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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) December 30, 1996
SOUTHWEST GAS CORPORATION
(Exact name of registrant as specified in its charter)
California 1-7850 88-0085720
(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)
Registrant's telephone number, including area code: (702) 876-7237
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ITEM 5. OTHER EVENTS
Medium-Term Notes Offering
On December 30, 1996, Southwest Gas Corporation (the Company) finalized the
terms for an offering of $150,000,000 of Medium-Term Notes with respect to
Registration Statement No. 333-14605. In connection therewith, the Company
executed a distribution agreement, a Second Supplemental Indenture, and
Interest Rate Agent Calculation Agreement as well as obtained an opinion of
legal counsel on the securities. These documents are contained herein as
exhibits.
ITEM 7. EXHIBITS
1.01 Distribution Agreement
4.04 Second Supplemental Indenture
4.05 Interest Rate Calculation Agent Agreement
5.01 Opinion of O'Melveny & Myers LLP as to the validity of the securities
23.02 Consent of O'Melveny & Myers LLP (included in Exhibit 5.01)
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: December 30, 1996 /s/ EDWARD A. JANOV
----------------------
Edward A. Janov
Vice President/Controller and
Chief Accounting Officer<PAGE>
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EXHIBIT INDEX
Exhibit
Number Description
- ------- ----------------------------------------------------------------------
1.01 Distribution Agreement
4.04 Second Supplemental Indenture
4.05 Interest Rate Calculation Agent Agreement
5.01 Opinion of O'Melveny & Myers LLP as to the validity of the securities
23.02 Consent of O'Melveny & Myers LLP (included in Exhibit 5.01)<PAGE>
EXHIBIT 1.01
$150,000,000
SOUTHWEST GAS CORPORATION
Medium-Term Notes, Series A
Due Nine Months or More From Date of Issue
DISTRIBUTION AGREEMENT
December 30, 1996
Merrill Lynch & Co.
Merrill Lynch, Pierce, Fenner & Smith Incorporated
World Financial Center
North Tower, 10th Floor
New York, New York 10281-1310
Dean Witter Reynolds Inc.
Two World Trade Center
New York, New York 10048
PaineWebber Incorporated
1285 Avenue of the Americas
New York, New York 10019
Ladies and Gentlemen:
Southwest Gas Corporation, a California corporation (the "Company"),
confirms its agreement with Merrill Lynch & Co., Merrill Lynch, Pierce, Fenner
& Smith Incorporated, Dean Witter Reynolds Inc. and PaineWebber Incorporated
(each, an "Agent" and collectively, the "Agents") with respect to the issue and
sale by the Company of its Medium-Term Notes, Series A due nine months or more
from date of issue (the "Notes"). The Notes are to be issued pursuant to an
Indenture, dated as of July 15, 1996, as amended, supplemented or modified
from time to time including by the Second Supplemental Indenture dated as of
December 30, 1996 (as so amended, supplemented or modified, the "Indenture"),
between the Company and Harris Trust and Savings Bank, as trustee (the
"Trustee"). As of the date hereof, the Company has authorized the issuance
and sale of up to $150,000,000 aggregate initial offering price of Notes to or
through the Agents pursuant to the terms of this Agreement. It is understood,
however, that the Company may from time to time authorize the issuance of
additional Notes and that such additional Notes may be sold to or through the
Agents pursuant to the terms of this Agreement, all as though the issuance of
such Notes were authorized as of the date hereof.
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The Company has filed with the Securities and Exchange Commission (the
"SEC") 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") for the offering from time to time
in accordance with Rule 415 of the rules and regulations of the SEC under the
1933 Act (the "1933 Act Regulations") 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 securities remained unsold under the 1994
Registration Statement, the Company and Southwest Gas Capital I, a statutory
business trust organized under the Business Trust Act of the State of Delaware
(the "Trust"), filed with the SEC a registration statement on Form S-3 (No.
33-62143), as amended (the "1995 Registration Statement"), under the 1933 Act
for the offering from time to time in accordance with Rule 415 of the 1933 Act
Regulations of the Company's debt securities, preferred stock and/or common
stock and the Trust's preferred securities and related guarantee of preferred
securities by the Company having an aggregate offering price of $270,400,000
and the 1995 Registration Statement has become effective. While an aggregate
offering price of $60,400,000 of such securities remained unsold under the
1994 Registration Statement and the 1995 Registration Statement, the Company
filed with the SEC a registration statement on Form S-3 (No. 333-14605)(the
"1996 Registration Statement"), under the 1933 Act for the offering from time
to time in accordance with Rule 415 of the 1933 Act Regulations of its debt
securities, including the Notes, preferred stock and/or common stock having an
aggregate offering price of $250,000,000 (all of which securities remain
unsold) and the 1996 Registration Statement has become effective. The 1994
Registration Statement, the 1995 Registration Statement and the 1996
Registration Statement (and any further registration statements that may be
filed by the Company for the purpose of registering additional Notes and in
connection with which this Agreement is included or incorporated by reference
as an exhibit) and the combined prospectus constituting a part of the 1996
Registration Statement pursuant to Rule 429 of the 1933 Act Regulations, and
any prospectus supplement (a "Prospectus Supplement") and pricing supplement
(a "Pricing Supplement") relating to the Notes, including all documents that
are filed by the Company with the SEC under the Securities Exchange Act of
1934, as amended (the "1934 Act"), or the rules and regulations of the SEC
under the 1934 Act (the "1934 Act Regulations") that are at any time
incorporated or deemed to be incorporated by reference therein pursuant to
Item 12 of Form S-3 under the 1933 Act (the "Incorporated Documents"), as from
time to time amended or supplemented by the filing of documents pursuant to
the 1934 Act, the 1934 Act Regulations, the 1933 Act, the 1933 Act Regulations
or otherwise, are referred to herein as the "Registration Statements" and the
"Prospectus," respectively, except that if any revised prospectus shall be
provided to the Agents by the Company for use in connection with the offering
of the Notes, whether or not such revised prospectus is required to be filed
by the Company pursuant to Rule 424(b) of the 1933 Act Regulations, the term
"Prospectus" shall refer to such revised prospectus from and after the time it
is first provided to the Agents for such use.
All references in this Agreement to financial statements and schedules
and other information that is "contained," "included" or "stated" in the
Registration Statements 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 Registration Statements or the Prospectus, as the case may
be; and all
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references in this Agreement to amendments or supplements to the
Registration Statements or the Prospectus shall be deemed to mean and include
the filing of any Incorporated Document after the time of execution of this
Agreement; provided, however, that any supplement to the Prospectus filed with
the SEC pursuant to Rule 424(b) of the 1933 Act Regulations with respect to an
offering of securities of the Company, other than the Notes, or the Trust
shall not be deemed to be a supplement to, or a part of, the Prospectus.
SECTION 1. Appointment as Agent.
(a) Appointment. Subject to the terms and conditions stated herein and
subject to the reservation by the Company of the right to sell Notes directly
on its own behalf, the Company hereby agrees that Notes will be sold
exclusively to or through the Agents. The Company may from time to time offer
and sell Notes otherwise than through an Agent; provided, however, that so long
as this Agreement shall be in effect, (i) the Company shall not solicit offers
to purchase Notes through any agent without (A) amending this Agreement to
appoint such agent as an additional Agent hereunder on the same terms and
conditions as provided herein for the Agents and (B) giving the Agents prior
notice of such appointment and (ii) the Company may accept any offer to
purchase Notes through any agent other than an Agent, provided that (A) the
Company shall not have solicited such offer, (B) the Company and such agent
shall have entered into an agreement with respect to such purchase having terms
and conditions (including, without limitation, any commissions with respect
thereto) in substance identical to the terms and conditions that would apply
to such purchase under this Agreement if such agent were an Agent hereunder,
which may be effected by incorporating the terms and conditions of this
Agreement by reference into such agreement in the form of Exhibit B hereto, and
(C) the Company shall provide the Agents with notice of such offer to purchase,
together with a copy of such agreement, promptly following the acceptance
thereof.
(b) Sale of Notes. The Company shall not sell or approve the solicita-
tion of purchases of Notes in excess of the amount that shall be authorized by
the Company and the Public Utilities Commission of the State of California
(the "CPUC") from time to time or in excess of the aggregate initial offering
price of Notes registered pursuant to the Registration Statements. The Agents
shall have no responsibility for maintaining records with respect to the
aggregate initial offering price of Notes sold, or of otherwise monitoring the
availability of Notes for sale, under the Registration Statements or
applicable CPUC authorizations.
(c) Purchases as Principal. The Agents shall not have any obligation to
purchase Notes from the Company as principal, but one or more Agents may agree
from time to time to purchase Notes as principal for resale to investors and
other purchasers determined by such Agent or Agents. Any such purchase of
Notes by an Agent as principal shall be made in accordance with Section 3(a)
hereof.
(d) Solicitations as Agent. If agreed upon by an Agent and the Company,
such Agent, acting solely as agent for the Company and not as principal, will
solicit purchases of the Notes. Such Agent will communicate to the Company,
orally, each offer to purchase Notes solicited by it on an agency basis, other
than those offers rejected by such Agent. Such Agent shall have the right, in
its discretion reasonably exercised, to reject any proposed purchase of Notes,
as a whole or in part, and any such rejection shall not be deemed a breach of
its agreement contained herein. The Company may accept or reject any proposed
purchase of Notes, in whole or in part. Such Agent shall make reasonable
efforts to assist the Company in obtaining performance by each purchaser whose
offer to purchase Notes has been solicited by it and accepted by the Company.
Such Agent shall not have any liability to the Company in the event that any
such purchase is not consummated for any reason. If the Company shall default
on its obligation to deliver Notes to a purchaser whose offer it has accepted,
the Company shall (i) hold such Agent harmless against any loss, claim or
damage arising from or as a result of such default by the Company and (ii) pay
to such Agent any commission to which it would otherwise be entitled absent
such default.
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(e) Reliance. The Company and the Agents agree that any Notes purchased
by one or more Agents as principal shall be purchased, and any Notes the
placement of which an Agent arranges as agent shall be placed by such Agent,
in reliance on the representations, warranties, covenants and agreements of
the Company contained herein and on the terms and conditions and in the manner
provided herein.
SECTION 2. Representations and Warranties.
(a) The Company represents and warrants to each Agent as of the date
hereof, as of the date of each acceptance by the Company of an offer for the
purchase of Notes (whether to such Agent as principal or through such Agent as
agent), as of the date of each delivery of Notes (whether to such Agent as
principal or through such Agent as agent) (the date of each such delivery to
the Agent as principal being hereafter referred to as a "Settlement Date"),
and as of any time that the Registration Statements or the Prospectus shall be
amended or supplemented or there is filed with the SEC any Incorporated
Document (each of the times referenced above being referred to herein as a
"Representation Date"), as follows:
(i) Requirements for Use of Form S-3; No Stop Orders. The Company
meets the requirements for the use of Form S-3 and Rule 415 of the 1933
Act Regulations and has filed or will file with the SEC a Prospectus
Supplement relating to the Notes required to be filed pursuant to Rule
424(b) of the 1933 Act Regulations. No stop order suspending the
effectiveness of any of the Registration Statements has been issued by
the SEC, and no proceedings for the issuance of such a stop order have
been instituted or, to the knowledge of the Company, threatened by the
SEC.
(ii) Registration Statements and Prospectus. The Registration
Statements, at the respective Effective Dates thereof, fully complied,
and as of each Representation Date will fully comply, and the Prospectus,
at the time of the most recent filing thereof and of any supplement or
amendment thereto (including each Pricing Supplement) with the SEC
pursuant to Rule 424(b) of the 1933 Act Regulations and as of each
Representation Date, as it may then be amended or supplemented, and the
Indenture, as of each Representation Date, will fully comply in all
material respects with the applicable provisions of the 1933 Act, the
1933 Act Regulations, the Trust Indenture Act of 1939, as amended (the
"Trust Indenture Act"), and the rules and regulations of the Commission
thereunder (the "Trust Indenture Act Regulations"), or pursuant to said
rules and regulations did or will be deemed to comply therewith. On the
respective Effective Dates thereof and as of each Representation Date,
the Registration Statements did not and 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 not
misleading. The Prospectus, at the time of the most recent filing
thereof and of any supplement or amendment thereto (including each
Pricing Supplement) with the SEC pursuant to Rule 424(b) of the 1933 Act
Regulations and as of each Representation Date, will not contain any
untrue statement of a material fact or omit to state a material fact
necessary in order to make the statements therein, in the light of the
circumstances under which they were made, not misleading. The foregoing
representations and warranties in this paragraph (ii) shall not apply to
statements or
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omissions made in reliance upon and in conformity with
written information furnished to the Company by or on behalf of the
Agents specifically for use in connection with the preparation of the
Registration Statements or the Prospectus, as they may be amended or
supplemented, or to any statements in or omissions from the statement of
eligibility, as it may be amended, under the Trust Indenture Act, of the
Trustee under the Indenture (the "Statement of Eligibility"). As used
herein, the term "Effective Date" means, with respect to each of the
Registration Statements, at any time, the later of (i) the date that such
Registration Statement or any post-effective amendment thereto was or is
declared effective by the SEC under the 1933 Act and (ii) the date that
the Company's Annual Report on Form 10-K for its most recently completed
fiscal year is filed with the SEC under the 1934 Act, in each case at
such time.
(iii) Incorporated Documents. The Incorporated Documents
heretofore filed, when they were filed (or, if any amendment with respect
to any such document was filed, when such amendment was filed), conformed
in all material respects with the requirements of the 1934 Act and the
1934 Act Regulations, and any further Incorporated Documents so filed
will, when they are filed, conform in all material respects with the
requirements of the 1934 Act and the 1934 Act Regulations; no such
Incorporated Document when it was filed (or, if an amendment with respect
to any such document was filed, when such amendment was filed) contained
any untrue statement of a material fact or omitted to state a material
fact necessary in order to make the statements therein, in the light of
the circumstances under which they were made, not misleading; and such
further Incorporated Documents, when filed, will not contain any untrue
statement of a material fact or omit to state a material fact necessary
in order to make the statements therein, in the light of the
circumstances under which they were made, not misleading.
(iv) Indenture. The Indenture has been duly and validly
authorized by all necessary corporate action on the part of the Company,
has been duly and validly executed and delivered by the Company, is a
legal, valid and binding instrument of the Company enforceable against
the Company in accordance with its terms, except as limited by
bankruptcy, insolvency, reorganization, fraudulent conveyance or other
similar laws affecting creditors' rights and general equitable principles
(whether considered in a proceeding in equity or at law), and has been
duly qualified under the Trust Indenture Act and no proceedings to
suspend such qualification have been instituted or, to the knowledge of
the Company, threatened by the SEC. The Indenture conforms in all
material respects to all statements relating thereto contained in the
Prospectus.
(v) Notes. The Notes have been duly authorized by all necessary
corporate action on the part of the Company, and, when the terms of the
Notes have been established pursuant to the Indenture and when the Notes
are authenticated and delivered in accordance with the Indenture against
payment therefor, the Notes will constitute the legally, valid and
binding obligations of the Company enforceable against the Company in
accordance with their terms, except as limited by bankruptcy, insolvency,
reorganization, fraudulent conveyance or other similar laws affecting
creditors' rights and general equitable principles (whether considered in
a proceeding in equity or at law), and will be entitled to the
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benefits of the Indenture. The Notes will conform in all material respects
to all statements relating thereto contained in the Prospectus.
(vi) Due Incorporation and Qualification. (1) The Company is a
corporation duly organized and validly existing in good standing under
the laws of the State of California with full corporate power and
authority to own, lease and operate its properties and to conduct its
business as described in the Registration Statements and the Prospectus,
and 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 on the condition (financial or other),
business, prospects, properties, net worth or results of operations of
the Company and the Subsidiaries (as hereinafter defined) taken as a
whole (a "Material Adverse Effect").
(2) The Subsidiaries are corporations duly organized and validly
existing in good standing under the laws of the State of Nevada with full
corporate power and authority to own, lease and operate their properties
and to conduct their businesses as described in the Registration
Statements and the Prospectus, and are duly registered and qualified to
conduct their businesses and are in good standing in each jurisdiction or
place where the nature of their properties or the conduct of their
businesses requires such registration or qualification, except where the
failure so to register or qualify does not have a Material Adverse
Effect.
(vii) Subsidiaries. All of 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, 1995 (the "1995 Form 10-K"), which is
incorporated by reference into the Prospectus.
(viii) Legal Proceedings; Contracts. There are no legal or
governmental proceedings pending or, to the knowledge of the Company,
threatened, against Northern Pipeline Construction Co. or Paiute Pipeline
Company (collectively, the "Subsidiaries") or the Company, or to which
the Company or either of the Subsidiaries is subject, or to which any of
their respective properties is subject, that are required to be described
in the Registration Statements 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 Registration
Statements or the Prospectus or to be filed as an exhibit to the
Registration Statements or any Incorporated Document that are not
described or filed as required by the 1933 Act, the 1933 Act Regulations,
the 1934 Act or the 1934 Act Regulations.
(ix) No Defaults. Except as disclosed in the Prospectus,
neither the Company nor either of the Subsidiaries (i) is in violation of
its charter or by-laws, or of any law, ordinance, administrative or
governmental rule or regulation applicable to the Company or either of
the Subsidiaries, 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 or
either of the Subsidiaries, or (ii) is in default in
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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 material agreement, indenture, lease or other
instrument to which the Company or either of the Subsidiaries is a party or
by which any of them or any of their respective properties may be bound.
(x) Regulatory Approvals; No Conflicts. Neither the issuance and
sale of the Notes, the execution, delivery or performance of this
Agreement and the Indenture by the Company nor the consummation by the
Company of the transactions contemplated hereby requires any consent,
approval, authorization or other order of or registration or filing with,
any court, regulatory body, administrative agency or other governmental
body, agency or official (except such as may be required for the
registration of the Securities under the 1933 Act or the 1933 Act
Regulations and compliance with the securities or blue sky laws of
various jurisdictions, the qualification of the Indenture under the Trust
Indenture Act and the authorizations of the CPUC issued December 7, 1994,
June 6, 1996 and November 11, 1996 (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), all of which
have been or will be effected in accordance with this Agreement) or
conflicts or will conflict with or constitutes or will constitute a
breach of, or a default under, the charter or bylaws of the Company or
either of the Subsidiaries or conflicts or will conflict with or
constitutes or will constitute a breach of, or a default under, any
agreement, indenture, lease or other instrument to which the Company or
either of the Subsidiaries is a party or by 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 or either of the Subsidiaries 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 or either of the Subsidiaries 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.
(xi) Accountants. The independent certified public
accountants, Arthur Andersen LLP, who have audited the financial
statements incorporated by reference in the Registration Statements and
the Prospectus (or any amendment or supplement thereto) are independent
public accountants as required by the 1933 Act and the 1933 Act
Regulations.
(xii) Financial Statements. The financial statements, together
with related schedules and notes, included or incorporated by reference
in the Registration Statements and the Prospectus (and any amendment or
supplement thereto), present fairly the consolidated financial position,
results of operations and changes in financial position of the Company
and its subsidiaries on the basis stated in the Registration Statements
and the Prospectus at the respective dates or for the respective periods
to which they apply; such statements and related schedules and notes have
been prepared in accordance with generally accepted accounting principles
consistently applied throughout the periods involved, except as disclosed
therein; and the other financial and statistical information and
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data included or incorporated by reference in the Registration Statements and
the Prospectus (and any amendment or supplement thereto) are accurately
presented and prepared on a basis consistent with such financial
statements and the books and records of the Company and its subsidiaries.
The pro forma financial statements incorporated by reference in the
Registration Statements and the Prospectus comply in all material
respects with Article 11 of Regulation S-X under the 1933 Act.
(xiii) Agreement. The execution and delivery of, and the
performance by the Company of its obligations under, this Agreement have
been duly and validly authorized by the Company, and this Agreement has
been duly executed and delivered by the Company and constitutes the valid
and legally binding agreement of the Company, enforceable against the
Company in accordance with its terms, except as rights to indemnity and
contribution hereunder may be limited by applicable law and as limited by
bankruptcy, insolvency, reorganization, fraudulent conveyance or other
similar laws affecting creditors' rights and general equitable principles
(whether considered in equity or law).
(xiv) Material Changes or Material Transactions. Except as
disclosed in the Registration Statements and the Prospectus (or any
amendment or supplement thereto), subsequent to the respective dates as
of which such information is given in the Registration Statements and the
Prospectus (or any amendment or supplement thereto), (i) neither the
Company nor either of the Subsidiaries 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 Company and its
subsidiaries taken as a whole, and (ii) there has not been any change or
development involving the Company which may reasonably be expected to
have a Material Adverse Effect.
(xv) Licenses. Each of the Company and the Subsidiaries has
such permits, licenses, franchises and authorizations of governmental or
regulatory authorities (the "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 Company and the Subsidiaries has fulfilled
and performed all of 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 that allows, or after notice or lapse
of time would allow, 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.
(xvi) No Registration. No holder of any security of the Company
has any right to require registration of any security of the Company
because of the filing of any of the Registration Statements or
consummation of the transactions contemplated by this Agreement.
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(xvii) Public Utility Holding Company Act. Neither the Company
nor any of its subsidiaries is currently subject to regulation under the
Public Utility Holding Company Act of 1935, as amended (the "1935 Act").
(xviii) Investment Company Act. Neither the Company nor any of
its subsidiaries is required to be registered under the Investment
Company Act of 1940, as amended (the "1940 Act").
(xix) Ratings. The Notes, prior to any issuance thereof, will be
rated Baa2 by Moody's Investors Service, Inc. and BBB- by Standard & Poor's
or such other rating as to which the Company shall have most recently
notified the Agents of pursuant to Section 4(a) hereof.
(b) Additional Certifications. Any certificate signed by any director
or officer of the Company and delivered to one or more Agents or to counsel
for the Agents in connection with an offering of Notes to one or more Agents
as principal or through an Agent as agent shall be deemed a representation and
warranty by the Company to such Agent or Agents as to the matters covered
thereby on the date of such certificate and at each Representation Date
subsequent thereto.
SECTION 3. Purchases as Principal; Solicitations as Agent.
(a) Purchases as Principal. Unless otherwise agreed by an Agent and the
Company, Notes shall be purchased by one or more Agents as principal in
accordance with terms agreed upon by such Agent or Agents and the Company
(which terms, unless otherwise agreed, shall, to the extent applicable,
include those terms specified in Exhibit A hereto and be agreed upon orally
with written confirmation prepared by such Agent or Agents and mailed or sent
by facsimile transmission to the Company). An Agent's commitment to purchase
Notes as principal shall be deemed to have been made on the basis of the
representations and warranties of the Company herein contained and shall be
subject to the terms and conditions herein set forth. Unless the context
otherwise requires, references herein to "this Agreement" shall include the
applicable agreement of one or more Agents to purchase Notes from the Company
as principal. Each purchase of Notes, unless otherwise agreed, shall be at a
discount from the principal amount of each such Note equivalent to the
applicable commission set forth in Schedule A hereto. The Agents may engage
the services of any other broker or dealer in connection with the resale of
the Notes purchased by them as principal and may allow all or any portion of
the discount received in connection with such purchases from the Company to
such brokers and dealers. At the time of each purchase of Notes by one or
more Agents as principal, such Agent or Agents shall specify the requirements
for the stand-off agreement, officers' certificate, opinions of counsel and
comfort letter pursuant to Sections 4(k), 7(b), 7(c) and 7(d) hereof.
(b) Solicitations as Agent. On the basis of the representations and
warranties herein contained, but subject to the terms and conditions herein
set forth, when agreed by the Company and an Agent, such Agent, as an agent of
the Company, will use its reasonable efforts to solicit offers to purchase the
Notes upon the terms and conditions set forth in the Prospectus. The Agents
are not authorized to appoint sub-agents with respect to Notes sold through
them as agent. All Notes sold through an Agent as agent will be sold at 100%
of their principal amount unless otherwise agreed to by the Company and such
Agent.
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The Company reserves the right, in its sole discretion, to suspend
solicitation of purchases of the Notes through an Agent, as agent, commencing
at any time for any period of time or permanently. As soon as practicable
after receipt of instructions from the Company, such Agent will suspend
solicitation of purchases from the Company until such time as the Company has
advised such Agent that such solicitation may be resumed.
The Company agrees to pay each Agent a commission, in the form of a
discount, equal to the applicable percentage of the principal amount of each
Note sold by the Company as a result of a solicitation made by such Agent as
set forth in Schedule A hereto.
(c) Administrative Procedures. The purchase price, interest rate or
formula, maturity date and other terms of the Notes (as applicable) specified
in Exhibit A hereto shall be agreed upon by the Company and the applicable
Agent or Agents and specified in a Pricing Supplement to be prepared in
connection with each sale of Notes. Except as may be otherwise specified in
the applicable Pricing Supplement, the Notes will be issued in denominations
of $1,000 or any larger amount that is an integral multiple of $1,000.
Administrative procedures with respect to the sale of Notes shall be agreed
upon from time to time by the Company, the Agents and the Trustee (the "Proce-
dures"). The Agents and the Company agree to perform, and the Company agrees
to cause the Trustee to agree to perform, their respective duties and
obligations specifically provided to be performed by them in the Procedures.
SECTION 4. Covenants of the Company.
The Company covenants with the Agents as follows:
(a) Notice of Certain Events. The Company will notify the Agents
immediately, and confirm such notice in writing, of (i) the effectiveness of
any amendment to any of the Registration Statements, (ii) the transmittal to
the SEC for filing of any amendment or supplement to the Prospectus or any
document to be filed pursuant to the 1934 Act or the 1934 Act Regulations
(other than any amendment, supplement or document relating solely to
securities other than the Notes), (iii) the receipt of any comments from the
SEC with respect to any of the Registration Statements or the Prospectus, (iv)
any request by the SEC for any amendment to any of the Registration Statements
or any amendment or supplement to the Prospectus or for additional
information, (v) the issuance by the SEC of any stop order suspending the
effectiveness of any of the Registration Statements or the initiation of any
proceedings for that purpose, (vi) the issuance of any authorization of the
CPUC relating to the authority of the Company to issue and sell Notes in
addition to the authorizations referred to in Section 2(a)(x) of this
Agreement, (vii) the expiration of the authorizations of the CPUC referred to
in Section 2(a)(x) of this Agreement and (viii) any change in the rating
assigned by any nationally recognized statistical rating organization to the
Notes or the public announcement by any nationally recognized statistical
rating organization that it has under surveillance or review, with possible
negative implications, its rating of the Notes or the withdrawal by any
nationally recognized statistical rating organization of its
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rating of the Notes. The Company will make every reasonable effort to prevent
the issuance of any stop order with respect to any of the Registration
Statements and, if any such stop order is issued, to obtain the lifting thereof
at the earliest possible moment.
(b) Notice of Certain Proposed Filings. The Company will give the
Agents advance notice of its intention to file or prepare any additional
registration statement with respect to the registration of additional Notes,
any amendment to any of the Registration Statements or any amendment or
supplement to the Prospectus (other than an amendment or supplement providing
solely for a change in the interest rate or formula applicable to the Notes or
relating solely to the issuance and/or offering of securities other than the
Notes), whether by the filing of documents pursuant to the 1934 Act, the 1934
Act Regulations, the 1933 Act, the 1933 Act Regulations or otherwise, and will
furnish to the Agents copies of any such amendment or supplement or other
documents proposed to be filed or used a reasonable time in advance of such
proposed filing or use, as the case may be, and will not file any such
amendment or supplement or other documents in a form to which the Agents or
counsel for the Agents shall reasonably object.
(c) Copies of the 1996 Registration Statement and the Prospectus. The
Company will deliver to the Agents as many signed and conformed copies of the
1996 Registration Statement (as originally filed) and of each amendment
thereto (including exhibits filed therewith or incorporated by reference
therein and Incorporated Documents) as the Agents reasonably request. The
Company will furnish to the Agents as many copies of the Prospectus (as
amended or supplemented) as the Agents reasonably request so long as the
Agents are required to deliver a Prospectus in connection with sales or
solicitations of offers to purchase the Notes.
(d) Preparation of Pricing Supplements. The Company will prepare, with
respect to any Notes to be sold to or through one or more Agents pursuant to
this Agreement, a Pricing Supplement with respect to such Notes in a form
previously approved by the Agents and will file such Pricing Supplement
pursuant to Rule 424(b)(3) of the 1933 Act Regulations not later than the
close of business of the SEC on the fifth business day after the date on which
such Pricing Supplement is first used.
(e) Prospectus Revisions -- Material Changes. Except as otherwise
provided in Section 4(l) hereof, if at any time during the term of this
Agreement any event shall occur or condition exist as a result of which it is
necessary, in the opinion of counsel for the Agents or counsel for the
Company, to amend or supplement the Prospectus in order that the Prospectus
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 not misleading
in the light of the circumstances existing at the time the Prospectus is
delivered to a purchaser, or if it shall be necessary, in the opinion of
either such counsel, to amend or supplement any of the Registration Statements
or the Prospectus in order to comply with the requirements of the 1933 Act or
the 1933 Act Regulations, the Company shall give immediate notice, confirmed
in writing, to the Agents to cease the solicitation of offers to purchase the
Notes in their capacity as agents and to cease sales of any Notes they may
then own as principal, and the Company will promptly amend the relevant
Registration Statement and the Prospectus, whether by filing documents
pursuant to the 1934 Act, the 1934 Act Regulations, the 1933 Act, the 1933 Act
Regulations or otherwise, as may be necessary to correct such untrue
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statement or omission or to make the relevant Registration Statement and
Prospectus comply with such requirements.
(f) Prospectus Revisions -- Periodic Financial Information. Except as
otherwise provided in Section 4(l) hereof, on or prior to the date on which
there shall be released to the general public interim financial statement
information related to the Company with respect to each of the first three
quarters of any fiscal year or preliminary financial statement information
with respect to any fiscal year, the Company shall furnish such information to
the Agents, confirmed in writing, and shall cause the Prospectus to be amended
or supplemented to include or incorporate by reference financial information
with respect thereto and corresponding information for the comparable period
of the preceding fiscal year, as well as such other information and explana-
tions as shall be necessary for an understanding thereof or as shall be
required by the 1933 Act or the 1933 Act Regulations.
(g) Prospectus Revisions -- Audited Financial Information. Except as
otherwise provided in Section 4(l) hereof, on or prior to the date on which
there shall be released to the general public financial information included
in or derived from the audited financial statements of the Company for the
preceding fiscal year, the Company shall furnish such information to the
Agents, confirmed in writing, and shall cause the Registration Statements and
the Prospectus to be amended, whether by the filing of documents pursuant to
the 1934 Act, the 1934 Act Regulations, the 1933 Act, the 1933 Act Regulations
or otherwise, to include or incorporate by reference such audited financial
statements and the report or reports, and consent or consents to such
inclusion or incorporation by reference, of the independent accountants with
respect thereto, as well as such other information and explanations as shall
be necessary for an understanding thereof or as shall be required by the 1933
Act or the 1933 Act Regulations.
(h) Earning Statements. The Company will make generally available to
its 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 1996
Registration Statement.
(i) Blue Sky Qualifications. The Company will cooperate with the Agents
and with counsel for the Agents in connection with the registration or
qualification of the Notes for offering and sale by the Notes under the
securities or blue sky laws of such jurisdictions as the Agents 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 Company be obligated to qualify to do business in
any jurisdiction where it is not now so qualified or to take any action that
would subject it to service of process in suits, other than those arising out
of the offering or sale of the Notes, in any jurisdiction where it is not now
so subject.
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(j) 1934 Act Filings. The Company, during the period when the
Prospectus is required to be delivered under the 1933 Act, the 1933 Act
Regulations, the 1934 Act or the 1934 Act Regulations in connection with sales
of the Notes, will file all documents required to be filed with the SEC
pursuant to Sections 13, 14 or 15(d) of the 1934 Act within the time periods
prescribed by the 1934 Act and the 1934 Act Regulations.
(k) Stand-Off Agreement. If specified by the applicable Agent or Agents
in connection with a purchase of Notes from the Company as principal, between
the date of the agreement to purchase such Notes and the Settlement Date with
respect to such purchase, the Company will not, without the prior written
consent of such Agent or Agents, offer or sell, grant any option for the sale
of, or enter into any agreement to sell, any debt securities of the Company
(other than the Notes that are to be sold pursuant to such agreement or
commercial paper in the ordinary course of business).
(l) Suspension of Certain Obligations. The Company shall not be
required to comply with the provisions of subsections (e), (f) or (g) of this
Section 4 during any period from the time (i) the Agents shall have suspended
solicitation of purchases of the Notes in their capacity as agents pursuant to
a request from the Company and (ii) no Agent shall then hold any Notes
purchased as principal pursuant hereto, until the time the Company shall
determine that solicitation of purchases of the Notes should be resumed or an
Agent shall subsequently purchase Notes from the Company as principal.
SECTION 5. Conditions of Obligations.
The obligations of the Agents to purchase Notes from the Company as
principal and to solicit offers to purchase Notes as agent of the Company, and
the obligations of any purchasers of Notes sold through an Agent as agent,
will be subject to the accuracy of the representations and warranties on the
part of the Company herein and to the accuracy of the statements of the
Company's directors or officers made in any certificate furnished pursuant to
the provisions hereof, to the performance and observance by the Company of all
its covenants and agreements herein contained and to the following additional
conditions precedent:
(a) Legal Opinions. On the date hereof, the Agents shall have received
the following legal opinions, dated as of the date hereof and in form and
substance satisfactory to the Agents:
(1) Opinion of Company Counsel. The favorable opinion of O'Melveny
& Myers, counsel to the Company, 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 and to enter into this
Agreement and to issue and deliver the Notes as provided therein.
(ii) The statements in the Prospectus under the captions
"Description of the Notes" (except under the caption "--Book-Entry
Notes") and "Description of Debt Securities" (except under the
caption "--Book-Entry Debt Securities"), insofar
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as such statements constitute matters of California, New York or
federal law applicable to the Company or summaries of the Indenture,
fairly present the information required to be included therein by the
1933 Act, the 1933 Act Regulations, the Trust Indenture Act and the
Trust Indenture Act Regulations.
(iii) The Notes have been duly authorized by all necessary
corporate action on the part of the Company, and, when the terms of
the Notes have been established pursuant to the Indenture and upon
payment for and delivery of the Notes in accordance with this
Agreement and the Indenture, the Notes will constitute the legal,
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.
(iv) Each of the Registration Statements has been declared
effective under the 1933 Act and, to the knowledge of such counsel,
no stop order suspending the effectiveness of any of the
Registration Statements has been issued or threatened by the SEC.
(v) The execution, delivery and performance of this
Agreement have been duly and validly authorized by all necessary
corporate action on the part of the Company and this Agreement has
been duly executed and delivered by the Company.
(vi) No consent, approval, authorization or order of, or
filing with, any federal, California or New York governmental
authority is required on the part of the Company for the issuance
and sale of the Notes as contemplated by this Agreement, except (i)
such as may have been obtained under the 1933 Act, the 1933 Act
Regulations, the Trust Indenture Act or the Trust Indenture Act
Regulations, (ii) the authorizations of the CPUC referred to in
Section 2(a)(x) 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 (iii) such as may be
required under state securities or blue sky laws or the by-laws and
rules of the National Association of Securities Dealers, Inc. in
connection with the purchase and distribution of the Notes.
(vii) The Indenture has been duly authorized by all
necessary corporate action on the part of the Company, executed and
delivered by the Company and qualified under the Trust Indenture Act
and constitutes the legal, valid and binding obligation of the
Company enforceable against the Company in accordance with its
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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.
(viii) The Company's execution, delivery and performance of
this Agreement, the Indenture and the Notes do not violate the
Company's Articles of Incorporation, Bylaws or any applicable
California, New York or federal law, ordinance, administrative or
governmental rule or regulation.
(ix) The Registration Statements, at the respective
Effective Dates thereof, and the Prospectus, at the date it was
filed with, or transmitted for filing to, the SEC pursuant to Rule
424(b) of the 1933 Act Regulations, appeared on their face to comply
in all material respects with the requirements as to form under the
1933 Act and the 1933 Act Regulations in effect at the date of
filing, except that such counsel need express no opinion concerning
the financial statements and other financial information contained
or incorporated by reference therein. The Incorporated Documents,
on the respective dates they were filed, appeared on their face to
comply in all material respects with the requirements as to form for
reports on Form 10-K, Form 10-Q and Form 8-K, as the case may be,
under the 1934 Act and the 1934 Act Regulations in effect at the
respective dates of their filing, except that such counsel need
express no opinion concerning the financial statements and other
financial information contained or incorporated by reference
therein.
(x) Neither the Company nor any of its subsidiaries is a
"holding company" or a "subsidiary company" of a "holding company"
or an "affiliate" of a "holding company" or of such a "subsidiary
company" within the meaning of the 1935 Act.
(xi) The statements set forth in the Prospectus Supplement
under the caption "Certain Tax Considerations," constitute a fair
and accurate summary of the matters addressed therein, based upon
current law and the assumptions stated or referred to therein.
In connection with such counsel's participation in the preparation
of the Registration Statements and the Prospectus (excluding the summary
financial information attached to the Form 8-Ks dated February 14, 1996 and
May 2, 1996 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
paragraphs (ii) and (xi) above).
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However, on the basis of such counsel's review of the Registration
Statements, the Prospectus and the Incorporated Documents and such
counsel's participation in conferences in connection with the preparation
of the Registration Statements and the Prospectus (excluding the summary
financial information attached to the Form 8-Ks dated February 14, 1996 and
May 2, 1996 incorporated by reference therein), such counsel does not believe
that any of the Registration Statements and the Incorporated Documents, as of
the respective Effective Dates thereof, considered as a whole as of such date,
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 and the Incorporated Documents, considered as a whole at the
time the Prospectus was filed with, or transmitted for filing to, the SEC
pursuant to Rule 424(b) of the 1933 Act Regulations and on the date of such
opinion (in each case including the Incorporated Documents and considered as
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) the financial statements and other financial
or statistical data included or incorporated by reference in the
Registration Statements or the Prospectus or (y) the Statement of
Eligibility.
(2) Opinion of Robert M. Johnson, Associate General Counsel for the
Company. The favorable opinion of Robert M. Johnson, Associate General
Counsel for the Company, to the effect that:
(i) The Subsidiaries 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 to carry on their respective businesses 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 nor Paiute
Pipeline Company own or lease material properties or conduct
material business in any other jurisdiction that would require such
qualification. All the outstanding shares of capital stock of the
Subsidiaries 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) To the best knowledge of such counsel after due
inquiry, neither the Company nor either 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 either of the Subsidiaries is a
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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.
(iv) To the best knowledge of such counsel, after
reasonable inquiry, there are no rights that entitle or will entitle
any person to acquire any security of the Company upon the issuance
of the Notes by the Company; to the best knowledge of such counsel
after due inquiry, 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, any securities of the Company as a
result of the issuance of the Notes by the Company.
(v) The Company's execution, delivery and performance of this
Agreement, the Indenture and the Notes 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 Registration Statements or to any
Incorporated Document 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, judgment 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.
(vi) No consent, approval, authorization or order of, or
filing with, any federal, California, Arizona or Nevada governmental
authority is required on the part of the Company for the issuance
and sale of the Notes as contemplated by this Agreement, except (i)
such as have been obtained under the 1933 Act, the 1933 Act
Regulations, the Trust Indenture Act or the Trust Indenture Act
Regulations, (ii) the authorizations of the CPUC referred to in
Section 2(a)(x) 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 (iii) such as may be
required under state securities or blue sky laws or the by-laws and
rules of the National Association of Securities Dealers, Inc. in
connection with the purchase and distribution of the Notes.
(vii) To the best knowledge of such counsel after
reasonable inquiry, other than as described or contemplated in the
Prospectus, there are no legal or governmental proceedings pending
or threatened against the Company or either of the Subsidiaries, or
to which the Company or either of the Subsidiaries, or any of their
property, is subject, which are required to be described in the
Registration Statements or Prospectus and are not so described.
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In addition, such counsel shall include in his opinion a statement
substantially to the effect set forth in the last paragraph of subsection
(a)(1) above.
In rendering their opinions as aforesaid, counsel may rely upon an
opinion or opinions, each dated the date hereof, 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 States of
California and New York 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 Agents that states that the Agents
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 Agents are justified in relying thereon.
(3) Opinion of Counsel to the Agents. The favorable opinion of
Winthrop, Stimson, Putnam & Roberts, counsel for the Agents, an
opinion with respect to the issuance and sale of the Notes, the
Registration Statements and the Prospectus and other related matters
as the Agents may reasonably require, and the Company shall have
furnished to such counsel such documents as they request for the
purposes of enabling them to pass upon such matters.
(b) Officers' Certificate. At the date hereof, the Agents shall have
received a certificate of the Chief Executive Officer, President or Vice
President and the principal financial officer or principal accounting officer
of the Company, dated as of the date hereof, to the effect that (i) since the
respective dates as of which information is given in the Prospectus or since
the date of any agreement by one or more Agents to purchase Notes from the
Company as principal, there has not been any material adverse change in the
condition (financial or other), business, prospects, properties, net worth or
results of operations of the Company and its Subsidiaries taken as a whole,
whether or not arising in the ordinary course of business, (ii) the repre-
sentations and warranties of the Company contained in Section 2 hereof are
true and correct with the same force and effect as though expressly made at
and as of the date of such certificate, (iii) the Company has performed or
complied with all agreements and satisfied all conditions on its part to be
performed or satisfied at or prior to the date of such certificate, (iv) no
stop order suspending the effectiveness of any of the Registration Statements
has been issued and no proceedings for that purpose have been initiated or
threatened by the SEC, and (v) the authorizations of the CPUC referred to in
Section 2(a)(x) of this Agreement are in full force and effect, to the
knowledge of such officer, are not the subject of any pending or threatened
application for rehearing or petition for modification and are sufficient to
authorize the issuance and sale of the Notes. As used in this Section 5(b),
the term "Prospectus" means the Prospectus in the form first provided to the
applicable Agent or Agents for use in confirming sales of the Notes.
(c) Comfort Letter of Arthur Andersen LLP. On the date hereof, the
Agents shall have received a letter from Arthur Andersen LLP, dated as of the
date hereof and in form and substance satisfactory to the Agents, to the
effect that:
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(i) They are independent certified public accountants with
respect to the Company within the meaning of the 1933 Act, the 1933 Act
Regulations, the 1934 Act and the 1934 Act Regulations.
(ii) It is their opinion that the consolidated financial
statements of the Company and its subsidiaries and incorporated by
reference in the Registration Statements and the Prospectus and audited
by them and covered by their opinions therein comply as to form in all
material respects with the applicable accounting requirements of the 1933
Act, the 1933 Act Regulations, the 1934 Act and the 1934 Act Regulations.
(iii) They have performed the procedures specified by the
American Institute of Certified Public Accountants for a review of
interim financial information as described in SAS No. 71, Interim
Financial Information, not constituting an audit, including a reading of
the latest available interim financial statements of the Company and its
subsidiaries, a reading of the minute books of the Company and such
subsidiaries since the end of the most recent fiscal year with respect to
which an audit report has been issued, inquiries of and discussions with
certain officials of the Company and such subsidiaries responsible for
financial and accounting matters with respect to the unaudited consoli-
dated financial statements incorporated by reference in the Registration
Statements and Prospectus and the latest available interim unaudited
financial statements of the Company and its subsidiaries, and such other
inquiries and procedures as may be specified in such letter, and on the
basis of such inquiries and procedures, nothing came to their attention
that caused them to believe that: (A) any material modifications should
be made to the unaudited consolidated financial statements of the Company
and its subsidiaries incorporated by reference in the Registration
Statements and Prospectus for them to be in conformity with generally
accepted accounting principles in the United States, (B) the unaudited
consolidated financial statements of the Company and its subsidiaries
incorporated by reference in the Registration Statements and Prospectus
do not comply as to form in all material respects with the applicable
accounting requirements of the 1934 Act and the 1934 Act Regulations, or
(C) at a specified date not more than three days prior to the date of
such letter, there was any decrease in stockholders' equity, excluding
the net income component of retained earnings and the unrealized gain
(loss), net of tax, on debt securities available for sale, or increase in
long-term debt, including current maturities, of the Company and its
subsidiaries, in each case as compared with the amounts shown on the most
recent consolidated balance sheet of the Company and its subsidiaries
included or incorporated by reference in the Registration Statements and
Prospectus, except in all instances for increases or decreases that the
Registration Statements and Prospectus disclose have occurred or may
occur or except for such exceptions enumerated in such letter as shall
have been agreed to by the Agents and the Company.
(iv) The pro forma financial statements included or
incorporated by reference in the Registration Statements and the
Prospectus comply as to form with the applicable accounting requirements
of Article 11 of Regulation S-X under the 1934 Act.
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(v) In addition to the audit referred to in their opinions and
the limited procedures referred to in clause (iii) above, they have
carried out certain specified procedures, not constituting an audit, with
respect to certain amounts, percentages and financial information which
are included or incorporated by reference in the Registration Statements
and the Prospectus and that are specified by the Agents, and have found
such amounts, percentages and financial information to be in agreement
with the relevant accounting, financial and other records of the Company
and its subsidiaries identified in such letter.
(d) Other Documents. On the date hereof and on each Settlement Date,
counsel to the Agents shall have been furnished with such documents and
opinions as such counsel may reasonably require for the purpose of enabling
such counsel to pass upon the issuance and sale of Notes as herein
contemplated and related proceedings, or in order to evidence the accuracy and
completeness of any of the representations and warranties, or the fulfillment
of any of the conditions, herein contained; and all proceedings taken by the
Company in connection with the issuance and sale of Notes as herein contem-
plated shall be satisfactory in form and substance to the Agents and to
counsel to the Agents.
If any condition specified in this Section 5 shall not have been
fulfilled when and as required to be fulfilled, this Agreement may be
terminated by the applicable Agent or Agents by notice to the Company at any
time and any such termination shall be without liability of any party to any
other party, except that the covenant regarding provision of an earning
statement set forth in Section 4(h) hereof, the provisions concerning payment
of expenses under Section 10 hereof, the indemnity and contribution agreement
set forth in Sections 8 and 9 hereof, the provisions concerning the
representations, warranties and agreements to survive delivery of Section 11
hereof, the provisions relating to governing law and forum set forth in
Section 14 and the provisions relating to parties set forth in Section 15
hereof shall remain in effect.
SECTION 6. Delivery of and Payment for Notes Sold Through an Agent.
Delivery of Notes sold through an Agent as agent shall be made by the
Company to such Agent for the account of any purchaser only against payment
therefor in immediately available funds. In the event that a purchaser shall
fail either to accept delivery of or to make payment for a Note on the date
fixed for settlement, such Agent shall promptly notify the Company and deliver
such Note to the Company and, if such Agent has theretofore paid the Company
for such Note, the Company will promptly return such funds to such Agent. If
such failure occurred for any reason other than default by such Agent in the
performance of its obligations hereunder, the Company will reimburse such
Agent on an equitable basis for its loss of the use of the funds for the
period such funds were credited to the Company's account.
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SECTION 7. Additional Covenants of the Company.
The Company covenants and agrees with the Agents that:
(a) Reaffirmation of Representations and Warranties. Each acceptance by
the Company of an offer for the purchase of Notes (whether to one or more
Agents as principal or through an Agent as agent), and each delivery of Notes
(whether to one or more Agents as principal or through an Agent as agent),
shall be deemed to be an affirmation that the representations and warranties
of the Company contained in this Agreement and in any certificate theretofore
delivered to the Agents pursuant hereto are true and correct at the time of
such acceptance or sale, as the case may be, and an undertaking that such
representations and warranties will be true and correct at the time of
delivery to such Agent or Agents or to the purchaser or its agent, as the case
may be, of the Note or Notes relating to such acceptance or sale, as the case
may be, as though made at and as of each such time (and it is understood that
such representations and warranties shall relate to the Registration
Statements and Prospectus as amended and supplemented to each such time).
(b) Subsequent Delivery of Officers' Certificate. Each time that (i)
any of the Registration Statements or the Prospectus shall be amended or
supplemented (other than by an amendment or supplement providing solely for a
change in the interest rate or formula applicable to the Notes or relating
solely to the issuance and/or offering of securities other than the Notes),
(ii) there is filed with the SEC any Incorporated Document (other than any
Current Report on Form 8-K relating solely to the issuance and/or offering of
securities other than the Notes, unless the Agents shall otherwise specify),
(iii) (if required in connection with the purchase of Notes from the Company
by one or more Agents as principal) the Company sells Notes to such Agent or
Agents as principal or (iv) the Company sells Notes in a form not previously
certified to the Agents by the Company, the Company shall furnish or cause to
be furnished to the Agents forthwith a certificate dated the date of filing
with the SEC of such supplement or document, the date of effectiveness of such
amendment, or the date of such sale, as the case may be, in form satisfactory
to the Agents to the effect that the statements contained in the certificate
referred to in Section 5(b) hereof that was last furnished to the Agents are
true and correct at the time of such amendment, supplement, filing or sale, as
the case may be, as though made at and as of such time (except that such
statements shall be deemed to relate to the Registration Statements and the
Prospectus as amended and supplemented to such time) or, in lieu of such
certificate, a certificate of the same tenor as the certificate referred to in
Section 5(b) hereof, modified as necessary to relate to the Registration
Statements and the Prospectus as amended and supplemented to the time of
delivery of such certificate.
(c) Subsequent Delivery of Legal Opinions. Each time that (i) any of
the Registration Statements or the Prospectus shall be amended or supplemented
(other than by an amendment or supplement providing solely for a change in the
interest rate or formula applicable to the Notes, providing solely for the
inclusion of additional financial information, or, unless the Agents shall
otherwise specify, relating solely to the issuance and/or offering of
securities other than the Notes), (ii) there is filed with the SEC any
Incorporated Document (other than any Current Report on Form 8-K relating
solely to the issuance and/or offering of securities other than the Notes,
21<PAGE>
<PAGE>
unless the Agents shall otherwise specify), (iii) (if required in connection
with the purchase of Notes from the Company by one or more Agents as
principal) the Company sells Notes to such Agent or Agents as principal or
(iv) the Company sells Notes in a form not previously certified to the Agents
by the Company, the Company shall furnish or cause to be furnished forthwith
to the Agents and to counsel to the Agents the written opinions of O'Melveny &
Myers, counsel to the Company, and Robert M. Johnson, Associate General
Counsel for the Company, or other counsel satisfactory to the Agents, dated
the date of filing with the SEC of such supplement or document, the date of
effectiveness of such amendment, or the date of such sale, as the case may be,
in form and substance satisfactory to the Agents, of the same tenor as the
opinions referred to in Sections 5(a)(1) and 5(a)(2) hereof, but modified, as
necessary, to relate to the Registration Statements and the Prospectus as
amended and supplemented to the time of delivery of such opinions or, in lieu
of such opinions, counsel last furnishing such opinions to the Agents shall
furnish the Agents with letters substantially to the effect that the Agents
may rely on such last opinions to the same extent as though they were dated
the date of such letters authorizing reliance (except that statements in such
last opinions shall be deemed to relate to the Registration Statements and the
Prospectus as amended and supplemented to the time of delivery of such letters
authorizing reliance).
(d) Subsequent Delivery of Comfort Letter. Each time that (i) any of
the Registration Statements or the Prospectus shall be amended or supplemented
to include additional financial information (other than by an amendment or
supplement relating solely to the issuance and/or offering of securities other
than the Notes), (ii) there is filed with the SEC any Incorporated Document
that contains additional financial information, or (iii) (if required in
connection with the purchase of Notes from the Company by one or more Agents
as principal) the Company sells Notes to such Agent or Agents as principal,
the Company shall cause Arthur Andersen LLP forthwith to furnish to the Agents
a letter, dated the date of effectiveness of such amendment, supplement or
document with the SEC, or the date of such sale, as the case may be, in form
satisfactory to the Agents, of the same tenor as the portions of the letter
referred to in clauses (i) and (ii) of Section 5(c) hereof but modified to
relate to the Registration Statements and Prospectus as amended and supple-
mented to the date of such letter, and of the same general tenor as the
portions of the letter referred to in clauses (iii) and (iv) of said Section
5(c) with such changes as may be necessary to reflect changes in the financial
statements and other information derived from the accounting records of the
Company.
(e) Subsequent Delivery of CPUC Authorizations. Each time that the
Company gives to the Agents the written notification required by Section
4(a)(vi) of this Agreement, the Company shall concurrently deliver to the
Agents and to counsel for the Agents (i) a certified copy of each such
authorization, and (ii) written opinions of O'Melveny & Myers, counsel to the
Company, and Robert M. Johnson, Associate General Counsel for the Company, to
the effect set forth in paragraph (vi) of Section 5(a)(1) and paragraph (vi)
of Section 5(a)(2), respectively, of this Agreement modified to reflect such
authorizations.
22<PAGE>
<PAGE>
SECTION 8. Indemnification.
(a) Indemnification of the Agents. The Company will indemnify and hold
harmless each Agent, the directors, officers, employees and agents of each
Agent and each person, if any, who controls each Agent 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 the
Registration Statement or the Prospectus or any amendment or supplement to the
Registration Statement or the Prospectus or in any Incorporated Documents
(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
Company will not be liable to the extent that such loss, claim, liability,
expense or damage arises from the sale of the Notes in the public offering to
any person by such Agent 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 Agent furnished in writing to the Company by
such Agent expressly for inclusion in the Registration Statement or the
Prospectus, or based upon statements in or omissions from the Statement of
Eligibility. This indemnity agreement will be in addition to any liability
that the Company might otherwise have.
(b) Indemnification of the Company. Each Agent will indemnify and hold
harmless the Company, each person, if any, who controls the Company within the
meaning of Section 15 of the 1933 Act or Section 20 of the 1934 Act, each
director of the Company and each officer of the Company who signed the
Registration Statement to the same extent as the foregoing indemnity from the
Company to each Agent, 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 Agent furnished in writing to the
Company by such Agent expressly for inclusion in the Registration Statement or
the Prospectus. This indemnity will be in addition to any liability that each
Agent might otherwise have.
(c) General. Any party that proposes to assert the right to be
indemnified under this Section 8 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 8,
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 8 unless,
and only to the extent that, such omission results in the forfeiture of or
substantial prejudice to substantive rights or defense 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
23<PAGE>
<PAGE>
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 admitted to practice in such
jurisdiction at any one time 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 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).
SECTION 9. Contribution.
In order to provide for just and equitable contribution in circumstances
in which the indemnification provided for in Section 8 of this Agreement is
applicable in accordance with its terms but for any reason is held to be
unavailable from the Company or the Agents, the Company and the Agents 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 Company from persons other than the Agents, such as persons
who control the Company within the meaning of Section 15 of the 1933 Act or
Section 20 of the 1934 Act, officers of the Company who signed the
Registration Statement and directors of the Company, who also may be liable
for contribution) to which the Company and any one or more of the Agents may
be subject in such proportion as shall be appropriate to reflect the relative
24<PAGE>
<PAGE>
benefits received by the Company on the one hand and the Agents on the other.
The relative benefits received by the Company on the one hand and the Agents
on the other shall be deemed to be in the same proportion as the total net
proceeds from the offering (before deducting expenses) of any Notes received
by the Company bear to the total underwriting discounts and commissions
received by the Agents, in each case as set forth in the applicable Pricing
Supplement. 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 Company, on the one hand, and the Agents, on the other, with
respect to the statements or omissions that 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 Company or the
Agents, the intent of the parties and their relative knowledge, access to
information and opportunity to correct or prevent such statement or omission.
The Company and the Agents agree that it would not be just and equitable if
contributions pursuant to this Section 9 were to be determined by pro rata
allocation (even if the Agents 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 9
shall be deemed to include, for purposes of this Section 9, 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 9, no Agent shall be required to contribute any
amount in excess of the underwriting discounts and commissions 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. For purposes
of this Section 9, any person who controls a party to this Agreement within
the meaning of Section 15 of the 1933 Act or Section 20 of the 1934 Act
Regulations will have the same rights to contribution as that party, and each
officer of the Company who signed the Registration Statement will have the
same rights to contribution as the Company, 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 9, 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 9.
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 indemnity and contribution agreements contained in Section 8
of this Agreement and this Section 9 and the representations and warranties of
the Company contained in this Agreement shall remain operative and in full
force and effect regardless of (i) any investigation made by or on behalf of
the Agents, (ii) acceptance of any of the Notes and payment therefor or (iii)
any termination of this Agreement.
SECTION 10. Payment of Expenses.
The Company will pay all expenses incident to the performance of its
obligations under this Agreement, including:
(a) The preparation and filing of the Registration Statements and all
amendments thereto and the Prospectus and any amendments or supplements
thereto;
(b) The preparation, filing and reproduction of this Agreement;
25<PAGE>
<PAGE>
(c) The preparation, printing, issuance and delivery of the Notes,
including any fees and expenses relating to the eligibility and issuance of
Notes in book-entry form;
(d) The fees and disbursements of the Company's accountants and counsel,
of the Trustee and its counsel, and of any calculation agent;
(e) The reasonable fees and disbursements of counsel to the Agents
incurred in connection with the establishment of the program relating to the
Notes and incurred from time to time in connection with the transactions
contemplated hereby;
(f) The qualification of the Notes under state securities laws in
accordance with the provisions of Section 4(i) hereof, including filing fees
and the reasonable fees and disbursements of counsel for the Agents in
connection therewith and in connection with the preparation of any blue sky
survey;
(g) The printing and delivery to the Agents in quantities as hereinabove
stated of copies of the Registration Statements and any amendments thereto,
and of the Prospectus and any amendments or supplements thereto, and the
delivery by the Agents of the Prospectus and any amendments or supplements
thereto in connection with solicitations or confirmations of sales of the
Notes;
(h) The preparation, reproducing and delivery to the Agents of copies of
the Indenture and all amendments, supplements and modifications thereto;
(i) Any fees charged by nationally recognized statistical rating
organizations for the rating of the Notes;
(j) The fees and expenses incurred in connection with any listing of
Notes on a securities exchange;
(k) The fees and expenses incurred with respect to any filing with the
National Association of Securities Dealers, Inc.;
(l) Any advertising and other out-of-pocket expenses of the Agents
incurred with the approval of the Company; and
(m) The cost of providing any CUSIP or other identification numbers for
the Notes.
SECTION 11. Representations, Warranties and Agreements to Survive Delivery.
All representations, warranties and agreements contained in this
Agreement or in certificates of officers of the Company submitted pursuant
hereto or thereto shall remain operative and in full force and effect,
regardless of any investigation made by or on behalf of the Agents or any con-
trolling person of an Agent, or by or on behalf of the Company, and shall
survive each delivery of and payment for any of the Notes.
26<PAGE>
<PAGE>
SECTION 12. Termination.
(a) Termination of this Agreement. This Agreement (excluding any
agreement by one or more Agents to purchase Notes from the Company as
principal) may be terminated for any reason, at any time by either the Company
or an Agent, as to itself, upon the giving of 30 days' written notice of such
termination to the other party hereto.
(b) Termination of Agreement to Purchase Notes as Principal. The
applicable Agent or Agents may terminate any agreement by such Agent or Agents
to purchase Notes from the Company as principal, immediately upon notice to
the Company, at any time prior to the Settlement Date relating thereto, if (i)
there has been, since the date of such agreement or since the respective dates
as of which information is given in the Prospectus, any material adverse
change in the condition (financial or other), business, prospects, properties,
net worth or results of operations of the Company and its subsidiaries consid-
ered as one enterprise, whether or not arising in the ordinary course of
business, or (ii) there shall have occurred any material adverse change in the
financial markets in the United States or any outbreak or escalation of
hostilities or other calamity or crisis or any change or development involving
a prospective change in national or international political, financial or
economic conditions, in each case the effect of which is such as to make it,
in the judgment of such Agent or Agents, impracticable to market the Notes or
enforce contracts for the sale of the Notes, or (iii) trading in any
securities of the Company has been suspended by the SEC, the New York Stock
Exchange or the Pacific Stock Exchange, or if trading generally on either the
American Stock Exchange or the New York Stock Exchange or in the over-the-
counter market shall have been suspended or limited, or minimum or maximum
prices for trading have been fixed, or maximum ranges for prices have been
required, by either of said exchanges or by such system or by order of the
SEC, the National Association of Securities Dealers, Inc. or any other
governmental authority, or if a banking moratorium shall have been declared by
either Federal or New York authorities, or (iv) the rating assigned by any
nationally recognized statistical rating organization to any debt securities
of the Company as of the date of such agreement shall have been lowered since
that date or if any such rating organization shall have publicly announced
that it has under surveillance or review, with possible negative implications,
its rating of any debt securities of the Company, or (v) there shall have come
to the attention of such Agent or Agents any facts that would cause them to
believe that the Prospectus, at the time it was required to be delivered to a
purchaser of Notes, included any untrue statement of a material fact or
omitted to state a material fact necessary in order to make the statements
therein, in the light of the circumstances existing at the time of such
delivery, not misleading. As used in this Section 12(b), the term
"Prospectus" means the Prospectus in the form first provided to the applicable
Agent or Agents for use in confirming sales of the related Notes.
(c) General. In the event of any such termination, neither party will
have any liability to the other party hereto, except that (i) the Agents shall
be entitled to any commission earned in accordance with the third paragraph of
Section 3(b) hereof, (ii) if at the time of termination (a) any Agent shall
own any Notes purchased by it as principal with the intention of reselling
them or (b) an offer to purchase any of the Notes has been accepted by the
Company but the time of delivery to the purchaser or his agent of the Note or
Notes relating thereto has not occurred, the covenants set forth in Sections 4
27<PAGE>
<PAGE>
and 7 hereof shall remain in effect until such Notes are so resold or deliv-
ered, as the case may be, and (iii) the covenant set forth in Section 4(h)
hereof, the provisions of Section 10 hereof, the indemnity and contribution
agreements set forth in Sections 8 and 9 hereof, and the provisions of
Sections 11, 14 and 15 hereof shall remain in effect.
SECTION 13. Notices.
Unless otherwise provided herein, all notices required under the terms
and provisions hereof shall be in writing, either delivered by hand, by mail
or by telex, telecopier or telegram, and any such notice shall be effective
when received at the address specified below.
If to the Company:
Southwest Gas Corporation
5241 Spring Mountain Road
Las Vegas, Nevada
Attention: Chief Financial Officer
Telecopy No.: (702) 876-7037
If to the Agents:
Merrill Lynch & Co.
Merrill Lynch, Pierce, Fenner & Smith
Incorporated
World Financial Center
North Tower - 10th Floor
New York, New York 10281-1310
Attention: MTN Product Management
Telecopy No.: (212) 449-2234
Dean Witter Reynolds Inc.
Two World Trade Center
New York, New York 10048
Attention: Samual H. Wolcott
Telecopy No.: (212) 392-2575
PaineWebber Incorporated
1285 Avenue of the Americas
New York, New York 10019
Attention: Walter Hulse
Telecopy No.: (212) 247-0371
or at such other address as such party may designate from time to time by
notice duly given in accordance with the terms of this Section 13.
28<PAGE>
<PAGE>
SECTION 14. Governing Law; Forum.
The rights and duties of the parties hereto under this Agreement shall,
pursuant to New York General Obligations Law Section 5-1401, be governed by
the law of the State of New York. Any suit, action or proceeding brought by
the Company against any Agent in connection with or arising under this
Agreement shall be brought solely in the state or federal court of appropriate
jurisdiction located in the Borough of Manhattan, The City of New York.
SECTION 15. Parties.
This Agreement shall inure to the benefit of and be binding upon the
Agents and the Company and their respective successors. Nothing expressed or
mentioned in this Agreement is intended or shall be construed to give any
person, firm or corporation, other than the parties hereto and their
respective successors and the controlling persons and officers and directors
referred to in Sections 8 and 9 and their heirs and legal representatives, any
legal or equitable right, remedy or claim under or in respect of this
Agreement or any provision herein contained. This Agreement and all
conditions and provisions hereof are intended to be for the sole and exclusive
benefit of the parties hereto and respective successors and said controlling
persons and officers and directors and their heirs and legal representatives,
and for the benefit of no other person, firm or corporation. No purchaser of
Notes shall be deemed to be a successor by reason merely of such purchase.
SECTION 16. Counterparts.
This Agreement may be executed in one or more counterparts and, if
executed in more than one counterpart, the executed counterparts hereof shall
constitute a single instrument.
29<PAGE>
<PAGE>
If the foregoing is in accordance with the Agents' understanding of our
agreement, please sign and return to the Company a counterpart hereof,
whereupon this instrument along with all counterparts will become a binding
agreement between the Agents and the Company in accordance with its terms.
Very truly yours,
Southwest Gas Corporation
By: /s/ Jeffrey W. Shaw
-----------------------
Name: Jeffrey W. Shaw
Title: Vice President/Treasurer
Confirmed and accepted as of the date
first above written:
Merrill Lynch, Pierce, Fenner & Smith
Incorporated
By: /s/ Scott G. Primrose
-------------------------
Dean Witter Reynolds Inc.
By: /s/ John Schaefer
-------------------------
PaineWebber Incorporated
By: /s/ Peter Masco
-------------------------
30<PAGE>
EXHIBIT A
The following terms, if applicable, shall be agreed to by one or more
Agents and the Company in connection with each sale of Notes:
Principal Amount: $_______
Interest Rate or Formula:
If Fixed Rate Note,
Interest Rate:
Default Rate:
Interest Payment Dates:
If Floating Rate Note,
Interest Rate Basis(es):
If LIBOR,
[ ] LIBOR Reuters
[ ] LIBOR Telerate
If CMT Rate,
Designated CMT Telerate Page:
Designated CMT Maturity Index:
Index Maturity:
Spread and/or Spread Multiplier, if any:
Initial Interest Rate, if any:
Initial Interest Reset Date:
Interest Reset Dates:
Interest Payment Dates:
Default Rate:
Maximum Interest Rate, if any:
Minimum Interest Rate, if any:
Optional Reset Date, if any,
Fixed Rate Commencement Date, if any:
Fixed Interest Rate, if any:
Calculation Agent:
If Redeemable:
Initial Redemption Date:
Initial Redemption Percentage:
Annual Redemption Percentage Reduction, if any:
If Repayable:
Optional Repayment Date(s):
Original Issue Date:
Stated Maturity Date:
Authorized Denomination:
Price to Public: ___%, plus accrued interest, if any, from ___________
Purchase Price: ___%, plus accrued interest, if any, from ___________
Settlement Date and Time:
Provisions applicable to the failure of any Agents (if more than one)
to purchase and pay for the Notes it has agreed to purchase and pay for
hereunder:
Additional/Other Terms:<PAGE>
<PAGE>
Also, in connection with the purchase of Notes from the Company by one or more
Agents as principal, agreement as to whether the following will be required:
Officers' Certificate pursuant to Section 7(b) of the Distribution
Agreement.
Legal Opinions pursuant to Section 7(c) of the Distribution Agreement.
Comfort Letter pursuant to Section 7(d) of the Distribution Agreement.
Stand-off Agreement pursuant to Section 4(k) of the Distribution Agreement.
A-2<PAGE>
<PAGE>
EXHIBIT B
AGREEMENT
____________, 199_
[Name and address of agent]
Re: Medium-Term Notes, Series A
Pricing Supplement Number:
Settlement Date: , 199
(See Attached Term Sheet)
Ladies and Gentlemen:
Reference is made to the Distribution Agreement dated December 30, 1996
between Southwest Gas Corporation, a California corporation (the "Company"),
and each of Merrill Lynch & Co., Merrill Lynch, Pierce, Fenner & Smith
Incorporated, Dean Witter Reynolds Inc. and PaineWebber Incorporated (the
"Agreement") relating to up to $150,000,000 aggregate principal amount of
Medium-Term Notes, Series A due nine months or more from date of issue (the
"Notes") to be offered from time to time by the Company. The provisions of the
Agreement (a copy of which has been previously provided to each of you) are
hereby incorporated by reference and each of the representations and warranties
set forth therein shall be deemed to have been made to you as of the date
hereof. Subject to the terms as set forth therein, the Company hereby appoints
you as an Agent (as such term is defined in the Agreement) of the Company for
the purposes of soliciting one offer to purchase Notes from the Company
containing the terms as set forth in the above-referenced Pricing Supplement.
This appointment is effective as to and extends only to the one transaction
that you are presenting to the Company (see attached Term Sheet) and the
Agreement shall automatically be terminated as to you upon the earlier to occur
of (i) payment made in full to the Company for the Notes sold pursuant to the
offer so presented and (ii) the Company or you determine not to proceed with
such transaction. Upon such termination of the Agreement by the Company,
neither you nor the Company shall have any liability to the other except as
provided in those sections of the Agreement referenced in Section 12(c)
thereof. You agree to be bound by, and comply with, all of the provisions of
the Agreement applicable to Agents thereunder.<PAGE>
<PAGE>
[As a condition precedent to your obligation to consummate the transaction
referred to above, you shall receive the following: (i) a certificate of the
Company dated [insert recent date] pursuant to [Section 5(b)] [Section 7(b)] of
the Agreement; (ii) the opinion or opinions of counsel dated [insert recent
date or most recent periodic update] pursuant to [Sections 5(a)(1) and 5(a)(2)]
[Section 7(c)] of the Agreement; (iii) a letter from Arthur Andersen LLP dated
[insert recent date or most recent periodic update] delivered pursuant to
Section [Section 5(c)] [Section 7(d)] of the Agreement; and (iv) a copy of the
resolutions adopted by the Company with respect to the form of Note evidencing
the Notes described in the above-referenced Pricing Supplement certified by an
officer of the Company.]*
This letter will be governed by and construed in accordance with the laws
of the State of New York.
If the foregoing is in accordance with your understanding of our
agreement, please sign and return to us the enclosed duplicate hereof,
whereupon this letter and your acceptance shall represent a binding agreement
between the Company and you.
Very truly yours,
SOUTHWEST GAS CORPORATION
By: ______________________
Name:
Title:
The foregoing letter is
hereby confirmed and accepted
as of the date hereof:
By: ______________________
Name:
Title:
__________________
* This provision is to be negotiated between the Company and such agent at the
time of the trade.
B-2<PAGE>
<PAGE>
SCHEDULE A
As compensation for the services of the Agents hereunder, the Company
shall pay the applicable Agent, on a discount basis, a commission for the sale
of each Note equal to the principal amount of such Note multiplied by the
appropriate percentage set forth below:
PERCENT OF
MATURITY RANGES PRINCIPAL AMOUNT
From 9 months to less than 1 year .125%
From 1 year to less than 18 months .150
From 18 months to less than 2 years .200
From 2 years to less than 3 years .250
From 3 years to less than 4 years .350
From 4 years to less than 5 years .450
From 5 years to less than 6 years .500
From 6 years to less than 7 years .550
From 7 years to less than 10 years .600
From 10 years to less than 15 years .625
From 15 years to less than 20 years .700
From 20 years to 30 years .750
Greater than 30 years *
________________
* As agreed to by the Company and the applicable Agent at the time of sale.<PAGE>
<PAGE>
APPENDIX A
SOUTHWEST GAS CORPORATION
ADMINISTRATIVE PROCEDURES
FOR FIXED RATE AND FLOATING RATE MEDIUM-TERM NOTES, SERIES A
DUE NINE MONTHS OR MORE FROM DATE OF ISSUE
(Dated as of December 30, 1996)
Medium-Term Notes, Series A due nine months or more from date of issue
(the "Notes") are to be offered on a continuous basis by Southwest Gas
Corporation, a California corporation (the "Company"), to or through Merrill
Lynch & Co., Merrill Lynch, Pierce, Fenner & Smith Incorporated, Dean Witter
Reynolds Inc. and PaineWebber Incorporated (each, an "Agent" and, collectively,
the "Agents") pursuant to a Distribution Agreement, dated December 30, 1996
(the "Distribution Agreement"), by and among the Company and the Agents.
Unless otherwise agreed by an Agent and the Company, Notes shall be
purchased by the one or more Agents as principal in accordance with terms
agreed upon by such Agent or Agents and the Company (which terms, unless
otherwise agreed, shall, to the extent applicable, include those terms
specified in Exhibit A to the Distribution Agreement, and be agreed upon
orally with written confirmation prepared by such Agent or Agents and mailed
or sent by facsimile transmission to the Company). If agreed upon by any
Agent or Agents and the Company, the Agent or Agents, acting solely as agent
or agents for the Company and not as principal, will use reasonable efforts to
solicit offers to purchase the Notes. Only those provisions in these
Administrative Procedures that are applicable to the particular role to be
performed by the related Agent or Agents shall apply to the offer and sale of
the relevant Notes.
The Notes will be issued as a series of debt securities under an
Indenture, dated as of July 15, 1996, as amended, supplemented or modified
from time to time, including by the Second Supplemental Indenture dated as of
December 30, 1996 (as so amended, supplemented or modified, the "Indenture"),
between the Company and Harris Trust and Savings Bank, as trustee (together
with any successor in such capacity, the "Trustee"). The Company has filed
Registration Statements (as defined in the Distribution Agreement) with the
Securities and Exchange Commission (the "Commission") registering, among other
securities, debt securities (which include the Notes). A pricing supplement
to the Prospectus (as defined in the Distribution Agreement) setting forth the
purchase price, interest rate or formula, maturity date and other terms of any
Notes (as applicable) is herein referred to as a "Pricing Supplement".
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The Notes will either be issued (a) in book-entry form and represented by
one or more fully registered Notes without coupons (each, a "Global Note")
delivered to the Trustee, as agent for The Depository Trust Company ("DTC"),
and recorded in the book-entry system maintained by DTC, or (b) in
certificated form (each, a "Certificated Note") delivered to the investor or
other purchaser thereof or a person designated by such investor or other
purchaser.
General procedures relating to the issuance of all Notes are set forth in
Part I hereof. Additionally, Global Notes will be issued in accordance with
the procedures set forth in Part II hereof and Certificated Notes will be
issued in accordance with the procedures set forth in Part III hereof.
Capitalized terms used but not otherwise defined herein shall have the
meanings ascribed thereto in the Indenture or the Notes, as the case may be.
PART I: PROCEDURES OF GENERAL
APPLICABILITY
Date of Issuance/
Authentication: Each Note will be dated as of the date of its
authentication by the Trustee. Each Note shall also
bear an original issue date (each, an "Original
Issue Date"). The Original Issue Date shall remain
the same for all Notes subsequently issued upon
transfer, exchange or substitution of an original
Note regardless of their dates of authentication.
Maturities: Each Note will mature on a date nine months or more
from its Original Issue Date (the "Stated Maturity
Date") selected by the investor or other purchaser
and agreed to by the Company.
Registration: Notes will be issued only in fully registered form.
Denominations: Unless otherwise provided in the applicable Pricing
Supplement, the Notes will be issued in
denominations of $1,000 and integral multiples
thereof.
Interest Rate Bases
applicable to
Floating Rate
Notes: Unless otherwise provided in the applicable Pricing
Supplement, Floating Rate Notes will bear interest
at a rate or rates determined by reference to the CD
Rate, the CMT Rate, the Commercial Paper Rate, the
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11th District Cost of Funds Rate, the Federal Funds
Rate, LIBOR, the Prime Rate, the J.J. Kenny Rate,
the Treasury Rate, or such other interest rate basis
or formula as may be set forth in the applicable
Pricing Supplement, or by reference to two or more
such rates, as adjusted by the Spread and/or Spread
Multiplier, if any, applicable to such Floating Rate
Notes.
Redemption/Repayment: The Notes will be subject to redemption by the
Company in accordance with the terms of the Notes,
which will be fixed at the time of sale and set
forth in the applicable Pricing Supplement. If no
Initial Redemption Date is indicated with respect to
a Note, such Note will not be redeemable prior to
its Stated Maturity Date.
The Notes will be subject to repayment at the option
of the Holders thereof in accordance with the terms
of the Notes, which will be fixed at the time of
sale and set forth in the applicable Pricing
Supplement. If no optional repayment date is
indicated with respect to a Note, such Note will not
be repayable at the option of the Holder prior to
its Stated Maturity Date.
Calculation of
Interest: In case of Fixed Rate Notes, interest (including
payments for partial periods) will be calculated and
paid on the basis of a 360-day year of twelve 30-day
months.
The interest rate on each Floating Rate Note (and
Floating Rate Notes designated as "Floating Rate/Fixed
Rate Notes" or "Inverse Floating Rate Notes") will be
calculated by reference to the specified Interest
Rate Basis or Bases plus or minus the applicable
Spread, if any, and/or multiplied by the applicable
Spread Multiplier, if any.
Unless otherwise provided in the applicable Pricing
Supplement, accrued interest on each Floating Rate
Note will be calculated by multiplying its principal
amount by an accrued interest factor. Such accrued
interest factor is computed by adding the interest
factors calculated for each day in the period for
which accrued interest is being calculated. Unless
otherwise provided in the applicable Pricing
Supplement, the interest factor (expressed as a
decimal calculated to seven decimal places without
rounding) for each such day is computed by dividing
the interest rate in effect on such day by 360 if
3<PAGE>
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the CD Rate, Commercial Paper Rate, 11th District
Cost of Funds Rate, Federal Funds Rate, LIBOR or
Prime Rate is an applicable Interest Rate Basis, or
by the actual number of days in the year if the CMT
Rate or Treasury Rate is an applicable Interest
Rate Basis, or by 365 days if the J.J. Kenny Rate is
an applicable Interest Rate Basis. Unless otherwise
provided in the applicable Pricing Supplement, the
interest factor for Notes for which the interest
rate is calculated with reference to two or more
Interest Rate Bases will be calculated in each
period in the same manner as if only the lowest,
highest or average of the applicable Interest Rate
Bases applied.
Interest: General. Each Note will bear interest in accordance
with its terms. Unless otherwise provided in the
applicable Pricing Supplement, interest on each Note
will accrue from and including the Original Issue
Date of such Note for the first interest period or
from the most recent Interest Payment Date (as
defined below) to which interest has been paid or
duly provided for all subsequent interest periods to
but excluding the applicable Interest Payment Date
or the Stated Maturity Date or date of earlier
redemption or repayment, as the case may be (the
Stated Maturity Date or date of earlier redemption
or repayment is referred to herein as the "Maturity
Date" with respect to the principal repayable on
such date).
If an Interest Payment Date or the Maturity Date
with respect to any Fixed Rate Note falls on a day
that is not a Business Day (as defined below), the
required payment to be made on such day need not be
made on such day, but may be made on the next
succeeding Business Day with the same force and
effect as if made on such day, and no interest shall
accrue on such payment for the period from and after
such day to the next succeeding Business Day. If an
Interest Payment Date other than the Maturity Date
with respect to any Floating Rate Note would
otherwise fall on a day that is not a Business Day,
such Interest Payment Date will be postponed to the
next succeeding Business Day, except that in the
case of a Note for which LIBOR is an applicable
Interest Rate Basis, if such Business Day falls in
the next succeeding calendar month, such Interest
Payment Date will be the immediately preceding
Business Day. If the Maturity Date with respect to
4<PAGE>
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any Floating Rate Note falls on a day that is not a
Business Day, the required payment to be made on
such day need not be made on such day, but may be
made on the next succeeding Business Day with the
same force and effect as if made on such day, and no
interest shall accrue on such payment for the period
from and after the Maturity Date to the next
succeeding Business Day. Unless otherwise provided
in the applicable Pricing Supplement, "Business Day"
means any day, other than a Saturday or Sunday, that
is neither a legal holiday nor a day on which
banking institutions or trust companies are
authorized or required by law, regulation or
executive order to close in The City of New York or
in any Place of Payment with respect to any Note;
PROVIDED, HOWEVER, that, with respect to Notes for
which LIBOR is an applicable Interest Rate Basis,
such day is also a London Banking Day (as defined
below). "London Banking Day" means any day on
which dealings in deposits in U.S. dollars are
transacted in the London interbank market.
Regular Record Dates. Unless otherwise provided in
the applicable Pricing Supplement, the "Regular
Record Date" for a Floating Rate Note shall be the
date 15 calendar days (whether or not a Business
Day) preceding the applicable Interest Payment Date
and, for a Fixed Rate Note, shall be March 15 or
September 15 (whether or not a Business Day)
immediately preceding the applicable Interest
Payment Date for such Fixed Rate Notes.
Interest Payment Dates. Interest payments will be
made on each Interest Payment Date commencing with
the first Interest Payment Date following the
Original Issue Date; PROVIDED, HOWEVER, the first
payment of interest on any Note originally issued
between a Regular Record Date and an Interest
Payment Date will occur on the Interest Payment Date
following the next succeeding Regular Record Date.
Unless otherwise provided in the applicable Pricing
Supplement, interest payments on Fixed Rate Notes
will be made semiannually in arrears on April 1 and
October 1 of each year and on the Maturity Date, while
interest payments on Floating Rate Notes will be
made as specified in the applicable Pricing
Supplement.
5<PAGE>
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Acceptance and
Rejection of Offers
from Solicitation
as Agents: If agreed upon by any Agent and the Company, then
such Agent acting solely as agent for the Company
and not as principal will solicit purchases of the
Notes. Each Agent will communicate to the Company,
orally or in writing, each reasonable offer to
purchase Notes solicited by such Agent on an agency
basis, other than those offers rejected by such
Agent. Each Agent has the right, in its discretion
reasonably exercised, to reject any proposed
purchase of Notes, as a whole or in part, and any
such rejection shall not be a breach of such Agent's
agreement contained in the Distribution Agreement.
The Company has the sole right to accept or reject
any proposed purchase of Notes, in whole or in part,
and any such rejection shall not be a breach of the
Company's agreement contained in the Distribution
Agreement. Each Agent has agreed to make reasonable
efforts to assist the Company in obtaining
performance by each purchaser whose offer to
purchase Notes has been solicited by such Agent and
accepted by the Company.
Preparation of
Pricing Supplement: If any offer to purchase a Note is accepted by the
Company, the Company will promptly prepare a Pricing
Supplement reflecting the terms of such Note.
Information to be included in the Pricing Supplement
shall include:
1. the name of the Company;
2. the title of the Notes;
3. the date of the Pricing Supplement and the date
of the Prospectus to which the Pricing
Supplement relates;
4. the name of the Offering Agent (as defined
below);
5. whether such Notes are being sold to the
Offering Agent as principal or to an investor
or other purchaser through the Offering Agent
acting as agent for the Company;
6. with respect to Notes sold to the Offering
Agent as principal, whether such Notes will be
6<PAGE>
<PAGE>
resold by the Offering Agent to investors and
other purchasers at (i) a fixed public offering
price of a specified percentage of their principal
amount or (ii) at varying prices related to
prevailing market prices at the time of resale to
be determined by the Offering Agent;
7. with respect to Notes sold to an investor or
other purchaser through the Offering Agent
acting as agent for the Company, whether such
Notes will be sold at (i) 100% of their
principal amount or (ii) a specified percentage
of their principal amount;
8. the Offering Agent's discount or commission;
9. net proceeds to the Company;
10. the Principal Amount, Original Issue Date,
Stated Maturity Date, Interest Payment Date(s),
Authorized Denomination, Initial Redemption
Date, if any, Initial Redemption Percentage, if
any, Annual Redemption Percentage Reduction, if
any, Optional Repayment Date(s), if any,
Default Rate, if any, and, in the case of Fixed
Rate Notes, the Interest Rate, and whether such
Fixed Rate Note is an Original Issue Discount
Note (and, if so, the Issue Price), and, in the
case of Floating Rate Notes, the Interest Rate
Basis or Bases, Index Maturity (if applicable),
Initial Interest Rate, if any, Maximum Interest
Rate, if any, Minimum Interest Rate, if any,
Initial Interest Reset Date, Interest Reset
Dates, Spread and/or Spread Multiplier, if any,
Optional Reset Date, if any, Fixed Rate
Commencement Date, if any, Fixed Interest Rate,
if any, and Calculation Agent; and
11. any other additional provisions of the Notes
material to investors or other purchasers of
the Notes not otherwise specified in the
Prospectus.
The Company shall use its reasonable best efforts to
send such Pricing Supplement by telecopy or
overnight express (for delivery by the close of
business on the applicable trade date, but in no
event later than 11:00 a.m. New York City time on
the Business Day following the applicable trade
date) to the Agent that made or presented the offer
to purchase the applicable Note (in such capacity,
7<PAGE>
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the "Offering Agent") and the Trustee at the
following applicable address: if to Merrill Lynch &
Co., to: Tritech Services, 40 Colonial Drive,
Piscataway, New Jersey 08854, Attention: Prospectus
Operations/Nachman Kimerling, (908) 885-2768,
telecopier: (908) 885-2774/5/6; if to Dean Witter
Reynolds Inc., to: Two World World Trade Center,
65th Floor, Attention: Samuel H. Wolcott, (212)
392-3119, telecopier: (212) 392-2575; if to PaineWebber
Incorporated, to: 1285 Avenue of the Americas,
New York, New York 10019, Attention: Walter Hulse,
(212) 713-2960, telecopier: (212) 247-0371; and if to
the Trustee, to: 311 West Monroe, Chicago, Illinois
60606, Attention: Daniel G. Donovan, (312) 461-2908,
telecopier: (312) 461-3525. For record
keeping purposes, one copy of such Pricing
Supplement shall also be mailed or telecopied to
Merrill Lynch & Co., Merrill Lynch, Pierce, Fenner &
Smith Incorporated, World Financial Center, North
Tower, 10th Floor, New York, New York, 10281-1310,
Attention: MTN Product Management, (212) 449-7476,
telecopier: (212) 449-2234, with a copy to Winthrop,
Stimson, Putnam & Roberts, One Battery Park Plaza,
New York, New York 10004, Attention: David P. Falck,
Esq.
In each instance that a Pricing Supplement is
prepared, the Offering Agent will provide a copy of
such Pricing Supplement to each investor or
purchaser of the relevant Notes or its agent.
Pursuant to Rule 434 ("Rule 434") of the Securities
Act of 1933, as amended, the Pricing Supplement may
be delivered separately from the Prospectus. Out-
dated Pricing Supplements (other than those retained
for files) will be destroyed.
Settlement: The receipt of immediately available funds by the
Company in payment for a Note and the authentication
and delivery of such Note shall, with respect to
such Note, constitute "settlement". Offers accepted
by the Company will be settled in three Business
Days, or at such time as the purchaser, the
applicable Agent and the Company shall agree,
pursuant to the timetable for settlement set forth
in Parts II and III hereof under "Settlement
Procedure Timetable" with respect to Global Notes
and Certificated Notes, respectively (each such date
fixed for settlement is hereinafter referred to as a
"Settlement Date"). If procedures A and B of the
applicable Settlement Procedures with respect to a
particular offer are not completed on or before the
time set forth under the applicable "Settlement
8<PAGE>
<PAGE>
Procedures Timetable", such offer shall not be
settled until the Business Day following the
completion of settlement procedures A and B or such
later date as the purchaser and the Company shall
agree.
The foregoing settlement procedures may be modified
with respect to any purchase of Notes by an Agent as
principal if so agreed by the Company and such
Agent.
Procedure for Changing
Rates or Other
Variable Terms: When a decision has been reached to change the
interest rate or any other variable term on any
Notes being sold by the Company, the Company will
promptly advise the Agents and the Trustee by
facsimile transmission and the Agents will forthwith
suspend solicitation of offers to purchase such
Notes. The Agents will telephone the Company with
recommendations as to the changed interest rates or
other variable terms. At such time as the Company
notifies the Agents and the Trustee of the new
interest rates or other variable terms, the Agents
may resume solicitation of offers to purchase such
Notes. Until such time, only "indications of
interest" may be recorded. Immediately after
acceptance by the Company of an offer to purchase
Notes at a new interest rate or new variable term,
the Company, the Offering Agent and the Trustee
shall follow the procedures set forth under the
applicable "Settlement Procedures".
Suspension of
Solicitation;
Amendment or
Supplement: The Company may instruct the Agents to suspend
solicitation of offers to purchase Notes at any
time. Upon receipt of such instructions, the
Agents will forthwith suspend solicitation of offers
to purchase from the Company until such time as the
Company has advised the Agents that solicitation of
offers to purchase may be resumed. If the Company
decides to amend or supplement the Registration
Statements or the Prospectus (other than to
establish or change interest rates or formulas,
maturities, prices or other similar variable terms
with respect to the Notes), it will promptly advise
the Agents and will furnish the Agents and their
counsel with copies of the proposed amendment or
9<PAGE>
<PAGE>
supplement. Copies of such amendment or supplement
will be delivered or mailed to the Agents, their
counsel and the Trustee in quantities which such
parties may reasonably request at the following
respective addresses: Merrill Lynch & Co., World
Financial Center, North Tower, 10th Floor, New York,
New York 10281-1310, Attention: MTN Product
Management, (212) 449-7476, telecopier: (212)
449-2234; Dean Witter Reynolds Inc., Two World Trade
Center, 65th Floor, Attention: Samuel H. Wolcott,
(212) 392-3119, telecopier: (212) 392-2575;
PaineWebber Incorporated, 1285 Avenue
of the Americas, New York, New York 10019, Attention:
Walter Hulse, (212) 713-2960, telecopier: (212)
247-0371, and if to the Trustee,
to: 311 West Monroe, Chicago, Illinois 60606,
Attention: Daniel G. Donovan, (312) 461-2908,
telecopier: (312) 461-3525. For record keeping
purposes, one copy of each such amendment or
supplement shall also be mailed or telecopied to
Winthrop, Stimson, Putnam & Roberts, One Battery
Park Plaza, New York, New York 10004, Attention:
David P. Falck, Esq., (212) 858-1438, telecopier:
(212) 858-1500.
In the event that at the time the solicitation of
offers to purchase from the Company is suspended
(other than to establish or change interest rates
or formulas, maturities, prices or other similar
variable terms with respect to the Notes) there
shall be any offers to purchase Notes that have been
accepted by the Company that have not been settled,
the Company will promptly advise the Offering Agent
and the Trustee whether such offers may be settled
and whether copies of the Prospectus as theretofore
amended and/or supplemented as in effect at the time
of the suspension may be delivered in connection
with the settlement of such offers. The Company
will have the sole responsibility for such decision
and for any arrangements that may be made in the
event that the Company determines that such offers
may not be settled or that copies of such Prospectus
may not be so delivered.
Delivery of Prospectus
and applicable
Pricing Supplement: A copy of the most recent Prospectus and the
applicable Pricing Supplement, which pursuant to
Rule 434 may be delivered separately from the
Prospectus, must accompany or precede the earlier of
(a) the written confirmation of a sale sent to an
investor or other purchaser or its agent and (b) the
delivery of Notes to an investor or other purchaser
or its agent.
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Authenticity of
Signatures: The Agents will have no obligation or liability to
the Company or the Trustee in respect of the
authenticity of the signature of any officer,
employee or agent of the Company or the Trustee on
any Note.
Documents Incorporated
by Reference: The Company shall supply the Agents with an adequate
supply of all documents incorporated by reference in
the Registration Statements and the Prospectus.
11<PAGE>
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PART II: PROCEDURES FOR NOTES ISSUED
IN BOOK-ENTRY FORM AS GLOBAL NOTES
In connection with the qualification of Notes issued in book-entry form
for eligibility in the book-entry system maintained by DTC, the Trustee will
perform the custodial, document control and administrative functions described
below, in accordance with its respective obligations under a Letter of
Representations from the Company and the Trustee to DTC, dated December 24,
1996, and a Certificate Agreement, dated July 2, 1990, between the
Trustee and DTC, as amended (the "Certificate Agreement"), and its obligations
as a participant in DTC, including DTC's Same-Day Funds Settlement System
("SDFS").
Issuance: All Fixed Rate Notes issued in book-entry form
having the same Original Issue Date, Interest Rate,
Default Rate, Interest Payment Dates, redemption
and/or repayment terms, if any, and Stated Maturity
Date (collectively, the "Fixed Rate Terms") will be
represented initially by a single Global Note; and
all Floating Rate Notes issued in book-entry form
having the same Original Issue Date, formula for the
calculation of interest (including the Interest Rate
Basis or Bases, which may be the CD Rate, the CMT
Rate, the Commercial Paper Rate, the 11th District Cost
of Funds Rate, the Federal Funds Rate, LIBOR, the Prime
Rate, the J.J. Kenny Rate or the Treasury Rate or any
other interest rate basis or formula, and Spread and/or
Spread Multiplier, if any), Initial Interest Rate,
Default Rate, Index Maturity (if applicable), Minimum
Interest Rate, if any, Maximum Interest Rate, if any,
redemption and/or repayment terms, if any, Option Reset
Date, if any, Fixed Rate Commencement Date, if any,
Fixed Interest Rate, if any, Interest Payment Dates,
Initial Interest Reset Date, Interest Reset Dates
and Stated Maturity Date (collectively, the
"Floating Rate Terms") will be represented initially
by a single Global Note.
For other variable terms with respect to the Fixed
Rate Notes and Floating Rate Notes, see the
Prospectus and the applicable Pricing Supplement.
Owners of beneficial interests in Global Notes will
be entitled to physical delivery of Certificated
Notes equal in principal amount to their respective
beneficial interests only upon certain limited
circumstances described in the Prospectus.
12<PAGE>
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Identification: The Company has arranged with the CUSIP Service
Bureau of Standard & Poor's (the "CUSIP Service
Bureau") for the reservation of one series of CUSIP
numbers, which series consists of approximately
900 CUSIP numbers which have been reserved for and
relating to Global Notes and the Company has
delivered to each of the Trustee and DTC such list
of such CUSIP numbers. The Company will assign
CUSIP numbers to Global Notes as described below
under Settlement Procedure B. DTC will notify the
CUSIP Service Bureau periodically of the CUSIP
numbers that the Company has assigned to Global
Notes. The Trustee will notify the Company at any
time when fewer than 100 of the reserved CUSIP
numbers remain unassigned to Global Notes, and, if
it deems necessary, the Company will reserve and
obtain additional CUSIP numbers for assignment to
Global Notes. Upon obtaining such additional CUSIP
numbers, the Company will deliver a list of such
additional numbers to the Trustee and DTC. Notes
issued in book-entry form in excess of $200,000,000
aggregate principal amount and otherwise required to
be represented by the same Global Note will instead
be represented by two or more Global Notes which
shall all be assigned the same CUSIP number.
Registration: Unless otherwise specified by DTC, each Global Note
will be registered in the name of Cede & Co., as
nominee for DTC, on the register maintained by the
Trustee under the Indenture. The beneficial owner
of a Note issued in book-entry form (i.e., an owner
of a beneficial interest in a Global Note) (or one
or more indirect participants in DTC designated by
such owner) will designate one or more participants
in DTC (with respect to such Note issued in
book-entry form, the "Participants") to act as agent
for such beneficial owner in connection with the
book-entry system maintained by DTC, and DTC will
record in book-entry form, in accordance with
instructions provided by such Participants, a credit
balance with respect to such Note issued in
book-entry form in the account of such Participants.
The ownership interest of such beneficial owner in
such Note issued in book-entry form will be recorded
through the records of such Participants or through
the separate records of such Participants and one or
more indirect participants in DTC.
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Transfers: Transfers of beneficial ownership interests in a
Global Note will be accomplished by book entries
made by DTC and, in turn, by Participants (and in
certain cases, one or more indirect participants in
DTC) acting on behalf of beneficial transferors and
transferees of such Global Note.
Exchanges: The Trustee may deliver to DTC and the CUSIP Service
Bureau at any time a written notice specifying (a)
the CUSIP numbers of two or more Global Notes
outstanding on such date that represent Global Notes
having the same Fixed Rate Terms or Floating Rate
Terms, as the case may be (other than Original Issue
Dates), and for which interest has been paid to the
same date; (b) a date, occurring at least 30 days
after such written notice is delivered and at least
30 days before the next Interest Payment Date for
the related Notes issued in book-entry form, on
which such Global Notes shall be exchanged for a
single replacement Global Note; and (c) a new CUSIP
number, obtained from the Company, to be assigned to
such replacement Global Note. Upon receipt of such
a notice, DTC will send to its Participants
(including the Trustee) a written reorganization
notice to the effect that such exchange will occur
on such date. Prior to the specified exchange date,
the Trustee will deliver to the CUSIP Service Bureau
written notice setting forth such exchange date and
the new CUSIP number and stating that, as of such
exchange date, the CUSIP numbers of the Global Notes
to be exchanged will no longer be valid. On the
specified exchange date, the Trustee will exchange
such Global Notes for a single Global Note bearing
the new CUSIP number and the CUSIP numbers of the
exchanged Notes will, in accordance with CUSIP
Service Bureau procedures, be canceled and not
immediately reassigned. Notwithstanding the
foregoing, if the Global Notes to be exchanged
exceed $200,000,000 in aggregate principal amount,
one replacement Note will be authenticated and
issued to represent each $200,000,000 in aggregate
principal amount of the exchanged Global Notes and
an additional Global Note or Notes will be
authenticated and issued to represent any remaining
principal amount of such Global Notes (See
"Denominations" below).
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Denominations: Unless otherwise provided in the applicable Pricing
Supplement, Notes issued in book-entry form will be
issued in denominations of $1,000 and integral
multiples thereof. Global Notes will not be
denominated in excess of $200,000,000 aggregate
principal amount. If one or more Notes are issued
in book-entry form in excess of $200,000,000
aggregate principal amount and would, but for the
preceding sentence, be represented by a single
Global Note, then one Global Note will be issued to
represent each $200,000,000 in aggregate principal
amount of such Notes issued in book-entry form and
an additional Global Note or Notes will be issued to
represent any remaining aggregate principal amount
of such Note or Notes issued in book-entry form. In
such a case, each of the Global Notes representing
Notes issued in book-entry form shall be assigned
the same CUSIP number.
Payments of Principal
and Interest: Payments of Interest Only. Promptly after each
Regular Record Date, the Trustee will deliver to the
Company and DTC a written notice specifying by CUSIP
number the amount of interest to be paid on each
Global Note on the following Interest Payment Date
(other than an Interest Payment Date coinciding with
the Maturity Date) and the total of such amounts.
DTC will confirm the amount payable on each Global
Note on such Interest Payment Date by reference to
the daily bond reports published by Standard &
Poor's. On such Interest Payment Date, the Company
will pay to the Trustee in immediately available
funds an amount sufficient to pay the interest then
due and owing on the Global Notes, and upon receipt
of such funds from the Company, the Trustee in turn
will pay to DTC such total amount of interest due on
such Global Notes (other than on the Maturity Date),
at the times and in the manner set forth below under
"Manner of Payment". The Trustee shall make payment
of that amount of interest due and owing on any
Global Notes that Participants have elected to
receive in foreign or composite currencies directly
to such Participants.
Notice of Interest Rates. Promptly after each
Interest Determination Date or Calculation Date, as
the case may be, for Floating Rate Notes issued in
book-entry form, the Trustee will notify each of
Moody's Investors Service, Inc. and Standard &
Poor's of the interest rates determined as of such
Interest Determination Date.
15<PAGE>
<PAGE>
Payments at Maturity. On or about the first
Business Day of each month, the Trustee will deliver
to the Company and DTC a written list of principal,
premium, if any, and interest to be paid on each
Global Note maturing or otherwise becoming due in
the following month. The Trustee, the Company and
DTC will confirm the amounts of such principal,
premium, if any, and interest payments with respect
to each such Global Note on or about the fifth
Business Day preceding the Maturity Date of such
Global Note. On the Maturity Date, the Company will
pay to the Trustee in immediately available funds an
amount sufficient to make the required payments, and
upon receipt of such funds the Trustee in turn will
pay to DTC the principal amount of Global Notes,
together with premium, if any, and interest due on
the Maturity Date, at the times and in the manner
set forth below under "Manner of Payment". Promptly
after payment to DTC of the principal, premium, if
any, and interest due on the Maturity Date of such
Global Note, the Trustee will cancel such Global
Note and deliver it to the Company with an
appropriate debit advice. On the first Business Day
of each month, the Trustee will deliver to the
Company a written statement indicating the total
principal amount of outstanding Global Notes as of
the close of business on the immediately preceding
Business Day.
Manner of Payment. The total amount of any
principal, premium, if any, and interest due on
Global Notes on any Interest Payment Date or the
Maturity Date, as the case may be, shall be paid by
the Company to the Trustee in funds available for
use by the Trustee no later than 10:00 a.m., New
York City time, on such date. The Company will make
such payment on such Global Notes to an account
specified by the Trustee. Upon receipt of such
funds, the Trustee will pay by separate wire
transfer (using Fedwire message entry instructions
in a form previously specified by DTC) to an account
at the Federal Reserve Bank of New York previously
specified by DTC, in funds available for immediate
use by DTC, each payment of principal, premium, if
any, and interest due on Global Notes on such date.
Thereafter on such date, DTC will pay, in accordance
with its SDFS operating procedures then in effect,
such amounts in funds available for immediate use to
the respective Participants in whose names the
beneficial interests in such Global Notes are
16<PAGE>
<PAGE>
recorded in the book-entry system maintained by DTC.
Neither the Company nor the Trustee shall have any
responsibility or liability for the payment by DTC
of the principal of, or premium, if any, or interest
on, the Global Notes.
Withholding Taxes. The amount of any taxes required
under applicable law to be withheld from any
interest payment on a Global Note will be determined
and withheld by the Participant, indirect
participant in DTC or other Person responsible for
forwarding payments and materials directly to the
beneficial owner of such Global Note.
Settlement
Procedures: Settlement Procedures with regard to each Note in
book-entry form sold by an Agent, as agent of the
Company, or purchased by an Agent, as principal,
will be as follows:
A. The Offering Agent will advise the Company by
telephone, confirmed by facsimile, of the
following settlement information:
1. Principal amount and Authorized Denomination.
2. (a) Fixed Rate Notes:
(i) Interest Rate.
(ii) Interest Payment Dates.
(iii) Whether such Note is being
issued with Original Issue
Discount and, if so, the terms
thereof.
(b) Floating Rate Notes:
(i) Interest Rate Basis or Bases.
(ii) Initial Interest Rate.
(iii) Spread and/or Spread Multiplier,
if any.
(iv) Initial Interest Reset Date or
Interest Reset Dates.
(v) Interest Payment Dates.
17<PAGE>
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(vi) Index Maturity, if any.
(vii) Maximum and/or Minimum Interest
Rates, if any.
(viii) Optional Reset Date, if any
(ix) Fixed Rate Commencement Date,
if any.
(x) Fixed Interest Rate, if any.
(xi) Calculation Agent.
3. Price to public, if any, of such Note
(or whether such Note is being offered
at varying prices relating to
prevailing market prices at time of
resale as determined by the Offering
Agent).
4. Trade Date.
5. Settlement Date (Original Issue Date).
6. Stated Maturity Date.
7. Redemption provisions, if any.
8. Repayment provisions, if any.
9. Default Rate, if any.
10. Net proceeds to the Company.
11. The Offering Agent's discount or
commission.
12. Whether such Note is being sold to the
Offering Agent as principal or to an
investor or other purchaser through the
Offering Agent acting as agent for the
Company.
13. Such other information specified with
respect to such Note (whether by
Addendum or otherwise).
B. The Company will assign a CUSIP number to the
Global Note representing such Note and then
advise the Trustee by facsimile transmission or
other electronic transmission of the above
settlement information received from the
Offering Agent, such CUSIP number and the name
18<PAGE>
<PAGE>
of the Offering Agent. The Company will also
advise the Offering Agent of the CUSIP number
assigned to the Global Note.
C. The Trustee will communicate to DTC and the
Offering Agent through DTC's Participant
Terminal System a pending deposit message
specifying the following settlement information:
1. The information set forth in Settlement
Procedure A.
2. Identification numbers of the participant
accounts maintained by DTC on behalf of the
Trustee and the Offering Agent.
3. Identification of the Global Note as a Fixed
Rate Global Note or Floating Rate Global
Note.
4. Initial Interest Payment Date for such Note,
number of days by which such date succeeds
the related record date for DTC purposes (or,
in the case of Floating Rate Notes which
reset daily or weekly, the date five calendar
days preceding the Interest Payment Date)
and, if then calculable, the amount of
interest payable on such Interest Payment
Date (which amount shall have been confirmed
by the Trustee).
5. CUSIP number of the Global Note representing
such Note.
6. Whether such Global Note represents any other
Notes issued or to be issued in book-entry
form.
DTC will arrange for each pending deposit
message described above to be transmitted to
Standard & Poor's, which will use the
information in the message to include certain
terms of the related Global Note in the
appropriate daily bond report published by
Standard & Poor's.
D. The Trustee will complete and authenticate the
Global Note representing such Note.
E. DTC will credit such Note to the participant
account of the Trustee maintained by DTC.
19<PAGE>
<PAGE>
F. The Trustee will enter an SDFS deliver order
through DTC's Participant Terminal System
instructing DTC (i) to debit such Note to the
Trustee's participant account and credit such
Note to the participant account of the Offering
Agent maintained by DTC and (ii) to debit the
settlement account of the Offering Agent and
credit the settlement account of the Trustee
maintained by DTC, in an amount equal to the
price of such Note less such Offering Agent's
discount or underwriting commission, as
applicable. Any entry of such a deliver order
shall be deemed to constitute a representation
and warranty by the Trustee to DTC that (i) the
Global Note representing such Note has been
issued and authenticated and (ii) the Trustee is
holding such Global Note pursuant to the
Certificate Agreement.
G. In the case of Notes in book-entry form sold
through the Offering Agent, as agent, the
Offering Agent will enter an SDFS deliver order
through DTC's Participant Terminal System
instructing DTC (i) to debit such Note to the
Offering Agent's participant account and credit
such Note to the participant account of the
Participants maintained by DTC and (ii) to debit
the settlement accounts of such Participants and
credit the settlement account of the Offering
Agent maintained by DTC in an amount equal to
the initial public offering price of such Note.
H. Transfers of funds in accordance with SDFS
deliver orders described in Settlement
Procedures F and G will be settled in accordance
with SDFS operating procedures in effect on the
Settlement Date.
I. Upon receipt, the Trustee will pay the Company,
by wire transfer of immediately available funds
to an account specified by the Company to the
Trustee from time to time, the amount
transferred to the Trustee in accordance with
Settlement Procedure F.
J. The Trustee will send a copy of the Global Note
by first class mail to the Company together with
a statement setting forth the principal amount
of Notes Outstanding as of the related
Settlement Date after giving effect to such
20<PAGE>
<PAGE>
transaction and all other offers to purchase
Notes of which the Company has advised the
Trustee but which have not yet been settled.
K. If such Note was sold through the Offering
Agent, as agent, the Offering Agent will confirm
the purchase of such Note to the investor or
other purchaser either by transmitting to the
Participant with respect to such Note a
confirmation order through DTC's Participant
Terminal System or by mailing a written
confirmation to such investor or other
purchaser.
Settlement Procedures
Timetable: For offers to purchase Notes accepted by the
Company, Settlement Procedures A through K set forth
above shall be completed as soon as possible
following the trade but not later than the
respective times (New York City time) set forth
below:
Settlement
Procedure Time
---------- ----
A 11:00 a.m. on the trade date or within
one hour following the trade
B 12:00 noon on the trade date or with
one hour following the trade
C No later than the close of business
on the trade date
D 9:00 a.m. on Settlement Date
E 10:00 a.m. on Settlement Date
F-G No later than 2:00 p.m. on Settlement
Date
H 4:00 p.m. on Settlement Date
I-K 5:00 p.m. on Settlement Date
Settlement Procedure H is subject to extension in
accordance with any extension of Fedwire closing
deadlines and in the other events specified in the
SDFS operating procedures in effect on the
Settlement Date.
If settlement of a Note issued in book-entry form is
rescheduled or canceled, the Trustee will deliver to
DTC, through DTC's Participant Terminal System, a
cancellation message to such effect by no later than
21<PAGE>
<PAGE>
5:00 p.m., New York City time, on the Business Day
immediately preceding the scheduled Settlement Date.
Failure to Settle: If the Trustee fails to enter an SDFS deliver order
with respect to a Note issued in book-entry form
pursuant to Settlement Procedure F, the Trustee may
deliver to DTC, through DTC's Participant Terminal
System, as soon as practicable a withdrawal message
instructing DTC to debit such Note to the
participant account of the Trustee maintained at
DTC. DTC will process the withdrawal message,
provided that such participant account contains a
principal amount of the Global Note representing
such Note that is at least equal to the principal
amount to be debited. If withdrawal messages are
processed with respect to all the Notes represented
by a Global Note, the Trustee will mark such Global
Note "canceled", make appropriate entries in its
records and send certification of destruction of
such canceled Global Note to the Company. The CUSIP
number assigned to such Global Note shall, in
accordance with CUSIP Service Bureau procedures, be
canceled and not immediately reassigned. If
withdrawal messages are processed with respect to a
portion of the Notes represented by a Global Note,
the Trustee will exchange such Global Note for two
Global Notes, one of which shall represent the
Global Notes for which withdrawal messages are
processed and shall be canceled immediately after
issuance and the other of which shall represent the
other Notes previously represented by the
surrendered Global Note and shall bear the CUSIP
number of the surrendered Global Note.
In the case of any Note in book-entry form sold
through the Offering Agent, as agent, if the
purchase price for any such Note is not timely paid
to the Participants with respect thereto by the
beneficial investor or other purchaser thereof (or a
person, including an indirect participant in DTC,
acting on behalf of such investor or other
purchaser), such Participants and, in turn, the
related Offering Agent may enter SDFS deliver orders
through DTC's Participant Terminal System reversing
the orders entered pursuant to Settlement Procedures
F and G, respectively. Thereafter, the Trustee will
22<PAGE>
<PAGE>
deliver the withdrawal message and take the related
actions described in the preceding paragraph. If
such failure shall have occurred for any reason
other than default by the applicable Offering Agent
to perform its obligations hereunder or under the
Distribution Agreement, the Company will reimburse
such Offering Agent on an equitable basis for its
reasonable loss of the use of funds during the
period when the funds were credited to the account
of the Company.
Notwithstanding the foregoing, upon any failure to
settle with respect to a Note in book-entry form,
DTC may take any actions in accordance with its SDFS
operating procedures then in effect. In the event
of a failure to settle with respect to a Note that
was to have been represented by a Global Note also
representing other Notes, the Trustee will provide,
in accordance with Settlement Procedure D, for the
authentication and issuance of a Global Note
representing such remaining Notes and will make
appropriate entries in its records.
23<PAGE>
<PAGE>
PART III: PROCEDURES FOR CERTIFICATED NOTES
Denominations: Unless otherwise provided in the applicable Pricing
Supplement, the Certificated Notes will be issued in
denominations of $1,000 and integral multiples
thereof.
Payments of Principal,
Premium, if any,
and Interest: Upon presentment and delivery of the Certificated
Note, the Trustee upon receipt of immediately
available funds from the Company will pay the
principal of, premium, if any, and interest on, each
Certificated Note on the Maturity Date in
immediately available funds. All interest payments
on a Certificated Note, other than interest due on
the Maturity Date, will be made by check mailed to
the address of the person entitled thereto as such
address shall appear in the Security Register;
PROVIDED, HOWEVER, that Holders of $10,000,000 or
more in aggregate principal amount of Certificated
Notes (whether having identical or different terms
and provisions) shall be entitled to receive such
interest payments by wire transfer of immediately
available funds if appropriate wire transfer
instructions have been received in writing by the
Trustee not less than 15 calendar days prior to the
applicable Interest Payment Date.
The Trustee will provide monthly to the Company a
list of the principal, premium, if any, and interest
to be paid on Certificated Notes maturing in the
next succeeding month. The Trustee will be
responsible for withholding taxes on interest paid
as required by applicable law.
Certificated Notes presented to the Trustee on the
Maturity Date for payment will be canceled by the
Trustee. All canceled Certificated Notes held by
the Trustee shall be destroyed and the Trustee shall
furnish to the Company a certificate with respect to
such destruction.
Settlement
Procedures: Settlement Procedures with regard to each
Certificated Note purchased by an Agent, as
principal, or through an Agent, as agent, shall be
as follows:
24<PAGE>
<PAGE>
A. The Offering Agent will advise the Company by
telephone of the following settlement information
with regard to each Certificated Note:
1. Exact name in which the Certificated Note(s)
is to be registered (the "Registered
Owner").
2. Exact address or addresses of the Registered
Owner for delivery, notices and payments of
principal, premium, if any, and interest.
3. Taxpayer identification number of the
Registered Owner.
4. Principal amount and Authorized
Denomination.
5. (a) Fixed Rate Notes:
(i) Interest Rate.
(ii) Interest Payment Dates.
(iii) Whether such Note is being
issued with Original Issue
Discount and, if so, the terms
thereof.
(b) Floating Rate Notes:
(i) Interest Rate Basis or Bases.
(ii) Initial Interest Rate.
(iii) Spread and/or Spread Multiplier,
if any.
(iv) Initial Interest Reset Date and
Interest Reset Dates.
(v) Interest Payment Dates.
(vi) Index Maturity, if any.
25<PAGE>
<PAGE>
(vii) Maximum and/or Minimum Interest
Rates, if any.
(viii) Optional Reset Date, if any.
(ix) Fixed Rate Commencement Date,
if any.
(x) Fixed Interest Rate, if any.
(xi) Calculation Agent.
6. Price to public of such Certificated Note
(or whether such Note is being offered at
varying prices relating to prevailing market
prices at time of resale as determined by
the Offering Agent).
7. Trade Date.
8. Settlement Date (Original Issue Date).
9. Stated Maturity Date.
10. Redemption provisions, if any.
11. Repayment provisions, if any.
12. Default Rate, if any.
13. Net proceeds to the Company.
14. The Offering Agent's discount or commission.
15. Whether such Note is being sold to the
Offering Agent as principal or to an
investor or other purchaser through the
Offering Agent acting as agent for the
Company.
16. Such other information specified with
respect to such Note (whether by Addendum or
otherwise).
B. After receiving such settlement information from
the Offering Agent, the Company will advise the
Trustee of the above settlement information by
facsimile transmission confirmed by telephone.
The Company will cause the Trustee to issue,
authenticate and deliver the Certificated Note.
26<PAGE>
<PAGE>
C. The Trustee will complete the Certificated Note
in the form approved by the Company and the
Offering Agent, and will make three copies
thereof (herein called "Stub 1", "Stub 2" and
"Stub 3"):
1. Certificated Note with the Offering Agent's
confirmation, if traded on a principal
basis, or the Offering Agent's customer
confirmation, if traded on an agency basis.
2. Stub 1 for Trustee.
3. Stub 2 for Offering Agent.
4. Stub 3 for the Company.
D. With respect to each trade, the Trustee will
deliver the Certificated Note and Stub 2 thereof
to the Offering Agent at the following
applicable address: Merrill Lynch, Pierce,
Fenner & Smith Incorporated, Merrill Lynch Money
Markets Clearance, 55 Water Street, Concourse
Level, N.S.C.C. Window, New York, New York
10041, Attention: Al Mitchell, (212) 558-2405,
telecopier: (212) 558-2457; Dean Witter Reynolds
Inc., Two World Trade Center, Attention: Samuel H.
Wolcott, (212) 392-3119, telecopier: (212) 392-
2575; PaineWebber Incorporated, 1285 Avenue of the
Americas, New York, New York 10019, Attention:
Walter Hulse, (212) 713-2960, telecopier: (212)
247-0371; and the Trustee will keep Stub 1. The
Offering Agent will acknowledge receipt of the
Certificated Note through a broker's receipt and
will keep Stub 2. Delivery of the Certificated
Note will be made only against such acknowledgment
of receipt. Upon determination that the
Certificated Note has been authorized, delivered
and completed as aforementioned, the Offering
Agent will wire the net proceeds of the
Certificated Note after deduction of its
applicable commission to the Company pursuant to
standard wire instructions given by the Company.
E. In the case of a Certificated Note sold through
the Offering Agent, as agent, the Offering Agent
will deliver such Certificated Note (with the
confirmation) to the purchaser against payment
in immediately available funds.
F. The Trustee will send Stub 3 to the Company.
27<PAGE>
<PAGE>
Settlement
Procedures
Timetable: For offers to purchase Certificated Notes accepted
by the Company, Settlement Procedures A through F
set forth above shall be completed as soon as
possible following the trade but not later than the
respective times (New York City time) set forth
below:
Settlement
Procedure Time
---------- ----
A 11:00 a.m. on the trade date or
within one hour following the trade
B 12:00 noon on the trade date or
within one hour following the trade
C-D 2:15 p.m. on Settlement Date
E 3:00 p.m. on Settlement Date
F 5:00 p.m. on Settlement Date
Failure to Settle: In the case of Certificated Notes sold through the
Offering Agent, as agent, if an investor or other
purchaser of a Certificated Note from the Company
shall either fail to accept delivery of or make
payment for such Certificated Note on the date fixed
for settlement, the Offering Agent will forthwith
notify the Trustee and the Company by telephone,
confirmed in writing, and return such Certificated
Note to the Trustee.
The Trustee, upon receipt of such Certificated Note
from the Offering Agent, will immediately advise the
Company and the Company will promptly arrange to
credit the account of the Offering Agent in an
amount of immediately available funds equal to the
amount previously paid to the Company by such
Offering Agent in settlement for such Certificated
Note. Such credits will be made on the Settlement
Date if possible, and in any event not later than
the Business Day following the Settlement Date;
provided that the Company has received notice on the
same day. If such failure shall have occurred for
any reason other than failure by such Offering Agent
to perform its obligations hereunder or under the
Distribution Agreement, the Company will reimburse
28<PAGE>
<PAGE>
such Offering Agent on an equitable basis for its
reasonable loss of the use of funds during the
period when the funds were credited to the account
of the Company. Immediately upon receipt of the
Certificated Note in respect of which the failure
occurred, the Trustee will cancel and destroy such
Certificated Note, make appropriate entries in its
records to reflect the fact that such Certificated
Note was never issued, and accordingly notify in
writing the Company.
29<PAGE>
<PAGE>
EXHIBIT 4.04
SOUTHWEST GAS CORPORATION
TO
HARRIS TRUST AND SAVINGS BANK, as Trustee
SECOND SUPPLEMENTAL INDENTURE
DATED AS OF DECEMBER 30, 1996
-----------------------------------
SUPPLEMENTING AND AMENDING THE
INDENTURE DATED AS OF JULY 15, 1996
-----------------------------------
MEDIUM-TERM NOTES, SERIES A
<PAGE>
<PAGE>
TABLE OF CONTENTS
Page
----
PARTIES . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 1
RECITALS. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 1
ARTICLE ONE
DEFINITIONS WITH RESPECT TO MEDIUM-TERM NOTES. . . . . . . 1
SECTION 1.1. ORIGINAL INDENTURE TERMS . . . . . . . . . . . . . . . . . 1
SECTION 1.2. MODIFICATION OF TERMS. . . . . . . . . . . . . . . . . . . 2
ARTICLE TWO
TERMS OF SERIES A MEDIUM-TERM NOTES . . . . . . . . . 3
SECTION 2.1. GENERAL TERMS AND CONDITIONS OF THE SERIES A
MEDIUM-TERM NOTES. . . . . . . . . . . . . . . . . . . . . 3
SECTION 2.2 FORM OF FLOATING RATE NOTE . . . . . . . . . . . . . . . . 3
SECTION 2.3. FORM OF FIXED RATE NOTE. . . . . . . . . . . . . . . . . .26
ARTICLE THREE
CONTINUED APPLICABILITY OF REMAINING PROVISIONS
OF THE ORIGINAL INDENTURE. . . . . . . . . . . .35
SECTION 3.1 CONTINUED APPLICABILITY. . . . . . . . . . . . . . . . . .35
SIGNATURES. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . S-1
<PAGE>
<PAGE>
SECOND SUPPLEMENTAL INDENTURE, dated as of December 30, 1996,
between SOUTHWEST GAS CORPORATION, a corporation duly organized and existing
under the laws of the State of California (the "Company"), having its
principal office at 5241 Spring Mountain Road, P. O. Box 98510, Las Vegas,
Nevada 89193-8510, and HARRIS TRUST AND SAVINGS BANK, an Illinois banking
corporation, as Trustee (the "Trustee").
RECITALS OF THE COMPANY
WHEREAS, the Company and the Trustee have executed and delivered an
Indenture dated as of July 15, 1996 (the "Original Indenture" and as amended
by the First Supplement Indenture, as hereinafter defined, and this Second
Supplement Indenture, the "Indenture") providing for the issuance from time
time by the Company of its unsecured debentures, notes or other evidences of
indebtedness (the "Debentures") to be issued in one or more series as
provided in the Original Indenture; and
WHEREAS, the Company has duly authorized the execution and delivery
of a First Supplemental Indenture to the Original Indenture (the "First
Supplemental Indenture") to provide for the issuance of two series of
debentures known as 7-1/2% Debentures, Due 2006 and 8% Debentures, Due 2026;
and
WHEREAS, the Company has duly authorized the execution and delivery
of this Second Supplemental Indenture to provide for the issuance of a series
of medium-term notes to be known as Medium-Term Notes, Series A (the "Series A
MTNs"); and
WHEREAS, all things necessary to make this Second Supplemental
Indenture a valid agreement of the Company, in accordance with its terms, have
been done.
NOW, THEREFORE, THIS INDENTURE WITNESSETH:
For and in consideration of the premises and the purchase of the
Series A MTNs by the Holders thereof, it is mutually covenanted and agreed,
for the equal and proportionate benefit of all Holders of the Series A MTNs as
follows:
ARTICLE ONE
DEFINITIONS WITH RESPECT TO SERIES A MEDIUM-TERM NOTES
SECTION 1.1 ORIGINAL INDENTURE TERMS. Except as otherwise
provided in this Second Supplemental Indenture, all terms used in this Second
Supplemental Indenture which are defined in the Original Indenture or the
First Supplemental Indenture shall have the meanings assigned to them in the
Original Indenture or the First Supplemental Indenture.
1<PAGE>
<PAGE>
SECTION 1.2. MODIFICATION OF TERMS. The following defined terms
used in the Original Indenture shall have the following meanings when used
with respect to the Series A MTNs:
(a) "Fixed Rate Notes" means the Series A MTNs bearing a fixed rate
of interest (which may be zero) authenticated and delivered under the
Indenture.
(b) "Floating Rate Notes" means the Series A MTNs bearing a rate of
interest which may vary from time to time in accordance with one of the
interest rate formulas set forth in Section 2.2 (or as otherwise
specified in an Officers' Certificate) authenticated and delivered under
the Indenture.
(c) "Interest Payment Date" means (i) when used with respect to a
Fixed Rate Note, each April 1 and October 1
(unless otherwise specified in an Officers' Certificate), and (ii) when
when used with respect to a Floating Rate Note, the dates specified in an
Officers' Certificate for such Floating Rate Note, in each case,
case, commencing with the next Interest Payment Date (unless the Series A
MTNs are issued between a Regular Record Date and an Interest Payment
Date, in which event, the first payment shall be made on the next
succeeding Interest Payment Date) and continuing until principal thereof
is paid or made available for payment.
(d) "Regular Record Date," means (i) when used with respect to an
Interest Payment Date applicable to a Fixed Rate Note, March 15 and
September 15 (unless otherwise specified in an Officers' Certificate),
and (ii) when used with respect to an Interest Payment Date applicable to
a Floating Rate Note, the day 15 calendar days next preceding an Interest
Payment Date (whether or not a Business Day).
(e) "Series A MTNs" means collectively the Fixed Rate Notes and the
Floating Rate Notes authenticated and delivered under the Indenture.
(f) "Second Supplemental Indenture" means the Second Supplemental
Indenture dated as of December 30, 1996 as originally executed by the
Company and the Trustee.
(g) "Stated Maturity," when used with respect to (i) the payment of
principal of a Series A MTN, means nine months or more from the date of
issuance of such Series A MTN as specified in an Officers' Certificate,
and (ii) the payment of an installment of interest of a Series A MTN,
means an Interest Payment Date specified in Section 1.3(c) of the Second
Supplemental Indenture.
2<PAGE>
<PAGE>
ARTICLE TWO
TERMS OF SERIES A MEDIUM-TERM NOTES
SECTION 2.1 GENERAL TERMS AND CONDITIONS OF THE SERIES A
MEDIUM-TERM NOTES.
(a) There is hereby authorized a series of Securities designated
the "Medium-Term Notes, Series A", limited in aggregate principal amount
to One Hundred Fifty Million Dollars ($150,000,000) (except for Series A
MTNs authenticated and delivered upon registration of transfer of, or in
exchange for, or in lieu of, other Series A MTNs pursuant to Sections 304,
305, 306, 906 or 1107 of the Original Indenture).
(b) The rate at which each of the Series A MTNs shall bear interest
shall be established in an Officers' Certificate, and may either be a
fixed interest rate (which may be zero) or may vary from time to time in
accordance with one of the interest rate formulas more fully described in
Section 2.2 (or otherwise as specified in an Officers' Certificate).
(c) Unless otherwise specified in an Officers' Certificate, the
date from which interest shall accrue for each Series A MTN shall be the
date of issuance of the MTN.
(d) The date, if any, on which any Series A MTN may be redeemed at
the option of the Company shall be established in an Officers'
Certificate.
(e) The terms under which any of the Series A MTNs shall be repaid
at the option of the Holder shall be established in an Officers'
Certificate.
(f) The Series A MTNs shall be issued as Global Securities under
the Indenture, unless otherwise specified in an Officers' Certificate.
(g) Sections 1008 and 1009 of the Indenture shall be applicable to
the Series A MTNs. So long as any of the Series A MTNs are outstanding
notwithstanding the redemption, repurchase or other retirement of the
1996 Debentures.
(h) Additional terms of the Series A MTNs, if any, shall be
specified in an Officer's Certificate.
SECTION 2.2. FORM OF FLOATING RATE NOTE. The Floating Rate Notes
and the Trustee's Certificate of Authentication to be endorsed thereon are to
be in substantially the following form, unless otherwise specified in an
Officers' Certificate:
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SOUTHWEST GAS CORPORATION
MEDIUM-TERM NOTE, SERIES A
REGISTERED (FLOATING RATE) REGISTERED
NO. FLR-
CUSIP-
THIS SECURITY IS A GLOBAL SECURITY WITHIN THE MEANING OF THE
INDENTURE HEREINAFTER REFERRED TO AND IS REGISTERED IN THE NAME OF A
DEPOSITARY OR A NOMINEE OF A DEPOSITARY. THIS GLOBAL SECURITY IS EXCHANGEABLE
FOR SECURITIES REGISTERED IN THE NAME OF A PERSON OTHER THAN THE DEPOSITARY OR
ITS NOMINEE ONLY IN THE LIMITED CIRCUMSTANCES DESCRIBED IN THE INDENTURE, AND
NO TRANSFER OF THIS SECURITY (OTHER THAN A TRANSFER OF THIS SECURITY AS A
WHOLE BY THE DEPOSITARY TO A NOMINEE OF THE DEPOSITORY OR BY A NOMINEE OF THE
DEPOSITARY TO THE DEPOSITARY OR ANOTHER NOMINEE OF THE DEPOSITARY) MAY BE
REGISTERED EXCEPT IN SUCH LIMITED CIRCUMSTANCES. EVERY SECURITY DELIVERED
UPON REGISTRATION OR TRANSFER OF, OR IN EXCHANGE FOR, OR IN LIEU OF, THIS
GLOBAL SECURITY SHALL BE A GLOBAL SECURITY SUBJECT TO THE FOREGOING, EXCEPT IN
THE LIMITED CIRCUMSTANCES DESCRIBED ABOVE.
UNLESS THIS CERTIFICATE IS PRESENTED BY AN AUTHORIZED REPRESENTATIVE
OF THE DEPOSITORY TRUST COMPANY, A NEW YORK CORPORATION ("DTC"), TO THE
COMPANY OR ITS AGENT FOR REGISTRATION OF TRANSFER, EXCHANGE OR PAYMENT, AND
ANY CERTIFICATE ISSUED IS REGISTERED IN THE NAME OF CEDE & CO. OR IN SUCH
OTHER NAME AS IS REQUESTED BY AN AUTHORIZED REPRESENTATIVE OF DTC (AND ANY
PAYMENT IS TO BE MADE TO CEDE & CO. OR TO SUCH OTHER ENTITY AS IS REQUESTED BY
AN AUTHORIZED REPRESENTATIVE OF DTC), ANY TRANSFER, PLEDGE OR OTHER USE HEREOF
FOR VALUE OR OTHERWISE BY OR TO ANY PERSON IS WRONGFUL INASMUCH AS THE
REGISTERED OWNER HEREOF, CEDE & CO., HAS AN INTEREST HEREIN.
TERMS
-----
Interest Rate Basis(es):
If LIBOR Reuters:
If LIBOR Telerate:
If CMT Rate:
Designated CMT Telerate Page:
Designated CMT Maturity Index:
Index Maturity:
Spread and/or Spread Multiplier, if any:
Initial Interest Rate, if any:
Initial Interest Reset Date:
Interest Reset Dates:
Interest Payment Dates:
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Default Rate:
Maximum Interest Rate, if any:
Minimum Interest Rate, if any:
Optional Reset Date, if any;
Fixed Rate Commencement Date, if any:
Fixed Interest Rate, if any:
Calculation Agent:
If Redeemable:
Initial Redemption Date:
Initial Redemption Percentage:
Annual Redemption Percentage Reduction, if any:
If Repayable:
Optional Repayment Date(s):
Original Issue Date:
Stated Maturity:
Authorized Denomination:
Price to Public: %, plus accrued interest, if any,
from
Purchase Price: %, plus accrued interest, if any, from
Settlement Date and time:
Additional/Other Terms:
SOUTHWEST GAS CORPORATION, a California corporation (hereinafter
called the "Company," which term includes any successor corporation under the
Indenture, as hereinafter defined), for value received, hereby promises to pay
to Cede & Co., or registered assigns, the principal sum set forth above at
Stated Maturity shown above and to pay interest thereon from the Original
Issue Date shown above or from the most recent Interest Payment Date (as
hereinafter defined) to which interest has been paid or duly provided for, in
arrears on the Interest Payment Dates set forth above ("Interest Payment
Dates"), until the principal hereof is paid or made available for payment, and
on Stated Maturity, commencing with the Interest Payment Date next succeeding
the Original Issue Date, at the rate per annum determined in accordance with
the provisions on the reverse hereof, depending on the Interest Rate Basis or
Bases specified above. Interest will be payable on each Interest Payment Date
and at Stated Maturity or upon redemption or optional repayment. Interest
will be payable to the Holder at the close of business on the Regular Record
Date which shall be the fifteenth calendar day (whether or not a Business Day
(as defined below)) immediately preceding the related Interest Payment Date;
provided, however, that interest payable at Stated Maturity or upon redemption
or optional repayment will be payable to the person to whom principal is
payable and (to the extent that the payment of such interest shall be legally
enforceable) at the Default Rate, if any, per annum set forth above on any
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overdue principal and premium and on any overdue installment of interest. If
the Original Issue Date is between a Regular Record Date and the next
succeeding Interest Payment Date, the first payment of interest hereon will be
made on the Interest Payment Date following the next succeeding Regular Record
Date to the Holder on such next Regular Record Date.
Payment of the principal, and premium, if any, and interest payable
at Stated Maturity or upon redemption or optional repayment of this Security
will be made by wire transfer in immediately available funds at the corporate
trust office of the Trustee in Chicago, Illinois or at the agency of the
Trustee maintained for that purpose in New York, New York, provided that this
Security is presented to the Trustee in time for the Trustee to make such
payments in such funds in accordance with its normal procedures. Interest
(other than interest payable at Stated Maturity or upon redemption or optional
repayment) will be paid by check mailed to the address of the person entitled
thereto as it appears in the Security Register on the applicable Regular
Record Date or, at the option of the Company, by wire transfer to an account
maintained by such person with a bank located in the United States.
Notwithstanding the foregoing, (i) the Depositary or its nominee, if it is the
registered Holder of this Security, will be entitled to receive payments of
interest by wire transfer to an account maintained by such Holder with a bank
located in the United States, and (ii) a Holder of $10,000,000 or more in
aggregate principal amount of Securities having the same Interest Payment Date
will, upon receipt on or prior to the Regular Record Date preceding an
applicable Interest Payment Date by the Trustee of written instructions from
such Holder, be entitled to receive payments of interest by wire transfer to
an account maintained by such Holder with a bank located in the United States.
Such instructions shall remain in effect with respect to payments of interest
made to such Holder on subsequent Interest Payment Dates unless revoked or
changed by written instructions received by the Trustee from such Holder,
provided that any such written revocation or change which is received by the
Trustee after a Regular Record Date and before the related Interest Payment
Date shall not be effective with respect to the interest payable on such
Interest Payment Date.
REFERENCE IS HEREBY MADE TO THE FURTHER PROVISIONS OF THIS SECURITY
SET FORTH ON THE REVERSE HEREOF, WHICH FURTHER PROVISIONS SHALL FOR ALL
PURPOSES HAVE THE SAME EFFECT AS IF SET FORTH AT THIS PLACE.
Unless the certificate of authentication hereon has been executed by
the Trustee referred to on the reverse hereof by manual signature, this
Security shall not be entitled to any benefit under the Indenture referred to
on the reverse hereof or be valid or obligatory for any purpose.
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IN WITNESS WHEREOF, the Company has caused this instrument to be
duly executed under its corporate seal.
Dated:
SOUTHWEST GAS CORPORATION
By
-----------------------
Attest:
By
-------------------------
CERTIFICATE OF AUTHENTICATION
This is one of the Securities of the series designated therein
referred to in the within-mentioned Indenture.
HARRIS TRUST AND SAVINGS BANK
As Trustee
By
--------------------------
Authorized Officer
SOUTHWEST GAS CORPORATION
MEDIUM-TERM NOTES, SERIES A
(FLOATING RATE)
This Security is one of a duly authorized issue of Medium-Term
Notes, Series A of the Company (herein called the "Securities"), issued and to
be issued under an Indenture dated as of July 15, 1996, as amended by a First
Supplemental Indenture dated as of August 1, 1996 and a Second Supplemental
Indenture dated as of December 30, 1996, (herein called the "Indenture")
between the Company and Harris Trust and Savings Bank, as trustee (herein
called the "Trustee," which term includes any successor trustee under the
Indenture), to which Indenture and all indentures supplemental thereto
reference is hereby made for a statement of the respective rights, limitation
of rights, duties and immunities thereunder of the Company, the Trustee and
the Holders of the Securities and of the terms upon which the Securities are,
and are to be, authenticated and delivered. This Security is one of the
series designated on the face hereof. The Securities of this series may be
issued from time to time at varying maturities, interest rates and other terms
as may be designated with respect to a Security.
The interest rate borne by this Security shall be determined as
follows:
(i) Unless this Security is designated as a "Floating Rate/Fixed
Rate Note," an "Inverse Floating Rate Note" or as having an Addendum
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attached, this Security shall be designated as a "Regular Floating Rate
Note" and, except as described below or as specified on the face hereof,
bear interest at the rate determined by reference to the Interest Rate
Basis or Bases specified on the face hereof (a) plus or minus the Spread,
if any, specified on the face hereof and/or (b) multiplied by the Spread
Multiplier, if any, specified on the face hereof. Commencing on the
first Interest Reset Date (as defined below), the rate at which interest
on this Security shall be payable shall be reset as of each Interest
Reset Date; provided, however, that the interest rate in effect for the
period from the Original Issue Date to the first Interest Reset Date
shall be the Initial Interest Rate specified on the face hereof.
(ii) If this Security is designated as a "Floating Rate/Fixed Rate
Note," then, except as described below or as specified on the face
hereof, this Security shall bear interest at the rate determined by
reference to the Interest Rate Basis or Bases specified on the face
hereof (a) plus or minus the Spread, if any, specified on the face hereof
and/or (b) multiplied by the Spread Multiplier, if any, specified on the
face hereof. Commencing on the first Interest Reset Date, the rate at
which interest on this Security shall be payable shall be reset as of
each Interest Reset Date; provided, however, that the interest rate in
effect for the period from the Original Issue Date to the first Interest
Reset Date shall be the Initial Interest Rate specified on the face
hereof and the interest rate in effect commencing on the Fixed Rate
Commencement Date specified on the face hereof to Stated Maturity shall
be the Fixed Interest Rate, if such rate is specified on the face hereof
or, if no such Fixed Interest Rate is so specified, the interest rate in
effect hereon on the day immediately preceding the Fixed Rate
Commencement Date.
(iii) If this Security is designated as an "Inverse Floating Rate
Note," then, except as described below or as specified on the face
hereof, this Security shall bear interest equal to the Fixed Interest
Rate specified on the face hereof minus the rate determined by reference
to the Interest Rate Basis or Bases specified on the face hereof (a) plus
or minus the Spread, if any, specified on the face hereof and/or
(b) multiplied by the Spread Multiplier, if any, specified on the face
hereof; provided, however, that, unless otherwise specified on the face
hereof, the interest rate hereon shall not be less than zero during any
Interest Rate Reset Period (as defined below). Commencing on the first
Interest Reset Date, the rate at which interest on this Security is
payable shall be reset as of each Interest Reset Date; provided, however,
that the interest rate in effect for the period from the Original Issue
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Date to the first Interest Reset Date shall be the Initial Interest Rate
specified on the face hereof.
Notwithstanding the foregoing, if this Security is designated as
having an Addendum attached as specified on the face hereof, this Security
shall bear interest in accordance with the terms described in such Addendum
and as specified on the face hereof.
Except as set forth above or as specified on the face hereof, the
interest rate in effect on each day shall be (i) if such day is an Interest
Reset Date, the interest rate determined as of the Interest Determination Date
(as defined below) immediately preceding such Interest Reset Date or (ii) if
such day is not an Interest Reset Date, the interest rate determined as of the
Interest Determination Date immediately preceding the most recent Interest
Reset Date.
Unless otherwise specified on the face hereof:
(1) The "Interest Reset Date" shall be, if the interest rate
specified on the face hereof resets (i) daily, each Business Day;
(ii) weekly, the Wednesday of each week (except with respect to the
Treasury Rate which shall reset on the Tuesday of each week, except as
described below); (iii) monthly, the third Wednesday of each month
(except with respect to the 11th District Cost of Funds Rate which shall
reset on the first calendar day of the month); (iv) quarterly, the third
Wednesday of March, June, September and December of each year;
(v) semiannually, the third Wednesday of the two months specified on the
face hereof; and (vi) annually, the third Wednesday of the month
specified on the face hereof. If any Interest Reset Date would otherwise
be a day that is not a Business Day, such Interest Reset Date shall be
postponed to the next succeeding day that is a Business Day, unless LIBOR
is an applicable Interest Rate Basis, in which case, if such Business Day
falls in the next succeeding calendar month, such Interest Reset Date
shall be the immediately preceding Business Day.
(2) The "Interest Determination Date" with respect to this Security
shall be: (i) if the applicable Interest Rate Basis is the CD Rate, the
CMT Rate, the Commercial Paper Rate, the Federal Funds Rate, the J.J.
Kenny Rate or the Prime Rate, the second Business Day immediately
preceding the applicable Interest Reset Date; (ii) if the applicable
Interest Rate Basis is the 11th District Cost of Funds Rate, the last
Business Day of the month immediately preceding the applicable Interest
Reset Date on which the Federal Home Loan Bank of San Francisco publishes
the Index (as defined below); (iii) if the applicable Interest Rate Basis
is LIBOR, the second London Banking Day (as defined below) immediately
preceding the applicable Interest Reset Date; and (iv) if the applicable
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Interest Rate Basis is the Treasury Rate, the day of the week in which
the applicable Interest Reset Date falls on which day Treasury Bills (as
defined below) are normally auctioned; provided, however, that if an
auction is held on the Friday of the week preceding the applicable
Interest Reset Date, the Interest Determination Date will be such
preceding Friday; and provided, further, that if an auction falls on the
applicable Interest Reset Date, then the Interest Reset Date will instead
be the first Business Day following such auction. If the interest rate
on this Security is determined by reference to two or more Interest Rate
Bases, the Interest Determination Date shall be the second Business Day
prior to the applicable Interest Reset Date for this Security on which
each Interest Rate Basis is determinable. Each Interest Rate Basis will
be determined on such date, and the applicable interest rate will take
effect on the applicable Interest Reset Date.
(3) The "Calculation Date," if applicable, pertaining to any
Interest Determination Date will be the earlier of (i) the tenth calendar
day after such Interest Determination Date, or, if such day is not a
Business Day, the next succeeding Business Day or (ii) the Business Day
immediately preceding the applicable Interest Payment Date or Stated
Maturity, as the case may be.
Unless otherwise specified on the face hereof, the interest rate
with respect to each Interest Rate Basis shall be determined in accordance
with the following provisions:
Determination of CD Rate
- ------------------------
If the Interest Rate Basis with respect to this Security is the CD
Rate, such rate shall be determined by the Calculation Agent appointed as
agent by and of the Company to calculate the rates of interest applicable to
securities including this Security ("Calculation Agent") in accordance with
the following provisions:
"CD Rate" means, with respect to any Interest Determination Date,
the rate on such date for negotiable certificates of deposit having the Index
Maturity specified on the face hereof as published by the Board of Governors
of the Federal Reserve System in "Statistical Release H.15(519), Selected
Interest Rates" or any successor publication ("H.15(519)") under the heading
"CDs (Secondary Market)," or, if not published by 3:00 p.m., New York City
time, on the related Calculation Date, the rate on such Interest Determination
Date for negotiable certificates of deposit of the Index Maturity specified on
the face hereof as published by the Federal Reserve Bank of New York in its
daily statistical release "Composite 3:30 p.m. Quotations for U.S. Government
Securities" or any successor publication ("Composite Quotations") under the
heading "Certificates of Deposit." If such rate is not yet published in
either H.15(519) or Composite Quotations by 3:00 p.m., New York City time, on
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the related Calculation Date, then the CD Rate on such Interest Determination
Date will be calculated by the Calculation Agent and will be the arithmetic
mean of the secondary market offered rates as of 10:00 a.m., New York City
time, on such Interest Determination Date, of three leading nonbank dealers in
negotiable United States dollar certificates of deposit in The City of New
York selected by the Calculation Agent for negotiable United States
certificates of deposit of major United States money market banks for
negotiable United States certificates of deposit with a remaining maturity
closest to the Index Maturity specified on the face hereon; provided, however,
that if the dealers so selected by the Calculation Agent are not quoting as
mentioned in this sentence, the CD Rate determined as of such Interest
Determination Date will be the CD Rate in effect on such Interest
Determination Date.
Determination of CMT Rate
- -------------------------
If the Interest Rate Basis with respect to this Security is the CMT
Rate, such rate shall be determined by the Calculation Agent in accordance
with the following provisions:
"CMT Rate" means, with respect to any Interest Determination Date,
the rate displayed on the Designated CMT Telerate Page (as defined below)
under the caption " . . . Treasury Constant Maturities . . . Federal Reserve
Board Release H.15 . . . Monday's Approximately 3:45 p.m.," under the column
for the Designated CMT Maturity Index (as defined below) for (i) if the
Designated CMT Telerate Page is 7055, the rate on such Interest Determination
Date and (ii) if the Designated CMT Telerate Page is 7052, the week, or the
month, as applicable, ended immediately preceding the week in which the
related Interest Determination Date occurs. If such rate is no longer
displayed on the relevant page, or if not displayed by 3:00 p.m., New York
City time, on the related Calculation Date, then the CMT Rate for such
Interest Determination Date will be such treasury constant maturity rate for
the Designated CMT Maturity Index as published in the relevant H.15(519). If
such rate is no longer published, or if not published by 3:00 p.m., New York
City time, on the related Calculation Date, then the CMT Rate for such
Interest Determination Date will be such treasury constant maturity rate for
the Designated CMT Maturity Index (or other United States Treasury rate for
the Designated CMT Maturity Index) for the Interest Determination Date with
respect to such Interest Reset Date as may then be published by either the
Board of Governors of the Federal Reserve System or the United States
Department of the Treasury that the Calculation Agent determines to be
comparable to the rate formerly displayed on the Designated CMT Telerate Page
and published in the relevant H.15(519). If such information is not provided
by 3:00 p.m., New York City time, on the related Calculation Date, then the
CMT Rate for the Interest Determination Date will be calculated by the
Calculation Agent and will be a yield to maturity, based on the arithmetic
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mean of the secondary market closing offer side prices as of approximately
3:30 p.m., New York City time, on the Interest Determination Date reported,
according to their written records, by three leading primary United States
government securities dealers (each, a "Reference Dealer") in The City of
New York selected by the Calculation Agent (from five such Reference Dealers
selected by the Calculation Agent and eliminating the highest quotation (or,
in the event of equality, one of the highest) and the lowest quotation (or, in
the event of equality, one of the lowest), for the most recently issued direct
noncallable fixed rate obligations of the United States ("Treasury Notes")
with an original maturity of approximately the Designated CMT Maturity Index
and a remaining term to maturity of not less than such Designated CMT Maturity
Index minus one year. If the Calculation Agent cannot obtain three such
Treasury Note quotations, the CMT Rate for such Interest Determination Date
will be calculated by the Calculation Agent and will be a yield to maturity
based on the arithmetic mean of the secondary market offer side prices as of
approximately 3:30 p.m., New York City time, on the Interest Determination
Date of three Reference Dealers in The City of New York (from five such
Reference Dealers selected by the Calculation Agent and eliminating the
highest quotation (or, in the event of equality, one of the highest) and the
lowest quotation (or, in the event of equality, one of the lowest)), for
Treasury Notes with an original maturity of the number of years that is the
next highest to the Designated CMT Maturity Index and a remaining term to
maturity closest to the Designated CMT Maturity Index and in an amount of at
least $100 million. If three or four (and not five) of such Reference Dealers
are quoting as described above, then the CMT Rate will be based on the
arithmetic mean of the offer prices obtained and neither the highest nor the
lowest of such quotes will be eliminated; provided, however, that if fewer
than three Reference Dealers selected by the Calculation Agent are quoting as
described herein, the CMT Rate will be the CMT Rate in effect on such Interest
Determination Date. If two Treasury Notes with an original maturity as
described in the third preceding sentence have remaining terms to maturity
equally close to the Designated CMT Maturity Index, the quotes for the
Treasury Note with the shorter remaining term to maturity will be used.
"Designated CMT Telerate Page" means the display on the Dow Jones
Telerate Service on the page specified on the face hereof (or any other page
as may replace such page on that service) for the purpose of displaying
Treasury Constant Maturities as reported in H.15(519). If no such page is
specified on the face hereof, the Designated CMT Telerate Page shall be 7052,
for the most recent week.
"Designated CMT Maturity Index" means the original period to
maturity of the Treasury Notes (either 1, 2, 3, 5, 7, 10, 20 or 30 years)
specified on the face hereof with respect to which the CMT Rate will be
calculated. If no such maturity is specified on the face hereof, the
Designated CMT Maturity Index shall be 2 years.
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Determination of Commercial Paper Rate
- --------------------------------------
If the Interest Rate Basis with respect to this Security is the
Commercial Paper Rate, such rate shall be determined by the Calculation Agent
in accordance with the following provisions:
"Commercial Paper Rate" means, with respect to any Interest
Determination Date, the Money Market Yield (as defined below) on such date of
the rate for commercial paper having the Index Maturity specified on the face
hereof as published in H.15(519) under the heading "Commercial Paper." In the
event that such rate is not published by 3:00 p.m., New York City time, on the
related Calculation Date then the Commercial Paper Rate shall be the Money
Market Yield on such Interest Determination Date of the rate for commercial
paper having the Index Maturity specified on the face hereof as published in
Composite Quotations under the heading "Commercial Paper" (with an Index
Maturity of one month or three months being deemed to be equivalent to an
Index Maturity of 30 days or 90 days, respectively). If by 3:00 p.m.,
New York City time, on the related Calculation Date such rate is not yet
published in H.15(519) or Composite Quotations, then the Commercial Paper Rate
on such Interest Determination Date shall be calculated by the Calculation
Agent and shall be the Money Market Yield of the arithmetic mean of the
offered rates at approximately 11:00 a.m., New York City time, on such
Interest Determination Date of three leading dealers of commercial paper in
The City of New York (selected by the Calculation Agent in its discretion) for
commercial paper having the Index Maturity specified on the face hereof placed
for an industrial issuer whose bond rating is "Aa," or the equivalent, from a
nationally recognized rating agency; provided, however, that if the dealers
selected as aforesaid by the Calculation Agent are not quoting as mentioned in
this sentence, the Commercial Paper Rate will be the Commercial Paper Rate in
effect on such Interest Determination Date.
"Money Market Yield" means a yield (expressed as a percentage
rounded to the nearest one-hundredth of a percent, with five one-thousandths
of a percent rounded upwards) calculated in accordance with the following
formula:
D X 360
Money Market Yield = ----------------- X 100
360 - (D X M)
where "D" refers to the applicable per annum rate for commercial paper quoted
on a bank discount basis and expressed as a decimal and "M" refers to the
actual number of days in the interest period for which interest is being
calculated.
Determination of 11th District Cost of Funds Rate
- -------------------------------------------------
If the Interest Rate Basis with respect to this Security is the 11th
District Cost of Funds Rate, such rate shall be determined by the Calculation
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Agent in accordance with the following provisions:
"11th District Cost of Funds Rate" means, with respect to any
Interest Determination Date, the rate equal to the monthly weighted average
cost of funds for the calendar month immediately preceding the month in which
such Interest Determination Date falls, as set forth under the caption "11th
District" on Telerate Page 7058 as of 11:00 a.m., San Francisco time, on such
Interest Determination Date. If such rate does not appear on Telerate Page
7058 on any related Interest Determination Date, the 11th District Cost of
Funds Rate for such Interest Determination Date shall be the monthly weighted
average cost of funds paid by member institutions of the 11th Federal Home
Loan Bank District that was most recently announced (the "Index") by the
Federal Home Loan Bank of San Francisco as such cost of funds for the calendar
month immediately preceding the date of such announcement. If the Federal
Home Loan Bank of San Francisco fails to announce such rate for the calendar
month immediately preceding such Interest Determination Date, then the 11th
District Cost of Funds Rate determined as of such Interest Determination Date
will be the 11th District Cost of Funds Rate in effect on such Interest
Determination Date.
Determination of Federal Funds Rate
- -----------------------------------
If the Interest Rate Basis with respect to this Security is the
Federal Funds Rate, such rate shall be determined by the Calculation Agent in
accordance with the following provisions:
"Federal Funds Rate" means, with respect to any Interest
Determination Date, the rate on such date for federal funds as published in
H.15(519) under the heading "Federal Funds (Effective)" or, if not published
by 3:00 p.m., New York City time, on the related Calculation Date, the rate on
such Interest Determination Date as published in Composite Quotations under
the column "Effective Rate" under the heading "Federal Funds." If by
3:00 p.m., New York City time, on the related Calculation Date such rate is
not published in either H.15(519) or Composite Quotations, then the Federal
Funds Rate on such Interest Determination Date will be calculated by the
Calculation Agent and will be the arithmetic mean of the rates for the last
transaction in overnight United States dollar federal funds arranged by three
leading brokers of federal funds transactions in The City of New York selected
by the Calculation Agent prior to 9:00 a.m., New York City time, on such
Interest Determination Date; provided, however, that if the brokers so
selected by the Calculation Agent are not quoting as mentioned in this
sentence, the Federal Funds Rate determined as of such Interest Determination
Date will be the Federal Funds Rate in effect on such Interest Determination
Date.
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Determination of LIBOR
- ----------------------
If the Interest Rate Basis with respect to this Security is LIBOR,
such rate shall be determined by the Calculation Agent in accordance with the
following provisions:
(i) With respect to an Interest Determination Date, LIBOR will be,
as specified on the face hereof, either: (a) the arithmetic mean of the
offered rates (unless the Reuters Screen LIBO Page by its terms provides only
for a single rate in which case the single rate shall be used) for deposits in
U.S. dollars having the Index Maturity specified on the face hereof,
commencing on the second London Banking Day immediately following that
Interest Determination Date, that appear (or, if only a single rate is
required as aforesaid, appears) on the Reuters Screen LIBO Page as of
11:00 a.m., London time, on that Interest Determination Date, if at least two
such offered rates appear on the Reuters Screen LIBO Page ("LIBOR Reuters"),
or (b) the rate for deposits in U.S. dollars having the Index Maturity
specified on the face hereof, commencing on the second London Banking Day
immediately following that Interest Determination Date, that appears on the
Telerate Page 3750 as of 11:00 a.m., London time, on that Interest
Determination Date ("LIBOR Telerate"). "Reuters Screen LIBO Page" means the
display designated as page "LIBO" on the Reuters Monitor Money Rates Service
(or such other page as may replace the LIBO page on that service for the
purpose of displaying London interbank offered rates of major banks).
"Telerate Page 3750" means the display designated as page "3750" on the
Telerate Service (or such other page as may replace the 3750 page on that
service or such other service or services as may be nominated by the British
Bankers' Association for the purpose of displaying London interbank offered
rates for U.S. dollar deposits). If neither LIBOR Reuters nor LIBOR Telerate
is specified on the face hereof, LIBOR will be determined as if LIBOR Telerate
had been specified. If fewer than two offered rates appear on the Reuters
Screen LIBO Page, in the case where (a) above applies, or if no rate appears
on the Telerate Page 3750, in the case where (b) above applies, as applicable,
LIBOR in respect of that Interest Determination Date will be determined as if
the parties had specified the rate described in (ii) below.
(ii) With respect to an Interest Determination Date on which fewer
than two offered rates appear on the Reuters Screen LIBO Page, as specified in
(i)(a) above, or on which no rate appears on Telerate Page 3750, as specified
in (i)(b) above, as applicable, LIBOR will be determined on the basis of the
rates at which deposits in U.S. dollars having the Index Maturity specified on
the face hereof are offered at approximately 11:00 a.m., London time, on that
Interest Determination Date by four major banks in the London interbank market
selected by the Calculation Agent ("Reference Banks") to prime banks in the
London interbank market commencing on the second London Banking Day
immediately following that Interest Determination Date and in a principal
15<PAGE>
<PAGE>
amount that is representative for a single transaction in such market at such
time. The Calculation Agent will request the principal London office of each
of the Reference Banks to provide a quotation of its rate. If at least two
such quotations are provided, LIBOR in respect of that Interest Determination
Date will be the arithmetic mean of such quotations. If fewer than two
quotations are provided, LIBOR in respect of that Interest Determination Date
will be the arithmetic mean of the rates quoted at approximately 11:00 a.m.,
New York City time, on that Interest Determination Date by three major banks
in The City of New York selected by the Calculation Agent for the loans in
U.S. dollars to leading European banks having the Index Maturity specified on
the face hereof commencing on the second London Banking Day immediately
following that Interest Determination Date and in a principal amount that is
representative for a single transaction in such market at such time; provided,
however, that if the banks selected as aforesaid by the Calculation Agent are
not quoting as mentioned in this sentence, LIBOR with respect to such Interest
Determination Date will be the rate of LIBOR in effect on such date.
"London Banking Day" means any day on which dealings in deposits in
U.S. dollars are transacted in the London interbank market.
Determination of Prime Rate
- ---------------------------
If the Interest Rate Basis with respect to this Security is the
Prime Rate, such rate shall be determined by the Calculation Agent in
accordance with the following provisions:
"Prime Rate" means, with respect to any Interest Determination Date,
the rate on such date as such rate is published in H.15(519) under the heading
"Bank Prime Loan." If such rate is not published prior to 3:00 p.m., New York
City time, on the related Calculation Date, then the Prime Rate shall be the
arithmetic mean of the rates of interest publicly announced by each bank that
appears on the Reuters Screen US PRIME 1 Page (as defined below) as such
bank's prime rate or base lending rate as in effect for such Interest
Determination Date. If fewer than four such rates but more than one such rate
appear on the Reuters Screen US PRIME 1 Page for such Interest Determination
Date, the Prime Rate shall be the arithmetic mean of the prime rates quoted on
the basis of the actual number of days in the year divided by a 360-day year
as of the close of business on such Interest Determination Date by four major
money center banks in The City of New York selected by the Calculation Agent.
If fewer than four such rates appear on the Reuters Screen US PRIME 1, the
Prime Rate for such Interest Determination Date will be calculated by the
Calculation Agent and will be the arithmetic mean of four prime rates quoted
on the basis of the actual number of days in the year divided by a 360-day
year as of the close of business on such Interest Determination Date furnished
in the City of New York on such Interest Determination Date by the major money
center banks, if any, that have provided such quotations and by a reasonable
number of substitute banks or trust companies organized and doing
16<PAGE>
<PAGE>
business under the laws of the United States, or any state thereof, having
total equity capital of at least U.S. $500 million and being subject to
supervision or examination by a Federal or state authority, selected by the
Calculation Agent to provide such rates; provided, however, that if the Prime
Rate is not published in H.15(519) and the banks or trust companies selected
as aforesaid are not quoting as mentioned in this sentence, the Prime Rate
determined as of such Interest Determination Date will be the Prime Rate in
effect on such Interest Determination Date.
"Reuters Screen US PRIME 1" means the display designated as page
"USPRIME1" on the Reuters Monitor Money Rates Service (or such other page as
may replace the USPRIME1 page on that service for the purpose of displaying
prime rates or base lending rates of major United States banks).
Determination of Treasury Rate
- ------------------------------
If the Interest Rate Basis with respect to this Security is the
Treasury Rate, such rate shall be determined by the Calculation Agent in
accordance with the following provisions:
"Treasury Rate" means, with respect to an Interest Determination
Date, the rate applicable to the most recent auction of direct obligations of
the United States ("Treasury Bills") having the Index Maturity specified on
the face hereof as published in H.15(519) under the heading "U.S. Government
Securities--Treasury bills--Auction Average (Investment)" or, if not so
published by 3:00 p.m., New York City time, on the related Calculation Date
pertaining to such Interest Determination Date, the auction average rate
(expressed as a bond equivalent on the basis of a year of 365 or 366 days, as
applicable, and applied on a daily basis) as otherwise announced by the United
States Department of the Treasury. In the event that the results of the
auction of Treasury Bills having the Index Maturity specified on the face
hereof are not published or reported as provided above by 3:00 p.m., New York
City time, on such Calculation Date or if no such auction is held on such
Interest Determination Date, then the Treasury Rate shall be calculated by the
Calculation Agent and shall be a yield to maturity (expressed as a bond
equivalent on the basis of a year of 365 or 366 days, as applicable, and
applied on a daily basis) of the arithmetic mean of the secondary market bid
rates, as of approximately 3:30 p.m., New York City time, on such Interest
Determination Date, of three leading primary United States government
securities dealers selected by the Calculation Agent for the issue of Treasury
Bills with a remaining maturity closest to the Index Maturity specified on the
face hereof; provided, however, that if the dealers selected as aforesaid by
the Calculation Agent are not quoting as mentioned in this sentence, the
Treasury Rate will be the Treasury Rate in effect on such Interest
Determination Date.
17<PAGE>
<PAGE>
Determination of J.J. Kenny Rate
- --------------------------------
If the Interest Rate Basis with respect to this Security is the J.J.
Kenny Rate, such rate shall be determined by the Calculation Agent in
accordance with the following provisions:
"J.J. Kenny Rate" means with respect to an Interest Determination
Date, the high grade weekly index made available by Kenny Information Systems
to the Calculation Agent for 30-day yield evaluations at par of bonds, the
interest on which is exempt from Federal income taxation under the Internal
Revenue Code of 1986, as amended (the "Internal Revenue Code"), of not less
than five high grade component issuers selected by Kenny, including, without
limitation, issuers of general obligation bonds, but excluding any bonds on
which the interest is subject to a minimum tax or similar tax under the
Internal Revenue Code unless all tax-exempt bonds are subject to such tax. In
the event Kenny ceases to make available such Weekly Index, a successor
indexing agent will be selected by the Calculation Agent, such index to
reflect the prevailing rate for bonds rated in the highest short-term rating
category by Moody's Investors Service, Inc. and Standard & Poor's in respect
of issuers most closely resembling the high grade component issuers selected
by Kenny for its Weekly Index, the interest on which is (i) variable on a
weekly basis, (ii) exempt from Federal income taxation under the Internal
Revenue Code and (iii) not subject to a minimum tax or similar tax under the
Internal Revenue Code unless all tax-exempt bonds are subject to such tax. If
such successor indexing agent is not available, the J.J. Kenny Rate for such
Interest Reset Period will be 67% of the rate determined as if the Treasury
Rate option had been originally selected.
Notwithstanding the foregoing, the interest rate hereon shall not be
greater than the Maximum Interest Rate, if any, or less than the Minimum
Interest Rate, if any, shown on the face hereof. The Calculation Agent shall
calculate the interest rate on this Security in accordance with the foregoing
on each Interest Determination Date.
The interest rate on this Security will in no event be higher than
the maximum rate permitted by New York or California law as the same may be
modified by the United States law of general applicability.
The Calculation Agent will, upon the request of the Holder of this
Security, provide to such Holder the interest rate hereon then in effect and,
if different, the interest rate which will become effective as of the next
applicable Interest Reset Date.
If any Interest Payment Date specified on the face hereof would
otherwise be a day that is not a Business Day, the Interest Payment Date shall
be postponed to the next day that is a Business Day, except that if (i) the
rate of interest on this Security shall be determined in accordance with the
18<PAGE>
<PAGE>
provisions of the heading "Determination of LIBOR" above, and (ii) such
Business Day is in the next succeeding calendar month, such Interest Payment
Date shall be the immediately preceding Business Day. "Business Day" means
(i) any day that is not a Saturday or Sunday and that is not a day on which
banking institutions or trust companies are generally authorized or obligated
by law to close, and (ii) if any Security has LIBOR as the applicable Interest
Rate Basis, is also a London Banking Day.
Interest payments for this Security will include interest accrued
from and including the date of issue or from and including the last date in
respect of which interest has been paid, as the case may be, to, but
excluding, the Interest Payment Date or Stated Maturity, as the case may be.
Accrued interest hereon from the Original Issue Date or from the last date to
which interest hereon has been paid, as the case may be, shall be an amount
calculated by multiplying the face amount hereof by an accrued interest
factor. Such accrued interest factor shall be computed by adding the interest
factor calculated for each day from the Original Issue Date or from the last
date to which interest shall have been paid, as the case may be, to the date
for which accrued interest is being calculated. Unless otherwise specified on
the face hereof, the interest factor for each such day shall be computed by
dividing the interest rate (expressed as a decimal calculated to seven
decimals without rounding) applicable to such day by 360, in case the Interest
Rate Basis of this Security is the Commercial Paper Rate, LIBOR the CD Rate,
the Prime Rate, the Federal Funds Rate and the 11th District Cost of Funds
Rate, or by the actual number of days in the year in the case the Interest
Rate Basis of this Security is the Treasury Rate or the CMT Rate, or 365 days
in the case of the J.J. Kenny Rate. Unless otherwise specified on the face
hereof, the interest factor for which the interest rate is calculated with
reference to one or more Interest Rate Bases will be calculated in each period
in the same manner as if only the applicable Interest Rate Basis specified on
the face hereof applied.
On each Optional Reset Date, if any, specified on the face hereof,
the Company has the option to reset the Spread and the Spread Multiplier. If
no date or dates for such reset are set forth on the face hereof, this
Security will not be subject to such reset. The Company may exercise such
option by notifying the Trustee of such exercise at least 45 but not more than
60 days prior to an Optional Reset Date. Not later than 40 days prior to such
Optional Reset Date, the Trustee will mail to the Holder hereof a notice (the
"Reset Notice"), first class, postage prepaid. The Reset Notice will indicate
whether the Company has elected to reset the Spread or Spread Multiplier and
if so, (i) such new Spread or Spread Multiplier, as the case may be; and (ii)
the provisions, if any, for redemption during the period from such Optional
Reset Date to the next Optional Reset Date or, if there is no such next
Optional Reset Date, to Stated Maturity (each such period a "Subsequent
19<PAGE>
<PAGE>
Interest Period"), including the date or dates on which or the period or
periods during which and the price or prices at which such redemption may
occur during such Subsequent Interest Period.
Notwithstanding the foregoing, the Company may, at its option,
revoke the Spread or Spread Multiplier as provided for in the Reset Notice,
and establish a Spread or Spread Multiplier that is higher (or lower if this
Security is designated an Inverse Floating Rate Note) than the Spread or
Spread Multiplier provided for in the relevant Reset Notice for the Subsequent
Interest Period commencing on such Optional Reset Date, by causing the Trustee
to mail, not later than 20 days prior to an Optional Reset Date, a notice of
such new Spread or Spread Multiplier to the Holder hereof. Such notice will
be irrevocable. The Company must notify the Trustee of its intentions to
revoke such Reset Notice at least 25 days prior to such Optional Reset Date.
If the Spread or Spread Multiplier hereof is reset on an Optional Reset Date
and the Holder hereof has not tendered this Security for repayment (or has
validly revoked any such tender) pursuant to the next succeeding paragraph,
such Holder will bear such new Spread or Spread Multiplier for the Subsequent
Interest Period.
If the Company elects to reset the Spread or Spread Multiplier as
described above, the Holder hereof will have the option to elect repayment
hereof by the Company on any Optional Reset Date at a price equal to the
aggregate principal amount hereof outstanding on, plus any interest accrued
to, such Optional Reset Date. In order to exercise such option, the Holder
hereof must follow the procedures set forth below for optional repayment,
except that (i) the period for delivery of this Security or notification to
the Trustee will be at least 25 but not more than 35 days prior to such
Optional Reset Date and (ii) a Holder who has tendered for repayment pursuant
to a Reset Notice may, by written notice to the Trustee, revoke any such
tender until the close of business on the tenth day prior to such Optional
Reset Date.
Unless otherwise indicated on the face of this Security, this
Security may not be redeemed prior to Stated Maturity. If so indicated on the
face of this Security, this Security may be redeemed, at the option of the
Company, on any date on or after the date set forth on the face hereof, either
in whole or from time to time in part at redemption prices declining from a
specified premium, if any, to par, together with interest accrued and unpaid
thereon to the date of redemption. Notice of redemption shall be mailed to
the Holders of the Securities designated for redemption at their addresses as
the same shall appear in the Security Register not less than 30 and not more
than 60 days prior to the date of redemption, subject to all the conditions
and provisions of the Indenture. In the event of any redemption, the Company
will not be required to (i) issue, register the transfer of, or exchange any
Security during a period beginning at the opening of business 15 days before
any selection of Securities to be redeemed and ending at the close of business
20<PAGE>
<PAGE>
on the date of mailing of the relevant notice of redemption or (ii) register
the transfer or exchange of any Security, or any portion thereof, called for
redemption, except the unredeemed portion of any Security being redeemed in
part. Only a new Security or Securities for the amount of the unredeemed
portion hereof shall be issued in the name of the Holder upon the cancellation
hereof.
If so provided on the face of this Security, the Security will be
subject to repayment at the option of the Holder on the date or dates so
indicated on the face hereof. If no date or dates for such repayment are set
forth on the face hereof, this Security will not be repayable at the option of
the Holder prior to Stated Maturity. On an optional repayment date, if any,
this Security will be repayable in whole or in part in increments of $1,000 at
the option of the Holder at redemption prices declining from a specified
premium, if any, to par, together with interest thereon payable to the date of
repayment, if the "Option to Elect Repayment," duly completed and received by
the Company in accordance with the terms of this Security, is received by the
Company not more than 60 nor less than 30 days prior to the date or dates of
repayment set forth on the face hereof. In the event of repayment of this
Security in part only, a new Security for the unrepaid portion hereof shall be
issued in the name of the Holder hereof upon the surrender hereof.
In certain circumstances described in the Indenture, the Company's
obligations in respect of the Securities or in respect of certain covenants
made for the benefit of the Securities may be discharged prior to payment upon
the deposit with the Trustee of cash and/or U.S. Government Obligations in the
required amount and upon compliance with certain conditions and other
provisions of the Indenture.
If an Event of Default with respect to Securities of this series
shall occur and be continuing, the principal of the Securities of the series
may be declared due and payable in the manner and with the effect provided in
the Indenture.
Unless otherwise specified on the face hereof, if (i) this Security
is issued with original issue discount (as defined in the Internal Revenue
Code of 1986, as amended) and (ii) the principal hereof is declared to be due
and payable immediately, the amount of principal due and payable with respect
hereto shall be limited to the Principal Amount hereof multiplied by the sum
of the Issue Price hereof (expressed as a percentage of the Principal Amount
hereof) plus the original issue discount amortized from the Original Issue
Date to the date of declaration, which amortization shall be computed in
accordance with generally accepted bond yield computation principles in effect
on the date of declaration.
The Indenture contains provisions permitting the Company and the
Trustee, with the consent of the Holders of not less than a majority in
21<PAGE>
<PAGE>
aggregate principal amount of the Notes of each series affected at the time
outstanding, as defined in the Indenture, to execute supplemental indentures
for the purpose of adding any provisions to or changing in any manner or
eliminating any of the provisions of the Indenture or of any supplemental
indenture or of modifying in any manner the rights of the Holders of the
Notes, provided, however, that no such supplemental indenture shall (i) extend
the fixed maturity of any Notes of any series, or reduce the principal amount
thereof, or reduce the rate or extend the time of payment of interest thereon,
without the consent of the Holder of each Note so affected, or (ii) reduce the
aforesaid percentage of Notes, the Holders of which are required to consent to
any such supplemental indenture, without the consent of the Holders of each
Note then outstanding and affected thereby. The Indenture also contains
provisions permitting the Holders of a majority in aggregate principal amount
of the Notes of any series at the time outstanding affected thereby, on behalf
of all of the Holders of the Notes of such series, to waive any past default
in the performance of any of the covenants contained in the Indenture, or
established pursuant to the Indenture with respect to such series, and its
consequences, except a default in the payment of the principal of or interest
on any of the Notes of such series. Any such consent or waiver by the
registered Holder of this Note (unless revoked as provided in the Indenture)
shall be conclusive and binding upon such Holder and upon all future Holders
and owners of this Note and of any Note issued in exchange herefor or in place
hereof (whether by registration of transfer or otherwise), irrespective of
whether or not any notation of such consent or waiver is made upon this Note.
In certain limited circumstances, the Indenture also permits the
amendment thereof and the modification of the rights and obligations of the
Company and the rights of the Holder, at any time by the Company and the
Trustee, without notice to or the consent of the Holders.
No reference herein to the Indenture and no provision of this
Security or of the Indenture shall alter or impair the obligation of the
Company, which is absolute and unconditional, to pay the principal of,
premium, if any, and interest on this Security at the times, places and rate,
and in the coin or currency, herein prescribed. However, the Indenture limits
Holder's rights to enforce the Indenture and this Security.
As provided in the Indenture and subject to certain limitations set
forth therein, the transfer of this Security is registrable in the Securities
Register, upon surrender of this Security for registration of transfer at the
office or agency of the Company in any place where the principal of and
interest on this Security are payable, duly endorsed by or accompanied by a
written instrument of transfer in form satisfactory to the Company and the
Securities Registrar duly executed by the Holder hereof or his attorney duly
authorized in writing, and thereupon one or more new Securities of this
22<PAGE>
<PAGE>
series, of authorized denominations, of like aggregate principal amount and
bearing interest at the same rate or pursuant to the same formula, having the
same date of issuance, redemption provisions, if any, Stated Maturity and
other terms will be issued to the designated transferee or transferees. The
Securities of this series are issuable only in registered form without coupons
in denominations of $1,000 and any integral multiples thereof. As provided in
the Indenture and subject to certain limitations set forth therein, Securities
of this series are exchangeable for other Securities of this series of a
different authorized denomination and like principal amount and bearing the
same date of issuance, redemption provisions, if any, Stated Maturity and
other terms. No service charge shall be made for any such registration of
transfer or exchange, but the Company may require payment of a sum sufficient
to cover any tax or other governmental charge payable in connection therewith.
Prior to due presentment of this Security for registration of
transfer, the Company, the Trustee and any agent of the Company or the Trustee
may treat the person in whose name this Security is registered as the owner
hereof for all purposes, whether or not this Security be overdue and none of
the Company, the Trustee or any such agent shall be affected by notice to the
contrary.
No recourse shall be had for the payment of principal of or the
interest on this Security, or any claim based hereon or on the Indenture,
against any incorporator, shareholder, officer or director, past, present or
future, as such, of the Company or of any predecessor or successor
Corporation, under any rule of law, statute, or constitution or by the
enforcement of any assessment or otherwise, all such liability being released
by the Holder by the acceptance of this Security and being likewise waived and
released by the terms of this Indenture.
All percentages resulting from any calculation on this Security will
be rounded to the nearest one hundred-thousandth of a percentage point, with
five one-millionths of a percentage point rounded upwards, and all dollar
amounts used in or resulting from such calculation on this Security will be
rounded to the nearest cent (with one-half cent being rounded upwards).
THE INDENTURE AND THE SECURITIES SHALL BE GOVERNED BY AND CONSTRUED
IN ACCORDANCE WITH THE LAWS OF THE STATE OF NEW YORK.
All terms used in this Security which are defined in the Indenture
shall have the meanings assigned to them in the Indenture.
23<PAGE>
<PAGE>
OPTION TO ELECT REPAYMENT
The undersigned hereby irrevocably requests and instructs the
Company to repay the within Security (or portion thereof specified below)
pursuant to its terms at a price equal to the principal amount thereof,
together with interest to the repayment date, to the undersigned.
The undersigned acknowledges that for the within Security to be
repaid, the Company must receive at the offices or agencies of the Trustee in
Chicago, Illinois or The City of New York, during the period specified in this
Security (i) the Security with this "Option to Elect Repayment" form duly
completed, or (ii) a telegram, telex, facsimile or letter from a member of a
national securities exchange or the National Association of Securities
Dealers, Inc. or a commercial bank or a trust company in the United States of
America setting forth the name of the Holder of the Security, the principal
amount of the Security, the amount of the Security to be repaid, a statement
that the option to elect repayment is being exercised thereby and a guarantee
that the Security to be repaid with the "Option to Elect Repayment" form duly
completed will be received by the Company not later than five Business Days
after the date of such telegram, telex, facsimile transmission or letter and
such Security and form duly completed are received by the Company by such
fifth Business Day. Any such notice received by the Company during the period
specified in this Security shall be irrevocable.
If less than the entire principal amount of the within Security is
to be repaid, specify the portion thereof (which shall be $1,000 or an
integral multiple thereof) which the Holder elects to have repaid: $ ;
and specify the denomination or denominations (which shall be $1,000 or an
integral multiple thereof) of the Security or Securities to be issued to the
Holder for the portion of the within Security not being repaid (in the absence
of any such specification, one such Security will be issued for the portion
not being repaid): $ .
Dated:
-----------------------------------------------
Note: The signature to this Option to Elect
Repayment must correspond with the name as it
appears upon the face of the within Security in
every particular without alteration or
enlargement or any change whatever.
24<PAGE>
<PAGE>
ABBREVIATIONS
The following abbreviations, when used in the inscription on the
face of this instrument, shall be construed as though they were written out in
full according to applicable laws and regulations:
TEN COM - as tenants in common
TEN ENT - as tenants by the entireties
JT TEN - as joint tenants with right of survivorship and not
as tenants in common
UNIF GIFT MIN ACT -- Custodian
------------------ ------------------
(Cust) (Minor)
Under Uniform Gifts to Minors
Act
-------------------------------------------
(State)
Additional abbreviations may also be used though not in the above
list.
----------------------
FOR VALUE RECEIVED, the undersigned hereby sell(s), assign(s) and
transfer(s) unto
Please insert Social Security or Other
Identifying Number of Assignee
- ------------------------------
- ----------------------------------------------------------------------------
PLEASE PRINT OR TYPEWRITE NAME AND ADDRESS INCLUDING POSTAL ZIP CODE OF
ASSIGNEE
- ----------------------------------------------------------------------------
- ----------------------------------------------------------------------------
the within Security and all rights thereunder, hereby irrevocably constituting
and appointing
25<PAGE>
<PAGE>
Attorney
- -----------------------------------------------------------------
to transfer said Security on the books of the Company, with full power of
substitution in the premises.
Dated:
------------------ ----------------------------------------------
Notice: The signature to this assignment
must correspond with the name as
written on the face of the within
instrument in every particular,
without alteration or enlargement,
or any change whatever.
SECTION 2.3. FORM OF FIXED RATE NOTE. The Fixed Rate Notes and
the Trustee's Certificate of Authentication to be endorsed thereon are to be
in substantially the following form, unless otherwise specified in an
Officers' Certificate:
SOUTHWEST GAS CORPORATION
MEDIUM-TERM NOTE, SERIES A
(FIXED RATE)
REGISTERED REGISTERED
NO. FXR-
CUSIP-
THIS SECURITY IS A GLOBAL SECURITY WITHIN THE MEANING OF THE INDENTURE
HEREINAFTER REFERRED TO AND IS REGISTERED IN THE NAME OF A DEPOSITARY OR A
NOMINEE OF A DEPOSITARY. THIS GLOBAL SECURITY IS EXCHANGEABLE FOR SECURITIES
REGISTERED IN THE NAME OF A PERSON OTHER THAN THE DEPOSITARY OR ITS NOMINEE
ONLY IN THE LIMITED CIRCUMSTANCES DESCRIBED IN THE INDENTURE, AND NO TRANSFER
OF THIS SECURITY (OTHER THAN A TRANSFER OF THIS SECURITY AS A WHOLE BY THE
DEPOSITARY TO A NOMINEE OF THE DEPOSITORY OR BY A NOMINEE OF THE DEPOSITARY OR
TO THE DEPOSITORY OR ANOTHER NOMINEE OF THE DEPOSITARY) MAY BE REGISTERED
EXCEPT IN SUCH LIMITED CIRCUMSTANCES. EVERY SECURITY DELIVERED UPON
REGISTRATION OR TRANSFER OF, OR IN EXCHANGE FOR, OR IN LIEU OF, THIS GLOBAL
SECURITY SHALL BE A GLOBAL SECURITY SUBJECT TO THE FOREGOING, EXCEPT IN THE
LIMITED CIRCUMSTANCES DESCRIBED ABOVE.
UNLESS THIS CERTIFICATE IS PRESENTED BY AN AUTHORIZED REPRESENTATIVE OF
THE DEPOSITORY TRUST COMPANY, A NEW YORK CORPORATION ("DTC"), TO THE COMPANY
OR ITS AGENT FOR REGISTRATION OF TRANSFER, EXCHANGE OR PAYMENT, AND ANY
CERTIFICATE ISSUED IS REGISTERED IN THE NAME OF CEDE & CO. OR IN SUCH OTHER
NAME AS IS REQUESTED BY AN AUTHORIZED REPRESENTATIVE OF DTC (AND ANY PAYMENT
IS TO BE MADE TO CEDE & CO. OR TO SUCH OTHER ENTITY AS IS REQUESTED BY AN
AUTHORIZED REPRESENTATIVE OF DTC), ANY TRANSFER, PLEDGE OR OTHER USE HEREOF
26<PAGE>
<PAGE>
FOR VALUE OR OTHERWISE BY OR TO ANY PERSON IS WRONGFUL INASMUCH AS THE
REGISTERED OWNER HEREOF CEDE & CO., HAS AN INTEREST HEREIN.
TERMS
-----
Interest Rate:
Default Rate:
Interest Payment Dates:
If Redeemable:
Initial Redemption Date:
Initial Redemption Percentage:
Annual Redemption Percentage Reduction, if any:
If Repayable:
Optional Repayment Date(s):
Original Issue Date:
Stated Maturity:
Authorized Denomination:
Price to Public: %, plus accrued interest, if any, from
Purchase Price: %, plus accrued interest, if any, from
Settlement Date and time:
Additional/Other Terms:
SOUTHWEST GAS CORPORATION, a California corporation (hereinafter
called the "Company", which term includes any successor corporation under the
Indenture, as hereinafter defined), for value received, hereby promises to pay
to Cede & Co., or registered assigns, the principal sum set forth above at
Stated Maturity shown above and to pay interest thereon from and including the
Original Issue Date shown above or from the most recent Interest Payment Date
(as defined below) to which interest has been paid or duly provided for at a
fixed rate per annum semi-annually in arrears on and
in each year, unless otherwise set forth above ("Interest Payment Dates"),
until the principal hereof is paid or made available for payment, and on
Stated Maturity. Interest will be payable on each Interest Payment Date and
at Stated Maturity or upon redemption or optional repayment. Interest will be
payable to the Holder at the close of business on the Regular Record Date
which shall be and of each year, unless otherwise set
forth above, next preceding such Interest Payment Date; provided, however,
that interest payable at Stated Maturity or upon redemption or optional
repayment will be payable to the person to whom principal is payable and (to
27<PAGE>
<PAGE>
the extent that the payment of such interest shall be legally enforceable) at
the Default Rate, if any, per annum set forth above on any overdue principal
and premium and on any overdue installment of interest. If the Original Issue
Date is between a Regular Record Date and the next succeeding Interest Payment
Date, the first payment of interest hereon will be made on the Interest
Payment Date following the next succeeding Regular Record Date to the Holder
on such next Regular Record Date.
Payment of the principal, and premium, if any, and interest payable
at Stated Maturity or upon redemption or optional repayment on this Security
will be made by wire transfer in immediately available funds at the corporate
trust office of the Trustee in Chicago, Illinois or at the agency of the
Trustee maintained for that purpose in New York, New York, provided that this
Security is presented to the Trustee in time for the Trustee to make such
payments in such funds in accordance with its normal procedures. Interest
(other than interest payable at Stated Maturity or upon redemption or optional
repayment) will be paid by check mailed to the address of the person entitled
thereto as it appears in the Security Register on the applicable Regular
Record Date or, at the option of the Company, by wire transfer to an account
maintained by such person with a bank located in the United States.
Notwithstanding the foregoing, (i) the Depositary or its nominee, if it is the
registered Holder of this Security, will be entitled to receive payments of
interest by wire transfer to an account maintained by such Holder with a bank
located in the United States, and (ii) a Holder of $10,000,000 or more in
aggregate principal amount of Securities having the same Interest Payment Date
will, upon receipt on or prior to the Regular Record Date preceding an
applicable Interest Payment Date by the Trustee of written instructions from
such Holder, be entitled to receive payments of interest by wire transfer to
an account maintained by such Holder with a bank located in the United States.
Such instructions shall remain in effect with respect to payments of interest
made to such Holder on subsequent Interest Payment Dates unless revoked or
changed by written instructions received by the Trustee from such Holder,
provided that any such written revocation or change which is received by the
Trustee after a Regular Record Date and before the related Interest Payment
Date shall not be effective with respect to the interest payable on such
Interest Payment Date.
REFERENCE IS HEREBY MADE TO THE FURTHER PROVISIONS OF THIS SECURITY
SET FORTH ON THE REVERSE HEREOF, WHICH FURTHER PROVISIONS SHALL FOR ALL
PURPOSES HAVE THE SAME EFFECT AS IF SET FORTH AT THIS PLACE.
Unless the certificate of authentication hereon has been executed by
the Trustee referred to on the reverse hereof by manual signature, this
Security shall not be entitled to any benefit under the Indenture referred to
on the reverse hereof or be valid or obligatory for any purpose.
28<PAGE>
<PAGE>
IN WITNESS WHEREOF, the Company has caused this instrument to be
duly executed under its corporate seal.
Dated:
SOUTHWEST GAS CORPORATION
By
------------------------------
Attest:
By
---------------------------
CERTIFICATE OF AUTHENTICATION
This is one of the Securities of the series designated therein
referred to in the within-mentioned Indenture.
HARRIS TRUST AND SAVINGS BANK,
As Trustee
By
------------------------------
Authorized Officer
SOUTHWEST GAS CORPORATION
MEDIUM-TERM NOTES, SERIES A
(FIXED RATE)
This Security is one of a duly authorized issue of Medium-Term
Notes, Series A of the Company (herein called the "Securities"), issued and to
be issued under an Indenture dated as of July 15, 1996, as amended by the
First Supplemental Indenture dated as of August 1, 1996 and Second
Supplemental Indenture dated as of December 30, 1996, (herein called the
"Indenture") between the Company and Harris Trust and Savings Bank, as trustee
(herein called the "Trustee", which term includes any successor trustee under
the Indenture), to which Indenture and all indentures supplemental thereto
reference is hereby made for a statement of the respective rights, limitations
of rights, duties and immunities thereunder of the Company, the Trustee and
the Holders of the Securities and the terms upon which the Securities are, and
are to be, authenticated and delivered. This Security is one of the series
designated on the face hereof. The Securities of this series may be issued
from time to time at varying maturities, interest rates and other terms as may
be designated with respect to a Security.
29<PAGE>
<PAGE>
Interest payments for this Security will include interest accrued to
but excluding the Interest Payment Dates. Interest payments for this Security
shall be computed and paid on the basis of a 360-day year of twelve 30-day
months. If any Interest Payment Date specified on the face hereof would
otherwise be a day that is not a Business Day, the Interest Payment Date shall
be postponed to the next day that is a Business Day and without any interest
or other payment in respect of such delay. "Business Day" means any day that
is not a Saturday or Sunday and that is not a day on which banking
institutions or trust companies are generally authorized or obligated to
close.
Unless otherwise indicated on the face of this Security, this
Security may not be redeemed prior to Stated Maturity. If so indicated on the
face of this Security, this Security may be redeemed, at the option of the
Company, on any date on or after the date set forth on the face hereof, either
in whole or from time to time in part at redemption prices declining from a
specified premium, if any, to par, together with interest accrued and unpaid
thereon to the date of redemption. Notice of redemption shall be mailed to
the Holders of the Securities designated for redemption at their addresses as
the same shall appear in the Security Register not less than 30 and not more
than 60 days prior to the date of redemption, subject to all the conditions
and provisions of the Indenture. In the event of any redemption, the Company
will not be required to (i) issue, register the transfer of, or exchange any
Security during a period beginning at the opening of business 15 days before
any selection of Securities to be redeemed and ending at the close of business
on the date of mailing of the relevant notice of redemption or (ii) register
the transfer or exchange of any Security, or any portion thereof, called for
redemption, except the unredeemed portion of any Security being redeemed in
part. Only a new Security or Securities for the amount of the unredeemed
portion hereof shall be issued in the name of the Holder hereof upon the
cancellation hereof.
If so provided on the face of this Security, the Security will be
subject to repayment at the option of the Holder on the date or dates so
indicated on the face hereof. If no date or dates for such repayment are set
forth on the face hereof, this Security will not be repayable at the option of
the Holder prior to Stated Maturity. On an optional repayment date, if any,
this Security will be repayable in whole or in part in increments of $1,000 at
the option of the Holder at redemption prices declining from a specified
premium, if any, to par, together with interest thereon payable to the date of
repayment, if the "Option to Elect Repayment," duly completed and received by
the Company in accordance with the terms of this Security, is received by the
Company not more than 60 nor less than 30 days prior to the date or dates of
30<PAGE>
<PAGE>
repayment set forth on the face hereof. In the event of repayment of this
Security in part only, a new Security for the unrepaid portion hereof shall be
issued in the name of the Holder hereof upon the surrender hereof.
In certain circumstances described in the Indenture, the Company's
obligation in respect of the Securities or in respect of certain covenants
made for the benefit of the Securities may be discharged prior to payment upon
the deposit with the Trustee of cash and/or U.S. Government Obligations in the
required amount and upon compliance with certain conditions and other
provisions of the Indenture.
If an Event of Default with respect to Securities of this series
shall occur and be continuing, the principal of the Securities of this series
may be declared due and payable in the manner and with the effect provided in
the Indenture.
Unless otherwise specified on the face hereof, if (i) this Security
is issued with original issue discount (as defined in the Internal Revenue
Code of 1986, as amended) and (ii) the principal hereof is declared to be due
and payable immediately, the amount of principal due and payable with respect
hereto shall be limited to the Principal Amount hereof multiplied by the sum
of the Issue Price hereof (expressed as a percentage of the Principal Amount
hereof) plus the original issue discount amortized from the Original Issue
Date to the date of declaration, which amortization shall be computed in
accordance with generally accepted bond yield computation principles in effect
on the date of declaration.
The Indenture contains provisions permitting the Company and the
Trustee, with the consent of the Holders of not less than a majority in
aggregate principal amount of the Notes of each series affected at the time
outstanding, as defined in the Indenture, to execute supplemental indentures
for the purpose of adding any provisions to or changing in any manner or
eliminating any of the provisions of the Indenture or of any supplemental
indenture or of modifying in any manner the rights of the Holders of the
Notes, provided, however, that no such supplemental indenture shall (i) extend
the fixed maturity of any Notes of any series, or reduce the principal amount
thereof, or reduce the rate or extend the time of payment of interest thereon,
without the consent of the Holder of each Note so affected, or (ii) reduce the
aforesaid percentage of Notes, the Holders of which are required to consent to
any such supplemental indenture, without the consent of the Holders of each
Note then outstanding and affected thereby. The Indenture also contains
provisions permitting the Holders of a majority in aggregate principal amount
of the Notes of any series at the time outstanding affected thereby, on behalf
of all of the Holders of the Notes of such series, to waive any past default
in the performance of any of the covenants contained in the Indenture, or
31<PAGE>
<PAGE>
established pursuant to the Indenture with respect to such series, and its
consequences, except a default in the payment of the principal of or interest
on any of the Notes of such series. Any such consent or waiver by the
registered Holder of this Note (unless revoked as provided in the Indenture)
shall be conclusive and binding upon such Holder and upon all future Holders
and owners of this Note and of any Note issued in exchange herefor or in place
hereof (whether by registration of transfer or otherwise), irrespective of
whether or not any notation of such consent or waiver is made upon this Note.
In certain limited circumstances, the Indenture also permits the
amendment thereof and the modification of the rights and obligations of the
Company and the rights of the Holders, at any time by the Company and the
Trustee, without notice to or the consent of the Holders.
No reference herein to the Indenture and no provisions of this
Security or of the Indenture shall alter or impair the obligation of the
Company, which is absolute and unconditional, to pay the principal of,
premium, if any, and interest on this Security at the times, places and rate,
and in the coin or currency, herein prescribed. However, the Indenture limits
Holder's rights to enforce the Indenture and this Security.
As provided in the Indenture and subject to certain limitations set
forth therein, the transfer of this Security is registrable in the Securities
Register, upon surrender of this Security for registration of transfer at the
office or agency of the Company in any place where the principal of and
interest on this Security are payable, duly endorsed by or accompanied by a
written instrument of transfer in form satisfactory to the Company and the
Securities Registrar duly executed by the Holder hereof or his attorney duly
authorized in writing, and thereupon one or more new Securities of this
series, of authorized denominations, of like aggregate principal amount and
bearing interest at the same rate or pursuant to the same formula, having the
same date of issuance, redemption provisions, if any, Stated Maturity and
other terms will be issued to the designated transferee or transferees. The
Securities of this series are issuable only in registered form without coupons
in denominations of $1,000 and any integral multiple thereof. As provided in
the Indenture and subject to certain limitations set forth therein, Securities
of this series are exchangeable for other Securities of this series of a
different authorized denomination and principal amount and bearing interest at
the same rate or pursuant to the same formula, having the same date of
issuance, redemption provisions, if any, Stated Maturity and other terms. No
service charge shall be made for any such registration of transfer or
exchange, but the Company may require payment of a sum sufficient to cover any
tax or other governmental charge payable in connection therewith.
32<PAGE>
<PAGE>
Prior to due presentment of this Security for registration of
transfer, the Company, the Trustee and any agent of the Company or the Trustee
may treat the person in whose name this Security is registered as the owner
hereof for all purposes, whether or not this Security be overdue, and none of
the Company, the Trustee or any such agent shall be affected by notice to the
contrary.
No recourse shall be had for the payment of the principal of or the
interest on this Security, or for any claim based hereon or on the Indenture,
against any incorporator, shareholder, officer or director, past, present or
future, as such, of the Company or of any predecessor or successor
Corporation, under any rule of law, statute or constitution or by the
enforcement of any assessment or otherwise, all such liability being released
by the Holder by the acceptance of this Security and being likewise waived and
released by the terms of the Indenture.
THE INDENTURE AND THE SECURITIES SHALL BE GOVERNED BY AND
CONSTITUTED IN ACCORDANCE WITH THE LAWS OF THE STATE OF NEW YORK.
All terms used in this Security which are defined in the Indenture
shall have the meanings assigned to them in the Indenture.
OPTION TO ELECT REPAYMENT
The undersigned hereby irrevocably requests and instructs the
Company to repay the within Security (or portion thereof specified below)
pursuant to its terms at a price equal to the principal amount thereof,
together with interest to the repayment date, to the undersigned.
The undersigned acknowledges that for the within Security to be
repaid, the Company must receive at the offices or agencies of the Trustee in
Chicago, Illinois or The City of New York, during the period specified in this
Security (i) the Security with this "Option to Elect Repayment" form duly
completed, or (ii) a telegram, telex, facsimile or letter from a member of a
national securities exchange or the National Association of Securities
Dealers, Inc. or a commercial bank or a trust company in the United States of
America setting forth the name of the Holder of the Security, the principal
amount of the Security, the amount of the Security to be repaid, a statement
that the option to elect repayment is being exercised thereby and a guarantee
that the Security to be repaid with the "Option to Elect Repayment" form duly
completed will be received by the Company not later than five Business Days
after the date of such telegram, telex, facsimile transmission or letter and
such Security and form duly completed are received by the Company by such
33<PAGE>
<PAGE>
fifth Business Day. Any such notice received by the Company during the period
specified in this Security shall be irrevocable.
If less than the entire principal amount of the within Security is
to be repaid, specify the portion thereof (which shall be $1,000 or an
integral multiple thereof) which the Holder elects to have repaid: $ ;
and specify the denomination or denominations (which shall be $1,000 or an
integral multiple thereof) of the Security or Securities to be issued to the
Holder for the portion of the within Security not being repaid (in the absence
of any such specification, one such Security will be issued for the portion
not being repaid): $ .
Dated:
-----------------------------------------------
Note: The signature to this Option to Elect
Repayment must correspond with the name as it
appears upon the face of the within Security in
every particular without alteration or
enlargement or any change whatever.
ABBREVIATIONS
The following abbreviations, when used in the inscription on the
face of this instrument, shall be construed as though they were written out in
full according to applicable laws and regulations:
TEN COM - as tenants in common
TEN ENT - as tenants by the entireties
JT TEN - as joint tenants with right of survivorship and not
as tenants in common
UNIF GIFT MIN ACT -- Custodian
------------------ ------------------
(Cust) (Minor)
Under Uniform Gifts to Minors
Act
---------------------------------------------
(State)
Additional abbreviations may also be used though not in the above
list.
----------------------
34<PAGE>
<PAGE>
FOR VALUE RECEIVED, the undersigned hereby sell(s), assign(s) and
transfer(s) unto
Please insert Social Security or Other
Identifying Number of Assignee
- ------------------------------
- ------------------------------------------------------------------------------
PLEASE PRINT OR TYPEWRITE NAME AND ADDRESS INCLUDING POSTAL ZIP CODE OF
ASSIGNEE
- ------------------------------------------------------------------------------
- ------------------------------------------------------------------------------
the within Security and all rights thereunder, hereby irrevocably constituting
and appointing
Attorney
- --------------------------------------------------------------------
to transfer said Security on the books of the Company, with full power of
substitution in the premises.
Dated:
------------------ ------------------------------------------------
Notice: The signature to this assignment
must correspond with the name as
written on the face of the within
instrument in every particular,
without alteration or enlargement,
or any change whatever.
ARTICLE THREE
CONTINUED APPLICABILITY OF REMAINING PROVISIONS
OF THE ORIGINAL INDENTURE
SECTION 3.1 CONTINUED APPLICABILITY. Except as specifically
amended, supplemented or deleted by this Second Supplemental Indenture, all
provisions of the Original Indenture shall be applicable for all purposes with
respect to the Series A MTNs, and the Original Indenture, as supplemented and
amended hereby and by the First Supplemental Indenture, is hereby ratified,
confirmed and approved. The Original Indenture as supplemented and amended by
the First Supplemental Indenture and this Second Supplemental Indenture shall
be construed as one and the same instrument.
35<PAGE>
<PAGE>
IN WITNESS WHEREOF, the parties hereto have caused this Second
Supplemental Indenture to be duly executed as of the day and year first above
written.
SOUTHWEST GAS CORPORATION
By /s/ JEFFREY W. SHAW
---------------------------
HARRIS TRUST AND SAVINGS BANK,
as Trustee
By /s/ DANIEL G. DONOVAN
---------------------------
Authorized Officer
S-1<PAGE>
<PAGE>
EXHIBIT 4.05
INTEREST CALCULATION AGENT AGREEMENT
BETWEEN
SOUTHWEST GAS CORPORATION
AND
HARRIS TRUST AND SAVINGS BANK
THIS AGREEMENT is made as of December 30, 1996, between SOUTHWEST GAS
CORPORATION (the "Company"), and HARRIS TRUST AND SAVINGS BANK (the
"Calculation Agent").
WHEREAS, the Company proposes to issue and sell on a continuous basis
its Medium-Term Notes, Series A (the "Notes") pursuant to the terms and
conditions of a Distribution Agreement (the "Distribution Agreement") dated
December 30, 1996 by and among the Company and Merrill Lynch & Co., Merrill
Lynch, Pierce, Fenner & Smith Incorporated, PaineWebber Incorporated and
Dean Witter Reynolds Inc. (the "Agents") in such aggregate principal amount
as from time to time may be authorized by the Company;
WHEREAS, the Company desires the Calculation Agent to perform certain
interest calculation services with respect to the Company's Floating Rate Notes
bearing interest at a floating rate (the "Floating Rate Notes"); and
WHEREAS, undefined capitalized terms used in this Agreement have the
meanings given in the Distribution Agreement and Exhibits thereto.
NOW, THEREFORE, in consideration of the foregoing recitals and the
mutual covenants and agreements set forth herein, the parties hereto agree as
follows:
SECTION 1. Appointment of Calculation Agent. The Company
appoints Harris Trust and Savings Bank as Calculation Agent of the Company
with respect to any Floating Rate Notes issued by the Company. The Calculation
Agent hereby accepts its obligation for the purpose of calculating the amount
of interest on the Floating Rate Notes, upon the terms and conditions set
forth herein. The calculation of the base rates for the interest rates
applicable to the Notes shall be determined by reference to LIBOR, the
Commercial Paper Rate, the Treasury Rate, the CD Rate, the Prime Rate, the
J.J. Kenny Rate, the CMT Rate, the Federal Funds Rate, the 11th District Cost
of Funds Rate (the "Base Rates") or such other base rates as may be provided
and described in the Prospectus Supplement.
1<PAGE>
<PAGE>
SECTION 2. Calculation of Base Rates.
(a) The Calculation Agent shall calculate the amount of interest
on the Floating Rate Notes and communicate the same to the Company and Harris
Trust and Savings Bank (the "Trustee") upon the terms and conditions contained
herein. The Company shall cause the Trustee to provide the Calculation Agent
with not less than two (2) but not more than seven (7) business days notice of
the date on which a particular calculation is to be made by the Calculation
Agent (the "Calculation Date"), and the Calculation Agent shall notify the
Trustee of such calculation on such Calculation Date and shall confirm such
calculation in writing within twenty-four (24) hours after so notifying the
Trustee.
(b) In no event shall the interest rate be less than the
minimum interest rate, if any, or higher than the maximum interest rate, if
any, designated in the applicable pricing supplement.
(c) The Calculation Agent shall calculate the amount of interest
payable on each Floating Rate Note in the manner and at the times set forth in
such Note.
(d) As soon as practicable after each Calculation Date, the
Calculation Agent will cause to be forwarded to the Company and the Trustee
information regarding the interest rates, the interest periods, the amount of
interest for each interest period and the relevant Interest Payment Dates.
The Calculation Agent will, upon the request of any holder of any Floating Rate
Note, provide the interest rate which will become effective as a result of a
determination made with respect to the most recent Interest Determination Date
with respect to such Note.
SECTION 3. Status of Calculation Agent. Any acts taken by the
Calculation Agent under this Agreement or in connection with any Floating Rate
Notes, including, specifically, without limitation, the calculation of any
interest rate for a Floating Rate Note, shall be deemed to have been taken by
the Calculation Agent solely in its capacity as agent of the Company and shall
not create or imply any obligation to, or any agency or trust relationship
with any of the owners or holders of the Floating Rate Notes.
2<PAGE>
<PAGE>
SECTION 4. Fees and Expenses. The Calculation Agent shall be
entitled to such compensation for its services under this Agreement as may be
agreed upon with the Company, and the Company shall pay such compensation and
shall reimburse the Calculation Agent for all reasonable expenses,
disbursements and advances incurred or made by the Calculation Agent in
connection with the services rendered by it under this Agreement, including
reasonable counsel fees.
SECTION 5. Rights and Liabilities of Calculation Agent. The
Calculation Agent shall incur no liability for, or in respect of, any action
taken or omitted to be taken, or suffered by it in reliance upon any Floating
Rate Note, written instruction, notice, request, direction, certificate,
consent, report, affidavit, statement, order or other instrument, paper,
document or communication reasonably believed by it in good faith to be
genuine. Any order, certificate, affidavit, instruction, notice, request,
direction, statement or other comments from the Company or given by it and
sent, delivered or directed to the Calculation Agent under, pursuant to or as
permitted by any provision of this Agreement shall be sufficient for purposes
of this Agreement if such comment is in writing and signed by an officer of
the Company. The Calculation Agent may consult with counsel satisfactory to
it and the advice of such counsel shall constitute full and complete
authorization and protection of the Calculation Agent with respect to any
action taken, omitted to be taken, or suffered by it hereunder in good faith
and in accordance with and in reliance upon the advice of such counsel.
Neither the Calculation Agent nor its officers or employees shall be liable
to the Company or any other party for any act or omission hereunder, except
in the case of gross negligence or willful misconduct and, in any event, to
the extent permitted by law, it is agreed that the liability of the
Calculation Agent and its officers and employees hereunder for damages,
regardless of the form of the action, shall not exceed the fees payable to the
Calculation Agent hereunder for a period of six months, and that this shall be
the exclusive remedy for any damages hereunder. No party shall be liable for
any default resulting from force majeure, which shall be deemed to include any
circumstance beyond the reasonable control of the party affected. No action,
regardless of form, arising out of or pertaining to the role of the Calculation
Agent hereunder may be brought by any party hereto or beneficiary hereof more
than twelve (12) months after the cause of action has accrued.
SECTION 6. Duties of Calculation Agent. The Calculation Agent
shall be obligated only to perform such duties as are specifically set forth
herein and no other duties or obligations on the part of the Calculation Agent
3<PAGE>
<PAGE>
in its capacity as such, shall be implied by this Agreement. Neither the
Calculation Agent nor its officers and directors guarantee the correctness or
completeness of any data or other information furnished hereunder.
SECTION 7. Termination, Resignation or Removal of Calculation
Agent. The Calculation Agent may at any time terminate this Agreement by
giving written notice to the Company and the Trustee specifying the date on
which its desired resignation shall become effective, provided that such notice
shall be given no less than ninety (90) days prior to said effective date
unless the Calculation Agent, Company and Trustee otherwise agree in writing.
The Company may terminate this Agreement at any time by giving written notice
to the Calculation Agent and specifying the date when the termination shall
become effective; provided that such effective date of the Company's
termination shall be at least twenty (20) days after the date of notice and
shall not be less than forty-five (45) days before the Interest Payment Date
on any Floating Rate Note that shall be the final Interest Payment Date with
respect to which such Calculation Agent shall serve as the Calculation Agent.
No termination by either the Calculation Agent or the Company shall become
effective prior to the date of the appointment by the Company of a successor
Calculation Agent and the acceptance of such appointment by such successor
Calculation Agent as provided in Section 8 hereof. Upon termination by
either party pursuant to the provisions of this Section, the Calculation Agent
shall be entitled to the payment of any compensation owed to it by the Company
hereunder and to the reimbursement of all reasonable expenses incurred in
connection with the services rendered by it hereunder, as provided by
Section 4 hereof. The provisions of Sections 9 and 13 hereof shall remain
in effect following termination by either party.
SECTION 8. Appointment of Successor Calculation Agent. In the
event of the termination of this Agreement pursuant to Section 7 hereof, the
Company shall promptly appoint a successor Calculation Agent. Any successor
Calculation Agent appointed by the Company and approved by the Trustee
following termination of this Agreement pursuant to the provisions of
Section 7 hereof, shall execute and deliver to the original Calculation Agent,
the Company and the Trustee an instrument accepting such appointment.
Thereupon, such successor Calculation Agent shall, without any further act,
deed or conveyance, become vested with all the authority, rights, powers,
trusts, immunities, duties and obligations of the Calculation Agent and with
like effect as if originally named as Calculation Agent hereunder, and the
original Calculation Agent shall thereupon be obligated to transfer and
deliver such relevant records or copies thereof maintained by the Calculation
Agent in connection with the performance of its obligations hereunder.
4<PAGE>
<PAGE>
SECTION 9. Indemnification. The Company shall indemnify and
hold harmless the Calculation Agent, its officers and employees from and
against all actions, claims, damages, liabilities, losses and expenses
(including reasonable legal fees and expenses) relating to or arising out of
actions or omissions from actions in any capacity hereunder, except actions,
claims, damages, liabilities, losses and expenses caused by the gross
negligence or willful misconduct of the Calculation Agent, its officers or
employees.
SECTION 10. Merger, Consolidation or Sale of Business by the
Calculation Agent. Any corporation into which the Calculation Agent may be
merged or consolidated, or any corporation resulting from any merger or
consolidation to which the Calculation Agent may be a party, or any
corporation to which the Calculation Agent may sell or otherwise transfer all
or substantially all of its assets and business, shall, to the extent permitted
by applicable law, become the Calculation Agent under this Agreement without
the execution or filing of any paper or any further act by the parties hereto.
Notice in writing of any such merger, consolidation or sale shall be given to
each of the Company and Trustee.
SECTION 11. Notices. Any notice or other communication required
to be given hereunder shall be delivered in person, sent by letter, telecopy or
telex or communicated by telephone (subject, in the case of communication by
telephone, to written confirmation dispatched within twenty-four (24) hours to
the addresses given below or such other address as the party to receive such
notice may have previously specified):
To the Company:
Southwest Gas Corporation
5241 Spring Mountain Road
Las Vegas, Nevada 89102
Attention: Senior Vice President,
Chief Financial Officer
and Corporate Secretary
5<PAGE>
<PAGE>
To the Trustee:
Harris Trust and Savings Bank
311 West Monroe Street, 12th Floor
Chicago, Illinois 60606
Attention: Indenture Trust Administration
To the Calculation Agent:
Harris Trust and Savings Bank
311 West Monroe Street, 12th Floor
Chicago, Illinois 60606
Attention: Indenture Trust Administration
Any notice hereunder given by letter, telecopy or telex shall be deemed to have
been received when it would have been received in the ordinary course of post
or transmission, as the case may be.
SECTION 12. Benefit of Agreement. Except as provided herein,
this Agreement is solely for the benefit of the parties hereto and their
successors and assigns and no other person shall acquire or have any rights
under or by virtue hereof. The terms "successors" and "assigns" shall not
include any purchasers of any Floating Rate Notes merely because of such
purchases.
SECTION 13 Governing Law. This Agreement shall be governed by
and construed in accordance with the law of the State of New York applicable to
agreements entered into and performed in such State.
SECTION 14. Severability. If any provision of this Agreement
shall be held or deemed to be invalid, inoperative or unenforceable as applied
in any particular case because it conflicts with any provision of any
constitution, statute, rule or public policy applicable hereto, such
circumstance shall not have the effect of rendering any other provision herein
invalid, inoperative or unenforceable.
SECTION 15. Counterparts. This Agreement may be executed in
several counterparts or with counterpart signature pages, each of which shall
be regarded as an original and all of which shall constitute one and the same
document.
SECTION 16. Amendments. This Agreement may be amended by any
instrument in writing signed by the parties hereto.
6<PAGE>
<PAGE>
IN WITNESS WHEREOF, this Agreement has been entered into the day
and year first above written.
SOUTHWEST GAS CORPORATION
/s/ JEFFREY W. SHAW
-----------------------------
Name: Jeffrey W. Shaw
Title: Vice President/Treasurer
HARRIS TRUST AND SAVINGS BANK
/s/ DANIEL G. DONOVAN
-----------------------------
Authorized Officer
7<PAGE>
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EXHIBIT 5.01
[O'MELVENY & MYERS LETTERHEAD]
December
30th
1996
Southwest Gas Corporation
5241 Spring Mountain Road
P.O. Box 98510
Las Vegas, Nevada 89193
Re: Up to $150,000,000 Aggregate Principal Amount of Medium-Term Notes,
Series A of Southwest Gas Corporation (the "Company")
Ladies and Gentlemen:
We have acted as special counsel in connection with the issuance and
sale by the Company of an aggregate of up to $150,000,000 principal amount of
the Company's Medium-Term Notes, Series A (the "Notes") pursuant to that
certain Distribution Agreement dated December 30, 1996 (the "Agreement")
among the Company, Merrill Lynch & Co., Merrill Lynch, Pierce, Fenner & Smith
Incorporated, Dean Witter Reynolds Inc. and Painewebber Incorporated. The
Notes are to be issued pursuant to an Indenture dated as of July 15, 1996
(the "Original Indenture") between the Company and Harris Trust and Savings
Bank, as Trustee (the "Trustee"), as supplemented and amended by the First
Supplemental Indenture dated as of August 1, 1996 (the "First Supplement")
and the Second Supplemental Indenture dated as of December 30, 1996 (the
"Second Supplement" and together with the First Supplement and the Original
Indenture, the "Indenture").
On the basis of our consideration of such questions of law as we have
deemed relevant in the circumstances, we are of the opinion, subject to the
assumptions and limitations set forth herein, that the Notes have been duly
authorized by all necessary corporate action on the part of the Company and,
when the final terms of a particular Note and of its issuance and sale have
been duly established in conformity with the Indenture and when such<PAGE>
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Page 2 - Southwest Gas Corporation - December 30, 1996
Note has been duly executed, authenticated and issued in accordance with the
provisions of the Indenture and upon payment for and delivery of the Notes in
accordance with the terms of the Agreement and the Indenture, 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 except that the enforceability of the Notes
is subject to the effect of general principles of equity, including, without
limitation, concepts of materiality, reasonableness, good faith and fair
dealing and the possible unavailability of specific performance or injunctive
relief, regardless of whether considered in a proceeding in equity or at law.
We have, with your approval, assumed that the certificates for the Notes
will conform to the forms thereof examined by us, that the signatures on all
documents examined by us are genuine, that all items submitted as originals
are authentic, and that all items submitted as copies conform to the
originals, assumptions which we have not independently verified.
We consent to the incorporation of this opinion in the Company's current
Report on Form 8-K, event date December 30, 1996.
Respectfully submitted,
/s/ O'MELVENY & MYERS LLP<PAGE>
