EXHIBIT 1.01
[DESCRIPTION] [FORM OF DISTRIBUTION AGREEMENT]
SOUTHERN CALIFORNIA WATER COMPANY
$60,000,000
Medium-Term Notes, Series C
Distribution Agreement
____________, 1998
A.G. Edwards & Sons, Inc.
One North Jefferson
St. Louis, Missouri 63103
PaineWebber Incorporated
1285 Avenue of the Americas
New York, New York 10019
Ladies and Gentlemen:
Southern California Water Company, a California
corporation (the "Company"), proposes to issue and sell from time
to time up to $60,000,000 aggregate principal amount of its
Medium-Term Notes, Series C (the "Notes"), and agrees with A.G.
Edwards & Sons, Inc. and PaineWebber Incorporated (each
individually, an "Agent" and collectively, the "Agents") as set
forth in this Agreement.
Subject to the terms and conditions stated herein, the
Company hereby (i) appoints each of the Agents as an agent of the
Company for the purpose of soliciting and receiving offers to
purchase Notes from the Company and (ii) agrees that, except as
otherwise contemplated herein, whenever it determines to sell
Notes directly to an Agent as principal, it will enter into a
separate agreement (each a "Terms Agreement"), substantially in
the form of Annex I hereto, relating to such sale in accordance
with Section 2(b) hereof.
The Notes will be issued under an Indenture, dated as
of September 1, 1993 (the "Indenture"), between the Company and
Chase Manhattan Bank and Trust Company, National Association (formerly
Chemical Trust Company of California), as Trustee (the "Trustee").
The Notes shall have the maturities, annual interest rates and other
terms set forth in the Prospectus referred to below as it may be
amended or supplemented in relation to the Notes from time to
time. The Notes will be issued, and the terms and rights thereof
established, from time to time by the Company in accordance with
(i) the Indenture, (ii) the Administrative Procedures attached
hereto as Annex II, as they may be amended from time to time by
written agreement among the Agents and the Company (the
"Procedures"), and (iii) if applicable, a Terms Agreement.
1. Representations and Warranties of the Company. The
Company represents and warrants to, and agrees with, each Agent that:
(a) The Company meets the requirements for use of Form S-3
under the Securities Act of 1933, as amended (the "Act"); the
registration statement on Form S-3 (Registration No. 333-_____)
in respect of $60,000,000 aggregate amount of securities has been
filed with the Securities and Exchange Commission (the
"Commission"); the registration statement and any post-effective
amendment thereto, in the form heretofore delivered or to be
delivered to the Agents, excluding exhibits to such registration
statement but including all documents incorporated by reference
in the prospectus included therein, has been declared effective
by the Commission in such form and meets the requirements of
paragraph (a)(1)(ix) or (a)(1)(x) of Rule 415 under the Act and
complies in all other material respects with said Rule; no other
document with respect to such registration statement or document
incorporated by reference therein has heretofore been filed or
transmitted for filing with the Commission; and no stop order
suspending the effectiveness of such registration statement has
been issued and no proceeding for that purpose has been initiated
or threatened by the Commission. For purposes of this Agreement,
any preliminary prospectus relating to the Notes omitting
information of the kind described in Rule 430 under the Act and
furnished by the Company for use by the Agents (including a
preliminary prospectus supplement to the Prospectus hereinafter
referred to) is hereinafter called a "Preliminary Prospectus";
the various parts of such registration statement, including all
exhibits thereto and the documents incorporated by reference in
the prospectus contained in the registration statement at the
time such part of the registration statement became effective but
excluding the Statement of Eligibility on Form T-1 and, if
applicable, including the information contained in the form of
final prospectus filed with the Commission pursuant to Rule
424(b) under the Act, each as amended at the time such part of
the registration statement became effective, is hereinafter
collectively called the "Registration Statement"; the prospectus
(including, if applicable, any prospectus supplement) relating to
the Notes, in the form in which it has most recently been filed,
or transmitted for filing, with the Commission on or prior to the
date of this Agreement, is hereinafter called the "Prospectus";
any reference herein to any Preliminary Prospectus or the
Prospectus shall be deemed to refer to and include the documents
incorporated by reference (or the applicable portions thereof if
incorporated only in part) therein pursuant to the applicable
form under the Act, as of the date of such Preliminary Prospectus
or Prospectus, as the case may be; any reference to any amendment
or supplement to the Registration Statement, any Preliminary
Prospectus or the Prospectus shall be deemed to refer to and
include any documents filed after the effective date of the
Registration Statement or after the date of such Preliminary
Prospectus or Prospectus, as the case may be, under the
Securities Exchange Act of 1934, as amended (the "Exchange Act"),
and incorporated therein by reference (or the applicable portions
thereof if incorporated only in part); and any reference to the
Prospectus as amended or supplemented shall be deemed to refer to
and include the Prospectus as amended or supplemented in relation
to Notes sold pursuant to this Agreement, in the form in which it
is filed with the Commission pursuant to Rule 424(b) under the
Act and in accordance with Section 4(a) hereof, including any
documents incorporated by reference (or the applicable portions
thereof if incorporated only in part) therein as of the date of
such filing.
(b) The documents incorporated by reference in the Prospectus,
when they were filed with the Commission conformed in all
material respects to the requirements of the Exchange Act and the
rules and regulations of the Commission thereunder, when read
together with the other information in or incorporated by
reference in the Prospectus, did not contain an untrue statement
of a material fact or omit to state a material fact required to
be stated therein or necessary to make the statements therein, in
the light of the circumstances under which they were made, not
misleading; and any further documents so filed and incorporated
by reference in the Prospectus, when such documents are filed
with the Commission will conform in all material respects to the
requirements of the Act or the Exchange Act, as applicable, and
the rules and regulations of the Commission thereunder and, when
read together with the other information in or incorporated by
reference in the Prospectus, will not contain an untrue statement
of a material fact or omit to state a material fact required to
be stated therein or necessary to make the statements therein, in
the light of the circumstances under which they were made, not
misleading; provided, however, that this representation and
warranty shall not apply to any statements or omissions made in
reliance upon and in conformity with information furnished in
writing to the Company by any Agent expressly for use in the
Prospectus as amended or supplemented to relate to a particular
issuance of Notes.
(c) As of the applicable effective date of the
Registration Statement and each time thereafter at which any amendment
to the Registration Statement becomes effective or any Annual Report on
Form 10-K is filed by the Company with the Commission and as of
the applicable filing date under Rule 424(b) under the Act of the
Prospectus and any amendment or supplement thereto, (i) the
Registration Statement conforms, and any further amendments or
supplements to the Registration Statement will conform, in all
material respects to the requirements of the Act and the Trust
Indenture Act of 1939, as amended (the "Trust Indenture Act"),
and the rules and regulations of the Commission thereunder, (ii)
the Registration Statement does 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, and (iii) the Prospectus does
not and will not contain an untrue statement of a material fact
or omit to state a material fact necessary in order to make the
statements therein, in the light of the circumstances under which
they were made, not misleading; provided, however, that this
representation and warranty shall not apply to any statements or
omissions made in reliance upon and in conformity with
information furnished in writing to the Company by any Agent
expressly for use in the Registration Statement or the Prospectus
as amended or supplemented to relate to a particular issuance of
Notes.
(d) The Company has an authorized capitalization as set
forth for it in the Prospectus, and all the outstanding Common Shares
of the Company have been duly authorized and validly issued, are
fully paid and non-assessable and are free of any preemptive or
similar rights; and the capital stock of the Company conforms, in
all material respects, to the description thereof in the
Registration Statement and the Prospectus.
(e) The Company is a corporation duly organized and
validly existing in good standing under the laws of the State of
California with full corporate power and authority to own, lease
and operate its properties and to conduct its business as
described in the Registration Statement and the Prospectus, and
is not required to be qualified as a foreign corporation for the
transaction of business under the laws of any jurisdictions in
which the consequences of a failure to qualify, individually or
in the aggregate, would have a material adverse effect on the
business of the Company.
(f) There are no legal or governmental proceedings pending
or, to the knowledge of the Company, threatened, against the Company,
or to which the Company or any of its properties is subject, that
are required to be described in the Registration Statement or the
Prospectus but are not described as required, and there are no
agreements, contracts, indentures, leases or other instruments
that are required to be described in the Registration Statement
or the Prospectus or to be filed as an exhibit to the
Registration Statement or any Incorporated Document that are not
described or filed as required by the Act or the Exchange Act, as
applicable.
(g) The Company is not in violation of its articles of
incorporation or by-laws and has complied, in all respects
material to the Company, with any law, ordinance, administrative
or governmental rule or regulation applicable to the Company or
any decree applicable to the Company of any court or governmental
agency or body having jurisdiction over the Company, and is not
in default in any material respect in the performance of any
obligation, agreement or condition contained in any material
bond, debenture, note or other evidence of indebtedness or in any
material agreement, lease or other instrument to which the
Company is a party or by which its properties are bound.
(h) Neither the solicitation of offers to purchase the
Notes, the issue and sale of the Notes, nor the execution or
consummation by the Company of this Agreement, any Terms
Agreement or the Indenture (i) 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 on the part of the Company
(except (a) authorizations and orders of the Public Utilities
Commission of the State of California, which have been obtained,
are in full force and effect and are sufficient to authorize the
transactions contemplated hereby and (b) such as may be required
for compliance with the securities or Blue Sky laws of various
jurisdictions) or conflicts or will conflict with or constitutes
or will constitute a breach of, or a default under, the articles
of incorporation or bylaws of the Company or (ii) conflicts or
will conflict with or constitutes or will constitute a breach of,
or a default under, any agreement, indenture, lease or other
instrument to which the Company is a party or by which it or any
of its properties may be bound, or violates or will violate any
statute, law, regulation or filing or judgment, injunction, order
or decree applicable to the Company or any of its properties, or
will result in the creation or imposition of any lien, charge or
encumbrance upon any property or assets of the Company pursuant
to the terms of any agreement or instrument to which it is a
party or by which it may be bound or to which any of its property
or assets is subject.
(i) The accountants, Arthur Andersen LLP, who have certified
or shall certify the financial statements included or incorporated
by reference in the Registration Statement and the Prospectus (or
any amendment or supplement thereto) are independent public
accountants as required by the Act.
(j) The financial statements, together with related
schedules and notes, included or incorporated by reference in the
Registration Statement and the Prospectus (and any amendment or
supplement thereto for use in connection with an offering of the
Notes), present fairly the financial position, results of
operations and cash flows of the Company on the basis stated in
the Registration Statement 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 data included
or incorporated by reference in the Registration Statement and
the Prospectus (and any amendment or supplement thereto for use
in connection with the offering of the Notes) are accurately
presented and to the extent derived therefrom prepared on a basis
consistent with such financial statements and the books and
records of the Company.
(k) The execution and delivery of, and the performance by
the Company of its obligations under, this Agreement have been duly
and validly authorized by the Company, and this Agreement has
been duly executed and delivered by the Company and 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 federal or state securities laws, and except as
limited by bankruptcy, insolvency, reorganization, moratorium or
other laws or equitable principles.
(l) The Notes have been duly authorized, and, when issued
and delivered pursuant to the Indenture and this Agreement and any
Terms Agreement, will have been duly executed, authenticated,
issued and delivered and will constitute valid and legally
binding obligations of the Company issued pursuant to the Indenture
enforceable in accordance with their terms, subject, as to enforcement,
to bankruptcy, insolvency, reorganization and other laws of general
applicability relating to or affecting creditors' rights and to
general equitable principles; the Indenture has been duly authorized,
executed and delivered and duly qualified under the Trust Indenture Act
and constitutes a valid and legally binding instrument, enforceable
against the Company in accordance with its terms, subject, as to
enforcement, to bankruptcy, insolvency, reorganization and other
laws of general applicability relating to or affecting creditors'
rights and to general equitable principles; and the Indenture
conforms and the Notes of any particular issuance of Notes will
conform, in all material respects, to the descriptions thereof
contained in the Prospectus as amended or supplemented to relate
to such issuance of Notes.
(m) Except as disclosed in the Registration Statement
and the Prospectus (or any amendment or supplement thereto for use
in connection with an offering of the Notes), subsequent to the
respective dates as of which such information is given in the
Prospectus (or any amendment or supplement thereto for use in
connection with an offering of the Notes), the Company has not
incurred any liability or obligation, direct or contingent, or
entered into any transaction, in each case other than in the
ordinary course of business, that is material to the Company, and
there has not been any change in the capital stock, or material
increase in the short-term debt or long-term debt, of the
Company, or any material adverse change, or any development
involving, or which would reasonably be expected to involve, a
prospective material adverse change, in the condition (financial
or other), business, net worth or results of operations of the
Company.
(n) The Company has good and marketable title to all
property (real and personal) described in the Prospectus as being
owned by it, free and clear of all liens, claims, security interests
or other encumbrances except such as are described in the
Registration Statement and the Prospectus or in a document filed
as an exhibit to the Registration Statement and except for liens
claims, security interests or other encumbrances that do not,
individually or in the aggregate, have a material adverse effect
on the business of the Company; and all the property described in
the Prospectus as being held under lease by the Company is held
by it under valid, subsisting and enforceable leases except in
any respect that would not, individually or in the aggregate,
have a material adverse effect on the business of the Company.
(o) The Company has such permits, licenses, franchises
and authorizations of governmental or regulatory authorities
("permits") as are necessary to own its properties and to conduct
its business, in all material respects, in the manner described
in the Prospectus, subject to such qualifications as may be set
forth in the Prospectus; the Company has fulfilled and performed
all its obligations with respect to such permits where the
failure to fulfill or perform would have a material adverse
effect on the business of the Company and has no knowledge of the
occurrence of any event which, pursuant to the terms thereof,
allows, or after notice or lapse of time would allow, the early
revocation or termination thereof or results in any other
material impairment of the rights of the holder of any such
permit, subject in each case to such qualification as may be set
forth in the Prospectus.
(p) No holder of any security of the Company has any right
to require registration of any security of the Company because of
the filing of the registration statement or consummation of the
transactions contemplated by this Agreement.
(q) Immediately after the settlement of any sale of Notes
by the Company resulting from solicitation by an Agent hereunder and
immediately after any Time of Delivery relating to a sale under a
Terms Agreement, the aggregate amount of Notes which shall have
been issued and sold by the Company hereunder (when taken
together with any other securities the issuance of which was
covered by the Registration Statement) or under any Terms
Agreement will not exceed the amount of securities registered
under the Registration Statement.
2. Appointment of Agents; Solicitation by the Agents of
Offers to Purchase; Sales of Notes to a Purchaser.
(a) Subject to the terms and conditions set forth herein,
the Company hereby authorizes each of the Agents to act as its agent
to solicit offers for the purchase of all or part of the Notes
from the Company. The Company may appoint additional agents in
connection with the offering of the Notes; provided that (i) the
Company promptly notifies each Agent of such appointment and (ii)
such additional agent enters into an agreement with the Company
making such agent an Agent under this Agreement or enters into an
agreement with the Company on terms which are substantially
similar to those contained in this Agreement, which agreement
shall include appropriate changes to reflect the arrangements
between the Company and such additional agent.
On the basis of the representations and warranties, and
subject to the terms and conditions herein set forth, each Agent
hereby agrees, as agent of the Company, to use its reasonable
efforts when requested by the Company to solicit and receive
offers to purchase the Notes from the Company upon the terms and
conditions set forth in the Prospectus as amended or supplemented
from time to time. The Agents may sell to or through dealers who
may resell to investors. Each Agent may pay all or part of its
discount or commission to such dealers.
The Company reserves the right, in its sole discretion,
to suspend at any time, for any period of time or permanently,
the solicitation of offers to purchase the Notes. Upon receipt
of instructions from the Company, the Agents will forthwith
suspend solicitation of offers to purchase Notes from the Company
until such time as the Company has advised it that such
solicitation may be resumed.
At the time of delivery of, and payment for, any Notes
sold by the Company as a result of a solicitation made by, or
offer to purchase received by, an Agent, the Company agrees to
pay such Agent a commission in an amount equal to the following
percentage of the principal amount of such Notes sold:
Commission
(percentage of aggregate
Range of maturities principal amount of Notes sold)
- ----------------------------- -------------------------------
From less than 1 year .125%
From 1 year to less than 18 months .150%
From 18 months to less than 2 years .200%
From 2 years to less than 3 years .250%
From 3 years to less than 4 years .350%
From 4 years to less than 5 years .450%
From 5 years to less than 6 years .500%
From 6 years to less than 7 years .550%
From 7 years to less than 10 years .600%
From 10 years to less than 15 years .625%
From 15 years to less than 20 years .700%
From 20 years up to and including 30 years .750%
Subject to the provisions of this Section and to the
Procedures, offers for the purchase of Notes may be solicited by
each Agent as an agent of the Company at such time and in such
amounts as each Agent deems advisable. Each Agent shall
communicate to the Company, orally or in writing, each reasonable
offer to purchase Notes received by it as Agent other than those
rejected by such Agent. The Company shall have the sole right to
accept offers to purchase Notes and may reject any proposed
purchase of Notes as a whole or in part. Each Agent shall have
the right, in its discretion reasonably exercised, to reject any
offer received by it to purchase Notes, as a whole or in part,
and any such rejection by it shall not be deemed a breach of its
agreements contained herein.
(b) Each sale of Notes to an Agent as principal shall be
made in accordance with the terms of this Agreement and (unless the
Company and such Agent shall otherwise agree) a Terms Agreement
which will provide for the sale of such Notes to, and the
purchase thereof by, such Agent. A Terms Agreement may also
specify certain provisions relating to the reoffering of such
Notes by the applicable Agent. The commitment of an Agent to
purchase Notes pursuant to any Terms Agreement shall be deemed to
have been made on the basis of the representations and warranties
of the Company herein contained and shall be subject to the terms
and conditions herein set forth. Each Terms Agreement shall
specify the principal amount of Notes to be purchased by the
applicable Agent pursuant thereto, the price to be paid to the
Company for such Notes, any provisions relating to rights of, and
default by, underwriters acting together with such Agent in the
reoffering of the Notes and the time and date (each such time and
date being referred to herein as a "Time of Delivery") and place
of delivery of and payment for such Notes. Such Terms Agreement
shall also specify any requirements for opinions of counsel,
accountants' letters and officers' certificates pursuant to
Section 4 hereof.
For each sale of Notes to an Agent as principal that is
not made pursuant to a Terms Agreement, the Company agrees to pay
such Agent a commission (or grant an equivalent discount) as pro
vided in Section 2(a) hereof and in accordance with the schedule
set forth therein.
(c) Procedural details relating to the issue and delivery of
Notes, the solicitation of offers to purchase, and purchases by
an Agent as principal of, Notes, and the payment in each case
therefor shall be as set forth in the Procedures. Each Agent and
the Company agree to perform the respective duties and
obligations specifically provided to be performed by each of them
in the Procedures. The Company will furnish to the Trustee a
copy of the Procedures as from time to time in effect.
3. Commencement Date. The documents required to be delivered
pursuant to Section 6 hereof on the Commencement Date (as defined
below) shall be delivered at the offices of O'Melveny & Myers
LLP, 400 South Hope Street, Los Angeles, California, at
10:00 a.m., local time at the place of such delivery, on the date
of this Agreement, which date and time of such delivery may be
postponed by agreement between the Agents and the Company but in
no event shall be later than the day prior to the date on which
solicitation of offers to purchase Notes is commenced or on which
any Terms Agreement is executed (such time and date being
referred to herein as the "Commencement Date").
4. Covenants of the Company. The Company covenants
and agrees with the Agents:
(a) To prepare the Prospectus, as amended and supplemented,
in a form approved by the Agents and (i) except with respect to
Pricing Supplements filed as contemplated by subsection (d),
below, to file such Prospectus pursuant to Rule 424(b) under the
Act not later than the Commission's close of business on the
second business day following the acceptance of an offer to
purchase a Note (as described in the Procedures pursuant to
Section 2(c) of this Agreement) or (ii) to file such Prospectus
pursuant to Rule 424(b) under the Act not later than the
Commission's close of business on the second business day
following the execution and delivery of the Terms Agreement
relating to the Purchased Notes (as defined therein); to make no
amendment to the Registration Statement or amendment or
supplement to the Prospectus for use in connection with any
offering or sale of the Notes between the date of this Agreement
and the Commencement Date which shall be disapproved by either
Agent promptly after reasonable notice thereof or after the date
of any Terms Agreement or other agreement by an Agent to purchase
Notes as principal and prior to the related Time of Delivery
which shall be disapproved by the purchasing Agent promptly after
reasonable notice thereof, which approval in any event shall not
be unreasonably withheld or delayed (or, if only one Agent participates
in the transaction relating thereto, such Agent); to make no such
amendment or supplement at any other time prior to having afforded each
Agent a reasonable opportunity to review and comment thereon; to file
promptly all reports and any definitive proxy or information statements
required to be filed by the Company with the Commission pursuant to
Section 13(a), 13(c), 14 or 15(d) of the Exchange Act for so long as the
delivery of a prospectus is required in connection with the offering or
sale of the Notes, and during such same period to advise each Agent,
promptly after the Company receives notice thereof, of the time when any
amendment to the Registration Statement has been filed or has
become effective or any supplement to the Prospectus relating to
the Notes or any amended Prospectus for use in connection with
any offering or sale of the Notes has been filed with the
Commission, of the issuance by the Commission of any stop order
or of any order preventing or suspending the use of any
prospectus relating to the Notes, of the suspension of the
qualification of the Notes for offering or sale in any
jurisdiction, of the initiation or threatening of any proceeding
for any such purpose, or of any request by the Commission for the
amendment of the Registration Statement or the amendment or
supplement of the Prospectus in connection with any offering or
sale of the Notes or for additional information; and, in the
event of the issuance of any such stop order or of any such order
preventing or suspending the use of any such prospectus or
suspending any such qualification during such same period, to use promptly
its best efforts to obtain its withdrawal.
(b) Promptly from time to time to take such action as the
Agents may reasonably request to qualify the Notes for offering and sale
under the securities laws of such jurisdictions of the United
States as the Agents may request and to comply with such laws so
as to permit the continuance of sales and dealings therein for as
long as may be necessary to complete the distribution or sale of
the Notes; provided, however, that in connection therewith the
Company shall not be required to qualify as a foreign corporation
or to file a general consent to service of process in any
jurisdiction.
(c) To furnish each Agent with copies of the Registration
Statement and each amendment thereto, and with copies of the
Prospectus as each time amended or supplemented in the form in
which it is filed with the Commission pursuant to Rule 424 under
the Act, both in such quantities as such Agent may reasonably
request from time to time; and, if the delivery of a prospectus
is required at any time in connection with the offering or sale
of the Notes (including Notes purchased from the Company by an
Agent as principal) and if at such time any event shall have
occurred as a result of which, in the reasonable opinion of
Cahill Gordon & Reindel, counsel to the Agents ("Counsel to the
Agents"), or O'Melveny & Myers LLP, counsel to the Company
("Counsel to the Company"), the Prospectus as then amended or
supplemented would include an untrue statement of a material fact
or omit to state any material fact necessary in order to make the
statements therein, in the light of the circumstances under which
they were made when such Prospectus is delivered, not misleading,
or, if for any reason it shall be necessary, in the reasonable
opinion of Counsel to the Agents or Counsel to the Company,
during such same period to amend or supplement the Prospectus in
relation to any offering or sale of the Notes or to file under
the Exchange Act any document incorporated by reference in the
Prospectus in order to comply with the Act, the Exchange Act or
the Trust Indenture Act, to notify each Agent and request each
Agent, in its capacity as agent of the Company, to suspend
solicitation of offers to purchase Notes from the Company and, if
so notified, the Agents shall cease such solicitations as soon as
practicable, but in any event not later than one business day
later; and if the Company shall decide to amend or supplement the
Registration Statement or the Prospectus for use in connection
with any offering or sale of the Notes as then amended or
supplemented, to so advise each Agent promptly by telephone (with
confirmation in writing) and to prepare and cause to be filed
promptly with the Commission an amendment or supplement to the
Registration Statement or the Prospectus as then amended or
supplemented that will correct such statement or omission or
effect such compliance; provided, however, that if during such
same period an Agent continues to own Notes purchased from the
Company by such Agent as principal, the Company shall promptly
prepare and file with the Commission such an amendment or
supplement.
(d) The Company will prepare, with respect to any Notes
to be sold through or to an Agent pursuant to this Agreement, a Pricing
Supplement with respect to such Notes in a form previously
approved by such Agent and will file such Pricing Supplement
pursuant to Rule 424(b)(3) under the Act not later than the close
of business of the Commission on the fifth business day after the
date on which such Pricing Supplement is first used.
(e) Except as otherwise provided in subsection (n) of this
Section, on or prior to the date on which there shall be released
to the general public interim financial statement information
related to the Company with respect to each of the first three
quarters of any fiscal year or preliminary financial statement
information with respect to any fiscal year (or, if no such
release is made by the Company, on the date such information
becomes available), the Company shall furnish such information to
each Agent, confirmed in writing, and shall include such
financial information and corresponding information for the
comparable period of the preceding fiscal year, as well as such
other information and explanations as shall be necessary in order
to make the statements therein not misleading, in each Pricing
Supplement issued after such date and prior to the date such
information is included in a document filed by the Company with
the Commission pursuant to Section 13(a), 13(c), 14 or 15(d) of
the Exchange Act.
(f) To make generally available to its security holders
an earning statement, which need not be audited, covering a
twelve-month period commencing after the effective date of the
Registration Statement and ending not later than 15 months
thereafter, as soon as practicable after the end of such period,
which earning statement shall satisfy the provisions of Section
11(a) of the Act.
(g) So long as any Notes are outstanding, to deliver to
each Agent as soon as they are available, copies of any reports and
financial statements furnished to or filed by the Company with the
Commission or any national securities exchange on which any class of
securities of the Company is listed.
(h) That, from the date of any Terms Agreement and
continuing to and including the earlier of (i) the termination of
the trading restrictions for the Notes purchased thereunder, as notified
to the Company by the Agent purchasing Notes pursuant to such Terms
Agreement and (ii) the related Time of Delivery, the Company will
not, without the prior written consent of the purchasing Agent,
offer, sell, contract to sell or otherwise dispose of any debt
securities of the Company which mature more than nine months
after such Time of Delivery and which are substantially similar
to the Notes.
(i) That each acceptance by the Company of an offer to
purchase Notes hereunder, and each execution and delivery by the Company
of a Terms Agreement with an Agent, shall be deemed to be an
affirmation that the representations and warranties of the
Company contained in or made pursuant to this Agreement are true
and correct as of the date of such acceptance or of such Terms
Agreement, as the case may be, as though made at and as of such
date, and an undertaking that such representations and warranties
will be true and correct as of the settlement date for the Notes
relating to such acceptance or as of the Time of Delivery
relating to such sale, as the case may be, as though made at and
as of such date (except that such representations and warranties
shall be deemed to relate to the Registration Statement and the
Prospectus as amended and supplemented relating to such Notes).
(j) That reasonably in advance of each time the Registration
Statement or the Prospectus shall be amended or supplemented
(other than by an amendment or supplement providing solely for a
change in the interest rates, manner of determining interest
rates, interest payment dates, or maturities of the Notes or a
supplement to the Prospectus relating to the sale of Notes
otherwise than through or to an Agent) and each time a document
filed under the Act or the Exchange Act is incorporated by
reference into the Prospectus (other than an underwriting
agreement or form of certificate for a Note relating to the sale
of Notes otherwise than through or to an Agent), and
each time the Company sells Notes to an Agent as principal and
the applicable Terms Agreement specifies the delivery of any
opinion or opinions by Counsel to the Agents, as a condition to
the purchase of Notes pursuant to such Terms Agreement, the
Company shall furnish such counsel such papers and information as
they may reasonably request to enable them to furnish to the
applicable Agent or Agents the opinion or opinions referred to in
Section 6(b) hereof.
(k) That each time the Registration Statement or the
Prospectus shall be amended or supplemented (other than by an amendment
or supplement providing solely for a change in the interest rates,
manner of determining interest rates, interest payment dates, or
maturities of the Notes or a supplement to the Prospectus
relating to the sale of Notes otherwise than through or to an
Agent), so long as sales of Notes have not been then suspended or
terminated, hereunder, each time a document filed under the Act
or the Exchange Act is incorporated by reference into the
Prospectus (other than an underwriting agreement or form of
certificate for a Note relating to the sale of Notes otherwise
than through or to an Agent), and each time the Company sells
Notes to an Agent as principal and the applicable Terms Agreement
specifies the delivery of an opinion under this Section 4(k) as a
condition to the purchase of Notes pursuant to such Terms
Agreement, the Company shall furnish or cause to be furnished
forthwith to the applicable Agent or Agents a written opinion of
Counsel to the Company, dated the date of such amendment,
supplement, incorporation or Time of Delivery relating to such
sale, as the case may be, in form satisfactory to such Agent or
Agents, in each case to the effect that such Agent or Agents may
rely on the opinion referred to in Section 6(c) hereof which was
last furnished to such Agent or Agents to the same extent as
though it were dated the date of such letter authorizing reliance
(except that the statements in the next to last paragraph thereof
shall be deemed to relate to the Registration Statement and the
Prospectus as amended and supplemented to such date) or, in lieu
of such opinion, an opinion of the same tenor as the opinion
referred to in Section 6(c) hereof but modified to relate to the
Registration Statement and the Prospectus as amended and
supplemented to such date.
(l) That each time the Registration Statement or the
Prospectus shall be amended or supplemented (other than by an amendment
or supplement providing solely for a change in the interest rates,
manner of determining interest rates, interest payment dates, or
maturities of the Notes or a supplement to the Prospectus
relating to the sale of Notes otherwise than through or to an
Agent), each time a document filed under the Act or the Exchange
Act is incorporated by reference into the Prospectus, in either case to
set forth financial information included in or derived from the
Company's financial statements or accounting records, and each
time the Company sells Notes to an Agent as principal and the
applicable Terms Agreement specifies the delivery of a letter
under this Section 4(l) as a condition to the purchase of Notes
pursuant to such Terms Agreement, the Company shall cause the
independent certified public accountants who have certified the
financial statements of the Company included or incorporated by
reference in the Registration Statement forthwith to furnish the
applicable Agent or Agents a letter, dated the date of such
amendment, supplement, incorporation or Time of Delivery relating
to such sale, as the case may be, in form satisfactory to such
Agent or Agents, of the same tenor as the letter referred to in
Section 6(d) hereof but modified to relate to the Registration
Statement and the Prospectus as amended or supplemented to the
date of such letter, with such changes as may be necessary to
reflect changes in the financial statements and other information
derived from the accounting records of the Company, to the extent
such financial statements and other information are available as
of a date not more than five business days prior to the date of
such letter; provided, however, that, with respect to any
financial information or other matter, such letter may reconfirm
as true and correct at such date as though made at and as of such
date, rather than repeat, statements with respect to such
financial information or other matter made in the letter referred
to in Section 6(d) hereof which was last furnished to such Agent
or Agents.
(m) That each time the Registration Statement or the
Prospectus shall be amended or supplemented (other than by an amendment
or supplement providing solely for a change in the interest rates,
manner of determining interest rates, interest payment dates, or
maturities of the Notes or a supplement to the Prospectus
relating to the sale of Notes otherwise than through or to an
Agent), each time a document filed under the Act or the Exchange
Act is incorporated by reference into the Prospectus (other than
an underwriting agreement or form of certificate for a Note
relating to the sale of Notes otherwise than through or to an
Agent), and each time the Company sells Notes to an Agent as principal
and the applicable Terms Agreement specifies the delivery of a certificate
under this Section 4(m) as a condition to the purchase of Notes
pursuant to such Terms Agreement, the Company shall furnish or
cause to be furnished forthwith to the applicable Agent or Agents
a certificate or certificates of the Company, dated the date of
such supplement, amendment, incorporation or Time of Delivery
relating to such sale, as the case may be, in such form and
executed on its behalf by such officers of the Company as shall
be satisfactory to such Agent or Agents, to the effect that the
statements contained in the certificate or certificates referred
to in Section 6(g) hereof as last furnished to such Agent or
Agents are true and correct at such date as though made at and as
of such date (except that such statements shall be deemed to
relate to the Registration Statement and the Prospectus as
amended and supplemented to such date) or, in lieu of such
certificate, certificates of the same tenor as the certificates
referred to in said Section 6(g) but modified to relate to the
Registration Statement and the Prospectus as amended and
supplemented to such date.
(n) The Company shall not be required to comply with the
provisions of Section 4(e) with respect to a particular Agent
during any period from the time (i) such Agent shall have
suspended solicitations of purchases of the Notes in its capacity
as agent pursuant to a request from the Company and (ii) such
Agent shall not then hold any Notes as principal purchased
pursuant to a Terms Agreement, to the time the Company shall
determine that solicitation of purchases of the Notes should be
resumed or shall subsequently enter into a new Terms Agreement
with such Agent.
5. Expenses. The Company covenants and agrees with each
Agent that the Company will pay or cause to be paid the following: (i)
the fees, disbursements and expenses of the Company's counsel and
accountants in connection with the registration of the Notes
under the Act and all other expenses in connection with the
preparation, printing and filing of the Registration Statement,
any Preliminary Prospectus and the Prospectus and amendments and
supplements thereto and the mailing and delivering of copies
thereof in quantities as herein stated above; (ii) the fees and
expenses of Counsel to the Agents in connection with the
establishment of the program contemplated hereby and the
transactions contemplated hereunder; (iii) the reasonable
out-of-pocket expenses of each Agent; (iv) the cost of printing,
producing or reproducing this Agreement, any Terms Agreement, any
Indenture (including any supplement thereto or resolutions
thereunder), any Blue Sky Memorandum and any other documents in
connection with the offering, purchase, sale and delivery of the
Notes; (v) all expenses in connection with the qualification of
the Notes for offering and sale under state securities laws as
provided in Section 4(b) hereof, including the fees and
reasonable disbursements of Counsel to the Agents in connection
with such qualification and in connection with the Blue Sky
Memorandum; (vi) any fees charged by securities rating services
for rating the Notes; (vii) the cost of preparing, printing,
issuing and delivering the Notes and any costs relating to the
use of book-entry notes; (viii) the fees and expenses of the
Trustee and any agent of the Trustee and any transfer or paying
agent of the Company and the reasonable fees and disbursements of
counsel for the Trustee or such agent in connection with any
Indenture and the Notes; and (ix) all other costs and expenses
incident to the performance of the Company's obligations
hereunder which are not otherwise specifically provided for in
this Section. It is understood, however, that except as provided
in this Section 5 and Section 9 hereof, each Agent will pay all
other costs and expenses it incurs.
6. Conditions to the Obligations of the Agents. The
obligation of each Agent, as agent of the Company, at any time
("Solicitation Time") to solicit offers to purchase the Notes and
the obligation of an Agent to purchase Notes as principal
pursuant to any Terms Agreement shall in each case be subject to
(i) the condition that all the representations and warranties of
the Company contained in this Agreement (and, in the case of an
obligation of an Agent under a Terms Agreement, in or
incorporated in such Terms Agreement by reference) are true and
correct (a) on and as of the Commencement Date and (b) on and as
of any applicable date referred to in Section 4(j) that is after
such Commencement Date and prior to such Solicitation Time or
Time of Delivery, as the case may be, and (c) on and as of such
Solicitation Time or Time of Delivery, as the case may be, and
(ii) the condition that the Company shall not have failed at or
prior to such Solicitation Time or Time of Delivery, as the case
may be, to have performed or complied in all material respects with
any of its agreements herein and therein contained and required to
be performed or complied with by it at or prior to such date and the
following additional conditions:
(a) (i) With respect to any Notes sold at or prior to such
Solicitation Time or Time of Delivery, as the case may be, the
Prospectus as amended or supplemented with respect to such Notes
shall have been filed with the Commission pursuant to Rule 424(b)
within the applicable time period prescribed for such filing by
the rules and regulations under the Act and in accordance with
Section 4(a); (ii) no stop order suspending the effectiveness of
the Registration Statement shall have been issued and no
proceedings for that purpose shall have been instituted or, to
the knowledge of the Company or any Agent, threatened by the
Commission; and (iii) any request of the Commission for
additional information (to be included in the Registration
Statement or the Prospectus or otherwise) shall have been
complied with to the reasonable satisfaction of the Agents;
(b) Counsel to the Agents shall have furnished to the
Agents (i) such opinion letter, dated the Commencement Date, with
respect to the validity of the Indenture and the Notes, the Registration
Statement, the Prospectus as amended or supplemented and other
related matters as the Agents may reasonably request, and (ii) if
and to the extent requested by an Agent, with respect to each
applicable date referred to in Section 4(j) hereof that is on or
prior to such Solicitation Time or Time of Delivery, as the case
may be, an opinion letter, dated such applicable date, to the
effect that the applicable Agent or Agents may rely on the
opinion letter which was last furnished to such Agent or Agents
pursuant to this Section 6(b) to the same extent as though it was
dated the date of such letter authorizing reliance (except that
the statements in such last opinion letter shall be deemed to
relate to the Registration Statement and the Prospectus as
amended and supplemented to such date) or, in any case, in lieu
of such an opinion letter, an opinion letter of the same tenor as
the opinion letter referred to in clause (i) but modified to
relate to the Registration Statement and the Prospectus as
amended and supplemented to such date; and in each case such
counsel shall have received such papers and information as they
may reasonably request to enable them to pass upon such matters;
(c) Counsel to the Company, or other counsel for the Company
satisfactory to the Agents, shall have furnished to the Agents
their written opinions, dated the Commencement Date and each
applicable date referred to in Section 4(k) hereof that is on or
prior to such Solicitation Time or Time of Delivery, as the case
may be, in form and substance satisfactory to the Agents to the
effect that:
(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 and corporate authority to own its properties and
to conduct its business as described in the Prospectus (and any
amendment
or supplement thereto as used in connection with any offering or sale
of the Notes), including the corporate power and corporate authority to
function as a water and electric utility in the State of California;
(ii) The Company has authorized, issued and outstanding
capital stock as set forth in the Prospectus; the outstanding Common
Shares of the Company have been duly authorized by all necessary
corporate action on the part of the Company and are validly
issued, fully paid and non-assessable;
(iii) The Registration Statement has been declared effective
under the Act, and, to such counsel's knowledge, no stop order
suspending the effectiveness of the Registration Statement has
been issued or threatened by the Commission; to such counsel's
knowledge,
there are no contracts or documents which are required by the Act to be
described in the Registration Statement or the Prospectus, to be
incorporated
by reference therein, or to be filed as exhibits to the Registration
Statement, which are not described, incorporated or filed as and to the
extent
required;
(iv) Except for the matters disclosed in, or incorporated by
reference into, the Registration Statement, to such counsel's
knowledge, there are no pending or threatened actions, suits,
proceedings or investigations against the Company in any court or
by or before any arbitrator or governmental agency or authority
which are required by the Act to be disclosed therein;
(v) The execution, delivery and performance of this Agreement
have been duly authorized by all necessary corporate action on
the part of the Company, and this Agreement has been duly
executed and delivered by the Company;
(vi) The Company's execution and delivery of the Notes, the
Indenture, this Agreement and any applicable Terms Agreement, and
the issuance and sale of the Notes thereunder as contemplated by
the Prospectus do not (a) violate, breach, or result in a default
(or an event which with notice or lapse of time or both would constitute
a default or event of acceleration) under, any existing obligation of
the
Company under any agreement or instrument listed on an exhibit to the
Company's
most recent annual report on Form 10-K or any Form 10-Q or Form 8-K
filed
subsequent thereto, (b) breach or otherwise violate any existing
obligation of
the Company under any order, judgment or decree of any California or
federal
court or governmental authority binding on the Company and identified on
a
certificate of an officer of the Company, or (c) violate any California
or
federal statute or regulation that such counsel has, in the exercise of
customary professional diligence, recognized as directly applicable to
the
Company or to transactions of the type contemplated by the Notes, the
Indenture, this Agreement or any Terms Agreement, except that
such counsel need not express an opinion regarding any federal
securities laws, or Blue Sky or state securities laws or Section
9 of this Agreement, or (d) violate the Company's articles of
incorporation or bylaws;
(vii) No order, consent, permit or approval of
any California or federal governmental authority is required on the part
of the Company for the issuance and sale of the Notes as
contemplated by this Agreement, except: (a) such as have been obtained
under the Act and the Trust Indenture Act, (b) the authorization of
the California Public Utilities Commission, which remains in full force
and effect, and, to the best of our knowledge, is not the subject of
any pending or threatened application for rehearing or petition for
modification, and (c) such as may be required under applicable Blue
Sky or state securities laws;
(viii) The documents incorporated by reference in the
Prospectus as of the date the Prospectus was filed with the
Commission (other than the financial statements and schedules and
other financial and statistical data contained therein or
incorporated by reference therein, as to which no opinion is
expressed), on the respective dates on which they were filed,
appeared on their face to comply in all material respects with
the requirements as to form for reports on Form 10-K, Form 10-Q
and Form 8-K, as the case may be, under the Exchange Act and the
related rules and regulations in effect at the respective dates
of their filing;
(ix) The Notes (in the form of specimens certified by the
Company's Secretary and examined by such counsel) have been duly
authorized by all necessary corporate action on the part of the
Company and, when duly executed, and authenticated, and issued in
accordance with the Indenture and upon payment for and delivery
thereof in accordance with the terms hereof and any applicable
Terms Agreement, constitute the legally valid and binding obligations
of the Company, enforceable against the Company in accordance with
their terms, except as may be limited by bankruptcy, insolvency,
reorganization, moratorium or similar laws relating to or
affecting creditors' rights generally (including, without
limitation, fraudulent conveyance laws), and by general
principles of equity including, without limitation, concepts of
materiality, reasonableness, good faith and fair dealing and the
possible unavailability of specific performance or injunctive
relief, regardless of whether considered in a proceeding in
equity or at law;
(x) The Indenture has been duly authorized by all necessary
corporate action on the part of the Company and, assuming due
authorization, execution and delivery by the Trustee, constitutes the
legally valid and binding obligation of the Company, enforceable against
the Company in accordance with its terms, except as may be
limited by bankruptcy, insolvency, reorganization, moratorium or
similar laws relating to or affecting creditors' rights
generally (including, without limitation, fraudulent conveyance laws),
and by general principles of equity including, without limitation,
concepts of materiality, reasonableness, good faith and fair dealing
and the possible unavailability of specific performance or injunctive
relief, regardless of whether considered in a proceeding in equity or at
law, and the Indenture has been duly qualified under the Trust Indenture
Act; and
(xi) The statements in the Prospectus under the caption
Description of Notes, insofar as they summarize provisions of the
Indenture or the Notes, fairly present the information required
By Form S-3 and the Trust Indenture Act.
Such counsel may state that in connection with its
participation in the preparation of the Registration Statement
and the Prospectus, such counsel has not independently verified
the accuracy, completeness or fairness of the statements
contained or incorporated therein, and the limitations inherent
in the examination made by such counsel and the knowledge
available to such counsel are such that such counsel is unable to
assume, and does not assume, any responsibility for the accuracy,
completeness or fairness of the statements contained or
incorporated in the Registration Statement, the Prospectus or the
Incorporated Documents (except as otherwise specifically stated
in clauses (ii), (iii) and (xi) above). Such counsel also shall
state that, however, on the basis of such counsel's review of the
Registration Statement, the Prospectus and the Incorporated
Documents and its participation in conferences in connection with
the preparation of the Registration Statement and the Prospectus,
such counsel does not believe that the Registration Statement, on
the date it was declared effective, contained any untrue
statement of a material fact or omitted to state a material fact
required to be stated therein or necessary to make the statements
therein not misleading, and that such counsel does not believe
that the Prospectus and the documents incorporated therein,
considered as a whole on the date of the Prospectus and on a
Closing Date with respect to a sale of the Notes, contained any
untrue statement of a material fact or omitted to state a
material fact required to be stated therein or necessary to make
the statements therein, in light of the circumstances under which
they were made, not misleading. Such counsel need express no
opinion or belief as to any document filed by the Company under
the Exchange Act, whether prior or subsequent to the effective
date of the Registration Statement, except to the extent that any
such document is an Incorporated Document read together with the
Registration Statement or the Prospectus and considered as a
whole, nor any opinion or belief as to the financial statements
and other financial and statistical information included or
incorporated by reference in the Registration Statement, the
Prospectus or the Incorporated Documents.
Such counsel shall also state that, subject to the
foregoing, they also advise the Agents that, in such counsel's
opinion, the Registration Statement and the Prospectus (except
for the financial statements and other financial information
included or incorporated by reference therein, as to which such
counsel shall express no opinion) as of the effective date of the
Registration Statement and as of the date the Prospectus with
respect to a sale of the Notes, appeared on their face to comply
in all material respects with the requirements as to form for
registration statements on Form S-3 under the Act and the Trust
Indenture Act and the related rules and regulations in effect at
the date of filing.
Such counsel's opinion shall be rendered in respect of
the laws of the State of California and the federal law of the
United States. Such counsel's opinion further may be limited to
laws recognized by such counsel, through its representation of
the Company, as being applicable to the Company and to the
issuance and public sale of securities. For purposes of the
limitation in clauses (iii) and (iv) above, such counsel's
knowledge may be limited to the knowledge obtained by them in
connection with matters to which they have given substantive
attention as counsel for the Company, as determined from lawyers
within the firm who have performed services for the Company
within the prior twelve months.
(d) Not later than 10:00 a.m., New York City time, on the
Commencement Date and on each applicable date referred to in
Section 4(l) that is on or prior to such Solicitation Time or
Time of Delivery, as the case may be, the independent certified
public accountants who have certified the financial statements of
the Company and its subsidiaries included or incorporated by
reference in the Registration Statement shall have furnished to
the Agents a letter, dated the Commencement Date or such
applicable date, as the case may be, in form and substance
satisfactory to the Agents, to the effect set forth in Annex III
hereto;
(e) (i) There shall not have been any change in the capital
stock of the Company nor any material increase in the short-term
or long-term debt of the Company (other than in the ordinary
course of business) from that set forth or contemplated in the
Registration Statement or the Prospectus (or any amendment or
supplement thereto); (ii) there shall not have been, since the
respective dates as of which information is given in the
Registration Statement and the Prospectus (or any amendment or
supplement thereto), except as may otherwise be stated in the
Registration Statement and the Prospectus (or any amendment or
supplement thereto), any material adverse change in the condition
(financial or other), business, prospects, properties, net worth
or results of operations of the Company; and (iii) the Company
shall not have any liabilities or obligations, direct or
contingent (whether or not in the ordinary course of business),
that are material to the Company, other than those reflected in
the Registration Statement or the Prospectus (or any amendment or
supplement thereto), the effect of which, in any such case
described in clause (i) or (ii), is in the reasonable judgment of
the applicable Agent or Agents so material and adverse as to make
it impracticable or inadvisable to proceed with the solicitation
of offers to purchase Notes from the Company or the purchase by
the applicable Agent of Notes from the Company as principal, as
the case may be;
(f) There shall not have occurred any of the following:
(i) trading in securities generally on the New York Stock Exchange,
the American Stock Exchange or NASDAQ shall have been suspended
or materially limited; (ii) a general moratorium on commercial
banking activities in New York or California shall have been
declared by either federal or state authorities; (iii) there
shall have occurred any outbreak or escalation of hostilities or
other international or domestic calamity, crisis or change in
political, financial or economic conditions, if the effect of any
such event specified in this clause (iii) in the reasonable
judgment of the applicable Agent or Agents makes it impracticable
or inadvisable to proceed with the solicitation of offers to
purchase Notes or the purchase of Notes from the Company as
principal pursuant to the applicable Terms Agreement, as the case
may be; (iv) any downgrading in the rating accorded the Company's
debt securities by any "nationally recognized statistical rating
organization," as that term is defined by the Commission for
purposes of Rule 436(g)(2) under the Act; or (v) any such
"nationally recognized statistical rating organization" shall
have publicly announced that it has under surveillance or review,
with possible negative implications or direction not determined,
its rating of any of the Company's debt securities; and
(g) The Company shall have furnished or caused to be
furnished to the Agents certificates of officers of the Company dated
the Commencement Date and each applicable date referred to in Section
4(m) that is on or prior to such Solicitation Time or Time of
Delivery, as the case may be, in such form and executed by such
officers of the Company as shall be satisfactory to the Agents,
(i) as to the accuracy of the representations and warranties of
the Company herein at and as of the Commencement Date or such
applicable date, as the case may be, (ii) as to the performance
by the Company of all of its obligations hereunder to be
performed at or prior to the Commencement Date or such applicable
date, as the case may be, (iii) as to the matters set forth in
subsections (a) and (e) of this Section 6, and (iv) as to such
other matters as the Agents may reasonably request.
7. Right of Person Who Agreed To Purchase To Refuse To
Purchase.
(a) The Company agrees that any person who has agreed to
purchase and pay for any Note, including an Agent purchasing as
principal and any person who purchases pursuant to a solicitation
by such Agent, shall have the right to refuse to purchase such
Note if, at the Closing Date therefor, any condition set forth in
Section 6 shall not be satisfied.
(b) The Company agrees that any person who has agreed to
purchase and pay for any Note pursuant to a solicitation by an
Agent shall have the right to refuse to purchase such Note if,
subsequent to the agreement to purchase such Note, any change,
condition or development specified in any of Section 6(f) shall
have occurred, the effect of which is so material and adverse as
to make it impractical or inadvisable to proceed with the
delivery of such Note (it being understood that the judgment of
such person with respect to the impracticability or
inadvisability of such purchase of Notes shall be substituted,
for purposes of this Section 7(b), for the respective judgments
referred to therein of the Agents with respect to certain matters
referred to in such Section 6(f), and that under no circumstances
shall the Agents have any duty or obligation to exercise the
judgment permitted to be exercised under Section 6(f) on behalf
of any such person).
8. Delivery of and Payment for Notes Sold through the Agents.
Delivery of Notes sold through an Agent as agent shall be made by
the Company to such Agent for the account of any 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, the
applicable Agent shall promptly notify the Company and deliver
the Note to the Company, and, if such Agent has theretofore paid
the Company for such Note, the Company will promptly return such
funds to such Agent. If such failure occurred for any reason
other than default by an Agent in the performance of its
obligations hereunder, the Company will reimburse such Agent for
its loss of the use of the funds for the period such funds were
credited to the Company's account to the extent of any earnings
thereon received by the Company.
9. Indemnification and Contribution.
(a) The Company agrees to indemnify and hold harmless each
Agent and each person, if any, who controls any Agent within the
meaning of Section 15 of the Act or Section 20 of the Exchange
Act from and against any and all losses, claims, damages,
liabilities and expenses (including reasonable costs of
investigation) arising out of or based upon any untrue statement
or alleged untrue statement of a material fact contained in any
Preliminary Prospectus or in the Registration Statement or the
Prospectus or in any amendment or supplement thereto, or arising
out of or based upon any omission or alleged omission to state
therein a material fact required to be stated therein or
necessary to make the statements therein not misleading, except
insofar as such losses, claims, damages, liabilities or expenses
arise out of or are based upon any untrue statement or omission
or alleged untrue statement or omission which has been made
therein or omitted therefrom in reliance upon and in conformity
with the information relating to an Agent furnished in writing to
the Company by or on behalf of an Agent expressly for use in
connection therewith; provided, however, that the indemnification
contained in this paragraph (a) with respect to any Preliminary
Prospectus shall not inure to the benefit of any Agent (or to the
benefit of any person controlling such Agent) on account of any
such loss, claim, damage, liability or expense arising from a
purchase of the Notes if a copy of the Prospectus shall not have
been delivered or sent to such person within the time required by
the Act and the regulations thereunder, and the untrue statement
or alleged untrue statement or omission or alleged omission of a
material fact contained in such Preliminary Prospectus was
corrected in the Prospectus, provided that the Company has
delivered the Prospectus to such Agent in requisite quantity on a
timely basis to permit such delivery or sending. The foregoing
indemnity agreement shall be in addition to any liability which
the Company may otherwise have.
(b) If any action, suit or proceeding shall be brought
against any Agent or any person controlling any Agent in respect of
which indemnity may be sought against the Company, such Agent or such
controlling person shall promptly notify the Company and the
Company shall assume the defense thereof, including the
employment of counsel and payment of all fees and expenses. Such
Agent or any such controlling person shall have the right to
employ separate counsel in any such action, suit or proceeding
and to participate in the defense thereof, but the fees and
expenses of such counsel shall be at the expense of such Agent or
such controlling person unless (i) the Company has agreed in
writing to pay such fees and expenses, (ii) the Company has
failed to assume the defense and employ counsel, or (iii) the
named parties to any such action, suit or proceeding (including
any impleaded parties) include both such Agent or such
controlling person and the Company and such Agent or such
controlling person shall have been advised by its counsel that
representation of such indemnified party and the Company by the
same counsel would be inappropriate under applicable standards of
professional conduct (whether or not such representation by the
same counsel has been proposed) due to actual or potential
differing interests between them (in which case the Company shall
not have the right to assume the defense of such action, suit or
proceeding on behalf of such Agent or such controlling person).
It is understood, however, that the Company shall, in connection
with any one such action, suit or proceeding or separate but
substantially similar or related actions, suits or proceedings
arising out of the same general allegations or circumstances, be
liable for the reasonable fees and expenses of only one separate
firm of attorneys (in addition to any local counsel) at any time
for all such Agents and controlling persons not having actual or
potential differing interests among themselves (the "Represented
Group"), which firm shall be designated in writing by A.G.
Edwards & Sons, Inc. and must be reasonably acceptable to the
Company, and that all such fees and expenses shall be reimbursed
as they are incurred. The Company shall not be liable for the
fees and expenses of separate counsel to Agents or controlling
persons not included in the Represented Group nor for any
settlement of any such action, suit or proceeding effected
without its written consent, but if settled with such written
consent, or if there be a final judgment for the plaintiff in any
such action, suit or proceeding, the Company agrees to indemnify
and hold harmless any Agent, to the extent provided in the
preceding paragraph, and any such controlling person from and
against any loss, claim, damage, liability or expense by reason
of such settlement or judgment.
(c) Each Agent agrees, severally and not jointly, to
indemnify and hold harmless the Company, its directors, its officers who
sign the Registration Statement, and any person who controls the
Company within the meaning of Section 15 of the Act or Section 20
of the Exchange Act, to the same extent as the foregoing
indemnity from the Company to each Agent, but only with respect
to information relating to such Agent furnished in writing by or
on behalf of such Agent expressly for use in the Registration
Statement, the Prospectus or any Preliminary Prospectus, or any
amendment or supplement thereto. If any action, suit or
proceeding shall be brought against the Company, any of its
directors, any such officer, or any such controlling person based
on the Registration Statement, the Prospectus or any Preliminary
Prospectus, or any amendment or supplement thereto, and in
respect of which indemnity may be sought against any Agent
pursuant to this paragraph (c), such Agent shall have the rights
and duties given to the Company by paragraph (b) above (except
that if the Company shall have assumed the defense thereof such
Agent shall not be required to do so, but may employ separate
counsel therein and participate in the defense thereof, but the
fees and expenses of such counsel shall be at such Agent's
expense), and the Company, its directors, any such officer, and
any such controlling person shall have the rights and duties
given to the Agents by paragraph (b) above. The foregoing
indemnity agreement shall be in addition to any liability which
the Agents may otherwise have.
(d) If the indemnification provided for in this Section 9 is
unavailable to an indemnified party under paragraphs (a) or (c)
hereof in respect of any losses, claims, damages, liabilities or
expenses referred to therein, then an indemnifying party, in lieu
of indemnifying such indemnified party, shall contribute to the
amount paid or payable by such indemnified party as a result of
such losses, claims, damages, liabilities or expenses (i) in such
proportion as is appropriate to reflect the relative benefits
received by the Company on the one hand and the Agents on the
other hand from the offering of the Notes, or (ii) if the
allocation provided by clause (i) above is not permitted by
applicable law, in such proportion as is appropriate to reflect
not only the relative benefits referred to in clause (i) above
but also the relative fault of the Company on the one hand and
the Agents on the other in connection with the statements or
omissions that resulted in such losses, claims, damages,
liabilities or expenses, as well as any other relevant equitable
considerations. The relative benefits received by the Company on
the one hand and the Agents on the other shall be deemed to be in
the same proportion as the total net proceeds from the offering
(before deducting expenses) received by the Company bear to the
total net proceeds from the offering received by the Agents. The
relative fault of the Company on the one hand and the Agents on
the other hand shall be determined by reference to, among other
things, whether the untrue or alleged untrue statement of a
material fact or the omission or alleged omission to state a
material fact relates to information supplied by the Company on
the one hand or by the Agents on the other hand and the parties'
relative intent, knowledge, access to information and opportunity
to correct or prevent such statement or omission.
(e) The Company and the Agents agree that it would not be
just and equitable if contribution pursuant to this Section 9 were
determined by a pro rata allocation (even if the Agents were
treated as one entity for such purpose) or by any other method of
allocation that does not take account of the equitable
considerations referred to in paragraph (d) above. The amount
paid or payable by an indemnified party as a result of the
losses, claims, damages, liabilities and expenses referred to in
paragraph (d) above shall be deemed to include, subject to the
limitations set forth above, any legal or other expenses
reasonably incurred by such indemnified party in connection with
investigating any claim or defending any such action, suit or
proceeding. Notwithstanding the provisions of this Section 9, no
Agent shall be required to contribute any amount in excess of the
amount by which the total price of the Notes purchased by or
through it exceeds the amount of any damages which such Agent has
otherwise been required to pay by reason of such untrue or
alleged untrue statement or omission or alleged omission. No
person guilty of fraudulent misrepresentation (within the meaning
of Section 11(f) of the Act) shall be entitled to contribution
from any person who was not guilty of such fraudulent
misrepresentation. Each Agent's obligations to contribute
pursuant to this Section 9 are several, in proportion to the
amount of Notes which are the subject of the action and which
were distributed to the public through such Agent bears to the
total amount of such Notes distributed to the public through any
other Agent, and not joint.
(f) No indemnifying party shall, without the prior
written consent of the indemnified party, effect any settlement of
any pending or threatened action, suit or proceeding in respect of
which any indemnified party is or could have been a party and
indemnity could have been sought hereunder by such indemnified
party, unless such settlement includes an unconditional release
of such indemnified party from all liability on claims that are
the subject matter of such action, suit or proceeding.
(g) Any losses, claims, damages, liabilities or expenses for
which an indemnified party is entitled to indemnification or
contribution under this Section 9 shall be paid by the
indemnifying party to the indemnified party as such losses,
claims, damages, liabilities or expenses are incurred.
10. No Agent Liability for Failed Purchases. Each Agent,
in soliciting offers to purchase Notes from the Company and in
performing the other obligations of an Agent hereunder (other
than in respect of any Terms Agreement), is acting solely as
agent for the Company and not as principal. Each Agent will make
reasonable efforts to assist the Company in obtaining performance
by each purchaser whose offer to purchase Notes from the Company
was solicited by such Agent and has been accepted by the Company,
but such Agent shall not have any liability to the Company in the
event 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 hold the
Agents harmless against any loss, claim or damage arising from or
as a result of such default by the Company.
11. Survival of Certain Provisions. The respective
indemnities, agreements, representations, warranties and other statements
by the Agents and the Company set forth in or made pursuant to this
Agreement, shall remain in full force and effect regardless of
any investigation (or any statement as to the results thereof)
made by or on behalf of any Agent or any controlling person of
any Agent or the Company, or any officer or director or any
controlling person of the Company, and shall survive each
delivery of and payment for any of the Notes.
12. Suspension or Termination. The provisions of this
Agreement relating to the solicitation of offers to purchase Notes from
the Company may be suspended or terminated at any time by the Company
as to any Agent or, in the case of either Agent, by such Agent
insofar as this Agreement relates to such Agent upon the giving
of written notice of such suspension or termination to the other
parties hereto. In the event of such suspension or termination,
(x) this Agreement shall remain in full force and effect with
respect to the rights and obligations of any party which have
previously accrued or which relate to Notes which are already
issued, agreed to be issued or the subject of a pending offer at
the time of such suspension or termination and (y) in any event,
this Agreement shall remain in full force and effect insofar as
the fourth paragraph of Section 2(a) (with respect to
solicitations made prior to such suspension or termination),
Section 4(h), Section 4(i), Section 5 (with respect to
solicitations made prior to such suspension or termination),
Section 9, Section 10 and Section 11 are concerned.
13. Notices. Except as otherwise specifically provided
herein or in the Procedures, all statements, requests, notices and
advice hereunder shall be in writing, or by telephone if promptly
confirmed in writing, and if to A.G. Edwards & Sons, Inc. shall
be sufficient in all respects when delivered or sent by telex,
facsimile transmission or registered mail to One North Jefferson,
St. Louis, Missouri 63103, Facsimile Transmission No. (314)
289-5989, Attention: Karen Middleton, Debt Syndicate, if to
PaineWebber Incorporated shall be sufficient in all respects when
delivered or sent by telex, facsimile transmission or registered
mail to 1285 Avenue of the Americas, New York, New York 10019,
Facsimile Transmission No. (212) 247-0371, Attention: David G.
Zahka, First Vice President, and if to the Company shall be
sufficient in all respects when delivered or sent by telex,
facsimile transmission or registered mail to 630 East Foothill
Boulevard, San Dimas, California 91773, Facsimile Transmission
No. (909) 394-1382, Attention: Chief Financial Officer; with a
copy to C. James Levin, Esq., O'Melveny & Myers, 400 South Hope
Street, Los Angeles, California 90071, Facsimile Transmission No.
(213) 430-6407.
14. Successors. This Agreement and any Terms Agreement shall
be binding upon, and inure solely to the benefit of, the Agents and
the Company, and to the extent provided in Section 9, Section 10
and Section 11 hereof, the officers and directors of the Company
and any person who controls an Agent or the Company, and their
respective personal representatives, successors and assigns, and
no other person shall acquire or have any right under or by
virtue of this Agreement or any Terms Agreement. No purchaser of
any of the Notes through or from an Agent hereunder shall be
deemed a successor or assign by reason merely of such purchase.
15. Time of the Essence. Time shall be of the essence in
this Agreement and any Terms Agreement. As used herein the term
"business day" shall mean any day when the Commission's office in
Washington, D.C. is open for business.
16. Applicable Law. This Agreement and any Terms Agreement
shall be governed by, and construed in accordance with, the laws
of the State of New York applicable to contracts made and to be
performed within the State of New York.
17. Counterparts. This Agreement and any Terms Agreement may
be executed by any one or more of the parties hereto and thereto in
any number of counterparts, each of which shall be an original,
but all of such respective counterparts shall together constitute
one and the same instrument.
If the foregoing is in accordance with your
understanding, please sign and return to us two counterparts
hereof, whereupon this letter and the acceptance by such of you
thereof shall constitute a binding agreement between the Company
and you in accordance with its terms.
Very truly yours,
SOUTHERN CALIFORNIA WATER COMPANY
By:
------------------------------
Name: McClellan Harris III
Title: Chief Financial Officer
Accepted in New York, New York,
as of the date hereof:
A. G. EDWARDS & SONS, INC.
By:
----------------------------
Name: Karen Clay-Middleton
Title: Vice-President
PAINEWEBBER INCORPORATED
By:
-----------------------------
Name: Tim Laslavic
Title: Managing Director
ANNEX I
SOUTHERN CALIFORNIA WATER COMPANY
Medium-Term Notes, Series C
TERMS AGREEMENT
__________ __, ____
A. G. Edwards & Sons, Inc.
One North Jefferson
St. Louis, Missouri 63103
PaineWebber Incorporated
1285 Avenue of the Americas
New York, New York 10019
Ladies and Gentlemen:
Southern California Water Company (the "Company")
proposes, subject to the terms and conditions stated herein and
in the Distribution Agreement, dated _________________ (the
"Distribution Agreement"), among the Company, A.G. Edwards &
Sons, Inc. and PaineWebber Incorporated, to issue and sell to
______________________ ("Purchaser") the notes specified in the
attached Schedule hereto (the "Purchased Notes"). Each of the
provisions of the Distribution Agreement not specifically related
to the solicitation by an Agent, as agent of the Company, of
offers to purchase notes is incorporated herein by reference in
its entirety, and shall be deemed to be part of this Terms
Agreement to the same extent as if such provisions had been set
forth in full herein. Nothing contained herein or in the
Distribution Agreement shall make any party hereto an agent of
the Company or make such party subject to the provisions therein
relating to the solicitation of offers to purchase notes from the
Company, solely by virtue of its execution of this Terms
Agreement. Each of the representations and warranties set forth
therein shall be deemed to have been made at and as of the date
of this Terms Agreement, except that each representation and
warranty in Section 1 of the Distribution Agreement which makes
reference to the Prospectus shall be deemed to be a
representation and warranty as of the date of the Distribution
Agreement in relation to the Prospectus (as therein defined), and
also a representation and warranty as of the date of this Terms
Agreement in relation to the Prospectus as amended and
supplemented to relate to the Purchased Notes.
An amendment to the Registration Statement, or a
supplement to the Prospectus, as the case may be, relating to the
Purchased Note, in the form heretofore delivered to you is now
proposed to be filed with the Commission.
Subject to the terms and conditions set forth herein
and in the Distribution Agreement incorporated herein by
reference, the Company agrees to issue and sell to Purchaser and
Purchaser agrees to purchase from the Company the Purchased
Notes, at the time and place, in the principal amount and at the
purchase price set forth in the Schedule hereto.
If the foregoing is in accordance with your understanding,
please sign and return to us two counterparts hereof, and upon
acceptance hereof by you this letter, including those provisions of
the Distribution Agreement incorporated herein by reference, shall
constitute a binding agreement between you and the Company.
Very truly yours,
SOUTHERN CALIFORNIA WATER
COMPANY
By:
----------------------
Name:
Title:
Accepted:
A.G. EDWARDS & SONS, INC.
By:
------------------------
Name:
Title:
PAINEWEBBER INCORPORATED
By:
-------------------------
Name:
Title:
Schedule to Annex I
Title of Purchased Notes:
Medium-Term Notes, Series C ("Purchased Notes")
Aggregate Principal Amount:
$__________
[Price to Public:]
Purchase Price by Purchaser:
_____% of the principal amount of the Purchased Notes, plus
accrued interest from ________________ to _______________.
Method of and Specified Funds for Payment of Purchase Price:
By wire transfer to a bank account specified by the Company
in immediately available funds.
Indenture:
Indenture, dated as of September 1, 1993, between the
Company and Chase Manhattan Bank and Trust Company, National
Association (formerly Chemical Trust Company of California),
as Trustee.
Time of Delivery:
Closing Location:
Maturity:
Interest Rate:
[_______%]
Interest Payment Dates:
June 1 and December 1.
Record Dates:
May 15 and November 15.
Redemption Dates:
Documents to be Delivered:
The following documents referred to in the Distribution
Agreement shall be delivered as a condition to the Closing:
[(1) The opinion or opinions of counsel to the Agents
referred to in Section 4(j).]
[(2) The opinion or opinions of counsel to the Company
referred to in Section 4(k).]
[(3) The accountants' letter referred to in Section 4(1).]
[(4) The officers' certificate referred to in Section 4(m).]
Syndicate Provisions:
[Set forth any provisions relating to underwriters'
default and step-up of amounts to be purchased by underwriters
acting with Purchaser.]
ANNEX II
MEDIUM-TERM NOTE ADMINISTRATIVE
PROCEDURE FOR FIXED RATE NOTES
(Dated as of _______, _____)
Medium-Term Notes, Series C (the "Notes") in the
aggregate principal amount of up to U.S. $60,000,000 are to be
offered on a continuing basis by Southern California Water
Company (the "Company") through A.G. Edwards & Sons, Inc. and
PaineWebber Incorporated, who, as agents (individually, an
"Agent" and collectively, the "Agents"), have each agreed to use
their reasonable efforts to solicit offers to purchase the Notes
from the Company. The Agents may also purchase Notes as
principal for resale.
The Notes are being sold pursuant to a Distribution
Agreement among the Company and the Agents, dated as of __________,
1998 (the "Distribution Agreement"). The Notes will be issued
pursuant to an Indenture (the "Indenture"), dated as of September
1, 1993, between the Company and Chase Manhattan Bank and Trust
Company, National Association (formerly Chemical Trust Company of
California), as trustee (the "Trustee"). A Registration Statement
(the "Registration Statement") with respect to the Notes has been
filed with the Securities and Exchange Commission (the
"Commission"). The most recent Prospectus included in the
Registration Statement is herein referred to as the "Prospectus"
(which term includes all applicable supplements thereto other
than Pricing Supplements). The most recent supplement to the
Prospectus with respect to the specific terms of the Notes is
herein referred to as the "Pricing Supplement."
The Notes will either be issued (a) in book-entry form
and represented by one or more fully registered Notes (each, a
"Book-Entry Note") delivered to the Trustee, as agent for The
Depository Trust Company ("DTC"), and recorded in the book-entry
system maintained by DTC, or (b) in certificated form delivered
to the purchaser thereof or a person designated by such purchaser.
Except in the limited circumstances described in the
Prospectus, owners of beneficial interests in Notes issued in
book-entry form will not be entitled to physical delivery of
Notes in certificated form equal in principal amount to their
respective beneficial interests.
General procedures relating to the issuance of all
Notes are set forth in Part I hereof. Additionally, Notes issued
in book-entry form will be issued in accordance with the
procedures set forth in Part II hereof and Notes issued in
certificated form will be issued in accordance with the
procedures set forth in Part III hereof. Capitalized terms used
herein that are not otherwise defined shall have the meanings
ascribed thereto in the Indenture or the Notes, as the case may
be.
PART I: PROCEDURES OF GENERAL
APPLICABILITY
Date of Issuance/ Each Note will be dated as of the date of
Authentication: its authentication by the Trustee. Each
Note shall also bear an original issue
date (the "Original Issue Date"). The
Original Issue Date shall remain the same
for all Notes subsequently issued upon
transfer, exchange or substitution of an
original Note regardless of their dates
of authentication.
Maturities Each Note will mature on a date selected
by the purchaser and agreed to by the
Company which is not less than nine
months nor more than thirty years from
its Original Issue Date.
Registration: Notes will be issued only in fully
registered form.
Calculation of Interest (including payments for partial
Interest: periods) will be calculated and paid on
the basis of a 360-day year of twelve 30-
day months.
Acceptance and The Company shall have the sole right to
Rejection of accept offers to purchase Notes from the
Offers: Company and may reject any such offer in
whole or in part. Each Agent shall
communicate to the Company, orally or in
writing, each reasonable offer to
purchase Notes from the Company received
by it. Each Agent shall have the right,
in its discretion reasonably exercised,
without notice to the Company, to reject
any offer to purchase Notes through it in
whole or in part.
Preparation of If any offer to purchase a Note is
Pricing accepted by the Company, the Company,
Supplement: with the approval of the applicable
Agent, will prepare a Pricing Supplement
reflecting the terms of such Note and
file electronically via EDGAR a Pricing
Supplement relating to the Notes and the
plan of distribution thereof with the
Commission in accordance with Rule 424
under the Act. Such Agent will cause a
Pricing Supplement and a Prospectus to be
delivered to the purchaser of the Note.
The Company shall have delivered a
completed Pricing Supplement, via next
day mail or telecopy, to arrive no later
than 11 a.m. on the Business Day
following the trade date, to the
applicable Agent at the following
address:
If to A. G. Edwards & Sons, Inc.
A. G. Edwards & Sons, Inc.
One North Jefferson
St. Louis, Missouri 63103
Attention: Debt Syndicate/Karen
Middleton
Telephone: (314) 289-5800
Telecopy: (314) 289-5989
If to PaineWebber Incorporated:
PaineWebber Incorporated
1285 Avenue of the Americas
New York, New York 10019
Attention: David G. Zahka, First Vice
President
Telephone: (212) 713-2960
Telecopy: (212) 247-0371
In each instance that a Pricing
Supplement is prepared, the applicable
Agent will affix the Pricing Supplement
to Prospectuses prior to their use.
Outdated Pricing Supplements, and the
Prospectuses to which they are attached
(other than those retained for files)
will be destroyed.
Settlement: The receipt of immediately available
funds by the Company in payment for a
Note and the authentication and delivery
of such Note shall, with respect to such
Note, constitute "settlement." Offers
accepted by the Company will be settled
from one to three Business Days, or at a
time as the purchaser, the Trustee and
the Company shall agree, pursuant to the
timetable for settlement set forth in Parts
II and III hereof under "Settlement
Procedures" with respect to Book-Entry
Notes and Certificated Notes,
respectively. If procedures A and B of
the applicable Settlement Procedures with
respect to a particular offer are not
completed on or before the time set forth
under the applicable "Settlement
Procedures Timetable," such offer shall
not be settled until the Business Day
following the completion of settlement
procedures A and B or such later date as
the purchaser and the Company shall
agree.
In the event of a purchase of Notes by an
Agent as principal, appropriate
settlement details will be as agreed
between such Agent and the Company
pursuant to the applicable Terms
Agreement.
Procedure for When a decision has been reached to
Changing Rates or change the interest rate or any other
Other Variable variable term on any Notes being offered
Terms: for sale, the Company will promptly
advise the Agents and the Agents will fo
rthwith suspend solicitation of offers to
purchase such Notes. Each Agent will
telephone the Company with
recommendations as to the changed
interest rates or other variable terms.
At such time as the Company advises the
Agents of the new interest rates or other
variable 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 at a new
interest rate or new variable term, the
Company, the Agents and the Trustee shall
follow the procedures set forth under the
applicable "Settlement Procedures."
Suspension of The Company may suspend solicitation of
Solicitation; purchases at any time. Upon receipt of
Amendment or such instructions the Agents will each
Supplement: forthwith suspend solicitation of offers
to purchase from the Company until such
time as the Company has advised it that
solicitation of offers to purchase may be
resumed. If the Company decides to amend
the Registration Statement (including
incorporating any documents by reference
therein) or supplement any of such
documents (other than to change rates or
other variable terms), it will promptly
furnish each Agent and its counsel with
copies of the amendment (including any
document proposed to be incorporated by
reference therein) or supplement. One
copy of such filed document, along with a
copy of the cover letter sent to the
Commission, will be delivered or mailed
to each Agent at the following addresses:
A.G. Edwards & Sons, Inc.
One North Jefferson
St. Louis, Missouri 63103
Attention: Debt Syndicate/Karen Middleton
Telecopy: (314) 289-5989
PaineWebber Incorporated
1285 Avenue of the Americas
New York, New York 10019
Attention: David G. Zahka, First Vice
President
Telecopy: (212) 247-0371
In the event that at the time the
solicitation of offers to purchase from
the Company is suspended (other than to
change interest rates or other variable
terms) there shall be any orders
outstanding which have not been settled,
the Company will promptly advise the
Agents and the Trustee whether such
orders 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
orders. The Company will have the sole
responsibility for such decision and for
any arrangements which may be made in the
event that the Company determines that
such orders may not be settled or that
copies of such Prospectus may not be so
delivered.
Delivery of A copy of the most recent Prospectus and
Prospectus: Pricing Supplement must accompany or
precede the earlier of (a) the written
confirmation of a sale sent to a customer
or the agent of such customer, and (b)
the delivery of Notes to a customer or
the agent of such customer.
Authenticity of The Agents will have no obligations or
Signatures: 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 The Company shall supply the Agents with
Incorporated by an adequate supply of all documents
Reference: incorporated by reference in the
Registration Statement.
Business Day: "Business Day" means any day, other than
a Saturday or Sunday, on which banks in
The City of New York, are not required or
authorized by law to close.
PART II: PROCEDURES FOR NOTES ISSUED
IN BOOK-ENTRY FORM
In connection with the qualification of Notes issued in
book-entry form for eligibility in the book-entry system
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
Representation from the Company and the Trustee to DTC, dated as
of ________, _____, and a Medium-Term Note Certificate Agreement
between the Trustee and DTC (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, redemption provisions,
interest payment dates, interest
rate, and Stated Maturity
(collectively, the "Fixed Rate
Terms") will be represented initially
by a single global security in fully
registered form without coupons
(each, a "Book-Entry Note").
Each Book-Entry Note will be dated
and issued as of the date of its
authentication by the Trustee. Each
Book-Entry Note will bear an Interest
Accrual Date, which will be (a) with
respect to an original Book-Entry
Note (or any portion thereof), its
Original Issue Date and (b) with
respect to any Book-Entry Note (or
portion thereof) issued subsequently
upon exchange of a Book-Entry Note or
in lieu of a destroyed, lost or
stolen Book-Entry Note, the most
recent Interest Payment Date to which
interest has been paid or duly
provided for on the predecessor Book-
Entry Note or Notes (or if no such
payment or provision has been made,
the Original Issue Date of the
predecessor Book-Entry Note or
Notes), regardless of the date of
authentication of such subsequently
issued Book-Entry Note. No Book-
Entry Note shall represent any Note
issued in certificated form.
Identification: The Company has arranged with the
CUSIP Service Bureau of Standard &
Poor's Corporation (the "CUSIP
Service Bureau") for the reservation
of approximately 900 CUSIP numbers
which have been reserved for and
relating to Book-Entry Notes and the
Company has delivered to the Trustee
and DTC a written list of such CUSIP
numbers. The Trustee will assign
CUSIP numbers to Book-Entry Notes as
described below under Settlement
Procedure B. DTC will notify the
CUSIP Service Bureau periodically of
the CUSIP numbers that the Trustee
has assigned to Book-Entry Notes.
The Trustee will notify the Company
at any time when fewer than 50 of the
reserved CUSIP numbers remain
unassigned to Book-Entry Notes, and,
if it deems necessary, the Company
will reserve additional CUSIP numbers
for assignment to Book-Entry Notes.
Upon obtaining such additional CUSIP
numbers, the Company will deliver a
list of such additional numbers to
the Trustee and DTC.
Registration: Each Book-Entry Note will be
registered in the name of Cede & Co.,
as nominee for DTC, on the register
maintained by the Trustee under the
Indenture. The beneficial owner of a
Note issued in book-entry form (i.e.,
an owner of a beneficial interest in
a Book-Entry Note) (or one or more
indirect 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.
Transfers: Transfers of a Book-Entry Note will
be accomplished by book entries made
by DTC and, in turn, by Participants
(and in certain cases, one or more
indirect participants in DTC) acting
on behalf of beneficial transferors
and transferees of such Book-Entry
Note.
Exchanges: The Trustee may deliver to DTC and
the CUSIP Service Bureau at any time
a written notice specifying (a) the
CUSIP numbers of two or more Book-
Entry Notes Outstanding on such date
that represent Book-Entry Notes
having the same Fixed Rate Terms
(other than Original Issue Dates) and
for which interest has been paid to
the same date; (b) a date, occurring
at least 30 days after such written
notice is delivered and at least 30
days before the next Interest Payment
Date for the related Notes issued in
book-entry form, on which such Book-
Entry Notes shall be exchanged for a
single replacement Book-Entry Note;
and (c) a new CUSIP number, obtained
from the Company, to be assigned to
such replacement Book-Entry Note.
Upon receipt of such a notice, DTC
will send to its participants
(including the Trustee) a written
reorganization notice to the effect
that such exchange will occur on such
date. Prior to the 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 Book-Entry Notes to be exchanged
will no longer be valid. On the
specified exchange date, the Trustee
will exchange such Book-Entry Notes
for a single Book-Entry Note bearing
the new CUSIP number and the CUSIP
numbers of the exchanged Book-Entry
Notes will, in accordance with CUSIP
Service Bureau procedures, be
canceled and not reassigned.
Denominations: Notes issued in book-entry form will
be issued in denominations of $1,000
and any larger denomination which is
an integral multiple of $1,000.
Interest: General. Interest on each Note
issued in book-entry form will accrue
from the Original Issue Date of the
Book-Entry Note representing such
Note. Each payment of interest on a
Note issued in book-entry form will
include interest accrued through the
day preceding, as the case may be,
the Interest Payment Date or
Maturity. DTC will arrange for each
pending deposit message described
under Settlement Procedure C below to
be transmitted to Standard & Poor's,
which will use the information in the
message to include certain terms of
the related Book-Entry Note in the
appropriate daily bond report
published by Standard & Poor's.
Regular Record Dates. The Regular
Record Date with respect to any
Interest Payment Date for a Note
shall be the fifteenth calendar day
(whether or not a business day)
preceding such Interest Payment Date.
Interest Payment Dates. Interest
payments will be made on each
Interest Payment Date commencing with
the first Interest Payment Date
following the Original Issue Date to
the holders on the Record Date
preceding such Interest Payment Date;
provided, however, the first payment
of interest on any Note originally
issued between a Regular Record Date
and an Interest Payment Date will
occur on the Second Interest Payment
Date following the Original Issue
Date.
Interest payments on Notes issued in
book-entry form will be made
semiannually as specified in each
Note or Pricing Supplement and at
Maturity unless such day is not a
Business Day, in which case such
payment will be made on the next
Business Day.
Payments of Payments of Interest Only. Promptly
Principal and after each Regular Record Date, the
Interest: Trustee will deliver to the Company
and DTC a written notice specifying
by CUSIP number the amount of
interest to be paid on each Book-
Entry Note on the following Interest
Payment Date (other than an Interest
Payment Date coinciding with
Maturity) and the total of such
amounts. DTC will confirm the amount
payable on each Book-Entry Note on
such Interest Payment Date by
reference to the daily bond reports
published by Standard & Poor's. On
such Interest Payment Date, the
Company will pay to the Trustee, and
the Trustee in turn will pay to DTC,
such total amount of interest due
(other than at Maturity), at the
times and in the manner set forth
below under "Manner of Payment."
Payments at Maturity. On or about
the 15th day of each month preceding
the month on which principal and/or
interest is to be paid, the Trustee
will deliver to the Company and DTC a
written list of principal, interest
and premium, if any, to be paid on
each Book-Entry Note maturing either
at Stated Maturity or on a Redemption
Date in the following month. The
Trustee, the Company and DTC will
confirm the amounts of such principal
and interest payments with respect to
a Book-Entry Note on or about the
fifth Business Day preceding the
Maturity of such Book-Entry Note. At
such Maturity, the Company will pay
to the Trustee, and the Trustee in
turn will pay to DTC, the principal
amount of such Note, together with
interest and premium, if any, due at
such Maturity, at the times and in
the manner set forth below under
"Manner of Payment." If any Maturity
of a Book-Entry Note is not a
Business Day, the payment due on such
day shall be made on the next
succeeding Business Day and no
interest shall accrue on such payment
for the period from and after such
Maturity. Promptly after payment to
DTC of the principal, interest and
premium, if any, due at the maturity
of such Book-Entry Note, the Trustee
will cancel such Book-Entry Note and
deliver it to the Company with an
appropriate debit advice. On the
first Business Day of each month, the
Trustee will deliver to the Company a
written statement indicating the
total principal amount of Outstanding
Book-Entry Notes as of the
immediately preceding Business Day.
Manner of Payment. The total amount
of any principal, premium, if any,
and interest due on Book-Entry Notes
on any Interest Payment Date or at
Maturity shall be transferred by the
Company to the Trustee to an account
designated by the Trustee in funds
available for use by the Trustee as
of 9:30 a.m., New York City time, on
such date. The Company will confirm
such instructions in writing to the
Trustee. Prior to 10:00 a.m., New
York City time, on such date or as
soon as possible thereafter, the
Trustee will pay (but only from funds
withdrawn from such account) by
separate wire transfer (using Fedwire
message entry instructions in a form
previously specified by DTC) to an
account at the Federal Reserve Bank
of New York previously specified by
DTC, in funds available for immediate
use by DTC, each payment of interest,
principal and premium, if any, due on
a Book-Entry Note 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 such
Notes are recorded in the book-entry
system maintained by DTC. Neither
the Company nor the Trustee shall
have any responsibility or liability
for the payment by DTC of the
principal of, or premium, if any, or
interest on, the Book-Entry Notes to
such Participants.
Withholding Taxes. The amount of any
taxes required under applicable law
to be withheld from any interest
payment on a Note will be determined
and withheld by the Participant,
indirect participant in DTC or other
Person responsible for forwarding
payments and materials directly to
the beneficial owner of such Note.
Settlement Settlement Procedures with regard to
Procedures: each Note in book-entry form sold by
an Agent, as agent of the Company,
will be as follows:
A. The applicable Agent will advise
the Company by telephone
(confirmed in writing) or
telecopy of the following
settlement information:
1. Taxpayer identification number
of the purchaser.
2. Principal amount of the Note.
3. Interest rate and Interest
Payment Dates for the Notes.
4. Price to public of the Note.
5. Trade date.
6. Settlement Date (Original
Issue Date).
7. Maturity Date.
8. Net proceeds to the Company.
9. Agent's commission.
10.Redemption provisions, if any.
B. The Company will advise the
Trustee by electronic
transmission of the above
settlement information received
from such Agent with respect to
the Book-Entry Note representing
such Note.
C. The Trustee will assign a CUSIP
number to such Note and the
Trustee will communicate to DTC
through DTC's Participant
Terminal System, a pending
deposit message specifying the
following settlement information,
which will route such relevant
information to such Agent,
Standard & Poor's Corporation and
Interactive Data Corporation:
1. The information set forth in
Settlement Procedure A.
2. Identification numbers of the
participant accounts
maintained by DTC on behalf of
the Trustee and such Agent.
3. Identification as a Book-Entry
Note.
4. Initial Interest Payment Date
for such Note, number of days
by which such date succeeds
the related record dated for
DTC purposes and, if then
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 Book-Entry
Note representing such Note.
6. Whether such Book-Entry Note
represents any other Notes
issued or to be issued in book-
entry form.
D. The Trustee will complete a Book-
Entry Note representing such Note
in a form that has been approved
by the Company, such Agent and
the Trustee.
E. The Trustee will authenticate the
Book-Entry Note representing such
Note.
F. DTC will credit such Note to the
participant account of the
Trustee maintained by DTC.
G. The Trustee will enter an SDFS
deliver order through DTC's
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
applicable Agent maintained by
DTC and (ii) to debit the
settlement account of such Agent
and credit the settlement account
of the Trustee maintained by DTC,
in an amount equal to the price
of such Note less such Agent's
commission. Any entry of such a
deliver order shall be deemed to
constitute a representation and
warranty by the Trustee to DTC
that (i) the Book-Entry Note
representing such Note has been
issued and authenticated and (ii)
the Trustee is holding such Book-
Entry Note pursuant to the Medium
Term Note Certificate Agreement
between the Trustee and DTC.
H. The applicable Agent will enter
an SDFS deliver order through
DTC's Participant Terminal System
instructing DTC (i) to debit such
Note to such Agent's participant
account and credit such Note to
the participant account of the
Participants maintained by DTC
and (ii) to debit the settlement
accounts of such Participants and
credit the settlement account of
such Agent maintained by DTC, in
an amount equal to the public
offering price of such Note.
I. Transfers of funds in accordance
with SDFS deliver orders
described in settlement
Procedures G and H will be
settled in accordance with SDFS
operating procedures in effect on
the Settlement Date.
J. Upon receipt of such funds, the
Trustee will credit to an account
of the Company identified to the
Trustee funds available for
immediate use in the amount
transferred to the Trustee in
accordance with settlement
Procedure G.
K. The Trustee will send a copy of
each Book-Entry Note to the
Company together with a statement
setting forth the principal
amount of Notes Outstanding in
accordance with the Indenture.
L. The applicable Agent will confirm
the purchase of such Note to the
purchaser either by transmitting
to the Participant with respect
to such Note a confirmation order
through DTC's Participant
Terminal System or by mailing a
written confirmation to such
purchaser.
Settlement For orders of Notes accepted by the
Procedures Company, Settlement Procedures "A"
Timetable: through "L" set forth above shall be
completed as soon as possible but not
later than the respective times (New
York City time) set forth below:
Settlement
Procedure Time
A 11:00 a.m. on the trade date
B 12:00 noon on the trade date
C 2:00 p.m. on the trade date
D 3:00 p.m. on the Business Day before
Settlement Date
E 9:00 a.m. on Settlement Date
F 10:00 a.m. on Settlement Date
G-H 2:00 p.m. on the Settlement Date
I 4:45 p.m. on Settlement Date
J-L 5:00 p.m. on Settlement Date
If a sale is to be settled more than
one Business Day after the trade
date, Settlement Procedures A, B, and
C may, if necessary, be completed at
any time prior to the specified times
on the first Business Day after such
sale date. In connection with a
trade which is to be settled more
than one Business Day after the trade
date, Settlement Procedure I is
subject to extension in accordance
with any extension of Fedwire closing
deadlines and in the other events
specified in the SDFS operating
procedures in effect on the
Settlement Date.
If settlement of a Note issued in
book entry form is rescheduled or
canceled, the Trustee will deliver to
DTC, through DTC's Participant
Terminal System, a cancellation
message to such effect by no later
than 2:00 p.m., New York City time,
on the Business Day immediately
preceding the scheduled Settlement
Date.
Failure to Settle: If the Trustee fails to enter an SDFS
deliver order with respect to a Book-
Entry Note issued in book-entry form
pursuant to Settlement Procedure G,
the Trustee may deliver to DTC,
through DTC's Participant Terminal
System, as soon as practicable a
withdrawal message instructing DTC to
debit such Note to the participant
account of the Trustee maintained at
DTC. DTC will process the withdrawal
message, provided that such
participant account contains a
principal amount of the Book-Entry
Note representing such Note that is
at least equal to the principal
amount to be debited. If withdrawal
messages are processed with respect
to all the Notes represented by a
Book-Entry Note, the Trustee will
mark such Book-Entry Note "canceled,"
make appropriate entries in its
records and send such canceled
Book-Entry Note to the Company. The
CUSIP number assigned to such
Book-Entry Note shall, in 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
Book-Entry Note, the Trustee will
exchange such Book-Entry Note for two
Book-Entry Notes, one of which shall
represent the Book-Entry Notes for
which withdrawal messages are
processed and shall be canceled
immediately after issuance, and the
other of which shall represent the
other Notes previously represented by
the surrendered Book-Entry Note and
shall bear the CUSIP number of the
surrendered Book-Entry Note.
If the purchase price for any
Book-Entry Note is not timely paid to
the Participants with respect to such
Note by the beneficial purchaser
thereof (or a person, including an
indirect participant in DTC, acting
on behalf of such purchaser), such
Participants and, in turn, the
applicable Agent may enter SDFS
delivery orders through DTC's
Participant Terminal System reversing
the orders entered pursuant to
Settlement Procedures G and H,
respectively. Thereafter, the
Trustee will deliver the withdrawal
message and take the related actions
described in the preceding paragraph.
If such failure shall have occurred
for any reason other than default by
such Agent to perform its obligations
hereunder or under the Distribution
Agreement, the Company will reimburse
such Agent on an equitable basis for
its loss of the use of funds during
the period when the funds were
credited to the account of the
Company.
Notwithstanding the foregoing, upon
any failure to settle with respect to
a Book-Entry Note, DTC may take any
actions in accordance with its SDFS
operating Procedures then in effect.
In the event of a failure to settle
with respect to a Note that was to
have been represented by a Book-Entry
Security also representing other
Notes, the Trustee will provide, in
accordance with Settlement Procedures
D and E, for the authentication and
issuance of a Book-Entry Note
representing such remaining Notes and
will make appropriate entries in its
records.
Nothing herein should be deemed to
require the Trustee to risk or expend
its own funds in connection with any
payment to the Company, or the
Agents, or DTC, or any Noteholder, it
being understood by all parties that
payments made by the Trustee shall be
made solely to the extent that funds
are provided to the Trustee for such
purpose.
PART III: PROCEDURES FOR NOTES ISSUED
IN CERTIFICATED FORM
Denominations: The Notes will be issued in
denominations of U.S. $1,000 and
integral multiples of U.S. $1,000 in
excess thereof.
Interest: Each Note will bear interest in
accordance with its terms. Interest
will begin to accrue on the Original
Issue Date of a Note for the first
interest period and on the most
recent interest payment date to which
interest has been paid for all
subsequent interest periods. Each
payment of interest shall include
interest accrued to, but excluding,
the date of such payment. However,
the first payment of interest on any
Note issued between a Record Date and
an Interest Payment Date will be made
on the Interest Payment Date
following the next succeeding Record
Date. The Record Date for any
payment of interest shall be the
fifteenth calendar day (whether or
not a business day), prior to the
applicable Interest Payment Date.
Interest at Maturity will be payable
to the person to whom the principal
is payable.
Nothing herein should be deemed to
require the Trustee to risk or expend
its own funds in connection with any
payment to the Company, or the
Agents, or DTC, or any Noteholder, it
being understood by all parties that
payments made by the Trustee shall be
made solely to the extent that funds
are provided to the Trustee for such
purpose.
Payments of Upon presentment and delivery of the
Principal and Note, the Trustee will pay the
Interest: principal amount of each Note at
Maturity and the final installment of
interest in immediately available
funds. All interest payments on a
Note, other than interest due at
Maturity, will be made by check drawn
on the Trustee and mailed by the
Trustee to the person entitled
thereto as provided in the Note.
However, holders of $10 million or
more in aggregate principal amount of
Notes (whether having identical or
different terms and provisions) shall
be entitled to receive payments of
interest, other than at Maturity, by
wire transfer of immediately
available funds if appropriate wire
transfer instructions have been
received in writing by the Trustee
not less than 16 days prior to the
applicable Interest Payment Date.
Any payment of principal or interest
required to be made on an Interest
Payment Date or at Maturity of a Note
which is not a Business Day (as
defined below) need not be made on
such day, but may be made on the next
succeeding Business Day with the same
force and effect as if made on the
Interest Payment Date or at Maturity,
as the case may be, and no interest
shall accrue for the period from and
after such Interest Payment Date or
Maturity.
The Trustee will provide to the
Company in each month prior to a month
in which any Note or Notes mature, a
list of the principal and interest to
be paid on Notes maturing in the next
succeeding month. The Trustee will be
responsible for withholding taxes on
interest paid as required by
applicable law, but shall be relieved
from any such responsibility if it
acts in good faith and in reliance
upon an opinion of counsel.
Notes presented to the Trustee at
Maturity for payment will be canceled
and held by the Trustee.
Settlement Settlement Procedures with regard to
Procedures: each Note purchased through an Agent,
as agent, shall be as follows:
A. The applicable Agent will advise
the Company by telephone
(confirmed in writing) or
telecopy of the following
Settlement information with
regard to each Note:
1. Exact name in which the Note is
to be registered (the
"Registered Owner").
2. Exact address or addresses of
the Registered Owner for
delivery, notices and payments
of principal and interest.
3. Taxpayer identification number
of the Registered Owner.
4. Principal amount of the Note.
5. Denomination of the Note.
6. Interest rate and Interest Payment
Date for the Note.
7. Price to public of the Note.
8. Trade date.
9. Settlement date (Original Issue
Date).
10. Maturity Date.
11. Net proceeds to the Company.
12. Agent's Commission.
13. Redemption provisions, if any.
B. The Company shall provide to the
Trustee the above Settlement
information received from such
Agent and shall cause the Trustee
to issue, authenticate and deliver
Notes. The Company also shall
provide to the Trustee and/or
Agent a copy of the applicable
Pricing Supplement.
C. With respect to each trade, the
Trustee will deliver the Notes to
such Agent at the following
address:
If to A. G. Edwards & Sons, Inc.:
A. G. Edwards & Sons, Inc.
77 Water Street
6th Floor
New York, New York 10004
Attention: Carlos Velez
Telephone: (212) 952-7228
Telecopy: (212) 952-6818
If to PaineWebber Incorporated:
PaineWebber Incorporated
1285 Avenue of the Americas
New York, New York 10019
Attention: David G. Zahka
Telephone: (212) 713-2960
Telecopy: (212) 247-0371
The Trustee will keep a copy of
such Note. The applicable Agent
will acknowledge receipt of the
Note through a broker's receipt
and will keep a copy of such
Note. Delivery of the Note will
be made only against such
acknowledgment of receipt. Upon
determination that the Note has
been authorized, delivered and
completed as aforementioned, such
Agent will wire the net proceeds
of the Note after deduction of
its applicable commission to the
Company pursuant to standard wire
instructions given by the amount.
D. Such Agent will deliver the
Note (with confirmations), as
well as a copy of the
Prospectus and the Pricing
Supplement received from the
Trustee to the purchaser
against payment in immediately
available funds.
E. The Trustee will send a copy
of such Note to the Company.
Settlement For offers accepted by the Company,
Procedures Settlement Procedures "A" through "E"
Timetable: set forth above shall be completed on
or before the respective times set
forth below:
Settlement
Procedure Time
A 5:00 P.M. on the trade
date
B 3:00 P.M. on the second
Business Day prior to
settlement
C 12:00 noon on day of
settlement
D 3:00 P.M. on day of
settlement
E 5:00 P.M. on day of
settlement
Failure to Settle: In the event that a purchaser of a
Note from the Company shall either
fail to accept delivery of or make
payment for a Note on the date fixed
for settlement, the applicable Agent
will forthwith notify the Trustee and
the Company by telephone, confirmed
in writing, and return the Note to
the Trustee. The Trustee, upon
receipt of the Note from such Agent,
will immediately advise the Company
and the Company will promptly arrange
to credit the account of such Agent
in an amount of immediately available
funds equal to the amount previously
paid by such Agent in settlement for
the Note. Such credits will be made
on the settlement date if possible,
and in any event not later than the
Business Day following the settlement
date; 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
Agent to perform its obligations
hereunder or under the Distribution
Agreement, the Company will reimburse
such Agent on an equitable basis for
its loss of the use of funds during
the period when the funds were
credited to the account of the
Company. Immediately upon receipt of
the Note in respect of which the
failure occurred, the Trustee will
cancel and destroy the Note, make
appropriate entries in its records to
reflect the fact that the Note was
never issued, and accordingly notify
in writing the Company.
ANNEX III
Pursuant to Section 4(l) and Section 6(d), as the case
may be, of the Distribution Agreement, the Company's independent
certified public accountants shall furnish letters to the effect
that:
(i) They are independent certified public accountants
with respect to the Company and its subsidiaries within the
meaning of the Act and the applicable published rules and
regulations thereunder;
(ii) In their opinion, the financial statements and any
supplementary financial information and schedules examined by
them and included or incorporated by reference in the
Registration Statement or the Prospectus comply as to form in all
material respects with the applicable accounting requirements of
the Act or the Exchange Act, as applicable, and the related
published rules and regulations thereunder; and, if applicable,
they have made a review in accordance with standards established
by the American Institute of Certified Public Accountants of the
interim financial statements;
(iii) The unaudited selected financial information
with respect to the results of operations and financial position
of the Company for the five most recent fiscal years included in
the Prospectus and included or incorporated by reference in Item
6 of the Company's Annual Report on Form 10-K for the most recent
fiscal year agrees with the corresponding amounts (after
restatement where applicable) in the audited financial statements
for five such fiscal years which were included or incorporated by
reference in the Company's Annual Reports on Form 10-K for such
fiscal years;
(iv) On the basis of limited procedures, not
constituting an examination in accordance with generally accepted
auditing standards, consisting of a reading of the unaudited
financial statements and other information referred to below, a
reading of the latest available interim financial statements of
the Company, inspection of the minute books of the Company since
the date of the latest audited financial statements included or
incorporated by reference in the Prospectus, inquiries of
officials of the Company responsible for financial and accounting
matters and such other inquiries and procedures as may be
specified in such letter, nothing came to their attention that
caused them to believe that:
(A) the unaudited statements of income, balance sheets
and statements of cash flows included or incorporated by
reference in the Company's quarterly reports on Form 10-Q
incorporated by reference in the Prospectus do not comply as
to form in all material respects with the applicable
accounting requirements of the Exchange Act as it applies to
Form 10-Q and the related published rules and regulations
thereunder or are not in conformity with generally accepted
accounting principles applied on a basis substantially
consistent with the basis for the audited statements of
income, balance sheets and statements of cash flows included
or incorporated by reference in the Company's annual report
on Form 10-K for the most recent fiscal year;
(B) any other unaudited statement of income and cash
flow data, balance sheet items, per share and share data and
selected financial data included in the Prospectus do not
agree with the corresponding items in the unaudited or
audited financial statements from which such data and items
were derived, or that any such unaudited data and items were
not determined on a basis substantially consistent with the
basis for the corresponding amounts in the audited financial
statements included or incorporated by reference in the
Company's annual reports on Form 10-K for the three most
recent fiscal years;
(C) any unaudited financial statements which were not
included in the Prospectus but from which were derived the
unaudited financial statements referred to in Clause (A) and
any unaudited income statement data and balance sheet items
included in the Prospectus and referred to in Clause (B)
were not determined on a basis substantially consistent with
the basis for the audited financial statements included or
incorporated by reference in the Company's annual report on
Form 10-K for the most recent fiscal year;
(D) for the period from the date of the latest
financial statements included or incorporated by reference
in the Prospectus to the date of the most recent unaudited
financial statements not included in the Prospectus there
were any decreases in the amount of the Company's retained
earnings available for the payment of dividends or in net
revenues, income from operations before provision for income
taxes or operating profit or the total or per share amounts
of income before extraordinary items or net income, or any
decreases in the ratios of income from continuing operations
before provision for income taxes or net income to revenues,
or any increases in the ratios of selling and administrative
expense or interest expense to revenues, in each case as
compared to the average monthly period for the three months
constituting the latest quarter for which a balance sheet is
included or incorporated by reference in the Prospectus,
except in each case for increases or decreases which the
Prospectus discloses have occurred or may occur; or
(E) as of a specified date not more than five days
prior to the date of such letter, there have been any
decrease in the capital stock (other than issuances of
capital stock upon conversions of convertible securities
which were outstanding on the date of the latest balance
sheet included or incorporated by reference in the Pro
spectus) or any increase in the long-term debt of the
Company, in each case as compared with amounts shown in the
latest balance sheet included or incorporated by reference
in the Prospectus, except in each case for changes,
increases or decreases, which the Prospectus discloses have
occurred or may occur; and
(v) In addition to the examination referred to in
their report(s) included or incorporated by reference in the
Prospectus and the limited procedures, inspection of minute
books, inquiries and other procedures referred to in paragraphs
(iii) and (iv) above, they have carried out certain specified
procedures, not constituting an examination in accordance with
generally accepted auditing standards, with respect to certain
amounts, percentages and financial information specified by the
Agents which are derived from the general accounting records of
the Company which appear in the Prospectus (excluding documents
incorporated by reference), or in Part II of, or in exhibits and
schedules to, the Registration Statement specified by the Agents
or in documents incorporated by reference in the Prospectus
specified by the Agents, and have compared certain of such
amounts, percentages and financial information with the
accounting records of the Company and have found them to be in
agreement.
All references in this Annex III to the Prospectus
shall be deemed to refer to the Prospectus (including the documents
incorporated by reference therein) as defined in the
Distribution Agreement as of the Commencement Date referred to in
Section 6(d) thereof and to the Prospectus as amended or
supplemented (including the documents incorporated by reference
therein) as of the date of the amendment, supplement,
incorporation or the Time of Delivery relating to the Terms
Agreement requiring the delivery of such letter under Section
4(l) thereof.