upon oral or written
statements and representations of officers, trustees and other representatives
of the Company, the Trust and others.
<PAGE> 3
Southwest Gas Capital I
October 30, 1995
Page 3
Members of our firm are admitted to the bar in the State of
Delaware, and we express no opinion as to the laws of any other jurisdiction
other than the laws of the United States of America to the extent specifically
referred to herein.
Based on and subject to the foregoing and to the other
qualifications and limitations set forth herein, we are of the opinion
that the Preferred Securities, when the Declaration is executed and delivered
and the terms of the Preferred Securities are established in accordance with
the terms of the Declaration, will be duly authorized for issuance and, when
issued and executed in accordance with the Declaration and delivered and paid
for as set forth in the Underwriting Agreement, will be validly issued, fully
paid and nonassessable, representing undivided beneficial interests in the
assets of Trust. We bring to your attention that the Preferred Securities
holders may be obligated, pursuant to the Trust Declaration, to (i) provide
indemnity and/or security in connection with and pay taxes or governmental
charges arising from transfers of Preferred Securities and (ii) provide
security and indemnity in connection with the requests of or directions to the
Property Trustee to exercise its rights and powers under the Declaration.
This opinion is furnished to you solely for your benefit in
connection with the filing of the Registration Statement and, except as set
forth in the next sentence, is not to be used, circulated, quoted or otherwise
referred to for any other purpose or relied upon by any other person for any
purpose without our prior written consent. We also consent to the
incorporation by reference into the Registration Statement and the use of our
name under the heading "Legal Matters" in the Prospectus, dated October 24,
1995, as supplemented by the Prospectus Supplement, dated October 26, 1995,
relating to the Preferred Securities included as an exhibit to the Registration
Statement. In giving this consent, we do not thereby admit that we are within
the category of persons whose consent is required under Section 7 of the Act or
the rules and regulations of the Commission promulgated
<PAGE> 4
Southwest Gas Capital I
October 30, 1995
Page 4
thereunder. This opinion is expressed as of the date hereof unless otherwise
expressly stated and we disclaim any undertaking to advise you of any
subsequent changes of the facts stated or assumed herein or any subsequent
changes in applicable law.
Very truly yours,
/s/ Skadden, Arps, Slate, Meagher & Flom
<PAGE> 1
EXHIBIT 8.01
[O'MELVENY & MYERS LETTERHEAD]
October
30th
1 9 9 5
(213) 669-6000
815,040-023
LA3-693294.V3
Southwest Gas Corporation
5241 Spring Mountain Road
Las Vegas, Nevada 89102
Re: Southwest Gas Capital I
Ladies and Gentlemen:
You have requested our opinion as to whether Southwest Gas
Capital I (the "Trust") will qualify as a grantor trust for United States
federal income tax purposes as of the date the Trust is formed. The Trust will
be a business trust formed in accordance with the provisions of the Delaware
Code, title 12, chapter 38.
In connection with rendering this opinion, we have examined
the Amended and Restated Declaration of Trust (the "Declaration"), the
Indenture, the First Supplemental Indenture, and such other documents as we
have deemed necessary or appropriate for purposes of this opinion. For
purposes of such examination, we have assumed the genuineness of all
signatures, the legal capacity of natural persons, and the authenticity of all
documents submitted to us as relevant to this opinion and, as to matters of
fact, we have relied upon the agreements, instruments, certificates and
documents referred to above. We have assumed that all parties have the
corporate power and authority to enter into and perform all obligations
thereunder, and we have also assumed the due authorization by all requisite
corporate actions, the due execution and delivery and the validity, binding
effect and enforceability of such documents.
<PAGE> 2
Page 2 - Southwest Gas Corporation - October 30, 1995
The facts as we understand them and on which this opinion is
based are as follows:
Southwest Gas Corporation, a California corporation (the
"Company"), will issue subordinated debt securities (the "Subordinated Debt
Securities"), which will be held by the Trust. The Trust will initially have
three trustees (the "Trustees"), two of whom will be persons employed by or
affiliated with the Company. The third Trustee will be Wilmington Trust
Company, a Delaware corporation. The Declaration will authorize the Trustees
to have the Trust issue preferred securities (the "Preferred Securities") and
common securities (the "Common Securities" and together with the Preferred
Securities, the "Securities") representing beneficial undivided interests in
the Trust. All of the Common Securities will be held by the Company. The
Declaration will not permit the issuance by the Trust of any securities or
other beneficial interests other than the Securities. Pursuant to the
Declaration, Harris Trust and Savings Bank (the "Property Trustee"), who will
not be a Trustee, will be appointed to hold the Subordinated Debt Securities
owned by the Trust for the benefit of the holders of the Securities. The
Property Trustee will also receive all interest and principal paid in respect
of the Subordinated Debt Securities and will maintain such funds in a
segregated account pending distribution of such funds to the holders of the
Securities.
Holders of the Securities will be entitled to receive
cumulative cash distributions (the "Distributions") at a specified annual rate
of the liquidation preference of $25 per Security, accruing from the date of
original issuance and payable monthly in arrears on the last day of each
calendar month of each year. The timing and rate of payments on the Securities
and the total outstanding liquidation preference of the Securities shall be
identical to, respectively, the timing and rate of payments on and total
outstanding principal amount of the Subordinated Debt Securities. The
Preferred Securities will rank pari passu with the Common Securities, except
that in the event of a default under the Declaration the rights of the holders
of the Common Securities to payments of Distributions and to payments upon
liquidation, redemption or otherwise will be subordinated to the rights of the
holders of the Preferred Securities. In addition, in the event that the Trust
does not have sufficient funds to pay Distributions to the holders of the
Preferred Securities, such holders will be entitled to elect a special trustee
(the "Special Trustee") who will be a Trustee of the Trust and who will have
the authority to bring legal action to compel the Property Trustee to enforce
the rights of the Trust under the indenture executed in connection with the
issuance of the Subordinated Debt Securities (the "Indenture").
<PAGE> 3
Page 3 - Southwest Gas Corporation - October 30, 1995
The Subordinated Debt Securities will have a maturity of up to
30 years. In addition, the Company may also be given an option (the "Extension
Option") to extend the maturity date of the Subordinated Debt Securities for an
additional period not to exceed 19 years, provided however, that the Company
may only exercise the Extension Option if it satisfies certain financial
conditions at the end of the initial 30-year term. Furthermore, the Company
may defer interest payments on the Subordinated Debt Securities for up to 20
consecutive quarters, at which time all deferred interest would be payable.
The Subordinated Debt Securities will be rated just below investment grade.
Under Treasury Regulation Section 301.7701-4, in order for a
trust to be classified as a fixed investment trust rather than as an
association taxable as a corporation or as a partnership, there must be no
power, on the part of the trustee or any other person, to vary the investment
of the holders of interests in the trust in order to take advantage of market
fluctuations. Furthermore, the trust cannot have multiple classes of
ownership, unless the trust is formed for purposes of facilitating direct
investment in the trust assets and the existence of multiple classes is merely
incidental to such purposes.
The Declaration prohibits the Trustees from causing the Trust
to acquire any assets other than the Subordinated Debt Securities. In
particular, neither the Trustees nor the Trust may vary the assets of the Trust
or the terms of the Securities. In addition, payments of interest and
principal received with respect to the Subordinated Debt Securities may not be
invested, but rather must be distributed to the holders of the Securities.
Furthermore, as stated and with the exception noted above, the Preferred
Securities will rank pari passu with the Common Securities.
Based on the foregoing, and assuming compliance with the
provisions of the Declaration, it is our opinion that the Trust will be treated
as a grantor trust under subpart E, part I of subchapter J of the Internal
Revenue Code for United States federal income tax purposes rather than as an
association taxable as a corporation or as a partnership and, accordingly, each
beneficial owner of a Preferred Security will be treated for United States
federal income tax purposes as the owner of an undivided interest in the
Subordinated Debt Securities held by the Trust.
We consent to the inclusion of this opinion in the Current
Report on Form 8-K dated October 26, 1995 which is incorporated by reference
in the Registration Statement on Form S-3, File No. 33-62143, as amended by
Amendment No. 1 filed by the Company and the Trust with the Securities and
Exchange Commission on August 25, 1995 and October 6, 1995, respectively, the
Prospectus dated October 24, 1995 and the Prospectus Supplement dated October
26, 1995 relating to the registration of the Preferred Securities.
Respectfully submitted,
O'MELVENY & MYERS
