1 EXHIBIT 4.08
-------------------------------------------------------------------------------
-------------------------------------------------------------------------------
SOUTHWEST GAS CORPORATION
TO
XXXXXX TRUST AND SAVINGS BANK, as Trustee
FIRST SUPPLEMENTAL INDENTURE
dated as of October 31, 1995
9.125% Subordinated Deferrable
Interest Notes Due 2025
-------------------------------------------------------------------------------
-------------------------------------------------------------------------------
2
Table of Contents
PAGE
ARTICLE I
Definitions . . . . . . . . . . . . . . . 2
Section 1.1. Definition of Terms. . . . . . . . . . . . . . . . . . . . . 2
ARTICLE II
General Terms and Conditions of the Notes. . . . . . . . 4
Section 2.1. Designation and Principal Amount . . . . . . . . . . . . . . 4
Section 2.2. Maturity . . . . . . . . . . . . . . . . . . . . . . . . . . 4
Section 2.3. Form and Payment . . . . . . . . . . . . . . . . . . . . . . 5
Section 2.4. Global Note. . . . . . . . . . . . . . . . . . . . . . . . . 5
Section 2.5. Interest . . . . . . . . . . . . . . . . . . . . . . . . . . 7
ARTICLE III
Redemption of the Notes . . . . . . . . . . . . 8
Section 3.1. Special Event Redemption.. . . . . . . . . . . . . . . . . . 8
Section 3.2. Optional Redemption by Company . . . . . . . . . . . . . . . 9
Section 3.3. No Sinking Fund. . . . . . . . . . . . . . . . . . . . . . . 10
ARTICLE IV
Extension of Interest Payment Period. . . . . . . . . 10
Section 4.1. Extension of Interest Payment Period . . . . . . . . . . . . 10
Section 4.2. Notice of Extension. . . . . . . . . . . . . . . . . . . . . 10
ARTICLE V
Expenses. . . . . . . . . . . . . . . . 11
Section 5.1. Payment of Expenses. . . . . . . . . . . . . . . . . . . . . 11
ARTICLE VI
Subordination. . . . . . . . . . . . . . . 12
Section 6.1. Agreement to Subordinate . . . . . . . . . . . . . . . . . . 12
Section 6.2. Default on Senior Indebtedness . . . . . . . . . . . . . . . 12
Section 6.3. Liquidation; Dissolution; Bankruptcy . . . . . . . . . . . . 13
i
3
Section 6.4. Subrogation. . . . . . . . . . . . . . . . . . . . . . . . . 14
Section 6.5. Trustee to Effectuate Subordination. . . . . . . . . . . . . 15
Section 6.6. Notice by the Company. . . . . . . . . . . . . . . . . . . . 15
Section 6.7. Rights of the Trustee; Holders of Senior
Indebtedness. . . . . . . . . . . . . . . . . . . . . . . . . . . . . 16
Section 6.8. Subordination May Not Be Impaired. . . . . . . . . . . . . . 17
ARTICLE VII
Covenants. . . . . . . . . . . . . . . . 17
Section 7.1. Listing on an Exchange . . . . . . . . . . . . . . . . . . . 17
Section 7.2. Equal and Ratable Security . . . . . . . . . . . . . . . . . 18
ARTICLE VIII
Form of Note. . . . . . . . . . . . . . . 19
Section 8.1. Form of Note . . . . . . . . . . . . . . . . . . . . . . . . 19
ARTICLE IX
Original Issue of Notes . . . . . . . . . . . . 26
Section 9.1. Original Issue of Notes. . . . . . . . . . . . . . . . . . . 26
Section 9.2. Reports by the Trustee . . . . . . . . . . . . . . . . . . . 26
ARTICLE X
Miscellaneous. . . . . . . . . . . . . . . 26
Section 10.1. Ratification of Indenture . . . . . . . . . . . . . . . . . 26
Section 10.2. Trustee Not Responsible for Recitals. . . . . . . . . . . . 26
Section 10.3. Governing Law . . . . . . . . . . . . . . . . . . . . . . . 26
Section 10.4. Separability. . . . . . . . . . . . . . . . . . . . . . . . 26
Section 10.5. Counterparts. . . . . . . . . . . . . . . . . . . . . . . . 27
Section 10.6. Third Party Beneficiaries . . . . . . . . . . . . . . . . . 27
ii
4
FIRST SUPPLEMENTAL INDENTURE, dated as of October 31, 1995 (the "First
Supplemental Indenture"), between Southwest Gas Corporation, a California
corporation (the "Company"), Xxxxxx Trust and Savings Bank, as trustee (the
"Trustee") under the Indenture dated as of October 31, 1995 between the
Company and the Trustee (the "Indenture").
WHEREAS, the Company executed and delivered the Indenture to the Trustee
to provide for the future issuance of the Company's unsecured subordinated
debt securities to be issued from time to time in one or more series as might
be determined by the Company under the Indenture, in an unlimited aggregate
principal amount which may be authenticated and delivered as provided in the
Indenture;
WHEREAS, pursuant to the terms of the Indenture, the Company desires to
provide for the establishment of a new series of its Securities to be known as
its 9.125% Subordinated Deferrable Interest Notes due 2025 (the "Notes"), the
form and substance of such Notes and the terms, provisions and conditions
thereof to be set forth as provided in the Indenture and this First
Supplemental Indenture;
WHEREAS, Southwest Gas Capital I, a Delaware statutory business trust
(the "Trust"), has offered to the public $60,000,000 aggregate liquidation
amount of its 9.125% Trust Originated Preferred Securities (the "Preferred
Securities"), representing undivided beneficial interests in the assets of the
Trust and proposes to invest the proceeds from such offering in $60,000,000
aggregate principal amount of the Notes; and
WHEREAS, the Company has requested that the Trustee execute and deliver
this First Supplemental Indenture and all requirements necessary to make this
First Supplemental Indenture a valid instrument in accordance with its terms
and to make the Notes, when executed by the Company and authenticated and
delivered by the Trustee, the valid obligations of the Company have been
performed, and the execution and delivery of this First Supplemental Indenture
has been duly authorized in all respects;
NOW THEREFORE, in consideration of the purchase and acceptance of the
Notes by the Holders thereof, and for the purpose of setting forth, as
provided in the Indenture, the form and substance of the Notes and the terms,
provisions and conditions thereof, the Company covenants and agrees with the
Trustee as follows:
1
5
ARTICLE I
Definitions
Section 1.1. Definition of Terms.
Unless the context otherwise requires:
(a) a term defined in the Indenture has the same meaning when used in
this First Supplemental Indenture;
(b) a term defined anywhere in this First Supplemental Indenture has the
same meaning throughout;
(c) the singular includes the plural and vice versa;
(d) a reference to a Section or Article is to a Section or Article of
this First Supplemental Indenture;
(e) headings are for convenience of reference only and do not affect
interpretation;
(f) the following terms have the meanings given to them in the
Declaration: (i) Business Day; (ii) Common Securities; (iii)
Delaware Trustee; (iv) Depositary; (v) Dissolution Tax Opinion;
(vi) Ministerial Action; (vii) No Recognition Opinion; (viii)
Preferred Securities Guarantee; (ix) Property Trustee; (x)
Redemption Tax Opinion; (xi) Regular Trustees; and (xii) Tax Event;
and
(g) the following terms have the meanings given to them in this Section
1.1(g):
"Additional Interest" has the meaning given such term in Section 2.5(c).
"Compounded Interest" has the meaning given such term in Section 4.1.
"Coupon Rate" has the meaning given such term in Section 2.5(a).
"Debt" means, in respect of the Company, (i) the principal, premium,
if any, and interest in respect of (A) indebtedness of the Company for money
borrowed and (B) indebtedness evidenced by securities, debentures, bonds or
other similar instruments issued by the Company, (ii) all capital lease
obligations of the Company, (iii) all obligations of the Company issued or
assumed as the deferred purchase price of property, all conditional sale
obligations of the Company and all obligations of the Company under any title
retention agreement (but excluding trade accounts payable arising in the
ordinary course of business), (iv) all obligations of the Company for the
reimbursement of any letter of credit, banker's acceptance, security purchase
2
6
facility or similar credit transaction, (v) all obligations of the type
referred to in clauses (i) through (iv) above of other persons for the payment
of which the Company is responsible or liable as obligor, guarantor or
otherwise, and (vi) all obligations of the type referred to in clauses (i)
through (v) above of other persons secured by any lien on any property or
asset of the Company (whether or not such obligation is assumed by the
Company).
"Deferred Interest" means Additional Interest and Compounded Interest.
"Dissolution Event" means that as a result of the occurrence and
continuation of a Tax Event, the Trust is to be dissolved in accordance with
the Declaration, and the Notes held by the Property Trustee are to be
distributed to the holders of the Trust Securities issued by the Trust pro
rata in accordance with the Declaration.
"Extended Maturity Date" means, if the Company elects to extend the
Maturity Date in accordance with Section 2.2(b), the date selected by the
Company which is after the Stated Maturity Date but before December 31, 2044.
"Extended Interest Payment Period" has the meaning given such term in
Section 4.1.
"Global Note" has the meaning given such term in Section 2.4(a)(i).
"Interest Payment Date" means the Stated Maturity of an installment of
interest on the Notes as set forth in Section 2.5(a).
"Lien" means any lien, mortgage, pledge, security interest, charge or
other encumbrance of any kind.
"Maturity Date" means the date on which the Notes mature and on which the
principal shall be due and payable together with all accrued and unpaid
interest thereon, including Deferred Interest, if any.
"Non Book-Entry Preferred Securities" has the meaning given such term in
Section 2.4(a)(ii).
"Optional Redemption Price" has the meaning given such term in Section
3.2.
"Reporting Date" means that date that is one year from the date first
written herein and each one year anniversary of such date thereafter.
"Restricted Securities" means, shares of capital stock of a Subsidiary.
3
7
"Senior Indebtedness" means in respect of the Company, Debt of the
Company, except for (1) any such Debt that is by its terms subordinated to or
pari passu with the Notes and (2) any Debt (including all other debt
securities and guarantees in respect of those debt securities) initially
issued to any other trust, or a trustee of such trust, partnership, or other
entity affiliated with the Company that is, directly or indirectly, a
financing vehicle of the Company in connection with the issuance by such
entity of preferred securities or other similar securities.
"Stated Maturity Date" means December 31, 2025.
ARTICLE II
General Terms and Conditions of the Notes
Section 2.1. Designation and Principal Amount.
There is hereby authorized a series of Securities designated the "9.125%
Subordinated Deferrable Interest Notes due 2025", limited in aggregate
principal amount to $61.8 million, which amount shall be as set forth in any
written Company Order for the authentication and delivery of Notes pursuant to
Section 2.4 of the Indenture.
Section 2.2. Maturity.
(a) The Maturity Date will be either:
(i) the Stated Maturity Date; or
(ii) if the Company elects to extend the Maturity Date beyond the
Stated Maturity Date in accordance with Section 2.2(b), the
Extended Maturity Date;
(b) the Company may at any time before the day which is 90 days before
the Stated Maturity Date, elect to extend the Maturity Date only
once to the Extended Maturity Date, PROVIDED THAT the following
conditions in this Section 2.2(b) are satisfied both at the date the
Company gives notice in accordance with Section 2.2(c) of its
election to extend the Maturity Date and at the Stated Maturity
Date:
(i) the Company is not in bankruptcy or otherwise insolvent;
(ii) the Company is not in default on any Notes issued to the Trust
or any trustee of the Trust or to any trust or trustee of the
Trust in connection with the issuance of Trust Securities by
the Trust;
4
8
(iii) the Company has made timely payments on the Notes for the
immediately preceding 18 months without deferrals;
(iv) the Trust is not in arrears on payments of Distributions on the
Trust Securities issued by it; and
(v) the Notes are rated in one of the four highest rating
categories by any one of Standard & Poor's Ratings Group, a
division of XxXxxx-Xxxx, Inc., Xxxxx'x Investors Service, Inc.,
Fitch Investor Services, Duff & Xxxxxx Credit Rating Company or
any other nationally recognized statistical rating
organization; and
(c) if the Company elects to extend the Maturity Date in accordance with
Section 2.2(b), the Company shall give notice to Holders of the
Notes, the Property Trustee, the Trust and the Trustee of the
extension of the Maturity Date and the Extended Maturity Date at
least 90 days before the Stated Maturity Date.
Section 2.3. Form and Payment.
Except as provided in Section 2.4, the Notes shall be issued as
Registered Securities in fully registered certificated form without interest
coupons. Principal and interest on the Notes issued in certificated form will
be payable, the transfer of such Notes will be registrable and such Notes will
be exchangeable for Notes bearing identical terms and provisions at the office
or agency of the Trustee; provided, however, that payment of interest may be
made at the option of the Company by check mailed to the Holder at such
address as shall appear in the Security Register. Notwithstanding the
foregoing, so long as the Holder of any Notes is the Property Trustee, the
payment of the principal of and interest, including Deferred Interest, if any,
on such Notes held by the Property Trustee will be made at such place and to
such account as may be designated by the Property Trustee.
Section 2.4. Global Note.
(a) In connection with a Dissolution Event:
(i) the Notes in certificated form may be presented to the Trustee
by the Property Trustee in exchange for a global Note in an
aggregate principal amount equal to all Outstanding Notes (a
"Global Note") to be registered in the name of the Depositary,
or its nominee, and delivered by the Trustee to the Depositary
for crediting to the accounts of its participants pursuant to
the instructions of the Regular Trustees. The Company upon any
5
9
such presentation shall execute a Global Note in such aggregate
principal amount and deliver the same to the Trustee for
authentication and delivery in accordance with the Indenture
and this First Supplemental Indenture. Payments on the Notes
issued as a Global Note will be made to the Depositary; and
(ii) if any Preferred Securities are held in non book-entry
certificated form, the Notes in certificated form may be
presented to the Trustee by the Property Trustee and any
Preferred Security Certificate which represents Preferred
Securities other than Preferred Securities held by the
Depositary or its nominee ("Non Book-Entry Preferred
Securities") will be deemed to represent beneficial interests
in Notes presented to the Trustee by the Property Trustee
having an aggregate principal amount equal to the aggregate
liquidation amount of the Non Book-Entry Preferred Securities
until such Preferred Security Certificates are presented to the
Security Registrar for transfer or reissuance at which time
such Preferred Security Certificates will be cancelled, and a
Note registered in the name of the holder of the Preferred
Security Certificate or the transferee of the holder of such
Preferred Security Certificate, as the case may be, with an
aggregate principal amount equal to the aggregate liquidation
amount of the Preferred Security Certificate cancelled will be
executed by the Company and delivered to the Trustee together
with a Company Order for authentication and delivery in
accordance with the Indenture and this First Supplemental
Indenture. On issue of such Notes, Notes with an equivalent
aggregate principal amount that were presented by the Property
Trustee to the Trustee will be deemed to have been cancelled.
(b) A Global Note may be transferred, in whole but not in part only to
another nominee of the Depositary, or to a successor Depositary
selected or approved by the Company or to a nominee of such
successor Depositary.
(c) If at any time the Depositary notifies the Company that it is
unwilling or unable to continue as Depositary or if at any time the
Depositary for such series shall no longer be registered or in good
standing under the Exchange Act or other applicable statute or
regulation, and a successor Depositary for such series is not
appointed by the Company within 90 days after the Company receives
such notice or becomes aware of such condition, as the case may be,
the Company will execute, and, subject to Article Two of the
6
10
Indenture, the Trustee will authenticate and deliver the Notes in
definitive registered form without coupons, in authorized
denominations, and in an aggregate principal amount equal to the
principal amount of the Global Note in exchange for such Global
Note. In addition, the Company may at any time determine that the
Notes shall no longer be represented by a Global Note. In such
event the Company will execute and, subject to Article Two of the
Indenture, the Trustee will authenticate and deliver the Notes in
definitive registered form without coupons, in authorized
denominations, and in an aggregate principal amount equal to the
principal amount of the Global Note in exchange for such Global
Note. Upon the exchange of the Global Note for such Notes in
definitive registered form without coupons, in authorized
denominations, the Global Note shall be cancelled by the Trustee.
Such Notes in definitive registered form issued in exchange for the
Global Note shall be registered in such names and in such authorized
denominations as the Depositary, pursuant to instructions from its
direct or indirect participants or otherwise, shall instruct the
Trustee in writing. The Trustee shall deliver such Notes to the
Depositary for delivery to the Persons in whose names such Notes are
so registered.
Section 2.5. Interest.
(a) Each Note will bear interest at the rate of 9.125% per annum (the
"Coupon Rate") from the original date of issuance until the
principal thereof becomes due and payable, and on any overdue
principal and (to the extent that payment of such interest is
enforceable under applicable law) on any overdue installment of
interest at the Coupon Rate, compounded quarterly, payable (subject
to the provisions of Article Four) quarterly in arrears on March 31,
June 30, September 30 and December 31 of each year (each, an
"Interest Payment Date", commencing on December 31, 1995), to the
Person in whose name such Note or any predecessor Note is
registered, at the close of business on the regular record date for
such interest installment, which, in respect of any Notes of which
the Property Trustee is the Holder of or a Global Note, shall be the
close of business on the Business Day next preceding that Interest
Payment Date. Notwithstanding the foregoing sentence, if the
Preferred Securities are no longer in book-entry only form or if
pursuant to the Indenture the Notes are not represented by a Global
Note, the Company may select a regular record date for such interest
installment which shall be any date at least one Business Day before
an Interest Payment Date.
7
11
(b) The amount of interest payable for any period will be computed on
the basis of a 360-day year of twelve 30-day months. Except as
provided in the following sentence, the amount of interest payable
for any period shorter than a full quarterly period for which
interest is computed, will be computed on the basis of the actual
number of days elapsed in such a 30-day month. In the event that
any date on which interest is payable on the Notes is not a Business
Day, then payment of the interest payable on such date will be made
on the next succeeding day which is a Business Day (and without any
interest or other payment in respect of any such delay), except
that, notwithstanding the provisions of Section 113 of the
Indenture, if such Business Day is in the next succeeding calendar
year, such payment shall be made on the immediately preceding
Business Day, in each case with the same force and effect as if made
on such date.
(c) If at any time while the Property Trustee is the Holder of any
Notes, the Trust or the Property Trustee, on behalf of the Trust, is
required to pay any taxes, duties, assessments or governmental
charges of whatever nature (other than withholding taxes) imposed by
the United States, or any other taxing authority, then, in any case,
the Company will pay as additional interest ("Additional Interest")
on the Notes held by the Property Trustee, on behalf of the Trust,
such additional amounts as shall be required so that the net amounts
received and retained by the Trust and the Property Trustee, on
behalf of the Trust, after paying such taxes, duties, assessments or
other governmental charges will be equal to the amounts the Trust
and the Property Trustee, on behalf of the Trust, would have
received had no such taxes, duties, assessments or other
governmental charges been imposed.
ARTICLE III
Redemption of the Notes
Section 3.1. Special Event Redemption.
If a Tax Event has occurred and is continuing and:
(a) the Company has received a Redemption Tax Opinion; or
(b) after receiving a Dissolution Tax Opinion, the Regular Trustees
shall have been informed by tax counsel rendering the Dissolution
Tax Opinion that a No Recognition Opinion cannot be delivered to the
Trust, then, notwithstanding Section 3.2(a) but subject to Section
3.2(b), the Company shall have the right upon not less than 30 days
nor more than 60 days notice to the Holders of the Notes to redeem
8
12
the Notes in whole or in part for cash within 90 days following the
occurrence of such Tax Event (the "90 Day Period"), provided that,
if at the time there is available to the Company the opportunity to
eliminate within the 90 Day Period, the Tax Event by taking some
Ministerial Action, the Company shall pursue such Ministerial Action
in lieu of redemption, and provided, further, that the Company shall
have no right to redeem the Notes while the Trust is pursuing any
Ministerial Action pursuant to its obligations under the
Declaration. The Redemption Price shall be paid prior to 12:00
noon, New York time, on the date of such redemption or such earlier
time as the Company determines provided that the Company shall
deposit with the Trustee an amount sufficient to pay the Redemption
Price by 10:00 a.m., New York time, on the date such Redemption
Price is to be paid.
Section 3.2. Optional Redemption by Company.
(a) Subject to the provisions of Section 3.2(b) and to the provisions of
Article Eleven of the Indenture, except as otherwise may be
specified in this First Supplemental Indenture, the Company shall
have the right to redeem the Notes, in whole or in part, from time
to time, on or after December 31, 2000, at a redemption price equal
to 100% of the principal amount to be redeemed plus any accrued and
unpaid interest thereon to the date of such redemption (the
"Optional Redemption Price"). Any redemption pursuant to this
paragraph will be made upon not less than 30 nor more than 60 days'
notice to the Holder of the Notes, at the Optional Redemption Price.
If the Notes are only partially redeemed pursuant to this Section
3.2, the Notes will be redeemed pro rata or by lot or by any other
method utilized by the Trustee; provided that, if at the time of
redemption the Notes are registered as a Global Note, the Depositary
shall determine by lot the principal amount of such Notes held by
each Holder of Notes to be redeemed. The Optional Redemption Price
shall be paid prior to 12:00 noon, New York time, on the date of
such redemption or at such earlier time as the Company determines
provided that the Company shall deposit with the Trustee an amount
sufficient to pay the Optional Redemption Price by 10:00 a.m., New
York time, on the date such Optional Redemption Price is to be paid.
(b) If a partial redemption of the Notes would result in the delisting
of the Preferred Securities issued by the Trust from any national
securities exchange or other organization on which the Preferred
Securities are then listed, the Company shall not be permitted to
9
13
effect such partial redemption and may only redeem the Notes in
whole.
Section 3.3. No Sinking Fund.
The Notes are not entitled to the benefit of any sinking fund.
ARTICLE IV
Extension of Interest Payment Period
Section 4.1. Extension of Interest Payment Period.
The Company shall have the right, at any time during the term of the
Notes, from time to time, to defer payments of interest by extending the
interest payment period of such Notes for up to 20 consecutive quarters (the
"Extended Interest Payment Period"). To the extent permitted by applicable
law, interest, the payment of which has been deferred because of the extension
of the interest payment period pursuant to this Section 4.1, will bear
interest thereon at the Coupon Rate compounded quarterly for each quarter of
the Extended Interest Payment Period ("Compounded Interest"). At the end of
the Extended Interest Payment Period the Company shall pay all interest
accrued and unpaid on the Notes, including any Deferred Interest that shall be
payable, to the Holders of the Notes in whose names the Notes are registered
in the Security Register on the first record date after the end of the
Extended Interest Payment Period. Before the termination of any Extended
Interest Payment Period, the Company may further extend such period, provided
that such period together with all such further extensions thereof shall not
exceed 20 consecutive quarters. Upon the termination of any Extended Interest
Payment Period and upon the payment of all Deferred Interest then due, the
Company may commence a new Extended Interest Payment Period, subject to the
foregoing requirements. No interest shall be due and payable during an
Extended Interest Payment Period, except at the end thereof.
Section 4.2. Notice of Extension.
(a) If the Property Trustee is the only registered Holder of the Notes
at the time the Company selects an Extended Interest Payment Period,
the Company shall give written notice to the Regular Trustees, the
Property Trustee and the Trustee of its selection of such Extended
Interest Payment Period one Business Day before the earlier of (a)
the next succeeding date on which Distributions on the Trust
Securities issued by the Trust are payable, or (b) the date the
Trust is required to give notice of the record date or the date such
Distributions are payable to the New York Stock Exchange or other
applicable self-regulatory organization or to holders of the
10
14
Preferred Securities issued by the Trust, but in any event at least
one Business Day before such record date.
(b) If the Property Trustee is not the only Holder of the Notes at the
time the Company selects an Extended Interest Payment Period, the
Company shall give the Holders of the Notes and the Trustee written
notice of its selection of such Extended Interest Payment Period 10
Business Days before the earlier of (i) the next succeeding Interest
Payment Date, or (ii) the date the Company is required to give
notice of the record or payment date of such interest payment to the
New York Stock Exchange or other applicable self-regulatory
organization or to Holders of the Notes.
(c) The quarter in which any notice is given pursuant to paragraphs (a)
or (b) of this Section 4.2 shall be counted as one of the 20
quarters permitted in the maximum Extended Interest Payment Period
permitted under Section 4.1.
ARTICLE V
Expenses
Section 5.1. Payment of Expenses.
In connection with the offering, sale and issuance of the Notes to the
Property Trustee in connection with the sale of the Trust Securities by the
Trust, the Company shall:
(a) pay all costs and expenses relating to the offering, sale and
issuance of the Notes, including compensation of the Trustee under
the Indenture in accordance with the provisions of Section 607 of
the Indenture;
(b) pay any and all taxes (other than United States withholding taxes
attributable to the Trust or its assets) and all liabilities, costs
and expenses with respect to such taxes of the Trust; and
(c) pay all other debts and obligations of the Trust (other than with
respect to the Trust Securities) and all costs and expenses of the
Trust (including, but not limited to, costs and expenses relating to
the organization of the Trust, the fees and expenses of the Property
Trustee, the trustee under the Preferred Securities Guarantee and
the guarantee of the Common Securities and the Delaware Trustee, the
costs and expenses relating to the operation of the Trust, including
without limitation, costs and expenses of accountants, attorneys,
statistical or bookkeeping services, expenses or printing and
engraving and computing or accounting equipment, paying agent(s),
registrar(s), transfer agent(s), duplicating, travel and telephone
11
15
and other telecommunications expenses and costs and expenses
incurred in connection with the acquisition, financing, and
disposition of Trust assets).
ARTICLE VI
Subordination
Section 6.1. Agreement to Subordinate.
The Company covenants and agrees, and each Holder of Notes issued
hereunder by such Holder's acceptance thereof likewise covenants and agrees,
that all Notes shall be issued subject to the provisions of this Article VI;
and each Holder of a Note, whether upon original issue or upon transfer or
assignment thereof, accepts and agrees to be bound by such provisions.
The payment by the Company of the principal of, premium, if any, and
interest on all Notes issued hereunder shall, to the extent and in the manner
hereinafter set forth, be subordinated and junior in right of payment to the
prior payment in full of all Senior Indebtedness of the Company, whether
outstanding at the date of this Indenture or thereafter incurred.
No provision of this Article VI shall prevent the occurrence of any
default or Event of Default hereunder.
Section 6.2. Default on Senior Indebtedness.
In the event and during the continuation of any default by the Company in
the payment of principal, premium, interest or any other payment due on any
Senior Indebtedness of the Company, as the case may be, or in the event that
the maturity of any Senior Indebtedness of the Company, as the case may be,
has been accelerated because of a default, then, in either case, no payment
shall be made by the Company with respect to the principal (including
redemption and sinking fund payments) of, or premium, if any, or interest on
the Notes.
In the event that, notwithstanding the foregoing, any payment shall be
received by the Trustee when such payment is prohibited by the preceding
paragraph of this Section 6.2, such payment shall be held in trust for the
benefit of, and shall be paid over or delivered to, the holders of Senior
Indebtedness or their respective representatives, or to the trustee or
trustees under any indenture pursuant to which any of such Senior Indebtedness
may have been issued, as their respective interests may appear, but only to
the extent that the holders of the Senior Indebtedness (or their
representative or representatives or a trustee) notify the Trustee in writing
within 90 days of such payment of the amounts then due and owing on the Senior
Indebtedness and only the amounts specified in such notice to the Trustee
shall be paid to the holders of Senior Indebtedness.
12
16
Section 6.3. Liquidation; Dissolution; Bankruptcy.
Upon any payment by the Company or distribution of assets of the Company
of any kind or character, whether in cash, property or securities, to
creditors upon any dissolution or winding-up or liquidation or reorganization
of the Company, whether voluntary or involuntary or in bankruptcy, insolvency,
receivership or other proceedings, all amounts due upon all Senior
Indebtedness of the Company shall first be paid in full, or payment thereof
provided for in money in accordance with its terms, before any payment is made
by the Company on account of the principal (and premium, if any) or interest
on the Notes; and upon any such dissolution or winding-up or liquidation or
reorganization, any payment by the Company, or distribution of assets of the
Company of any kind or character, whether in cash, property or securities, to
which the Holders of the Note or the Trustee would be entitled to receive from
the Company, except for the provisions of this Article VI, shall be paid by
the Company or by any receiver, trustee in bankruptcy, liquidating trustee,
agent or other Person making such payment or distribution, or by the Holders
of the Notes or by the Trustee under this Indenture if received by them or it,
directly to the holders of Senior Indebtedness of the Company (pro rata to
such holders on the basis of the respective amounts of Senior Indebtedness
held by such holders, as calculated by the Company) or their representative or
representatives, or to the trustee or trustees under any indenture pursuant to
which any instruments evidencing such Senior Indebtedness may have been
issued, as their respective interests may appear, to the extent necessary to
pay such Senior Indebtedness in full, in money or money's worth, after giving
effect to any concurrent payment or distribution to or for the holders of such
Senior Indebtedness, before any payment or distribution is made to the Holders
of Notes or to the Trustee.
In the event that, notwithstanding the foregoing, any payment or
distribution of assets of the Company of any kind or character, whether in
cash, property or securities, prohibited by the foregoing, shall be received
by the Trustee before all Senior Indebtedness of the Company is paid in full,
or provision is made for such payment in money in accordance with its terms,
such payment or distribution shall be held in trust for the benefit of and
shall be paid over or delivered to the holders of such Senior Indebtedness or
their representative or representatives, or to the trustee or trustees under
any indenture pursuant to which any instruments evidencing such Senior
Indebtedness may have been issued, and their respective interests may appear,
as calculated by the Company, for application to the payment of all Senior
Indebtedness of the Company, as the case may be, remaining unpaid to the
extent necessary to pay such Senior Indebtedness in full in money in
accordance with its terms, after giving effect to any concurrent payment or
distribution to or for the holders of such Senior Indebtedness.
13
17
For purposes of this Article VI, the words "cash, property or securities"
shall not be deemed to include shares of stock of the Company as reorganized
or readjusted, or securities of the Company or any other corporation provided
for by a plan of reorganization or readjustment, the payment of which is
subordinated at least to the extent provided in this Article VI with respect
to the Notes to the payment of all Senior Indebtedness of the Company, as the
case may be, that may at the time be outstanding provided that (i) such Senior
Indebtedness is assumed by the new corporation, if any, resulting from any
such reorganization or readjustment, and (ii) the rights of the holders of
such Senior Indebtedness are not, without the consent of such holders, altered
by such reorganization or readjustment. The consolidation of the Company
with, or the merger of the Company into, another corporation or the
liquidation or dissolution of the Company following the conveyance or transfer
of its property as an entirety, or substantially as an entirety, to another
corporation upon the terms and conditions provided for in Article Eight of the
Indenture shall not be deemed a dissolution, winding-up, liquidation or
reorganization for the purposes of this Section 6.3 if such other corporation
shall, as a part of such consolidation, merger, conveyance or transfer, comply
with the conditions stated in Article Eight of the Indenture. Nothing in
Section 6.2 or in this Section 6.3 shall apply to claims of, or payments to,
the Trustee under or pursuant to Section 607 of the Indenture.
Section 6.4. Subrogation.
Subject to the payment in full of all Senior Indebtedness of the Company,
the rights of the Holders of the Notes shall be subrogated to the rights of
the holders of such Senior Indebtedness to receive payments or distributions
of cash, property or securities of the Company, as the case may be, applicable
to such Senior Indebtedness until the principal of (and premium, if any) and
interest on the Notes shall be paid in full; and, for the purposes of such
subrogation, no payments or distributions to the holders of such Senior
Indebtedness of any cash, property or securities to which the Holders of the
Notes or the Trustee would be entitled except for the provisions of this
Article VI to or for the benefit of the holders of such Senior Indebtedness by
Holders of the Notes or the Trustee, shall, as between the Company, its
creditors other than Holders of Senior Indebtedness of the Company, and the
holders of the Notes shall be deemed to be a payment by the Company to or on
account of such Senior Indebtedness. It is understood that the provisions of
this Article VI are and are intended solely for the purposes of defining the
relative rights of the Holders of the Notes, on the one hand, and the holders
of such Senior Indebtedness of the other hand.
Nothing contained in this Article VI or elsewhere in this Indenture or in
the Notes is intended to or shall impair, as between the Company, its
creditors other than the holders of Senior Indebtedness of the Company, and
14
18
the Holders of the Notes, the obligation of the Company, which is absolute and
unconditional, to pay to the Holders of the Notes the principal of (and
premium, if any) and interest on the Notes as and when the same shall become
due and payable in accordance with their terms, or is intended to or shall
affect the relative rights of the Holders of the Notes and creditors of the
Company, as the case may be, other than the holders of Senior Indebtedness of
the Company, as the case may be, nor shall anything herein or therein prevent
the Trustee or the Holder of any Note from exercising all remedies otherwise
permitted by applicable law upon default under the Indenture, subject to the
rights, if any, under this Article VI of the holders of such Senior
Indebtedness in respect of cash, property or securities of the Company, as the
case may be, received upon the exercise of any such remedy.
Upon any payment or distribution of assets of the Company referred to in
this Article VI, the Trustee, subject to the provisions of Section 603 of the
Indenture, and the Holders of the Notes shall be entitled to rely upon any
order or decree made by any court of competent jurisdiction in which such
dissolution, winding-up, liquidation or reorganization proceedings are
pending, or a certificate of the receiver, trustee in bankruptcy, liquidation
trustee, agent or other Person making such payment or distribution, delivered
to the Trustee or to the Holders of the Notes, for the purposes of
ascertaining the Persons entitled to participate in such distribution, the
holders of Senior Indebtedness and other indebtedness of the Company, as the
case may be, the amount thereof or payable thereon, the amount or amounts paid
or distributed thereon and all other facts pertinent thereto or to this
Article VI.
Section 6.5. Trustee to Effectuate Subordination.
Each Holder of Notes by such Holder's acceptance thereof authorizes and
directs the Trustee on such Holder's behalf to take such action as may be
necessary or appropriate to effectuate the subordination provided in this
Article VI and appoints the Trustee such Holder's attorney-in-fact for any and
all such purposes.
Section 6.6. Notice by the Company.
The Company shall give prompt written notice to a Responsible Officer of
the Trustee of any fact known to the Company that would prohibit the making of
any payment of monies to or by the Trustee in respect of the Notes pursuant to
the provisions of this Article VI. Notwithstanding the provisions of this
Article VI or any other provision of the Indenture and this First Supplemental
Indenture, the Trustee shall not be charged with knowledge of the existence of
any facts that would prohibit the making of any payment of monies to or by the
Trustee in respect of the Notes pursuant to the provisions of this Article VI,
unless and until a Responsible Officer of the Trustee shall have received
15
19
written notice thereof from the Company or a holder or holders of Senior
Indebtedness or from any trustee therefor; and before the receipt of any such
written notice, the Trustee, subject to the provisions of Section 603 of the
Indenture, shall be entitled in all respects to assume that no such facts
exist; PROVIDED, HOWEVER, that, if the Trustee shall not have received the
notice provided for in this Section 6.6 at least two Business Days prior to
the date upon which by the terms hereof any money may become payable for any
purpose (including, without limitation, the payment of the principal of (or
premium, if any) or interest on any Note), then, anything herein contained to
the contrary notwithstanding, the Trustee shall have full power and authority
to receive such money and to apply the same to the purposes for which they
were received, and shall not be affected by any notice to the contrary that
may be received by it within two Business Days prior to such date.
The Trustee, subject to the provisions of Section 603 of the Indenture,
shall be entitled to rely on the delivery to it of a written notice by a
Person representing himself to be a holder of Senior Indebtedness of the
Company, as the case may be (or a trustee on behalf of such holder) to
establish that such notice has been given by a holder of such Senior
Indebtedness or a trustee on behalf of any such holder or holders. In the
event that the Trustee determines in good faith that further evidence is
required with respect to the right of any Person as a holder of such Senior
Indebtedness to participate in any payment or distribution pursuant to this
Article VI, the Trustee may require such Person to furnish evidence to the
reasonable satisfaction of the Trustee as to the amount of such Senior
Indebtedness held by such Person, the extent to which such Person is entitled
to participate in such payment or distribution and any other facts pertinent
to the rights of such Person under this Article VI, and, if such evidence is
not furnished, the Trustee may defer any payment to such Person pending
judicial determination as to the right of such Person to receive such payment.
Section 6.7. Rights of the Trustee; Holders of Senior Indebtedness.
The Trustee in its individual capacity shall be entitled to all the
rights set forth in this Article VI in respect of any Senior Indebtedness at
any time held by it, to the same extent as any other holder of Senior
Indebtedness, and nothing in this Indenture shall deprive the Trustee of any
of its rights as such holder.
With respect to the holders of Senior Indebtedness of the Company, the
Trustee undertakes to perform or to observe only such of its covenants and
obligations as are specifically set forth in this Article VI, and no implied
covenants or obligations with respect to the holders of such Senior
Indebtedness shall be read into this Indenture against the Trustee. The
Trustee shall not be deemed to owe any fiduciary duty to the holders of such
16
20
Senior Indebtedness and, subject to the provisions of Section 603 of the
Indenture, the Trustee shall not be liable to any holder of such Senior
Indebtedness if it shall pay over or deliver to Holders of Notes, the Company
or any other Person money or assets to which any holder of such Senior
Indebtedness shall be entitled by virtue of this Article VI or otherwise.
Section 6.8. Subordination May Not Be Impaired.
No right of any present or future holder of any Senior Indebtedness of
the Company to enforce subordination as herein provided shall at any time in
any way be prejudiced or impaired by any act or failure to act on the part of
the Company, as the case may be, or by any act or failure to act, in good
faith, by any such holder, or by any noncompliance by the Company, as the case
may be, with the terms, provisions and covenants of this Indenture, regardless
of any knowledge thereof that any such holder may have or otherwise be charged
with.
Without in any way limiting the generality of the foregoing paragraph,
the holders of Senior Indebtedness of the Company may, at any time and from
time to time, without the consent of or notice to the Trustee or the Holders
of the Notes, without incurring responsibility to the Holders of the Notes and
without impairing or releasing the subordination provided in this Article VI
or the obligations hereunder of the Holders of the Notes to the holders of
such Senior Indebtedness, do any one or more of the following: (i) change the
manner, place or terms of payment or extend the time of payment of, or renew
or alter, such Senior Indebtedness, or otherwise amend or supplement in any
manner such Senior Indebtedness or any instrument evidencing the same or any
agreement under which such Senior Indebtedness is outstanding; (ii) sell,
exchange, release or otherwise deal with any property pledged, mortgaged or
otherwise securing such Senior Indebtedness; (iii) release any Person liable
in any manner for the collection of such Senior Indebtedness; and (iv)
exercise or refrain from exercising any rights against the Company, as the
case may be, and any other Person.
ARTICLE VII
Covenant to List on Exchange
Section 7.1. Listing on an Exchange.
If the Notes are to be issued as a Global Note in connection with the
distribution of the Notes to the holders of the Preferred Securities issued by
the Trust upon a Dissolution Event, the Company will use its best efforts to
list such Notes on the New York Stock Exchange or on such other exchange as
the Preferred Securities are then listed.
17
21
Section 7.2. Equal and Ratable Security.
The Company will not create, incur, issue or assume any Debt secured by
any Lien on any property or assets owned by the Company, and the Company will
not create, incur, issue or assume any Debt secured by any Lien on any
Restricted Securities, unless (a) in the case of Debt which is expressly by
its terms subordinate or junior in right of payment to the Subordinated Debt
Securities, the Subordinated Debt Securities are secured by a Lien on such
property, assets or Restricted Securities that is senior to such other Lien,
or (b) in the case of Liens securing Debt that is ranked pari passu with the
subordinated Debt Securities, the Subordinated Debt Securities are secured by
a Lien on such property, assets or Restricted Securities that is equal and
ratable with such other Lien; PROVIDED, HOWEVER, that nothing contained in
this Section 7.2 shall apply to or prevent the creation of:
(i) existing Liens on any property or indebtedness of any entity
which is merged with or into or consolidated with the Company;
(ii) Liens in favor of the United States of America, any state or
any foreign country or any department, agency or
instrumentality or political subdivision of any such
jurisdiction, to secure partial, progress, advance or other
payment pursuant to any contract or statute, or to secure any
indebtedness incurred for the purpose of financing all or any
part of the purchase price or cost of constructing or improving
the property subject to such Liens, including, without
limitation, Liens to secure Debt of the pollution control or
industrial revenue bond type;
(iii) Liens to secure loans to the Company which mature within twelve
months from the creation thereof and which are made in the
ordinary course of business;
(iv) Liens on any property (including any natural gas, oil or other
mineral property) to secure all or part of the cost of
exploration or drilling for, or development of, oil or gas
reserves or laying a pipeline or to provide funds for any such
purpose;
(v) Liens on money or U.S. Government Obligations deposited with
the Trustee pursuant to the Indenture; and
(vi) Liens for the sole purposes of extending, renewing or
replacing, in whole or in part, Liens securing Debt of the type
referred to in the foregoing clauses (i) through (iv),
inclusive, or this clause (vi); provided, however, that the
18
22
principal amount of Debt so secured at the time of such
extension, renewal or replacement shall not be increased, and
that such extension, renewal or replacement shall be limited to
all or part of the property or indebtedness which secured the
Lien so extended, renewed or replaced (plus improvements on
such property).
ARTICLE VIII
Form of Note
Section 8.1. Form of Note.
The Notes and the Trustee's Certificate of Authentication to be endorsed
thereon are to be substantially in the following forms:
(FORM OF FACE OF NOTE)
(IF THE NOTE IS TO BE A GLOBAL NOTE, INSERT - This Note is a Global Note
within the meaning of the Indenture hereinafter referred to and is registered
in the name of a Depositary or a nominee of a Depositary. This Note is
exchangeable for Global Notes registered in the name of a person other than
the Depositary or its nominee only in the limited circumstances described in
the Indenture, and no transfer of this Note (other than a transfer of this
Note as a whole by the Depositary to a nominee of the Depositary or by a
nominee of the Depositary to the Depositary or another nominee of the
Depositary) may be registered except in limited circumstances. Every Note
delivered upon registration of transfer of, or in exchange for, or in lieu of,
this Global Security shall be a Global Security, subject to the foregoing,
except in the limited circumstances described above.
Unless this certificate is presented by an authorized representative of
The Depository Trust Company, a New York corporation ("DTC") to the issuer or
its agent for registration of transfer, exchange or payment, and any
certificate issued is registered in the name of Cede & Co. or in such other
name as requested by an authorized representative of DTC (or to such other
entity as is requested by an authorized representative of DTC) and any payment
is made to Cede & Co. (or to such other entity as is requested by an
authorized representative of DTC), ANY TRANSFER, PLEDGE OR OTHER USE HEREOF
FOR VALUE OR OTHERWISE BY ANY PERSON IS WRONGFUL inasmuch as the registered
owner hereof, Cede & Co., has an interest herein.)
19
23
No. __________________
$_____________
CUSIP No.__________________
9.125% SUBORDINATED DEFERRABLE INTEREST NOTE
DUE 2025
Southwest Gas Corporation, a California corporation (the "Company"),
which term includes any successor corporation under the Indenture hereinafter
referred to), for value received, hereby promises to pay to _______________,
or registered assigns, the principal sum of ______________ Dollars on December
31, 2025, (or on such later date before December 31, 2044, if the Company
elects to extend the maturity date as further described herein), and to pay
interest on said principal sum from December 31, 1995, or from the most recent
interest payment date (each such date, an "Interest Payment Date") to which
interest has been paid or duly provided for, quarterly (subject to deferral as
set forth herein) in arrears on March 31, June 30, September 30 and December
31 of each year commencing December 31, 1995, at the rate of 9.125% per annum
until the principal hereof shall have become due and payable, and on any
overdue principal and premium, if any, and (without duplication and to the
extent that payment of such interest is enforceable under applicable law) on
any overdue installment of interest at the same rate per annum compounded
quarterly. The amount of interest payable on any Interest Payment Date shall
be computed on the basis of a 360-day year of twelve 30-day months. In the
event that any date on which interest is payable on this Note is not a
Business Day, then payment of interest payable on such date will be made on
the next succeeding day that is a Business Day (and without any interest or
other payment in respect of any such delay), except that, if such Business Day
is in the next succeeding calendar year, such payment shall be made on the
immediately preceding Business Day, in each case with the same force and
effect as if made on such date. The interest installment so payable, and
punctually paid or duly provided for, on any Interest Payment Date will, as
provided in the Indenture, be paid to the Person in whose name this Note (or
one or more Predecessor Notes, as defined in said Indenture) is registered at
the close of business on the regular record date for such interest
installment, which shall be the close of business on the Business Day next
preceding such Interest Payment Date. [IF PURSUANT TO THE PROVISIONS OF THE
INDENTURE THE NOTES ARE NO LONGER REPRESENTED BY A GLOBAL NOTE -- which shall
be the close of business of the ____ Business Day next preceding such Interest
Payment Date.] Any such interest installment not punctually paid or duly
provided for shall forthwith cease to be payable to the registered Holders on
such regular record date and may be paid to the Person in whose name this Note
(or one or more Predecessor Notes) is registered at the close of business on a
special record date to be fixed by the Trustee for the payment of such
defaulted interest, notice whereof shall be given to the registered Holders of
20
24
this series of Notes not less than 10 days prior to such special record date,
or may be paid at any time in any other lawful manner not inconsistent with
the requirements of any securities exchange on which the Notes may be listed,
and upon such notice as may be required by such exchange, all as more fully
provided in the Indenture. The principal of (and premium, if any) and the
interest on this Note shall be payable at the office or agency of the Trustee
maintained for that purpose in any coin or currency of the United States of
America that at the time of payment is legal tender for payment of public and
private debts; provided, however, that payment of interest may be made at the
option of the Company by check mailed to the registered Holder at such address
as shall appear in the Security Register. Notwithstanding the foregoing, so
long as the Holder of this Note is the Property Trustee, the payment of the
principal of (and premium, if any) and interest on this Note will be made at
such place and to such account as may be designated by the Property Trustee.
The indebtedness evidenced by this Note is, to the extent provided in the
Indenture, subordinate and junior in right of payment to the prior payment in
full of all Senior Indebtedness, and this Note is issued subject to the
provisions of the Indenture with respect thereto. Each Holder of this Note,
by accepting the same, (a) agrees to and shall be bound by such provisions,
(b) authorizes and directs the Trustee on his or her behalf to take such
action as may be necessary or appropriate to acknowledge or effectuate the
subordination so provided and (c) appoints the Trustee his or her attorney-in-
fact for any and all such purposes. Each Holder hereof, by his or her
acceptance hereof, hereby waives all notice of the acceptance of the
subordination provisions contained herein and in the Indenture by each holder
of Senior Indebtedness, whether now outstanding or hereafter incurred, and
waives reliance by each such holder upon said provisions.
This Note shall not be entitled to any benefit under the Indenture
hereinafter referred to, be valid or become obligatory for any purpose until
the Certificate of Authentication hereon shall have been signed by or on
behalf of the Trustee.
Unless the Certificate of Authentication hereon has been executed by the
Trustee referred to on the reverse side hereof, this Note shall not be
entitled to any benefit under the Indenture or be valid or obligatory for any
purpose.
The provisions of this Note are continued on the reverse side hereof and
such continued provisions shall for all purposes have the same effect as
though fully set forth at this place.
21
25
IN WITNESS WHEREOF, the Company has caused this instrument to be
executed.
Dated:
SOUTHWEST GAS CORPORATION
By__________________________
Attest:
By__________________________
Secretary
(FORM OF CERTIFICATE OF AUTHENTICATION)
CERTIFICATE OF AUTHENTICATION
This is one of the Notes of the series of Notes described in the within-
mentioned Indenture.
__________________________
__________________________ _________________________
as Trustee or as Authentication Agent
By________________________ By_______________________
Authorized Signatory Authorized Signatory
(FORM OF REVERSE OF NOTE)
This Note is one of a duly authorized series of Notes of the Company
(herein sometimes referred to as the "Notes"), specified in the Indenture, all
issued or to be issued in one or more series under and pursuant to an
Indenture dated as of October 31, 1995, duly executed and delivered between
the Company and Xxxxxx Trust and Savings Bank, as Trustee (the "Trustee"), as
supplemented by the First Supplemental Indenture dated as of October 31, 1995,
between the Company and the Trustee (the Indenture as so supplemented, the
"Indenture"), to which Indenture and all indentures supplemental thereto
22
26
reference is hereby made for a description of the rights, limitations of
rights, obligations, duties and immunities thereunder of the Trustee, the
Company and the Holders of the Notes. By the terms of the Indenture, the
Notes are issuable in series that may vary as to amount, date of maturity,
rate of interest and in other respects as provided in the Indenture. This
series of Notes is limited in aggregate principal amount as specified in said
First Supplemental Indenture.
Because of the occurrence and continuation of a Tax Event, in certain
circumstances, this Note will become due and payable at the principal amount
together with any interest accrued thereon (the "Redemption Price"). The
Redemption Price shall be paid prior to 12:00 noon, New York time, on the date
of such redemption or at such earlier time as the Company determines. The
Company shall have the right to redeem this Note at the option of the Company,
without premium or penalty, in whole or in part at any time on or after
December 31, 2000 (an "Optional Redemption") or at any time in certain
circumstances upon the occurrence of a Tax Event, at a redemption price equal
to 100% of the principal amount plus any accrued but unpaid interest, to the
date of such redemption (the "Optional Redemption Price"). Any redemption
pursuant to this paragraph will be made upon not less than 30 nor more than 60
days' notice, at the Optional Redemption Price. If the Notes are only
partially redeemed by the Company pursuant to an Optional Redemption, the
Notes will be redeemed pro rata or by lot or by any other method utilized by
the Trustee; provided that if, at the time of redemption, the Notes are
registered as a Global Note, the Depositary shall determine by lot the
principal amount of such Notes held by each Holder of Notes to be redeemed.
In the event of redemption of this Note in part only, a new Note or Notes
of this series for the unredeemed portion hereof will be issued in the name of
the Holder hereof upon the cancellation hereof.
In case an Event of Default, as defined in the Indenture, shall have
occurred and be continuing, the principal of all of the Notes may be declared,
and upon such declaration shall become, due and payable, in the manner, with
the effect and subject to the conditions provided in the Indenture.
The Indenture contains provisions permitting the Company and the Trustee,
with the consent of the Holders of not less than a majority in aggregate
principal amount of the Notes of each series affected at the time outstanding,
as defined in the Indenture, to execute supplemental indentures for the
purpose of adding any provisions to or changing in any manner or eliminating
any of the provisions of the Indenture or of any supplemental indenture or of
modifying in any manner the rights of the Holders of the Notes; PROVIDED,
HOWEVER, that no such supplemental indenture shall (i) extend the fixed
maturity of any Notes of any series, or reduce the principal amount thereof,
23
27
or reduce the rate or extend the time of payment of interest thereon, or
reduce any premium payable upon the redemption thereof, without the consent of
the Holder of each Note so affected, or (ii) reduce the aforesaid percentage
of Notes, the Holders of which are required to consent to any such
supplemental indenture, without the consent of the Holders of each Note then
outstanding and affected thereby. The Indenture also contains provisions
permitting the Holders of a majority in aggregate principal amount of the
Notes of any series at the time outstanding affected thereby, on behalf of all
of the Holders of the Notes of such series, to waive any past default in the
performance of any of the covenants contained in the Indenture, or established
pursuant to the Indenture with respect to such series, and its consequences,
except a default in the payment of the principal of or premium, if any, or
interest on any of the Notes of such series. Any such consent or waiver by
the registered Holder of this Note (unless revoked as provided in the
Indenture) shall be conclusive and binding upon such Holder and upon all
future Holders and owners of this Note and of any Note issued in exchange
herefor or in place hereof (whether by registration of transfer or otherwise),
irrespective of whether or not any notation of such consent or waiver is made
upon this Note.
No reference herein to the Indenture and no provision of this Note or of
the Indenture shall alter or impair the obligation of the Company, which is
absolute and unconditional, to pay the principal of and premium, if any, and
interest on this Note at the time and place and at the rate and in the money
herein prescribed.
The Company shall have the right at any time during the term of the Notes
from time to time to extend the interest payment period of such Notes to up to
20 consecutive quarters (an "Extended Interest Payment Period"), at the end of
which period the Company shall pay all interest then accrued and unpaid
(together with interest thereon at the rate specified for the Notes to the
extent that payment of such interest is enforceable under applicable law).
Before the termination of any such Extended Interest Payment Period, the
Company may further extend such Extended Interest Payment Period, provided
that such Extended Interest Payment Period together with all such further
extensions thereof shall not exceed 20 consecutive quarters. At the
termination of any such Extended Interest Payment Period and upon the payment
of all accrued and unpaid interest and any additional amounts then due, the
Company may commence a new Extended Interest Payment Period.
As provided in the Indenture and subject to certain limitations therein
set forth, this Note is transferable by the registered Holder hereof on the
Security Register of the Company, upon surrender of this Note for registration
of transfer at the office or agency of the Company in the City and State of
New York accompanied by a written instrument or instruments of transfer in
form satisfactory to the Company or the Trustee duly executed by the
24
28
registered Holder hereof or his attorney duly authorized in writing, and
thereupon one or more new Notes of authorized denominations and for the same
aggregate principal amount and series will be issued to the designated
transferee or transferees. No service charge will be made for any such
transfer, but the Company may require payment of a sum sufficient to cover any
tax or other governmental charge payable in relation thereto.
Prior to due presentment for registration of transfer of this Note, the
Company, the Trustee, any paying agent and any Security Registrar may deem and
treat the registered Holder hereof as the absolute owner hereof (whether or
not this Note shall be overdue and notwithstanding any notice of ownership or
writing hereon made by anyone other than the Security Registrar) for the
purpose of receiving payment of or on account of the principal hereof and
premium, if any, and interest due hereon and for all other purposes, and
neither the Company nor the Trustee nor any paying agent nor any Security
Registrar shall be affected by any notice to the contrary.
No recourse shall be had for the payment of the principal of or the
interest on this Note, or for any claim based hereon, or otherwise in respect
hereof, or based on or in respect of the Indenture, against any incorporator,
stockholder, officer or director, past, present or future, as such, of the
Company or of any predecessor or successor corporation, whether by virtue of
any constitution, statute or rule of law, or by the enforcement of any
assessment or penalty or otherwise, all such liability being, by the
acceptance hereof and as part of the consideration for the issuance hereof,
expressly waived and released.
The Notes of this series are issuable only in registered form without
coupons in denominations of $25 and any integral multiple thereof. This
Global Note is exchangeable for Notes in definitive form only under certain
limited circumstances set forth in the Indenture. Notes of this series so
issued are issuable only in registered form without coupons in denominations
of $25 and any integral multiple thereof as provided in the Indenture and
subject to certain limitations herein and therein set forth. Notes of this
series so issued are exchangeable for a like aggregate principal amount of
Notes of this series of a different authorized denomination, as requested by
the Holder surrendering the same.
All terms used in this Note that are defined in the Indenture shall have
the meanings assigned to them in the Indenture.
25
29
ARTICLE IX
Original Issue of Notes
Section 9.1. Original Issue of Notes.
Notes in the aggregate principal amount of $61,800,000 may, upon
execution of this First Supplemental Indenture, be executed by the Company and
delivered to the Trustee for authentication, and the Trustee shall thereupon
authenticate and deliver said Notes to or upon the written order of the
Company, signed by its Chairman, its President, or any Vice President and its
Treasurer or an Assistant Treasurer, without any further action by the
Company.
Section 9.2. Reports by the Trustee.
Up until and including the Maturity Date the Trustee shall, in respect of
each Reporting Date, make such reports, and within such time periods, as are
required to be made by the Trustee under the Trust Indenture Act.
ARTICLE X
Miscellaneous
Section 10.1. Ratification of Indenture.
The Indenture, as supplemented by this First Supplemental Indenture, is
in all respects ratified and confirmed, and this First Supplemental Indenture
shall be deemed part of the Indenture in the manner and to the extent herein
and therein provided.
Section 10.2. Trustee Not Responsible for Recitals.
The recitals herein contained are made by the Company and not by the
Trustee, and the Trustee assumes no responsibility for the correctness
thereof. The Trustee makes no representation as to the validity or
sufficiency of this First Supplemental Indenture.
Section 10.3. Governing Law.
This First Supplemental Indenture and each Note shall be deemed to be a
contract made under the internal laws of the State of New York, and for all
purposes shall be construed in accordance with the laws of said State.
Section 10.4. Separability.
In case any one or more of the provisions contained in this First
Supplemental Indenture or in the Notes shall for any reason be held to be
invalid, illegal or unenforceable in any respect, such invalidity, illegality
or unenforceability shall not affect any other provisions of this First
26
30
Supplemental Indenture or of the Notes, but this First Supplemental Indenture
and the Notes shall be construed as if such invalid or illegal or
unenforceable provision had never been contained herein or therein.
Section 10.5. Counterparts.
This First Supplemental Indenture may be executed in any number of
counterparts each of which shall be an original; but such counterparts shall
together constitute but one and the same instrument.
Section 10.6. Third Party Beneficiaries.
The Property Trustee, the trustee under the Preferred Securities
Guarantee and the Delaware Trustee are each a third party beneficiary of, and
shall be entitled to, enforce, and to exercise all rights and remedies with
respect to, the provisions of Section 5.1. The terms "Property Trustee",
"Preferred Securities Guarantee" and "Delaware Trustee" have the meaning given
such terms in the Declaration.
27
31
IN WITNESS WHEREOF, the parties hereto have caused this First
Supplemental Indenture to be duly executed, and their respective corporate
seals to be hereunto affixed and attested, on the date or dates indicated in
the acknowledgements and as of the day and year first above written.
SOUTHWEST GAS CORPORATION
By /s/ XXXXXXX X. XXXXXX
-------------------------
Attest:
/s/ XXXXXX X. XXXXXXX
-------------------------
XXXXXX TRUST AND SAVINGS BANK,
as Trustee
By /s/ E. XXX XXXXXXXXX
-------------------------
Attest:
/s/ XXXX X. XXXXXXX
-----------------------
S-1
