-----BEGIN PRIVACY-ENHANCED MESSAGE----- Proc-Type: 2001,MIC-CLEAR Originator-Name: webmaster@www.sec.gov Originator-Key-Asymmetric: MFgwCgYEVQgBAQICAf8DSgAwRwJAW2sNKK9AVtBzYZmr6aGjlWyK3XmZv3dTINen TWSM7vrzLADbmYQaionwg5sDW3P6oaM5D3tdezXMm7z1T+B+twIDAQAB MIC-Info: RSA-MD5,RSA, Rarql4J24+JjpRuE0f/QsDBMjVCXmJf7ndmXBYLtFa+MDnx+t0CrD6aTb7wIdkC+ mau21sZNQs3dU5C1dRzaBA== 0000950172-01-500179.txt : 20010514 0000950172-01-500179.hdr.sgml : 20010514 ACCESSION NUMBER: 0000950172-01-500179 CONFORMED SUBMISSION TYPE: S-3 PUBLIC DOCUMENT COUNT: 9 FILED AS OF DATE: 20010511 FILER: COMPANY DATA: COMPANY CONFORMED NAME: QUESTAR PIPELINE CO CENTRAL INDEX KEY: 0000764044 STANDARD INDUSTRIAL CLASSIFICATION: NATURAL GAS DISTRIBUTION [4924] IRS NUMBER: 870307414 STATE OF INCORPORATION: UT FISCAL YEAR END: 1231 FILING VALUES: FORM TYPE: S-3 SEC ACT: SEC FILE NUMBER: 333-60766 FILM NUMBER: 1630807 BUSINESS ADDRESS: STREET 1: 180 E 100 SOUTH STREET STREET 2: P O BOX 45360 CITY: SALT LAKE CITY STATE: UT ZIP: 84145 BUSINESS PHONE: 8013242400 MAIL ADDRESS: STREET 1: 180 E 100 SOUTH STREET STREET 2: P O BOX 45360 CITY: SALT LAKE CITY STATE: UT ZIP: 84145 FORMER COMPANY: FORMER CONFORMED NAME: MOUNTAIN FUEL RESOURCES INC DATE OF NAME CHANGE: 19880331 S-3 1 s494756.txt S-3 As filed with the Securities and Exchange Commission on May 11, 2001 Registration No. 333- SECURITIES AND EXCHANGE COMMISSION WASHINGTON, D.C. 20549 ---------------- FORM S-3 REGISTRATION STATEMENT UNDER THE SECURITIES ACT OF 1933 ---------------- QUESTAR PIPELINE COMPANY (Exact name of registrant as specified in its charter) Utah 4922 87-0307414 (State or other (Primary Standard (I.R.S. jurisdiction of Industrial Employer incorporation Classification Identification or organization) Code Number) Number) ---------------- 180 East 100 South P.O. Box 45360 Salt Lake City, Utah 84145-0360 (801) 324-5555 (Address, including zip code, and telephone number, including area code, of registrant's principal executive offices) ---------------- Connie C. Holbrook, Esq. Questar Pipeline Company 180 East 100 South P.O. Box 45360 Salt Lake City, Utah 84145-0360 (801) 324-5202 (Name, address, including zip code, and telephone number, including area code, of agent for service) ---------------- Copies to: Richard J. Grossman, Esq. Paul C. Pringle, Esq. Skadden, Arps, Slate, Meagher & Flom LLP Sidley Austin Brown & Wood LLP Four Times Square 555 California Street New York, New York 10036 Suite 5000 San Francisco, California 94104 ---------------- Approximate date of commencement of proposed sale to the public: As soon as practicable from time to time after the effective date of this registration statement as determined in light of market conditions. ------------------ If the only securities being registered on this form are to be offered pursuant to dividend or interest reinvestment plans, please check the following box. |_| If any of the securities being registered on this form are to be offered on a delayed or continuous basis pursuant to Rule 415 under the Securities Act of 1933, other than securities offered only in connection with dividend or reinvestment plans, check the following box. |X| If this form is filed to register additional securities for an offering pursuant to Rule 462(b) under the Securities Act, please check the following box and list the Securities Act registration statement number of the earlier effective registration statement for the same offering. |_| ________ If this form is a post-effective amendment filed pursuant to Rule 462(c) under the Securities Act, check the following box and list the Securities Act registration statement number of the earlier effective registration statement for the same offering. |_| ________ If delivery of the prospectus is expected to be made pursuant to Rule 434, please check the following box. |_| ________ CALCULATION OF REGISTRATION FEE =============================================================================== Proposed Proposed Amount Maximum Maximum Amount of Title of Securities to be Offering Aggregate Registration to be Registered Registered Price Per Note Offering Price Fee - ------------------------------------------------------------------------------- Medium-Term Notes, $250,000,000 100%* $250,000,000* $62,500 Series B......... =============================================================================== * Estimated solely for purposes of calculating the registration fee. ---------------- The Registrant hereby amends this registration statement on such date or dates as may be necessary to delay its effective date until the Registrant shall file a further amendment which specifically states that this registration statement shall thereafter become effective in accordance with Section 8(a) of the Securities Act of 1933 or until the registration statement shall become effective on such date as the Commission, acting pursuant to said Section 8(a), may determine. =============================================================================== SUBJECT TO COMPLETION, DATED MAY 11, 2001 PROSPECTUS Information contained in this prospectus is not complete and may be changed. We may not sell these notes until the registration statement filed with the Securities and Exchange Commission is effective. This prospectus is not an offer to sell these securities and it is not soliciting an offer to buy these securities in any state where the offer or sale is not permitted. $250,000,000 QUESTAR PIPELINE COMPANY (an indirect subsidiary of Questar Corporation) Medium-Term Notes, Series B Due from 9 Months to 30 Years from Date of Issue ---------------- The Company: Questar Pipeline Company, our executive offices are located at 180 East 100 South Street, P.O. Box 45360, Salt Lake City, Utah 84145-0360, and our telephone number is (801) 324-5555. Terms: We may offer from time to time up to $250,000,000 of medium-term notes. The following terms may apply to the notes. We will provide the final terms for each note in a pricing supplement. o The notes will be senior unsecured debt securities of Questar Pipeline. o The notes will mature in 9 months to 30 years from the date they are originally issued. o The notes may be subject to redemption or repayment at our option or the option of the holder. o We will pay amounts due on the notes in U.S. dollars. o The notes will bear interest at either a fixed or floating rate. The floating interest rate formula may be based on: o Commercial Paper Rate; o Federal Funds Rate; o LIBOR; o Prime Rate; o Treasury Rate; or o A basis, index or formula specified in the applicable pricing supplement. o The notes will be in certificated or book-entry form. o Interest will be paid on fixed rate notes on June 1 and December 1 of each year. o Interest will be paid on floating rate notes as described in the applicable pricing supplement. o The notes will have minimum denominations of $1,000 increased in multiples of $1,000. o We will specify the final terms of each note, which may be different from the terms described in this prospectus, in the applicable pricing supplement. Investing in the notes involves certain risks. See "Risk Factors" beginning on page 2. ---------------------------------- =============================================================================== Price to Agents' Discounts Proceeds to Public (1) and Commissions (2)(3) Company (2)(4) - ------------------------------------------------------------------------------- Per Note..... 100% .125%-.750% 99.875%-99.250% - ------------------------------------------------------------------------------- Total........ $250,000,000 $312,500-$1,875,000 $249,687,500-$248,125,000 =============================================================================== (1) Unless otherwise specified in the applicable pricing supplement, notes will be issued at 100% of their principal amount. (2) We will pay a commission to the agents in the form of a discount, ranging from .125% to .750% of the principal amount of any note, depending upon its stated maturity, sold through such agent, and may sell notes to any agent, as principal, at a discount for resale to investors or other purchasers at varying prices related to prevailing market prices at the time of resale to be determined by such agent. No commission will be payable on any sales made directly by us. (3) We have agreed to indemnify the agents against certain liabilities, including liabilities under the Securities Act of 1933, as amended. See "Plan of Distribution." (4) Before deducting expenses payable by us estimated at $476,000. ------------------------------ We may sell the notes to the agents as principal for resale at varying or fixed offering prices or through the agents as agents using their reasonable best efforts on our behalf. We will sell the notes to the public at 100% of the principal amount unless otherwise specified in the applicable pricing supplement. We may also sell the notes without the assistance of the agents. Neither the Securities and Exchange Commission nor any state securities commission has approved or disapproved of these securities or determined if this prospectus, any prospectus supplement or any pricing supplement, is truthful or complete. Any representation to the contrary is a criminal offense. ---------------------------------- Merrill Lynch & Co. Banc of America Securities LLC Banc One Capital Markets, Inc. U.S. Bancorp Piper Jaffray ----------------------------------- The date of this prospectus is , 2001. TABLE OF CONTENTS Page Risk Factors..................................................................2 The Company...................................................................5 Use of Proceeds..............................................................10 Capitalization...............................................................10 Ratio of Earnings to Fixed Charges...........................................10 Description of the Medium-Term Notes.........................................11 Plan of Distribution.........................................................35 Legal Matters................................................................36 Experts......................................................................36 Where You Can Find Additional Information....................................37 You should rely only on the information contained or incorporated by reference in this prospectus. We have not, and the agents have not, authorized any other person to provide you with different information. If anyone provides you with different or inconsistent information, you should not rely on it. We are not, and the agents are not, making an offer to sell these securities in any jurisdiction where the offer or sale is not permitted. You should assume that the information appearing in this prospectus is accurate only as of the date on the front cover of this prospectus. Our business, financial condition, results of operations and prospects may have changed since that date. References in this prospectus to "the Company," "we," "us," or "our" are to Questar Pipeline Company. 1 RISK FACTORS Investment in the notes involves certain risks. In consultation with financial and legal advisers, you should carefully consider, among other matters, the following discussion of risks before deciding whether an investment in the notes is suitable. The notes are not an appropriate investment for unsophisticated investors. Investing in Indexed Notes Involves Additional Risk If your notes are indexed notes, they entail significant risks that are not associated with an investment in a conventional fixed-rate or floating rate debt security. Indexation of the interest rate of a note may result in an interest rate that is less than the rate payable on a conventional fixed-rate debt security issued at the same time, including the possibility that no interest will be paid. Indexation of the principal of and/or premium on a note may result in an amount of principal and/or premium payable that is less than the original purchase price of the note, including the possibility that no principal will be paid. The value of an index can depend on a number of factors over which we have no control, including economic, financial and political events. These factors are important in determining the existence, magnitude and longevity of the risks and their results. If the formula used to determine the amount of principal, premium and/or interest payable with respect to indexed notes contains a multiplier or leverage factor, the effect of any change in the index will be magnified. In recent years, values of indices and formulas have been volatile and you should be aware that volatility may occur in the future. Nonetheless, the historical experience of an index should not be taken as an indication of its future performance. In addition, special tax rules may apply to indexed notes, which rules will be discussed in the applicable pricing supplement. You should consult your own financial, tax and legal advisors as to the risks entailed by an investment in indexed notes and the suitability of the notes in light of your particular circumstances. Our Ability to Redeem the Notes May Adversely Affect Your Return on the Notes If your notes are redeemable at our option or subject to mandatory redemption, we may, in the case of optional redemption, or must, in the case of mandatory redemption, choose to redeem the notes at times when prevailing interest rates may be relatively low. Accordingly, you will not be able to reinvest the redemption proceeds in a comparable security at an interest rate as high as that of the notes. We Cannot Assure You That a Market Will Develop For Your Notes or What the Market Price Will Be We cannot assure that a trading market for your notes will develop or be maintained. In addition to our creditworthiness, many other factors may affect the trading market for or value of the notes. These factors include: o complexity and volatility of the index or formula applicable to the notes, o method of calculating the principal, premium and interest in respect of the notes, 2 o time remaining to the maturity of the notes, o outstanding amount of the notes, o redemption features of the notes, o amount of other debt securities linked to the index or formula applicable to the notes, and o level, direction and volatility of market interest rates generally. In addition, because some notes may be designed for specific investment objectives or strategies, these notes will have a more limited trading market and experience more price volatility. There may be a limited number of buyers when you decide to sell the notes. This limited market may affect the price you receive for the notes or your ability to sell the notes. You should not purchase the notes unless you understand, and know you can bear, all of the investment risks involving the notes. Our Credit Ratings May Not Reflect All the Risks of an Investment in the Notes. Our credit ratings are an independent assessment of ability to pay our obligations. Consequently, real or anticipated changes in our credit ratings will generally affect the market value of your notes. Our credit ratings, however, may not reflect the potential impact of risks related to structural, market or other factors discussed in this prospectus on the value of your notes. As Our Parent Company Diversifies Into More Unregulated Business Activities, Our Credit Ratings May Be Affected Our credit ratings depend in part on our relationship with our parent company and our affiliates, some of which are businesses involved in open market competition for sales. Our parent company has announced an intention to target as much as 70% of capital expenditures towards non-regulated activities related to oil and gas exploration and production and other activities over the next several years. In as much as rating agencies tend to view those ventures as holding more business risk than investment in rate regulated utility properties, our parent company may see pressure on its credit ratings. This pressure could negatively impact the ratings on the notes. Environmental Regulation Significantly Affects Our Business Our business operations are subject to federal, state and local laws and regulations relating to environmental protection. If an accidental leak or spill of hazardous materials occurs from our pipelines, storage, or other facilities, we may have to pay a significant amount to clean up the leak or spill. The resulting costs and liabilities could negatively affect our level of cash flow. In addition, emission controls required under the Federal Clean Air Act and other similar federal and state laws could require unexpected capital expenditures at our facilities. Although 3 we cannot predict the impact of Environmental Protection Agency standards or future environmental measures or other state and local regulations, our costs could increase if environmental laws and regulations become stricter. Since the costs of environmental regulation are already significant, additional regulation could negatively affect our business. Competition Could Lead to Lower Levels of Profits and Lower Our Cash Flow Over Time Our natural gas pipelines and storage facilities compete against other existing natural gas pipelines originating from the same sources or serving the same markets as our facilities. In addition, we also may face competition from natural gas pipelines and storage projects that may be built in the future. Our ability to compete also depends upon general market conditions, which may change. We conduct our operations without the benefit of exclusive franchises from government entities. We provide open access transportation and storage services at filed tariffs. Demand for storage service and transportation on our pipelines is primarily a function of customer usage rates, economic conditions, competing transportation and storage sources and price for service. We Are Parties to a Complex Lawsuit Involving Our Ownership in the TransColorado Gas Transmission Company, Which Could Expose Us to Material Losses KN TransColorado, Inc. ("KNTC"), a subsidiary of Kinder Morgan, Inc., is challenging the validity of our contractual right to put our 50% interest in the project to it. KNTC alleges we have breached our fiduciary duty to it and to the partnership and is seeking damages in excess of $150 million plus punitive damages, and a ruling that our put option is void and unenforceable. We have filed a counterclaim seeking affirmation of our contractual right to exercise the put and damages of at least $185 million. A trial is scheduled for April 2002. In the meantime, we are incurring significant legal expenses to defend ourselves and to protect our rights. 4 THE COMPANY Overview We are a subsidiary of Questar Corporation ("Questar"), and are in the business of transporting and storing natural gas in the Rocky Mountain States of Utah, Wyoming and Colorado. We and our affiliate Questar Gas Company ("Questar Gas", formerly Mountain Fuel Supply Company) are directly owned by Questar Regulated Services Company which is a sub- holding company of Questar. As an open-access pipeline, we transport gas for affiliated and unaffiliated customers. We own and operate the Clay Basin storage facility, a large underground storage project in northeastern Utah, and own other underground storage operations in Utah and Wyoming. Through a subsidiary, we own and operate a gas processing plant. We are also involved in two partnerships, Overthrust Pipeline Company ("Overthrust"), and TransColorado Gas Transmission Company ("TransColorado"). We have extended our presence in other parts of the western United States by participating in the TransColorado pipeline project and purchasing the Southern Trails line. There are market risks associated with these projects, as evidenced by our decision to write down our investment in TransColorado in 1999. See "Partnership Interests." Our efforts to complete the western section of Southern Trails are affected by our ability to obtain firm shipper contracts. Competition for transportation and storage services has intensified in recent years. Changes in regulation have significantly increased customer choices. We actively compete with other interstate pipelines for transportation volumes throughout the Rocky Mountain region. We have two key assets that contribute to our continued success. We have a strategically located and integrated, low-cost transmission system with interconnections to major pipeline systems and with access to major producing areas and markets. We also have the Clay Basin storage facility, a storage reservoir that has been successfully operated since 1977. Clay Basin has been expanded in response to interest from customers and is fully subscribed by firm-service customers under contracts that are generally long-term in nature. We intend to take advantage of these assets by increasing our ability to quickly and reliably move gas volumes between receipt and delivery points and by continuing to review opportunities to increase our storage capacity and services. Regulation As a natural gas company under the Natural Gas Act, we are subject to the jurisdiction of the Federal Energy Regulatory Commission (the "FERC"), which administers the Natural Gas Act of 1938 and other federal laws as to rates and charges for storage and transportation of gas in interstate commerce, construction of new storage and transmission facilities, extensions or abandonments of service and facilities, accounts and records, and depreciation and amortization policies. We hold certificates of public convenience and necessity granted by the FERC for the transportation and underground storage of natural gas in interstate commerce and for the facilities required to perform such operations. 5 We plan to maintain our current rate structure and do not currently plan to file an application with the FERC for an increase in rates in 2001. We, however, will continue to review our revenues and costs as we add new facilities and make expenditures to comply with regulatory mandates. Affiliate Relationships We have significant business relationships with affiliates, particularly Questar Gas. Depending on the season, Questar Gas has reserved 66% to 69% of the total reserved firm transportation capacity on our transmission system to serve the needs of its approximately 706,000 customers in Utah, southwestern Wyoming, and southeastern Idaho. Questar Gas has also contracted for 26% of the firm storage capacity available at Clay Basin and has storage contracts for 100% of the capacity of three smaller storage reservoirs. Through a subsidiary, we have a processing plant that extracts carbon dioxide from a portion of the gas volumes delivered to Questar Gas. We transport natural gas owned by Questar Gas and produced from properties operated by Wexpro Company ("Wexpro"), another affiliate, as well as natural gas volumes purchased directly by Questar Gas from field producers and other suppliers. We also transport volumes that are marketed by Questar Energy Trading Company ("Questar Energy Trading"), another affiliate. Transmission System Our core transmission system is strategically located in the Rocky Mountains near large reserves of natural gas. We describe it as a "hub and spoke" system, rather than a "long-line" pipeline, because of its physical configuration, multiple interconnections to other interstate pipeline systems, and access to major producing areas. Our transmission system has connections with the pipeline systems of Colorado Interstate Gas Company ("CIG"); the middle segment of the Trailblazer Pipeline System ("Trailblazer") owned by Wyoming Interstate Company, Ltd. ("WIC"); The Williams Companies Inc. ("Williams"), including Kern River Gas Transmission Company ("Kern River"); TransColorado; and Overthrust. These connections have opened markets in the western and mid-western United States outside Questar Gas' traditional service area and allow us to transport gas for others. Our transmission system includes 1,734 miles of transmission lines that link various producers of natural gas with Questar Gas' distribution facilities in Utah and Wyoming and interconnect with other pipelines. This total transmission mileage includes pipelines associated with our storage fields and tap lines. It does not include the systems in which we have a partnership interest or Southern Trails line. The system includes two major segments, often referred to as the northern and southern systems, which are linked together. The northern segment extends from northwestern Colorado through southwestern Wyoming into northern Utah; the southern segment of the transmission system extends from western Colorado to Payson, in central Utah. The link between the two systems is provided by our transmission line that runs from the Kanda/Coleman compressor station on the northern segment to our Clay Basin storage reservoir and then on to our Fidlar compressor station on the southern system. Our largest single transportation customer is our affiliate, Questar Gas. During 2000, we transported 108.2 million decatherms ("MMDth") (or 39% of our total transportation) for 6 Questar Gas, compared to 105.5 MMDth in 1999 (A decatherm ("Dth") is the amount of heat energy equal to 10 therms or one million British thermal units ("Btu")). These transportation volumes include Questar Gas' cost-of-service gas produced by Wexpro and volumes purchased by Questar Gas directly from field producers and other suppliers. Our transportation agreement with Questar Gas was extended in 1999 for three years and expires June 30, 2002. Questar Gas paid an annual reservation charge of approximately $54.3 million in 2000, which includes reservation charges attributable to firm and "no-notice" transportation. Questar Gas only needs its total reserved capacity during peak-demand situations. When it is not fully utilizing its capacity, Questar Gas releases the capacity to others, primarily industrial transportation customers and marketing entities. We collect approximately 95% of our transmission revenues through reservation charges from firm transportation customers. In other words, these customers pay primarily for access to transportation capacity. Consequently, our throughput volumes do not have a significant effect on our short-term operating results. Transportation revenues are not significantly affected by fluctuating demand based on the vagaries of weather or gas prices. Revenues may, however, be affected if the FERC changes its basic regulatory scheme of "straight fixed-variable" rates described above. Total system throughput increased from 253.5 MMDth in 1999 to 275.2 MMDth in 2000. We increased volumes transported for nonaffiliated customers from 135.9 MMDth in 1999 to 158.6 MMDth in 2000. About 77% of our transmission system capacity is subscribed for under firm transportation contracts. We also own and operate a major compressor complex near Rock Springs, Wyoming. The Kanda/Coleman station compresses volumes of gas from our transmission system for delivery to the WIC segment of the Trailblazer system and to CIG. The complex has become a major delivery point on our system. Five of our major natural gas lines are connected to the system at the complex. In addition, both of CIG's Wyoming pipelines and the WIC segment are connected to the complex. Our pipelines, compressor stations, regulator stations, and other transmission-related facilities are constructed on properties held under long-term easements, rights of way, or fee interests sufficient for the conduct of our business activities. Partnership Interests In addition to the transmission system described above, we own a 72% interest in and are the operating partner of Overthrust, a general partnership that was organized in 1979 to construct, own, and operate the Overthrust segment of Trailblazer. Trailblazer is a major 800- mile pipeline system that transports gas from producing areas in the Rocky Mountains to the Midwest. The 88-mile Overthrust segment is the western-most segment in Trailblazer's system. Although the Overthrust segment is currently underutilized because it was designed to flow gas eastward, we and our partners are reviewing opportunities, including reversing its flow ("backhauling"), to increase its value in meeting western gas demand. The Overthrust partnership 7 agreement requires unanimous consent of all partners on major operating and financial issues. Questar TransColorado, Inc., which is our subsidiary, and KN TransColorado, Inc., a subsidiary of Kinder Morgan, Inc. (formerly KN Energy) each have a 50% interest in the TransColorado pipeline project. Our ownership interest in the project is subject to a lawsuit described in Item 3 of our 2000 Annual Report on Form 10-K and updated in our Quarterly Report on Form 10-Q. The pipeline, which was completed in March 1999, was built to transport gas from the Rocky Mountain area that was traditionally priced lower than other gas supplies to California and Midwestern markets through interconnections with major pipeline systems. The pipeline originates at a point on our system 25 miles east of Rangely in northwestern Colorado and extends 292 miles to the Blanco hub in northwestern New Mexico. In its first two full years of operation, TransColorado incurred significant losses because basis differentials, which reflect gas prices in different producing basins, were not sufficient to encourage producers and market aggregators to transport volumes on the line. We wrote down our investment in TransColorado at year-end 1999 (which write-down included our anticipated contributions of operating funds to April 1, 2001), pending the outcome of the litigation and our ability to put our interest to our partner. The Company has been, and may continue to be, required to contribute operating funds to TransColorado in the amount of approximately $2 million per quarter. Storage Facilities Our Clay Basin storage facility in northeastern Utah is the largest underground storage reservoir in the Rocky Mountains. The facility has a total capacity of 117.5 billion cubic feet ("Bcf") and a working capacity of 51.3 Bcf. Clay Basin has been operational since 1977 and has been successfully expanded several times. Clay Basin's firm storage capacity is fully subscribed by customers under long-term agreements. Questar Gas currently has 13.3 MMDth of working gas capacity at Clay Basin. Other large customers include Williams; Puget Sound Energy Company, a distribution utility in the state of Washington; and Duke Energy Trading and Marketing L.L.C. Storage service is important to distribution companies that need to match annual gas purchases with fluctuating customer demand, improve service reliability, and avoid imbalance penalties. We offer interruptible storage service at Clay Basin and also allow firm storage service customers the right to release their injection and withdrawal rights to other parties. Our storage facilities are certificated by the FERC, and rates for storage service (based on operating costs and investment in plant plus an allowed rate of return) are subject to approval by the FERC. New Projects The Mainline 104 project is expected to commence construction during 2001 in order to have the project in service before the winter heating season of 2001-2002. This line, which is 75.6 miles long and 24 inches in diameter, extends from Price, Utah, near the Ferron area of coalbed methane gas, to Questar Gas' system at Payson, Utah, and the Kern River line near Elberta, Utah. The project is estimated to cost $80 million and will provide approximately 272,000 Dth per day of additional firm transportation capacity. CIG has a 31.3% interest in the 8 line and has subscribed to 94,000 Dth of capacity. Questar Gas has contracted for 50,000 Dth of capacity all year long and 50,000 Dth of additional capacity during the heating-season months of December, January and February. This additional capacity will allow Questar Gas to have additional firm capacity to meet its long-term needs. The Bureau of Land Management has established a schedule of town meetings to consider public response to the new line. We do not yet have the final environmental approvals to construct, but the timetable established by the federal agencies involved with the environmental review, if met, would allow us to meet our schedule. The Southern Trails Pipeline project involves converting a 700-mile oil pipeline and installing compression facilities to transport natural gas volumes. The line extends from the Four Corners area where the states of Utah, Colorado, New Mexico and Arizona meet to Long Beach, California. Through a subsidiary, we are continuing to negotiate necessary rights of way for the project. Current operating plans divide this line into two segments. The eastern segment, with a daily capacity of 80,000 Dth, extends from the San Juan Basin to the California state line and is expected to be in service in mid-2002. The western segment, which has a daily capacity of 120,000 Dth and extends from the California state line to Long Beach, needs firm shipper contracts and action by the California Public Utilities Commission that would modify its residual load service tariff penalty to allow completion of this segment. We have received regulatory approval for the project from the FERC and formal certification from the California State Lands Commission. On April 9, 2001, we announced we had secured a long-term gas-transportation contract for the entire initial capacity on the eastern segment of the line. On May 2, 2001, we announced our intention to construct a high deliverability salt cavern gas storage facility near the city of Evanston, Wyoming. The facility will consist of four salt cavern domes that will each hold up to 3.5 Bcf of gas which could be injected and withdrawn up to twelve times each year. We believe the facility will be useful for those electric power companies which require immediate delivery of gas supplies. Depending on our ability to sign contracts with customers, the facility is expected to be in operation by 2004. Employees As of December 31, 2000, we and a wholly-owned subsidiary had an aggregated 108 employees, compared to 129 employees as of year-end 1999. Questar Regulated Services, our parent, had 358 employees (compared to 431 at year-end 1999) who perform specified services for us, and other members of the group. The reduction in employees reflects an early retirement program offered to employees of the Questar Regulated Services group effective October 31, 2000. Headquarters Our headquarters are located at 180 East 100 South Street, P.O. Box 45360, Salt Lake City, Utah 84145-0360 and our telephone number is (801) 324-5555. 9 USE OF PROCEEDS The net proceeds from the sale of the notes will be used to redeem our $85 million 9- 3/8% Debentures due 2021, to finance a portion of capital expenditures and partnership investments, estimated at $180.3 million in 2001. During 2001, capital expenditures for Main Line 104 are estimated at $77.5 million, while capital expenditures for the Southern Trails Pipeline are estimated to be $38.0 million in 2001. At March 31, 2001, short-term debt totaled $800,000 and had an interest rate of 5.47% per annum. Short-term debt was incurred for general corporate purposes. CAPITALIZATION The following table shows the capitalization of the Company as of March 31, 2001. March 31, 2001 ----------------------------------- Amount Percentage ------------ ----------- (Dollars in Thousands) Short-term debt, owed to Questar .......... $800 ==== Long-term debt (1) ........................ $215,025 47.5% Common shareholder's equity ............... 237,668 52.5% ------- Total capitalization ...................... $452,693 100.0% ======== ====== - ------------- (1) This amount reflects a discount of $375,000. RATIO OF EARNINGS TO FIXED CHARGES Twelve Months Ended Years Ended December 31, March 31, 2001 ------------------------ -------------- 1996 1997 1998 1999 2000 ---- ---- ---- ---- ---- Ratio of earnings to fixed charges (1)... 3.58 4.02 3.78 .33 3.05 3.12 (1) For purposes of this presentation, earnings represent income from continuing operations before income taxes and fixed charges. Fixed charges consist of total interest charges, amortization of debt issuance costs and debt discounts, and the interest portion of rental costs. 10 DESCRIPTION OF THE MEDIUM-TERM NOTES We will issue the notes as a new series of debt securities under an indenture, dated as of August 17, 1998, as amended and modified from time to time, between us and Wells Fargo Bank Northwest, National Association (f/k/a First Security Bank, N.A.), as trustee. The following description is only a summary of the material provisions of the notes and of the indenture and is not complete and is qualified in its entirety by reference to the indenture, a copy of which has been filed as an exhibit to the registration statement of which this prospectus is a part. We urge you to read the indenture because it, and not this description, defines your rights as holders of the notes. A copy of the indenture is available upon request made to us or to the agents. When we refer to securities, we refer to all debt securities that we have issued or may issue in the future under the indenture and include the notes. The terms and conditions described below apply to each note unless otherwise indicated in an applicable pricing supplement. General In addition to the notes we are offering in this prospectus, the indenture provides for the issuance of additional securities, in one or more series (including both interest bearing and original issue discount securities), without limitation as to aggregate principal amount. The notes will be our unsecured obligations and will rank equally with all our other unsecured and unsubordinated indebtedness. Other than a limitation on liens covenant, the indenture does not contain restrictive covenants which would require us to maintain certain financial ratios or restrict our ability to incur additional indebtedness. In addition, the indenture permits the issuance of notes which do not pay interest for stated periods of time and which are issued with original issue discount. The notes being offered hereby constitute a separate series of securities under the indenture and are currently limited to $250,000,000 aggregate initial offering amount. Such series may be reopened and the aggregate initial offering amount of the notes may be increased from time to time. The notes will be offered on a continuing basis, and each note will mature on a Business Day (as defined below), not less than 9 months nor more than 30 years from its date of issue, as selected by the initial purchaser and agreed to by us. The notes will be denominated and be payable in United States dollars. The pricing supplement relating to any note will set forth the principal amount, interest rate, issue price and agent's commission, original issue and Maturity dates, redemption and repayment provisions, if any, and other material terms of such note. Unless otherwise specified in the applicable pricing supplement, each note will be issued in registered book-entry form or in registered certificated form, in denominations of $1,000 and integral multiples of $1,000. Book-entry notes may be transferred or exchanged only through a participating member of The Depository Trust Company (or such other depositary as is identified in an applicable pricing supplement). See "Book Entry notes; Global Securities" below. Registration of transfer or exchange of certificated notes will be made at the corporate trust office of the trustee. No service charge will be made for the registration of transfer or exchange of notes, but we may require payment of a sum sufficient to cover any tax or other governmental 11 charge payable in connection therewith (other than exchanges pursuant to Sections 304, 906 or 1107 of the indenture, not involving any transfer). "Business Day" means any day that is not a Saturday or Sunday, and that in The City of New York is not a day on which banking institutions are generally authorized or obligated by law or executive order to close, and, with respect to any LIBOR Note, is a London Business Day. Unless otherwise specified in the applicable pricing supplement, "London Business Day" means any day on which dealings in deposits in United States dollars are transacted in the London interbank market. "Maturity," when used with respect to any note, means the date on which the principal of such note or an installment of principal becomes due and payable as provided in the note or the indenture, whether at the Stated Maturity or by declaration of acceleration, call for redemption, repayment at the option of the holder or otherwise. "Stated Maturity," when used with respect to any note or any installment of principal thereof or interest thereon, means the date specified in such note as the fixed date on which the principal of such note or such installment of principal or interest is due and payable. Under the indenture, notes may be issued at a discount from their principal amount payable at stated maturity, or with such terms (such as contingent interest, interest holidays, irregular accrual periods, interest payable in additional notes, stepped rates, rates based on multiple or non-conventional interest indices or notes on which payments are tied to the value of a single stock, a basket of stocks, a commodity or a stock or commodities index) so as to cause the notes to be subject to the original issue discount rules of federal, state, local or foreign tax laws. In the event notes are issued at such a discount or with such terms so as to cause original issue discount rules to apply, the terms of such notes and additional disclosure regarding the federal income tax treatment of such notes as well as certain other considerations will be provided in the applicable pricing supplement relating to such notes. Unless otherwise indicated in a pricing supplement, the covenants contained in the indenture and the notes would not necessarily afford holders of the notes protection in the event of a highly leveraged or other transaction involving us that may adversely affect holders. Interest rates offered by us with respect to the notes may differ depending upon, among other things, the aggregate principal amount of notes purchased in any single transaction. Notes with similar variable terms other than interest rates, as well as notes with different other variable terms, may be offered concurrently to different investors. Interest rates or formulas and other terms of notes are subject to change by us from time to time, but no such change will affect any note previously issued or as to which an offer to purchase has been accepted by us. Payments For certificated notes, payments of principal, premium, if any, and interest payable at Maturity will be made in immediately available funds at the corporate trust office of the trustee in Salt Lake City, Utah or at such other place as we may designate, provided that the certificated note is presented to the trustee in time for the trustee to make such payments in such funds in 12 accordance with its normal procedures. Interest (other than interest payable at Maturity) will be paid by check mailed to the address of the holder as it appears in the security register as of the regular record dates or, at our option, by wire transfer to an account maintained by such holder with a bank located in the United States. Notwithstanding the foregoing, a holder of $10,000,000 or more in aggregate principal amount of certificated notes having the same Interest Payment Dates (as defined below) shall be entitled, upon written request received by the trustee prior to the regular record date in respect of an interest payment, or the date which is fifteen days before the Stated Maturity or date of redemption or repayment of the principal of the notes, as the case may be, to receive payments of principal, premium, if any, and interest by wire transfer to an account maintained by such holder with a bank located in the United States; provided, however, that no payment of principal and premium, if any, will be made without prior notice of presentment and surrender of the notes. If any Stated Maturity or date of redemption or repayment would otherwise be a day that is not a Business Day, payments due on any such day need not be made on such day, but may be made on the next succeeding Business Day (or, in the case of a LIBOR Note, if such day falls in the next succeeding calendar month, the immediately preceding Business Day), with the same force and effect as if made on the due date, and no interest shall accrue for the period from such due date to such succeeding Business Day. The total amount of any principal, premium, if any, or interest due on any global security (as defined below) representing one or more book-entry notes on any interest payment date or at Maturity will be made available to the trustee on such date. As soon as practicable thereafter, the trustee will make such payments to the depositary in accordance with existing arrangements between the trustee and the depositary. The depositary will allocate such payments to each book- entry note represented by such global security and make payments to the registered owners or holders thereof in accordance with its existing operating procedures. Neither we nor the trustee shall have any responsibility or liability for such payments by the depositary. So long as the depositary or its nominee is the registered owner of any global security, the depositary or its nominee, as the case may be, will be considered the sole owner or holder of the book-entry note or book-entry notes represented by such global security for all purposes under the indenture. Redemption at the Option of the Company; No Sinking Fund Unless otherwise specified in an applicable pricing supplement, the notes will not be subject to any optional or mandatory sinking fund. If provided in an applicable pricing supplement, the notes may be subject to redemption, in whole or in part, prior to their Stated Maturity at our option or through operation of a mandatory or optional sinking fund or analogous provisions at a price or prices (including premiums, if any) determined as set forth in a pricing supplement, together with interest thereon payable to the date of redemption, on notice given no more than 60 nor less than 30 days prior to the date of redemption. If the notes are to be redeemable, the notes will be subject to redemption by us on and after the redemption date, if any, fixed at the time of sale and set forth in the applicable pricing supplement. If no redemption date is indicated in the applicable pricing supplement with respect to a note, such note will not be redeemable prior to Stated Maturity. 13 Repayment at the Option of the Holder If provided in an applicable pricing supplement, the notes will be subject to repayment at the option of the holder of the notes in accordance with the terms of such notes on their respective optional repayment dates, if any, as agreed upon by us and the purchasers of such notes at the time of sale (each, an "Optional Repayment Date"). If no Optional Repayment Date is indicated with respect to a note, such note will not be repayable at the option of the holder of such note prior to its Stated Maturity. We may at any time purchase notes at any price or prices in the open market or otherwise. Notes so purchased by us may, at our discretion, be held, resold or surrendered to the trustee for cancellation. Interest and Interest Rates General Unless otherwise specified in an applicable pricing supplement, each note will bear interest from the date of original issue at the rate per annum or, in the case of a Floating Rate Note, pursuant to the interest rate formula, stated therein and in the applicable pricing supplement until the principal thereof is paid or made available for payment. Interest will be payable in arrears on each date specified in the applicable pricing supplement and in a note on which an installment of interest is due and payable (an "Interest Payment Date") and at Maturity. Interest will be payable generally to the person in whose name a note (or any predecessor security) is registered at the close of business on the regular record date next preceding the related Interest Payment Date; provided, however, that interest payable at Maturity will be payable to the person to whom principal shall be payable. Each interest payment shall be the amount of interest accrued from and including the later of the date of original issue or the most recent Interest Payment Date (in respect of which interest has been paid or duly provided for with respect to such note) to but excluding the next succeeding Interest Payment Date (an "Interest Accrual Period"). Unless otherwise specified in the applicable pricing supplement, the first payment of interest on any note originally issued between a regular record date and the related Interest Payment Date will be made on the Interest Payment Date immediately following the next succeeding regular record date to the holder on such next succeeding regular record date. Interest rates, interest rate formulas and other terms of the notes are subject to change by us from time to time but no such change will affect any notes already issued or as to which offers to purchase have been accepted by us. Fixed Rate Notes Unless otherwise specified in an applicable pricing supplement, we will pay interest on Fixed Rate Notes semiannually on June 1 and December 1 of each year, and the regular record dates in respect of such Interest Payment Dates will be the immediately preceding May 15 and November 15 (whether or not a Business Day), respectively. If any Interest Payment Date or Maturity of a Fixed Rate Note falls on a day that is not a Business Day with respect to such Fixed Rate Note, the payment due on such Interest Payment Date or at Maturity will be made on the following day that is a Business Day with respect to such Fixed Rate Note as if it were made 14 on the date such payment was due and no interest shall accrue on the amount so payable for the period from and after such Interest Payment Date or Maturity, as the case may be. Unless otherwise specified in the applicable pricing supplement, interest on each Fixed Rate Note will be computed on the basis of a 360-day year of twelve 30-day months. Floating Rate Notes Unless otherwise specified in an applicable pricing supplement, Floating Rate Notes will be issued as described below. Interest on Floating Rate Notes will be determined by reference to a "Base Rate," which may be one or more of: o the Commercial Paper Rate, in which case such note will be a "Commercial Paper Rate Note"; o the Federal Funds Rate, in which case such note will be a "Federal Funds Rate Note"; o LIBOR, in which case such note will be a "LIBOR Note"; o the Prime Rate, in which case such note will be a "Prime Rate Note"; o the Treasury Rate, in which case such note will be a "Treasury Rate Note"; or o such other interest rate formula as may be set forth in the applicable pricing supplement and Floating Rate Note. In addition, a Floating Rate Note may bear interest at the lowest of two or more Base Rates determined in the same manner as the Base Rates are determined for the types of Floating Rate Notes described above (except the interest rate for such Floating Rate Notes will not be determined with reference to the Treasury Rate). Each Floating Rate Note will specify the Base Rate or Rates applicable thereto. The interest rate on each Floating Rate Note will be calculated by reference to the specified Base Rate or the lowest of two or more specified Base Rates, in either case plus or minus the applicable Spread, if any, and/or multiplied by the applicable Spread Multiplier, if any. The "Spread" is the number of basis points to be added to or subtracted from the related Base Rate or Rates applicable to such Floating Rate Note. The "Spread Multiplier" is the percentage of the related Base Rate or Rates applicable to such Floating Rate Note by which said Base Rate or Rates are to be multiplied to determine the applicable interest rate on such Floating Rate Note. The "Index Maturity" is the period to Maturity of the instrument or obligation with respect to which the related Base Rate or Rates are calculated. Each Floating Rate Note will specify the Index Maturity and the Spread, if any, and/or Spread Multiplier, if any, applicable thereto. Each Floating Rate Note and the applicable pricing supplement will specify whether the rate of interest on such Floating Rate Note will be reset daily, weekly, monthly, quarterly, semiannually, annually or otherwise (each, an "Interest Reset Period") and the date on which such interest rate will be reset (each, an "Interest Reset Date"). Unless otherwise specified in a 15 Floating Rate Note and the applicable pricing supplement, the Interest Reset Date will be, in the case of a Floating Rate Note which resets: o daily, each Business Day; o weekly, on Wednesday of each week (with the exception of weekly reset Floating Rate Notes as to which the Treasury Rate is an applicable Base Rate, which will reset Tuesday of each week, except as described below); o monthly, the third Wednesday of each month; o quarterly, the third Wednesday of each March, June, September and December of each year; o semiannually, the third Wednesday of each of the two months specified in such pricing Supplement; and o annually, the third Wednesday of the month specified in such pricing supplement. If any Interest Reset Date for any Floating Rate Note would otherwise be a day that is not a Business Day, such Interest Reset Date will be postponed to the next succeeding day that is a Business Day, except that in the case of a LIBOR Note (or a Floating Rate Note for which LIBOR is an applicable Base Rate), if such Business Day is in the next succeeding calendar month, such Interest Reset Date shall be the last Business Day in the preceding month. The interest rate applicable to each Interest Reset Period commencing on the Interest Reset Date or Dates with respect to such Interest Reset Period will be the rate determined with respect to the applicable "Interest Determination Date." Unless otherwise specified in an applicable pricing supplement, the Interest Determination Date with respect to the Commercial Paper Rate, the Federal Funds Rate and the Prime Rate will be the second Business Day preceding each Interest Reset Date for the related note. Unless otherwise specified in an applicable pricing supplement, the Interest Determination Date with respect to LIBOR will be the second London Business Day preceding each Interest Reset Date. With respect to the Treasury Rate, unless otherwise specified in an applicable pricing supplement, the Interest Determination Date will be the day in the week in which the Interest Reset Date falls on which day Treasury Bills are normally auctioned (Treasury Bills are normally sold at auction on Monday of each week, unless that day is a legal holiday, in which case the auction is normally held on the following Tuesday, except that such auction may be held on the preceding Friday); provided, however, that if, as a result of a legal holiday, an auction is held on the Friday of the week preceding the Interest Reset Date, the related Interest Determination Date shall be such preceding Friday; and provided, further, that if an auction shall fall on any Interest Reset Date, then the related Interest Reset Date shall instead be the first Business Day immediately following such auction. Unless otherwise specified in the applicable pricing supplement, the Interest Determination Date pertaining to a Floating Rate Note the interest rate of which is determined with reference to two or more Base Rates will be the first Business Day which is at least two Business Days prior to such Interest Reset Date for such a Floating Rate Note on which each Base Rate 16 shall be determinable. Each Base Rate shall be determined and compared on such date, and the applicable interest rate shall take effect on the related Interest Reset Date. Any Floating Rate Note may also specify either or both a maximum limit and a minimum limit on the rate at which interest may accrue during any Interest Accrual Period. In addition to any maximum interest rate that may be applicable to any Floating Rate Note pursuant to the preceding sentence, the interest rate on Floating Rate Notes will in no event be higher than the maximum rate permitted by New York law, as the same may be modified by United States law of general application. Except as provided below or in the applicable pricing supplement, interest will be payable, in the case of a Floating Rate Note which resets: o daily, each Business Day; o weekly, on Wednesday of each week (with the exception of weekly reset Floating Rate Notes as to which the Treasury Rate is an applicable Base Rate, which will reset on Tuesday of each week, except as described below); o monthly, on the third Wednesday of each month; o quarterly, on the third Wednesday of March, June, September and December of each year; o semiannually, on the third Wednesday of the two months of each year specified in the applicable pricing supplement; and o annually, on the third Wednesday of the month specified in the applicable pricing supplement (each, an "Interest Payment Date"); and, in each case, at Maturity. If any Interest Payment Date for a Floating Rate Note falls on a day that is not a Business Day with respect to such Floating Rate Note, such Interest Payment Date will be the following day that is a Business Day with respect to such Floating Rate Note, except that, in the case of a LIBOR Note (or a Floating Rate Note for which LIBOR is an applicable Base Rate), if such Business Day is in the next succeeding calendar month, such Interest Payment Date shall be the immediately preceding day that is a Business Day with respect to such Floating Rate Note. If the Maturity of a Floating Rate Note falls on a day that is not a Business Day with respect to such Floating Rate Note, the payment of principal, premium, if any, and interest will be made on the next succeeding Business Day with respect to such Floating Rate Note, and no interest on such payment shall accrue for the period from and after Maturity. Unless otherwise specified in a Floating Rate Note and the applicable pricing supplement, the regular record date or Dates for interest payable on such Floating Rate Note will be the fifteenth day (whether or not a Business Day) immediately preceding the related Interest Payment Date or Dates. The interest rate in effect with respect to a Floating Rate Note on each day that is not an Interest Reset Date will be the interest rate determined as of the Interest Determination Date 17 pertaining to the immediately preceding Interest Reset Date and the interest rate in effect on any day that is an Interest Reset Date will be the interest rate determined as of the Interest Determination Date pertaining to such Interest Reset Date, subject in either case to applicable provisions of law and any maximum or minimum interest rate limitation referred to in such Floating Rate Note; provided, however, that the interest rate in effect with respect to a Floating Rate Note for the period from the date of original issue to the first Interest Reset Date will be the rate specified as such in the applicable pricing supplement and the related Floating Rate Note (the "Initial Interest Rate") and unless otherwise specified in the applicable pricing supplement the interest rate in effect for the ten calendar days immediately prior to a Maturity will be the interest rate in effect on the tenth calendar day preceding such Maturity. Unless otherwise specified in the applicable pricing supplement, with respect to each Floating Rate Note, accrued interest is calculated by multiplying its face amount by an accrued interest factor. Such accrued interest factor is computed by adding the interest factor calculated for each day from the later of the date of issue, or from the last date to which interest has been paid or duly provided for, to the date for which accrued interest is being calculated. Unless otherwise specified in the applicable pricing supplement, the interest factor for each such day is computed by dividing the interest rate applicable to such day by 360, in the case of Commercial Paper Rate Notes, Federal Funds Rate Notes, LIBOR Notes, or Prime Rate Notes or by the actual number of days in the year, in the case of Treasury Rate Notes. Unless otherwise specified in an applicable pricing supplement, the interest factor for notes for which the interest rate is calculated with reference to two or more Base Rates will be calculated in each period in the same manner as if only the lowest of the applicable Base Rates applied. All percentages resulting from any calculation on Floating Rate Notes will be rounded, if necessary, to the nearest one hundred-thousandth of a percentage point, with five one-millionths of a percentage point rounded upward (e.g., 9.876545% (or .09876545) will be rounded upward to 9.87655% (or 0987655)), and all dollar amounts used in or resulting from such calculation on Floating Rate Notes will be rounded to the nearest cent (with one-half cent being rounded upward). Unless otherwise specified in an applicable pricing supplement, the trustee will be the calculation agent. Upon the request of the holder of any Floating Rate Note, the calculation agent will provide the interest rate then in effect and, if determined, the interest rate that will become effective as a result of a determination made for the next succeeding Interest Reset Date with respect to such Floating Rate Note. Unless otherwise specified in an applicable pricing supplement, the calculation date, if applicable, pertaining to any Interest Determination Date will be the earlier of: o the tenth calendar day after the applicable Interest Determination Date or, if the tenth calendar day is not a Business Day, the next succeeding Business Day; or o the Business Day immediately preceding the applicable Interest Payment Date or Maturity, as the case may be. 18 The interest rate in effect with respect to a Floating Rate Note from the date of original issue to the first Interest Reset Date will be the Initial Interest Rate. The interest rate for each subsequent Interest Reset Date will be determined by the calculation agent as follows: Commercial Paper Rate. Commercial Paper Rate Notes will bear interest at the interest rates (calculated with reference to the Commercial Paper Rate and the Spread and/or Spread Multiplier, if any) specified in such Commercial Paper Rate Notes and in an applicable pricing supplement. Unless otherwise specified in an applicable pricing supplement, "Commercial Paper Rate" means, with respect to any Interest Determination Date relating to a Commercial Paper Rate Note or any Interest Determination Date for a note for which the Commercial Paper Rate is one of the Base Rates (a "Commercial Paper Rate Interest Determination Date"), the Money Market Yield (as defined below) on such date of the rate for commercial paper having the Index Maturity specified in the applicable pricing supplement as published by the Board of Governors of the Federal Reserve System in "Statistical release H.15(519), Selected Interest Rates" or any successor publication ("H.15(519)") under the heading "Commercial Paper - Nonfinancial" or, if unavailable, under such other heading representing commercial paper issued by non-financial entities whose bond rating is "AA," or the equivalent, from a nationally recognized statistical rating organization. In the event that such rate is not published by 3:00 P.M., New York City time, on the Calculation Date pertaining to such Commercial Paper Rate Interest Determination Date, then the Commercial Paper Rate will be the Money Market Yield on such Commercial Paper Rate Interest Determination Date of the rate for commercial paper having the Index Maturity specified in the applicable pricing supplement as published by the Federal Reserve Bank of New York in its daily statistical release "Composite 3:30 P.M. Quotations for U.S. Governmental Securities" or any successor publication ("Composite Quotations") under the heading "Commercial Paper" (with an Index Maturity of one month or three months being deemed to be equivalent to an Index Maturity of thirty days or ninety days, respectively). If such rate is not published in either H.15(519) or Composite Quotations by 3:00 P.M., New York City time, on such Calculation Date, then the Commercial Paper Rate will he calculated by the calculation agent and will be the Money Market Yield of the arithmetic mean of the offered rates, as of approximately 11:00 A.M., New York City time, on such Commercial Paper Rate Interest Determination Date, of three leading dealers of commercial paper in The City of New York (which may include one or more of the agents or their affiliates) selected by the calculation agent (after consultation with us) for commercial paper having the specified Index Maturity placed for a nonfinancial issuer whose bond rating is "AA," or the equivalent, from a nationally recognized statistical rating organization; provided, however, that if the dealers selected as aforesaid by the calculation agent are not quoting as mentioned in this sentence, the Commercial Paper Rate determined as of such Commercial Paper Interest Determination Date will be the Commercial Paper Rate in effect on such Commercial Paper Rate Interest Determination Date. "Money Market Yield" means a yield (expressed as a percentage) calculated in accordance with the following formula: Money Market Yield = [ D x 360 ] x 100 -------- 360 - (D x M) 19 where "D" refers to the applicable per annum rate for commercial paper quoted on a bank discount basis and expressed as a decimal and "M" refers to the actual number of days in the interest period for which interest is being calculated. Federal Funds Rate. Federal Funds Rate Notes will bear interest at the interest rates (calculated with reference to the Federal Funds Rate and the Spread and/or Spread Multiplier, if any) specified in such Federal Funds Rate Notes and in an applicable pricing supplement. Unless otherwise specified in an applicable pricing supplement, "Federal Funds Rate" means, with respect to any Interest Determination Date relating to a Federal Funds Rate Note or a Floating Rate Note for which the interest rate is determined with reference to the Federal Funds Rate (a "Federal Funds Rate Interest Determination Date"), the rate on such date for United States dollar federal funds as published in H.15(519) under the heading "Federal Funds (Effective)" or, if not published by 3:00 P.M., New York City time, on the related Calculation Date, the rate on such Federal Funds Rate Interest Determination Date as published in Composite Quotations under the heading "Federal Funds/Effective Rate." If such rate is not published in either H.15(519) or Composite Quotations by 3:00 P.M., New York City time, on the related Calculation Date, then the Federal Funds Rate on such Federal Funds Rate Interest Determination Date will be calculated by the calculation agent and will be the arithmetic mean of the rates for the last transaction in overnight United States dollar federal funds arranged by three leading brokers of federal funds transactions in The City of New York (which may include the agents or their affiliates) selected by the calculation agent prior to 9:00 A.M., New York City time, on such Federal Funds Rate Interest Determination Date; provided, however, that if the brokers so selected by the calculation agent are not quoting as mentioned in this sentence, the Federal Funds Rate determined as of such Federal Funds Rate Interests Determination Date will be the Federal Funds Rate in effect on such Federal Funds Rate Interest Determination Date. LIBOR. LIBOR Notes will bear interest at the interest rates (calculated with reference to LIBOR and the Spread and/or Spread Multiplier, if any) specified in such LIBOR Notes and in an applicable pricing supplement. Unless otherwise specified in an applicable pricing supplement, "LIBOR" means the rate determined by the calculation agent in accordance with the following provisions: o With respect to an Interest Determination Date relating to a LIBOR Note or any Floating Rate Note for which LIBOR is an applicable Base Rate (a "LIBOR Interest Determination Date"), either, as specified in the applicable pricing supplement: (a) the arithmetic mean of the offered rates for deposits in U.S. dollars for the period of the Index Maturity specified in the applicable pricing supplement, commencing on the second London Business Day immediately following such LIBOR Interest Determination Date, which appear on the Reuters Screen LIBOR Page as of 11:00 A.M., London time, on the LIBOR Interest 20 Determination Date, if at least two such offered rates appear on the Reuters Screen LIBOR Page ("LIBOR Reuters"), or (b) the rate for deposits in U.S. dollars having the Index Maturity designated in the applicable pricing supplement, commencing on the second London Business Day immediately following that LIBOR Interest Determination Date, that appears on the Telerate Page 3750 as of 11:00 A.M., London time, on that LIBOR Interest Determination Date ("LIBOR Telerate"). Unless otherwise indicated in the applicable pricing supplement, "Reuters Screen LIBOR Page" means the display designated as Page "LIBOR" on the Reuters Monitor Money Rate Service (or such other page as may replace the LIBOR page on that service for the purpose of displaying London interbank offered rates of major banks). "Telerate Page 3750" means the display designated as page "3750" on the Telerate Service (or such other page as may replace the 3750 page on that service or such other service or services as may be nominated by the British Bankers' Association for the purpose of displaying London interbank offered rates for U.S. dollar deposits). If neither LIBOR Reuters nor LIBOR Telerate is specified in the applicable pricing supplement, LIBOR will be determined as if LIBOR Telerate had been specified. If fewer than two offered rates appear on the Reuters Screen LIBOR Page, or if no rate appears on the Telerate Page 3750, as applicable, LIBOR in respect of that LIBOR Interest Determination Date will be determined as if the parties had specified the rate described in the immediately following clause. o With respect to a LIBOR Interest Determination Date on which fewer than two offered rates appear on the Reuters Screen LIBOR Page, as described in clause (a) immediately above, or on which no rate appears on the Telerate Page 3750, as specified in clause (b) immediately above, as applicable, LIBOR will be determined on the basis of the rates at which deposits in U.S. dollars having the index Maturity designated in the applicable pricing supplement are offered at approximately 11:00 A.M., London time, on such LIBOR Interest Determination Date by four major banks ("Reference Banks") in the London interbank market selected by the calculation agent (after consultation with us) to prime banks in the London interbank market commencing on the second London Business Day immediately following such LIBOR Interest Determination Date and in a principal amount of not less than U.S. $1,000,000 that is representative for a single transaction in such market at such time. The calculation agent will request the principal London office of each of the Reference Banks to provide a quotation of its rate. If at least two such quotations are provided, LIBOR for such LIBOR Interest Determination Date will be the arithmetic mean of such quotations. If fewer than two quotations are provided, LIBOR for such LIBOR Interest Determination Date will be the arithmetic mean of the rates quoted at approximately 11:00 AM., New York City time, on such LIBOR Interest Determination Date by three major banks (which may include the agents or their affiliates) in The City of New York selected by the calculation agent (after consultation with us) for loans in U.S. dollars to leading European banks having the specified Index Maturity designated in the applicable pricing supplement commencing on the second London Business Day immediately following such LIBOR Interest Determination Date and in a principal amount equal to an 21 amount of not less than U.S. $1,000,000 that is representative for a single transaction in such market at such time; provided, however, that if the banks selected as aforesaid by the calculation agent are not quoting as mentioned in this sentence, LIBOR determined as of such LIBOR Interest Determination Date will be LIBOR then in effect on such LIBOR Interest Determination Date. Prime Rate. Prime Rate Notes will bear interest at the interest rates (calculated with reference to the Prime Rate and the Spread and/or Spread Multiplier, if any) specified in such Prime Rate Notes and in an applicable pricing supplement. Unless otherwise specified in an applicable pricing supplement, "Prime Rate" means: o with respect to any Interest Determination Date relating to a Prime Rate Note or a Floating Rate Note for which the interest rate is determined with reference to the Prime Rate (a "Prime Rate Interest Determination Date"), the rate on such date as such rate is published in H.15(519) under the heading "Bank Prime Loan"; or o if the rate referred to in the first clause is not published prior to 3:00 P.M., New York City time, on the related Calculation Date, then the arithmetic mean of the rates of interest publicly announced by each bank that appears on the Reuters Screen USPRIME1 Page (as hereinafter defined) as such bank's prime rate or base lending rate as in effect for such Prime Rate Interest Determination Date; or o if fewer than four such rates described in the second clause appear on the Reuters Screen USPRIME1 Page for such Prime Rate Interest Determination Date, then the arithmetic mean of the prime rates or base lending rates quoted on the basis of the actual number of days in the year divided by a 360-day year as of the close of business on such Prime Rate Interest Determination Date by four major money center banks (which may include affiliates of the agents) in The City of New York selected by the calculation agent; o if fewer than four such quotations described in the third clause are so provided, then the arithmetic mean of four prime rates quoted on the basis of the actual number of days in the year divided by a 360-day year as of the close of business on such Prime Rate Interest Determination Date as furnished in The City of New York by the major money center banks, if any, that have provided such quotations and by a reasonable number of substitute banks or trust companies (which may include affiliates of the agents) to obtain four such prime rate quotations, provided such substitute banks or trust companies are organized and doing business under the laws of the United States, or any State thereof, each having total equity capital of at least $500 million and being subject to supervision or examination by Federal or State authority. "Reuters Screen USPRIME1 Page" means the display on the Reuter Monitor Money Rates Service (or any successor service) on the "USPRIME1" page (or such other page as may 22 replace the USPRIME1 page on such service) for the purpose of displaying prime rates or base lending rates of major United States banks. Treasury Rate. Treasury Rate Notes will bear interest at the interest rates (calculated with reference to the Treasury Rate and the Spread and/or Spread Multiplier, if any) specified in such Treasury Rate Notes and in an applicable pricing supplement. Unless otherwise specified in an applicable pricing supplement, "Treasury Rate" means, with respect to any Interest Determination Date relating to a Treasury Rate Note or any Floating Rate Note for which the interest rate is determined by reference to the Treasury Rate (a "Treasury Rate Interest Determination Date"), the rate applicable to the most recent auction of direct obligations of the United States ("Treasury Bills") having the Index Maturity specified in the applicable pricing supplement, as such rate is published in H.15(519) under the heading "Treasury Bills--auction average (investment)" or, if not published by 3:00 P.M., New York City time, on the Calculation Date pertaining to such Treasury Rate Interest Determination Date, the auction average rate (expressed as a bond equivalent on the basis of a year of 365 or 366 days, as applicable, and applied on a daily basis) as otherwise announced by the United States Department of the Treasury. In the event that the results of the auction of Treasury Bills having the specified Index Maturity are not reported as provided by 3:00 P.M., New York City time, on such Calculation Date, or if no such auction is held in a particular week, then the Treasury Rate shall be calculated by the calculation agent and shall be a yield to Maturity (expressed as a bond equivalent on the basis of a year of 365 days or 366 days, as applicable, and applied on a daily basis) of the arithmetic mean of the secondary market bid rates, as of approximately 3:30 P.M., New York City time on such Treasury Rate Interest Determination Date, of three leading primary United States government securities dealers (which may include one or more of the agents or their affiliates) selected by the calculation agent (after consultation with us), for the issue of Treasury Bills with a remaining Maturity closest to the specified index Maturity; provided, however, that if the dealers selected as aforesaid by the calculation agent are not quoting as mentioned in this sentence, the Treasury Rate determined as of such Treasury Rate Interest Determination Date will be the Treasury Rate in effect on such Treasury Rate Interest Determination Date. Other Provisions; Addenda Any provisions with respect to the determination of a Base Rate, the specification of a Base Rate, calculation of the interest rate applicable to a Floating Rate Note, its Interest Payment Dates or any other matter relating thereto may be modified by the terms as specified under "Other Provisions" on the face of the applicable notes or in an Addendum relating to the applicable notes, if so specified on the face of the applicable notes and described in the applicable pricing supplement. Discount Notes We may offer notes ("Discount Notes") from time to time that have an issue price (as specified in the applicable pricing supplement) that is less than 100% of the principal amount of the applicable notes by more than a percentage equal to the product of 0.25% and the number of 23 full years to the Stated Maturity. Discount Notes may not bear any interest currently or may bear interest at a rate that is below market rates at the time of issuance. The difference between the issue price of a Discount Note and 100% of the principal amount is referred to as the "discount." In the event of redemption, repayment or acceleration of Maturity of a Discount Note, the amount payable to the holder of such Discount Note will be equal to the sum of (i) the issue price (increased by any accruals of discount) and, in the event of any redemption of such Discount Note (if applicable), multiplied by the redemption percentage (as adjusted by the annual redemption percentage reduction, if applicable) and (ii) any unpaid interest accrued thereon to the date of such redemption, repayment or acceleration of Maturity, as the case may be. Unless otherwise specified in the applicable pricing supplement, for purposes of determining the amount of discount that has accrued as of any date on which a redemption, repayment or acceleration of Maturity occurs for a Discount Note, such discount will be accrued using a constant yield method. The constant yield will be calculated using a 30-day month, 360- day year convention, a compounding period that, except for the Initial Period (as defined below), corresponds to the shortest period between Interest Payment Dates for the applicable Discount Note (with ratable accruals within a compounding period), a coupon rate equal to the initial coupon rate applicable to such Discount Note and an assumption that the Maturity of such Discount Note will not be accelerated. If the period from the date of issue to the initial Interest Payment Date for a Discount Note (the "Initial Period") is shorter than the compounding period for such Discount Note, a proportionate amount of the yield for an entire compounding period will be accrued. If the Initial Period is longer than the compounding periods, then such period will be divided into a regular compounding period and a short period with the short period being treated as provided in the preceding sentence. The accrual of the applicable discount may differ from the accrual of original issue discount for purposes of the Internal Revenue Code of 1986, as amended (the "Code"), certain Discount Notes may not be treated as having original issue discount within the meaning of the Code, and notes other than Discount Notes may be treated as issued with original issue discount for federal income tax purposes. In the event notes are issued at such a discount or with such terms so as to cause original issue discount rules under federal tax laws to apply, the terms of such notes and additional disclosure regarding the federal income tax treatment of such notes as well as certain other considerations will be provided in the applicable pricing supplement relating to such notes. Book-Entry Notes; Global Securities Upon issuance, all book-entry notes having the same original issue date, Stated Maturity and otherwise having identical terms and provisions will be represented by a single global security. Each global security representing book-entry notes will be deposited with, or on behalf of, the depositary. Except as set forth below, a global security may not be transferred except 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 or by the depositary or any nominee to a successor of the depositary or a nominee of such successor. Upon our issuance of book-entry notes represented by a global security, the depositary will credit, on its book-entry registration and transfer system, the respective principal amounts of the book-entry notes represented by such global security to the accounts of participants. The accounts to be credited shall be designated by the applicable agent or the underwriter of such 24 book-entry notes, as the case may be. Ownership of beneficial interests in a global security will be limited to participants or persons that hold interests through participants. Ownership of beneficial interests in book-entry notes represented by a global security will be shown on, and the transfer of that ownership will be effected only through, records maintained by the depositary (with respect to interest of participants in the depositary), or by participants in the depositary or persons that may hold interests through such participants (with respect to persons other than participants in the depositary). The laws of some states may require that certain purchasers of securities take physical delivery of such securities in definitive form. Such limits and such laws may impair the ability to transfer beneficial interest in a global security. So long as the depositary for a global security, or its nominee, is the registered owner of the global security, the depositary or its nominee, as the case may be, will be considered the sole owner or holder of the book-entry notes represented by such global security for all purposes under the indenture. Except as provided below, owners of beneficial interests in book-entry notes represented by a global security will not be entitled to have book-entry notes represented by such global security registered in their names, will not receive or be entitled to receive or be entitled to receive physical delivery of book-entry notes in definitive form, known as certificated notes and will not be considered the owners or holders of such book-entry notes under the indenture. The Depository Trust Company, or DTC, will be the initial depositary with respect to the book-entry notes. The book-entry notes will be issued as fully registered securities registered in the name of Cede & Co., DTC's partnership nominee. One fully registered global security will be issued for each issue of book-entry notes having the same terms and provisions, each in the aggregate principal amount of such issue, and will be deposited with DTC. If, however, the aggregate principal amount of any issue exceeds $200,000,000, one global security will be issued with respect to each $200,000,000 of principal amount and an additional global security will be issued with respect to any remaining principal amount of such issue. DTC is a limited-purpose trust company organized under the New York Banking Law, a "banking organization" within the meaning of the New York Banking Law, a member of the Federal Reserve System, a "clearing corporation" within the meaning of the New York Uniform Commercial Code, and a "clearing agency" registered pursuant to the provisions of Section 17A of the Exchange Act. DTC holds securities that its participants deposit with DTC. DTC also facilitates the clearance and settlement among participants of securities transactions, such as transfers and pledges, in deposited securities through electronic computerized book-entry changes in participants' accounts, thereby eliminating the need of physical movement of securities certificates. Direct participants of DTC include securities brokers and dealers (including the agents), banks, trust companies, clearing corporations and certain other organizations. DTC is owned by a number of its direct participants and by the New York Stock Exchange, Inc., the American Stock Exchange, Inc., and the National Association of Securities Dealers, Inc. Access to DTC's system is also available to others, known as indirect participants, such as securities brokers and dealers, banks and trust companies that clear through or maintain a custodial relationship with a direct participant, either directly or indirectly. The rules applicable to DTC and its participants are on file with the Securities and Exchange Commission. 25 Purchases of book-entry notes under DTC's system must be made by or through direct participants, which will receive a credit for such book-entry notes on DTC's records. The ownership interest of each actual purchaser, or beneficial owner, of each book-entry note represented by a global security is in turn to be recorded on the records of direct participants and indirect participants. Beneficial owners will not receive written confirmation from DTC of their purchase, but beneficial owners are expected to receive written confirmations providing details of the transaction, as well as periodic statements of their holdings, from the direct participants or indirect participants through which such beneficial owner entered into the transaction. Transfer of ownership interests in a global security representing book-entry notes are to be accomplished by entries made on the books of participants acting on behalf of beneficial owners. Beneficial owners of a global security representing book-entry notes will not receive certificated notes representing their ownership interests in such global security, except in the limited circumstances described above. To facilitate subsequent transfers, all global securities representing book-entry notes which are deposited with, or on behalf of, DTC are registered in the name of DTC's nominee, Cede & Co. The deposit of global securities with, or on behalf of, DTC and their registration in the name of Cede & Co. effect no change in beneficial ownership. DTC has no knowledge of the actual beneficial owners of the global securities representing the book-entry notes; DTC's records reflect only the identity of the direct participants to whose accounts such book-entry notes are credited, which may or may not be the beneficial owners. The participants will remain responsible for keeping account of their holdings on behalf of their customers. Conveyance of notices and other communications by DTC to direct participants, by direct participants to indirect participants, and by direct participants and indirect participants to beneficial owners will be governed by arrangements among them, subject to any statutory or regulatory requirements as may be in effect from time to time. Neither DTC nor Cede & Co. will consent or vote with respect to the global securities representing the book-entry notes. Under its usual procedures, DTC mails an omnibus proxy to us as soon as possible after the applicable record date. The omnibus proxy assigns Cede & Co.'s consenting or voting rights to those direct participants to whose account the book-entry notes are credited on the applicable record date (identified in a listing attached to the omnibus proxy). Principal, premium, if any, and/or interest, if any, payments on the global securities representing the book-entry notes will be made by us through the trustee in immediately available funds to DTC or its nominee, as the case may be, as the registered owner of such global securities. DTC' s practice is to credit direct participants' accounts on the applicable payment date in accordance with their respective holdings shown on DTC's records unless DTC has reason to believe that it will not receive payment on such date. Payments by participants to beneficial owners will be governed by standing instructions and customary practices, as is the case with securities held for the accounts of customers in bearer form or registered in "street name," and will be the responsibility of such participant and not of DTC, the trustee or ours, subject to any statutory or regulatory requirements as may be in effect from time to time. Payment of principal, premium, if any, and/or interest, if any, to DTC is the responsibility of ours and the trustee, disbursement of such payments to direct participants shall be the responsibility of DTC, and disbursement of such payments to the beneficial owners shall be the responsibility of 26 direct participants and indirect participants. None of us, the trustee, the Paying Agent or the Security Registrar will have any responsibility or liability for any aspect of the records relating to or payments made on account of beneficial ownership interests of a global security or for maintaining, supervising or reviewing any records relating to such beneficial ownership interests. If applicable, redemption notices shall be sent to Cede & Co. If less than all of the book- entry notes are being redeemed, DTC's practice is to determine by lot the amount of the interest of each direct participant in such issue to be redeemed. Unless otherwise specified in the applicable pricing supplement, book-entry notes represented by a global security will be exchanged for certificated notes of like tenor and terms and of differing authorized denominations in a like aggregate principal amount, only if: o the depositary notifies us that it is unwilling or unable to continue as depositary for the global securities or we become aware that the depositary has ceased to be a clearing agency registered under the Exchange Act and, in any such case, we shall not have appointed a successor to the depositary within 90 days after we receive such notice or become aware of such ineligibility, or o we, in our sole discretion, determine that the global securities shall be exchanged for certificated notes. Under such circumstances, certificated notes will be printed and delivered. Upon any such exchange, the certificated notes shall be registered in the names of the beneficial owners of the global security or securities representing book-entry notes, which names shall be provided by the depositary's relevant participants (as identified by the depositary) to the trustee. Limitations on Liens Subject to certain exceptions, we will not, and will not permit any Subsidiary to, create, assume or suffer to exist, otherwise than in favor of us or a Subsidiary, any mortgage, pledge, lien, encumbrance, or security interest (collectively, "Liens") upon any of our properties or assets or upon any income or profits therefrom unless the notes shall be equally and ratably secured. This prohibition will not apply to: o Liens existing as of the date of the indenture; o any purchase money mortgage or Lien created to secure all or part of the purchase price of any property (or to secure a loan made to us or any Subsidiary to enable it to acquire such property), provided that such Lien shall extend only to the property so acquired, improvements thereon, replacements thereof and the income or profits therefrom; o Liens on any property at the time of the acquisition thereof, whether or not assumed by us or a Subsidiary; provided that such Lien shall extend only to the property so acquired, improvements thereon, replacements thereof and income or profits therefrom; 27 o Liens on property or any contract for the sale of any product or service or any rights thereunder or any proceeds therefrom, acquired or constructed by us or a Subsidiary and created within one year after the later of (1) the completion of such acquisition or construction or (2) the commencement of operation of the project, provided that such Lien shall extend only to the property so acquired or constructed, improvements thereon, replacements thereof and income or profits therefrom; o Liens of Subsidiaries outstanding at the time they become Subsidiaries; o Liens created or assumed by us or a Subsidiary on coal, geothermal, oil, natural gas, inert gas, other hydrocarbon or mineral properties owned or leased by us or a Subsidiary to secure loans to us or a Subsidiary, for the purpose of developing such properties; o Liens on any investment (as defined in the indenture) of ours or a Subsidiary in any Person other than a Subsidiary or on any security representing any investment of ours or a Subsidiary; o any Lien not otherwise permitted by the indenture, provided that after giving effect to such Liens the sum of (1) all indebtedness of ours and our Subsidiaries secured by Liens not otherwise permitted by the indenture and (2) all Attributable Debt of ours and our Subsidiaries (to the extent not included in (1) above) does not exceed 10% of Consolidated Capitalization; o any refunding or extension of Maturity, in whole or in part, of any obligation or indebtedness secured by certain permitted Liens, provided that the principal amount of the obligation or indebtedness secured by such refunding or extension shall not exceed the principal amount of the obligation or indebtedness then outstanding and shall be limited in lien to the same or substituted property and after-acquired property that secured the refunded or extended obligation or indebtedness; o Liens upon any office equipment, data processing equipment or any motor vehicles, tractors or trailers; o Liens of or upon or in current assets of ours or a Subsidiary created or assumed to secure indebtedness incurred in the ordinary course of business; o any Lien which is payable, both with respect to principal and interest, solely out of the proceeds of natural gas, oil, coal, geothermal resources, inert gas, hydrocarbons or minerals to be produced from the property subject thereto and to be sold or delivered by us or a Subsidiary; o Liens to secure indebtedness incurred to finance advances made by us or any Subsidiary to any third party for the purpose of financing oil, natural gas, 28 hydrocarbon, inert gas or other mineral exploration or development, provided that such Liens shall extend only to the receivables of ours or such Subsidiary in respect of such advances; and o any rights reserved in others to take or reserve any part of the natural gas, oil, coal, geothermal resources, inert gas, hydrocarbons or minerals produced at any time on any property of ours or a Subsidiary. Also excepted from the general prohibition are various other liens including, but not limited to: mechanics' or materialmen's liens, certain governmental liens, certain leases, certain judgment liens, and certain liens arising in connection with leases, easements and rights-of-way for pipeline or distribution plant purposes. Certain Definitions Certain terms used in the indenture are defined and are used in this prospectus as follows: "Attributable Debt" means, as of the date of determination, the present value of net rent for the remaining term of a capital lease, determined in accordance with accounting principles generally accepted in the United States ("GAAP"), which is part of a Sale and Leaseback Transaction (as defined), including any periods for which the lessee has the right to renew or extend the lease. For purposes of the foregoing, "net rent" means the sum of capitalized rental payments required to be paid by the lessee, other than amounts required to be paid by the lessee for maintenance, repairs, insurance, taxes, assessments, energy, fuel, utilities and similar charges. In the case of a capital lease which is terminable by the lessee upon the payment of a penalty, such net amount shall also include the amount of such penalty, but no rent shall be considered to be required to be paid under such lease subsequent to the first date upon which it may be so terminated. "Consolidated Capitalization" means, without duplication, the sum of o the principal amount of Consolidated Funded Debt of ours and our Subsidiaries at the time outstanding, o the total capital represented by the capital stock of ours and our Subsidiaries at the time outstanding based, in the case of stock having par value, upon its par value, and in the case of stock having no par value, upon the value stated on our books, o the total amount of (or less the amount of any deficit in) retained earnings and paid-in capital of ours and our Subsidiaries, o reserves for deferred federal and state income taxes arising from timing differences, and 29 o Attributable Debt, all as shown on a consolidated balance sheet of ours and our Subsidiaries prepared in accordance with GAAP; provided that in determining the consolidated retained earnings and paid-in capital of ours and our Subsidiaries no effect shall be given to any unrealized write-up or write-down in the value of assets or any amortization thereof, except for accumulated provisions for depreciation, depletion, amortization and property retirement which shall have been created by charges made by us or any of our Subsidiaries on our books. "Consolidated Funded Debt" means the Funded Debt of ours and our Subsidiaries, consolidated in accordance with GAAP. "Funded Debt" means all Indebtedness that will mature, pursuant to a mandatory sinking fund or prepayment provision or otherwise, and all installments of Indebtedness that will fall due, more than one year from the date of determination. In calculating the Maturity of any Indebtedness, there shall be included the term of any unexercised right of the debtor to renew or extend such Indebtedness existing at the time of determination. "Indebtedness" means all items of indebtedness for borrowed money (other than unamortized debt discount and premium) which would be included in determining total liabilities as shown on the liability side of a balance sheet prepared in accordance with GAAP as of the date as of which Indebtedness is to be determined, and shall include Indebtedness for borrowed money (other than unamortized debt discount and premium) with respect to which we or any Subsidiary customarily pays interest secured by any mortgage, pledge or other lien or encumbrance of or upon, or any security interest in, any properties or assets owned by us or any Subsidiary, whether or not the Indebtedness secured thereby shall have been assumed, and shall also include guarantees of Indebtedness of others; provided that in determining Indebtedness of ours or any Subsidiary there shall be included the aggregate liquidation preference of all outstanding securities of any Subsidiary senior to its Common Stock that are not owned by us or a Subsidiary; and provided, further, that Indebtedness of any Person shall not include the following: o any indebtedness evidence of which is held in treasury (but the subsequent resale of such indebtedness shall be deemed to constitute the creation thereof); or o any particular indebtedness if, upon or prior to the Maturity thereof, there shall have been deposited with a depository (or set aside and segregated, if permitted by the instrument creating such indebtedness), in trust, money (or evidence of such indebtedness as permitted by the instrument creating such indebtedness) in the necessary amount to pay, redeem or satisfy such indebtedness; or o any indebtedness incurred to finance oil, natural gas, hydrocarbon, inert gas or other mineral exploration or development to the extent that the issuer thereof has outstanding advances to finance oil, natural gas, hydrocarbon, inert gas or other mineral exploration or development, but only to the extent such advances are not in default; or 30 o any indebtedness incurred without recourse to us or any Subsidiary; or o any indebtedness incurred to finance advance payments for gas (pursuant to take- or-pay provisions or otherwise), but only to the extent that such advance payments are pursuant to gas purchase contracts entered into in the normal course of business; or o any amount (whether or not included in determining total liabilities as shown on the liability side of a balance sheet prepared in accordance with GAAP) representing capitalized rent under any lease; or o any indirect guarantees or other contingent obligations in respect of indebtedness of other Persons, including agreements, contingent or otherwise, with such other Persons or with third parties with respect to, or to permit or assure the payment of, obligations of such other Persons, including, without limitation, agreements to purchase or repurchase obligations of such other Persons, to advance or supply funds to, or to invest in, such other Persons, or to pay for property, products or services of such other Persons (whether or not conveyed, delivered or rendered); demand charge contracts, through-put, take-or-pay, keep-well, make-whole or maintenance of working capital or similar agreements; or guarantees with respect to rental or similar periodic payments to be made by such other Persons. "Sale and Leaseback Transaction" means an arrangement in which we or a Subsidiary sells any of our or its property which was placed into service more than 120 days prior to such sale to a Person and leases it back from that Person within 180 days of the sale. Consolidation, Merger and Sale of Assets Nothing contained in the indenture or in any of the notes shall prevent any consolidation or merger of us with or into any other Person (whether or not affiliated with us), or successive consolidations or mergers in which we or our successor shall be a party, or shall prevent any conveyance, transfer or lease of our property as an entirety or substantially as an entirety, to any other Person (whether or not affiliated with us); provided, however, that: o in case of such a transaction, the entity formed by such consolidation or into which we are merged or the Person which acquires or leases our properties and assets substantially as an entirety shall be a corporation organized under the laws of the United States of America, any state thereof or the District of Columbia and shall expressly assume the due and punctual payment of the principal of, premium, if any, and interest on and any Additional Amounts (as defined in the indenture) with respect to all the notes and the performance of every other covenant of the indenture; o immediately after giving effect to such transaction, no event which, after notice or lapse of time, would become an Event of Default, shall have occurred and be continuing; and 31 o each of us and the successor Person shall have delivered to the trustee an Officers' Certificate and an Opinion of Counsel, each stating that such transaction complies with the above paragraphs (a) and (b) and that all conditions precedent relating to such transaction have been complied with. Events of Default The following are Events of Defaults under the indenture with respect to any notes: o failure to pay the principal of (or premium, if any, on) any note when due; o failure to make any mandatory sinking fund payment on any note when due or failure to pay any interest installment on or any Additional Amounts with respect to any note when due, in each case, continued for 30 days; o failure to perform any of our other covenants, continued for 90 days after written notice as provided in the indenture; o the occurrence of an event of default in other indebtedness of ours (including Securities other than the notes) resulting in indebtedness in excess of $10,000,000 principal amount being due and payable prior to Maturity and such acceleration shall not have been rescinded or annulled or such indebtedness shall not have been discharged after written notice as provided in the indenture; and o certain events of bankruptcy, insolvency or reorganization. If an Event of Default with respect to notes at the time outstanding shall occur and be continuing, then and in every such case (unless the principal of all the notes shall have already become due and payable) the trustee or the holders of at least 33 1/3% in principal amount of the outstanding notes may declare to be due and payable immediately, by a notice in writing to us (and to the trustee if given by holders), the entire principal amount of all the outstanding notes. At any time after such declaration of acceleration has been made, but before a judgment or decree for payment of the money due has been obtained by the trustee, the holders of a majority in principal amount of the outstanding notes, by written notice to us and the trustee, may, in certain circumstances, rescind and annul such declaration, No holder of any notes shall have any right to institute any proceeding with respect to the indenture or for any remedy thereunder, unless such holder previously shall have given to the trustee written notice of a default and unless also the holders of at least 25% of the principal amount of outstanding notes shall have made written request upon the trustee, and have offered reasonable indemnity, to institute such proceeding as the trustee may request, and the trustee shall not have received direction inconsistent with such request in writing by the holders of a majority in principal amount of outstanding notes and shall have neglected or refused to institute such proceeding within 60 days. However, the rights of any holder of any notes to enforce the payment of principal, premium, if any, and interest due on and any Additional Amount with 32 respect to such notes on or after the dates expressed in such notes may not be impaired or affected. Waiver, Modification and Amendment The holders of a majority in principal amount of the outstanding notes may waive certain past defaults, except a default in the payment of the principal of (or premium, if any) or interest on any note or in respect of any covenant or provision in the indenture which under the terms of the indenture cannot be modified without the consent of all holders of outstanding notes. The holders of a majority in aggregate principal amount of outstanding notes may waive our compliance with certain restrictive provisions. We and the trustee may modify and amend the indenture with the consent of the holders of majority in aggregate principal amount of the outstanding notes, provided that no such modification or amendment may, without the consent of the holder of each note affected thereby: o change the Stated Maturity of the principal of, or any installment of principal of, or interest on or any Additional Amount with respect to, any note; o reduce the principal amount of, or the rate of interest, if any, on, any Additional Amounts with respect to, or any premium payable upon the redemption of any note; o change the Place of Payment or change the currency of payment of principal, premium, if any, interest on, or any Additional Amounts with respect to any note; o impair the right to institute suit for the enforcement of any payment on or with respect to any note; o reduce the percentages of holders of outstanding notes specified in this or the preceding paragraph; or o effect certain other modifications or amendments described in the indenture. Defeasance and Covenant Defeasance The indenture provides that we may elect either: o to defease and be discharged from any and all obligations with respect to the notes ("defeasance"), or o to be released from our obligations with respect to such notes described above under "Limitations on Liens" and "Consolidation, Merger and Sale of Assets" ("covenant defeasance"), upon the irrevocable deposit with the trustee, in trust for such purpose, of money, and/or U.S. Government Obligations (as defined in the indenture) which through the payment of principal and interest in accordance 33 with their terms will provide money, in an amount sufficient to pay the principal of, and premium, if any, and interest on and any Additional Amounts with respect to such notes, and any mandatory sinking fund or analogous payments thereon, on the scheduled due date therefor. Unless otherwise specified in the applicable pricing supplement, defeasance and covenant defeasance are each conditioned upon our delivery to the trustee of an Opinion of Counsel to the effect that the holders of the notes will have no federal income tax consequences as a result of such deposit. The applicable pricing supplement may further describe the provisions, if any, permitting such defeasance or covenant defeasance with respect to the related notes (including any modifications to the provisions described above) and the effect of such defeasance or covenant defeasance under federal tax law. Concerning the Trustee Wells Fargo Bank Northwest, National Association (f/k/a First Security Bank, N.A.) is the trustee under the indenture. The indenture contains certain limitations on the rights of the trustee, should it become our creditor, to obtain payment of claims in certain cases or to realize on certain property received in respect of any such claim as security or otherwise. The trustee will be permitted to engage in other transactions with us; however, if it acquires a conflicting interest it must eliminate such conflict or resign or otherwise comply with the Trust Indenture Act of 1939, as amended. The indenture also provides that we will indemnify the trustee against loss, liability or expense incurred without negligence or bad faith on the part of the trustee arising out of or in connection with the trust under the indenture. 34 PLAN OF DISTRIBUTION The notes are being offered on a continuing basis for sale by us through the agents, who have agreed to use their reasonable efforts to solicit offers to purchase the notes, and we may also sell the notes to an agent, as principal, for resale to investors and other purchasers at varying prices related to prevailing market prices at the time of resale to be determined by such agent. We also reserve the right to sell notes directly on our own behalf or through additional agents, acting either as agent or principal, on substantially identical terms as those applicable to the agents. We reserve the right to withdraw, cancel or modify the offer made hereby without notice and may reject orders, in whole or in part, whether placed directly with us or through one of the agents. The agents will have the right, in their discretion reasonably exercised, to reject in whole or in part any offer to purchase notes received by them. We will pay the agents, in the form of a discount or otherwise, a commission which, depending on the Stated Maturity of the note, will range from .125% to .750% of the principal amount of any note sold through the agents. In addition, the agents may offer the notes they have purchased as principal to other dealers. The agents may sell notes to any dealer at a discount and, unless otherwise specified in the applicable pricing supplement, such discount allowed to any dealer will not be in excess of the discount to be received by such agent from us. Unless otherwise indicated in the applicable pricing supplement, any note sold to an agent as principal will be purchased by such agent at a price equal to 100% of the principal amount thereof less a percentage equal to the commission applicable to any agency sale of a note of identical Maturity, and may be resold by the agent to investors and other purchasers from time to time in one or more transactions, including negotiated transactions, at varying prices determined at the time of sale or, if so agreed, at a fixed public offering price. After the initial public offering of notes to be resold to investors and other purchasers, the public offering price (if resold on a fixed public offering price basis), concession and discount may be changed. Unless otherwise specified in the applicable pricing supplement, payment of the purchase price of the notes will be required to be made in immediately available funds in New York City on the date of settlement. In connection with the offering of the notes purchased by one or more agents as principal on a fixed price basis, the agents are permitted to engage in certain transactions that stabilize the price of the notes. Such transactions consist of bids or purchases for the purpose of pegging, fixing or maintaining the price of the notes. If the agents create a short position in the notes in connection with the offering, i.e., if they sell notes in an aggregate principal amount exceeding that set forth in the applicable pricing supplement, the agents may reduce that short position by purchasing notes in the open market. In general, purchases of a security for the purpose of stabilization or to reduce a short position could cause the price of the security to be higher than it might be in the absence of such purchases. Neither we nor any of the agents makes any representation or prediction as to the direction or magnitude of any effect that the transactions described above may have on the price of the notes. In addition, neither we nor any of the agents makes any representation that the 35 agents will engage in such transactions or that such transactions, once commenced, will not be discontinued without notice. The notes are a new issue of securities with no established trading market. Unless otherwise specified in the applicable pricing supplement, the notes will not be listed on any securities exchange. Each of the agents may from time to time purchase and sell notes in the secondary market, but no agent is obligated to do so, and there can be no assurance that there will be a secondary market for the notes or liquidity in the secondary market if one develops. From time to time, each of the agents may make a market in the notes. Each agent may be deemed to be an "underwriter" within the meaning of the Securities Act. We have agreed to indemnify each of the agents against, or to make contributions relating to, certain civil liabilities, including civil liabilities under the Securities Act. We have agreed to reimburse each of the agents for certain expenses. Certain of the agents have provided and will provide from time to time certain financial advisory services to us and Questar and certain of our affiliates. Merrill Lynch has acted as agent for the sale of our medium-term notes and those of Questar Gas and is a commercial paper issue agent for Questar. Merrill Lynch, Banc of America Securities, and Banc One Capital Markets were underwriters for the sale of the notes by another affiliate, Questar Market Resources, in 2001. Affiliates of Banc One Capital Markets, Banc of America Securities and U.S. Bancorp Piper Jaffray are lenders to our affiliates. The trustee, Wells Fargo Bank Northwest, National Association, is also a lender to our affiliates. LEGAL MATTERS Certain legal matters will be passed upon for us by Connie C. Holbrook, Senior Vice President, General Counsel and Corporate Secretary of Questar, 180 East 100 South Street, Salt Lake City, Utah 84111, and by Skadden, Arps, Slate, Meagher & Flom LLP, Four Times Square, New York, New York 10036. Sidley Austin Brown & Wood LLP, 555 California Street, San Francisco, California 94104, will act as counsel for the agents. In rendering their opinion, Sidley Austin Brown & Wood LLP may rely upon the opinion of Ms. Holbrook as to all matters governed by Utah law. As of March 31, 2001, Ms. Holbrook beneficially owned 226,285 shares of common stock of Questar (including currently exercisable options to purchase 119,551 shares of common stock of Questar). EXPERTS Ernst & Young LLP, independent auditors, have audited our consolidated financial statements included in our annual report on Form 10-K for the year ended December 31, 2000, as set forth in their report, which is incorporated by reference in this prospectus and elsewhere in the registration statement. Our consolidated financial statements are incorporated by reference in reliance on Ernst & Young LLP's report, given on their authority as experts in accounting and auditing. 36 WHERE YOU CAN FIND ADDITIONAL INFORMATION We file annual, quarterly and special reports and other information with the Securities and Exchange Commission. You may read and copy any document we file at the public reference facilities of the SEC located at 450 Fifth Street, N.W., Washington, D.C. 20549. You may also obtain information on the operation of the SEC's public reference facilities by calling the SEC at 1-800-SEC-0330. You can also obtain copies of this material from commercial retrieval services and electronically at the SEC's Internet web site at http://www.sec.gov. We have filed with the SEC a registration statement on Form S-3 (Registration No. 333- [_____]). This prospectus, which constitutes part of the registration statement, does not contain all of the information set forth in the registration statement. Certain parts of the registration statement are omitted from the prospectus in accordance with the rules and regulations of the SEC. The SEC permits us to "incorporate by reference" information we file with them into this document, which means that we can disclose important information to you by referring you to those documents filed with the SEC. The information incorporated by reference is considered to be part of this prospectus, and information that we file (or that is deemed to have been filed) with the SEC after the date of this prospectus will automatically update and supersede this information. This prospectus incorporates by reference the documents set forth below that we previously filed with the SEC. These documents contain important information about our operations. Filing Period - ------------------------- ----------------------------- Annual Report on Form 10-K Year ended December 31, 2000 Quarterly Report on Form 10-Q Quarter ended March 31, 2001 We also incorporate by reference any future filings made with the SEC under Sections 13(a), 13(c), 14 or 15(d) of the Securities Exchange Act of 1934, as amended, until we sell all of the notes being registered or until this offering is otherwise terminated. If you request a copy of any or all of the documents incorporated by reference, then we will send to you the copies you requested at no charge. However, we will not send exhibits to the documents unless exhibits are specifically incorporated by reference in those documents. You should direct requests for copies to: Corporate Secretary, Questar Pipeline Company, 180 East 100 South Street, Salt Lake City, Utah 84111; telephone number (801) 324-5202. 37 No dealer, salesperson or other individual has been authorized to give any information or to make any representations other than those contained or incorporated by reference in this prospectus or any prospectus supplement (including the applicable pricing supplement) in connection with the offer made by this prospectus and such prospectus supplement and, if given or made, such information or representations must not be relied upon as having been authorized by us or any agent. Neither the delivery of this prospectus or any prospectus supplement (including the applicable pricing supplement) nor any sale made hereunder shall under any circumstance create an implication that there has been no change in our affairs since the date hereof or thereof. This prospectus or any prospectus supplement (including the applicable pricing supplement) shall not constitute an offer or solicitation by anyone in any state in which such offer or solicitation is not authorized or in which the person making such offer or solicitation is not qualified to do so or to anyone to whom it is unlawful to make such offer or solicitation. $250,000,000 Questar Pipeline Company (an indirect subsidiary of Questar Corporation) [QUESTAR PIPELINE LOGO] Medium-Term Notes, Series B Due from 9 months to 30 years from Date of Issue ----------------- PROSPECTUS ----------------- Merrill Lynch & Co. Banc of America Securities LLC Banc One Capital Markets, Inc. U.S. Bancorp Piper Jaffray , 2001 PART II INFORMATION NOT REQUIRED IN PROSPECTUS Item 14. Other Expenses of Issuance and Distribution. The following table sets forth the fees and expenses to be incurred by us in connection with the offering described in the Registration Statement. All such fees and expenses other than the Securities and Exchange Commission Registration Fee are estimated. Securities and Exchange Commission Registration Fee......... $ 62,500 Printing Expenses........................................... 30,000 Legal Fees and Expenses..................................... 145,000 Accounting Fees and Expenses................................ 75,000 Blue Sky Fees and Expenses.................................. 5,000 Trustee's Fees and Expenses................................. 5,000 Rating Agency Fees.......................................... 153,000 Miscellaneous............................................... 500 ---------------- Total.............................................. $ 476,000 ============ Item 15. Indemnification of Directors and Officers. Reference is made to Section 16-10a-901 through 16-10a-909 of the Utah Revised Business Corporation Act, which provides for indemnification of directors and officers in certain circumstances. Our Bylaws provide that we may voluntarily indemnify any individual made a party to a proceeding because he is or was our director, officer, employee or agent against liability incurred in the proceeding, but only if we have authorized the payment in accordance with the applicable statutory provisions of the Utah Revised Business Corporation Act (Sections 16-10a-902, 16- 10a-904 and 16-10a-907) and a determination has been made in accordance with the procedures set forth in such provision that such individual conducted himself in good faith, that he reasonably believed his conduct, in his official capacity with us, was in our best interests and that his conduct, in all other cases, was at least not opposed to our best interests, and that he had no reasonable cause to believe his conduct was unlawful in the case of any criminal proceeding. The foregoing indemnification in connection with a proceeding by or in the right of us is limited to reasonable expenses incurred in connection with the proceeding, which expenses may be advanced by us. Our Bylaws provide that we may not voluntarily indemnify our director, officer, employee or agent in connection with a proceeding by or in the right of us in which such individual was adjudged liable to us or in connection with any other proceeding charging II-1 improper personal benefit to him, whether or not involving action in his official capacity, in which he was adjudged liable on the basis that personal benefit was improperly received by him. Our Bylaws provide further that we shall indemnify our director, officer, employee or agent who was wholly successful, on the merits or otherwise, in defense of any proceeding to which he was a party because he is or was such a director, officer, employee or agent, against reasonable expenses incurred by him in connection with the proceeding. Our Bylaws further provide that no director of ours shall be personally liable to us or our stockholders for monetary damages for any action taken or any failure to take any action, as a director, except liability for (a) the amount of a financial benefit received by a director to which he is not entitled; (b) an intentional infliction of harm on us or the shareholders; (c) for any action that would result in liability of the director under the applicable statutory provision concerning unlawful distributions; or (d) an intentional violation of criminal law. Questar Corporation, our parent, maintains an insurance policy on behalf of our officers and directors pursuant to which (subject to the limits and limitations of such policy) the officers and directors are insured against certain expenses in connection with the defense of actions or proceedings, and certain liabilities which might be imposed as a result of such actions or proceedings, to which any of them is made a party by reason of being or having been a director or officer. Reference is made to Sections 8 and 9 of the Distribution Agreement, the form of which is filed as Exhibit 1.01 hereto, for the description of the indemnification and contribution arrangements for this offering. Item 16. Exhibits. (a) Exhibits: Exhibit Number Description - ------- ----------- 1.01 -- Form of Distribution Agreement (including the forms of Terms Agreement and Administrative Procedures). 4.01* -- Indenture, dated as of August 17, 1998, between the Company and Wells Fargo Bank Northwest, National Association (f/k/a First Security Bank, N.A.), as trustee, relating to the Company's Debt Securities. 4.02 -- Form of Fixed Rate Note. 4.03 -- Form of Floating Rate Note. 5.01 -- Opinion of Connie C. Holbrook, Esq. 5.02 -- Opinion of Skadden, Arps, Slate, Meagher & Flom LLP. 12.01 -- Statement of Computation of Ratio of Earnings to Fixed Charges. 23.01 -- Consent of Ernst & Young LLP. 23.02 -- Consent of Connie C. Holbrook, Esq. (included in Exhibit 5.01). 23.03 -- Consent of Skadden, Arps, Slate, Meagher & Flom LLP (included in Exhibit 5.02). II-2 24.01 -- Form of Appointment of Power of Attorney (included on signature page to the registration statement). 25.01 -- Statement of Eligibility of Trustee on Form T-l. - ------------ * Incorporated by reference from Registration Statement on Form S-3 (Registration No. 333-61621) filed with the Securities and Exchange Commission on August 17, 1998. Item 17. Undertakings. A. The undersigned registrant hereby undertakes that, for purposes of determining any liability under the Securities Act of 1933, each filing of the registrant's annual report pursuant to Section 13(a) or Section 15(d) of the Securities Exchange Act of 1934 (and, where applicable, each filing of an employee benefit plan's annual report pursuant to Section 15(d) of the Securities Exchange Act of 1934) that is incorporated by reference in the registration statement shall be deemed to be a new registration statement relating to the securities offered therein, and the offering of such securities at that time shall be deemed to be the initial bona fide offering thereof. B. Insofar as indemnification for liabilities arising under the Securities Act of 1933 may be permitted to directors, officers and controlling persons of the registrant pursuant to the provisions of Utah law and the registrant's bylaws, a summary of which is set forth in Item 15 hereof, or otherwise, the registrant has been advised that in the opinion of the Securities and Exchange Commission such indemnification is against public policy as expressed in the Act and is, therefore, unenforceable. In the event that a claim for indemnification against such liabilities (other than the payment by the registrant of expenses incurred or paid by a director, officer or controlling person of the registrant in the successful defense of any action, suit or proceeding) is asserted by such director, officer or controlling person in connection with the securities being registered, the registrant will, unless in the opinion of its counsel the matter has been settled by controlling precedent, submit to a court of appropriate jurisdiction the question whether such indemnification by it is against public policy as expressed in the Act and will be governed by the final adjudication of such issue. C. The undersigned registrant hereby undertakes that: (1) For purposes of determining any liability under the Securities Act of 1933, the information omitted from the form of prospectus filed as part of this registration statement in reliance upon Rule 430A and contained in a form of prospectus filed by the registrant pursuant to Rule 424(b)(l) or (4) or 497(h) under the Securities Act shall be deemed to be part of this registration statement as of the time it was declared effective. (2) For the purpose of determining any liability under the Securities Act of 1933, each post-effective amendment that contains a form of prospectus shall be deemed to be a new registration statement relating to the securities offered therein, and the offering of such securities at that time shall be deemed to be the initial bona fide offering thereof. D. The undersigned registrant hereby undertakes: II-3 (1) To file, during any period in which offers or sales are being made, a post- effective amendment to this registration statement (i) to include any prospectus required by Section 10(a)(3) of the Securities Act of 1933, (ii) to reflect in the prospectus any facts or events arising after the effective date of the registration statement (or the most recent post-effective amendment thereof) which, individually or in the aggregate, represent a fundamental change in the information set forth in the registration statement. Notwithstanding the foregoing, any increase or decrease in volume of securities offered (if the total dollar value of securities offered would not exceed that which was registered) and any deviation from the low or high end of the estimated maximum offering range may be reflected in the form of prospectus filed with the Commission pursuant to Rule 424(b) if, in the aggregate, the changes in volume and price represent no more than a 20% change in the maximum aggregate offering price set forth in the "Calculation of Registration Fee" table in the effective registration statement, and (iii) to include any material information with respect to the plan of distribution not previously disclosed in the registration statement or any material change to such information in the registration statement; provided, however, that paragraphs (D)(l)(i) and (D)(1)(ii) do not apply if the information required to be included in a post-effective amendment by those paragraphs is contained in periodic reports filed with or furnished to the Commission by the registrant pursuant to Section 13 or Section 15(d) of the Securities Exchange Act of 1934 that are incorporated by reference in this registration statement; (2) That, for the purpose of determining any liability under the Securities Act of 1933, each such post effective amendment shall be deemed to be a new registration statement relating to the securities offered therein, and the offering of such securities at that time shall be deemed to be the initial bona fide offering thereof; and (3) To remove from registration by means of a post-effective amendment any of the securities being registered which remain unsold at the termination of the offering. II-4 SIGNATURES Pursuant to the requirements of the Securities Act of 1933, the registrant certifies that it has reasonable grounds to believe that it meets all of the requirements for filing on Form S-3 and has duly caused this registration statement to be signed on its behalf by the undersigned, thereunto duly authorized, in the City of Salt Lake, State of Utah, on the 11th day of May, 2001. QUESTAR PIPELINE COMPANY By: /s/ D.N. ROSE ------------------------------ D.N. Rose President and Chief Executive Officer II-5 POWER OF ATTORNEY KNOW ALL MEN BY THESE PRESENTS, that each person whose signature appears below constitutes and appoints each of D.N. Rose and S.F. Parks his true and lawful attorney-in- fact and agent, with full power of substitution and resubstitution, for him and his name, place and stead, in any and all capacities, to sign any and all amendments (including post-effective amendments) to this registration statement (or any other registration statement for the same offering that is to be effective upon filing pursuant to Rule 462(b) under the Securities Act), and to file the same, with all exhibits thereto, and other documents in connection therewith, with the Securities and Exchange Commission, granting unto said attorney-in-fact and agent, full power and authority to do and perform each and every act and thing requisite and necessary to be done in and about the premises, as fully to all intents and purposes as he might or could do in person, hereby ratifying and confirming all that said attorney-in-fact and agent or his substitute or substitutes, may lawfully do or cause to be done by virtue hereof. Pursuant to the requirements of the Securities Act of 1933, this registration statement has been signed by the following persons in the capacities and on the dates indicated: Signature Title Date --------- ----- ---- /s/ D.N. ROSE President and Chief Executive Officer, May 10, 2001 - ------------------------ Director (Principal Executive Officer) D.N. Rose /s/ S.E. PARKS Vice President, Treasurer and May 10, 2001 - ------------------------ Chief Financial Officer S.E. Parks (Principal Financial Officer) /s/ D.M. CURTIS Controller May 10, 2001 - ----------------------- (Principal Accounting Officer) D.M. Curtis /s/ R.D. CASH Chairman of the Board; Director May 10, 2001 - ------------------------ R.D. Cash /s/ K.O. RATTIE Vice Chairman of the Board; May 10, 2001 - ------------------------ Director K.O. Rattie /s/ U. EDWIN GARRISON Director May 10, 2001 - ------------------------ U. Edwin Garrison /s/ SCOTT S. PARKER Director May 10, 2001 - ------------------------ Scott S. Parker II-6 EXHIBIT INDEX Exhibit Number Description - ------- ----------- 1.01 -- Form of Distribution Agreement (including the forms of Terms Agreement and Administrative Procedures). 4.01* -- Indenture, dated as of August 17, 1998, between the Company and Wells Fargo Bank Northwest, National Association (f/k/a First Security Bank, N.A.), as trustee, relating to the Company's Debt Securities. 4.02 -- Form of Fixed Rate Note. 4.03 -- Form of Floating Rate Note. 5.01 -- Opinion of Connie C. Holbrook, Esq. 5.02 -- Opinion of Skadden, Arps, Slate, Meagher & Flom LLP. 12.01 -- Statement of Computation of Ratio of Earnings to Fixed Charges. 23.01 -- Consent of Ernst & Young LLP. 23.02 -- Consent of Connie C. Holbrook, Esq. (included in Exhibit 5.01). 23.03 -- Consent of Skadden, Arps, Slate, Meagher & Flom LLP (included in Exhibit 5.02). 24.01 -- Form of Appointment of Power of Attorney (included on signature page to the registration statement). 25.01 -- Statement of Eligibility of Trustee on Form T-l. - ------------ * Incorporated by reference from Registration Statement on Form S-3 (Registration No. 333-61621) filed with the Securities and Exchange Commission on August 17, 1998. II-7 EX-1 2 distrib.txt EX-1.01 Exhibit 1.01 QUESTAR PIPELINE COMPANY (a Utah corporation) Medium-Term Notes, Series B Due From Nine Months to Thirty Years From Date of Issue DISTRIBUTION AGREEMENT ____________, 2001 =============================================================================== Table of Contents Page ---- SECTION 1. Appointment as Agents. .........................................2 Section 2. Representations and Warranties..................................4 Section 3. Solicitations as Agent; Purchases as Principal..................8 Section 4. Covenants of the Company........................................9 Section 5. Conditions of Agents' Obligations...............................13 Section 6. Delivery of and Payment for Notes Sold through the Agents.......19 Section 7. Additional Covenants of the Company.............................20 Section 8. Indemnification.................................................21 Section 9. Contribution....................................................24 Section 10. Payment of Expenses.............................................25 Section 11. Representations, Warranties and Agreements to Survive Delivery........................................................26 Section 12. Termination.....................................................26 Section 13. Notices. .......................................................27 Section 14. Governing Law and Time. ........................................28 Section 15. Parties.........................................................28 Section 16. Captions........................................................29 i QUESTAR PIPELINE COMPANY Medium-Term Notes, Series B, Due from Nine Months to 30 Years from Date of Issue DISTRIBUTION AGREEMENT , 2001 MERRILL LYNCH & CO. Merrill Lynch, Pierce, Fenner & Smith Incorporated Four World Financial Center, FL 15 North Tower, 10th Floor New York, New York 10080 BANC OF AMERICA SECURITIES LLC Banc of America Corporate Center 100 North Tryon Street Charlotte, North Carolina 28255 BANC ONE CAPITAL MARKETS, INC. One Banc One Plaza Chicago, Illinois 60670 U.S. BANCORP PIPER JAFFRAY U.S. Bancorp Center 800 Nicollet Mall Minneapolis, Minnesota 55402 Ladies and Gentlemen: Questar Pipeline Company, a Utah corporation (the "Company"), confirms its agreement with Merrill Lynch & Co., Merrill Lynch, Pierce, Fenner & Smith Incorporated ("Merrill Lynch"), Banc of America Securities LLC, Banc One Capital Markets, Inc. and U.S. Bancorp Piper Jaffray (each, an "Agent", and together, the "Agents") with respect to the issue and sale by the Company of its Medium-Term Notes, Series B, due from nine months to 30 years from date of issue, described herein (the "Notes"). The Notes are to be issued pursuant to an indenture dated as of August 17, 1998, as amended, supplemented or modified from time to time (the "Indenture"), between the Company and Wells Fargo Bank Northwest, National Association (f/k/a First Security Bank, N.A.), as trustee (the "Trustee"). As of the date hereof, the Company has authorized the issuance and sale of up to $250,000,000 aggregate principal amount of Notes directly or through the Agents pursuant to the 1 terms of this Agreement. It is understood, however, that the Company may from time to time authorize the issuance of additional Notes and that such additional Notes may be distributed by the Company or through or to the Agents pursuant to the terms of this Agreement, all as though the issuance of such Notes were authorized as of the date hereof. This Agreement provides both for the sale of Notes by the Company directly to purchasers, in which case the Agents will act as agents of the Company in soliciting Note purchases, and (as may from time to time be agreed to by the Company and the related Agent or the Agents) to one or more Agents as principal for resale to purchasers. The Company has filed with the Securities and Exchange Commission (the "Commission") a registration statement on Form S-3 (No. 333-_____) for the registration of the Notes under the Securities Act of 1933, as amended (the "1933 Act"), and the offering thereof from time to time in accordance with Rule 415 of the rules and regulations of the Commission under the 1933 Act (the "1933 Act Regulations"). Such registration statement has been declared effective by the Commission and the Indenture has been qualified under the Trust Indenture Act of 1939, as amended (the "1939 Act"). Such registration statement (and any further registration statements which may be filed by the Company for the purpose of registering additional Notes and in connection with which this Agreement is included or incorporated by reference as an exhibit) and the prospectus constituting a part thereof, and any prospectus supplements relating to the Notes, including all documents incorporated therein by reference, as from time to time amended or supplemented by the filing of documents pursuant to the Securities Exchange Act of 1934, as amended (the "1934 Act"), or the 1933 Act or otherwise, are referred to herein as the "Registration Statement" and the "Prospectus", respectively, except that if any revised prospectus shall be provided to the Agents by the Company for use in connection with the offering of the Notes whether or not such revised prospectus is required to be filed by the Company pursuant to Rule 424(b) of the 1933 Act Regulations, the term "Prospectus" shall refer to such revised prospectus from and after the time it is first provided to the Agents for such use. Section 1. Appointment as Agent. -------------------- (a) Appointment of Agents. Subject to the terms and conditions stated herein and subject to the reservation by the Company of the right to sell Notes directly on its own behalf, the Company hereby appoints the Agents, except as otherwise provided in this Section 1(a), as the exclusive agents for the purpose of soliciting purchases of the Notes from the Company by others and agrees that, except as otherwise contemplated herein, whenever the Company determines to sell Notes directly to one or more of the Agents as principal for resale to others, it will enter into a Terms Agreement (as hereafter defined) relating to such sale in accordance with the provisions of Section 3(b) hereof if requested by such Agent. The Company agrees that, except as otherwise provided in this Section 1(a), during the period the Agents are acting as the Company's agents hereunder, the Company will not engage any other party to assist in the placement of the Notes (other than any person or entity which, by executing a counterpart of this Agreement, becomes an Agent hereunder). Notwithstanding the foregoing, the Company reserves the right to (i) appoint additional agents for the purpose of placing Notes in one or more discrete transactions during the term of this Agreement under the terms of an agreement substantially identical to this Agreement (provided that the commission to be paid to such additional agents in connection with the sale of any Note shall be the applicable commission 2 determined pursuant to Section 3(a) hereof), and (ii) sell Notes to one or more underwriters in one or more underwritten transactions so long as such underwriter or underwriters shall execute an agreement substantially identical to this Agreement relating to such underwritten transaction or transactions, provided that in each such case no such agreement will appoint any such agent or underwriter as an agent under this Agreement except as relates to the related transaction or transactions. The Company shall give prompt written notice to the Agents of the occurrence of any event described in clause (i) or (ii) above. As used herein, the term "Agent", in addition to Merrill Lynch, Banc of America Securities LLC, Banc One Capital Markets, Inc. and U.S. Bancorp Piper Jaffray refers to each person or entity which, at any particular time, is an agent or underwriter, as the case may be, for the Company hereunder as evidenced by its execution of a counterpart of this Agreement. (b) Reasonable Efforts Solicitations; Right to Reject Offers. Upon receipt of instructions from the Company, the Agents will use their reasonable efforts to solicit offers to purchase such principal amount of the Notes as the Company and the Agents shall agree upon from time to time during the term of this Agreement, it being understood that the Company shall not approve the solicitation of offers to purchase Notes in excess of the amount which shall be authorized by the Company from time to time or in excess of the principal amount of Notes registered pursuant to the Registration Statement. The Agents will have no responsibility for maintaining records with respect to the aggregate principal amount of Notes sold, or of otherwise monitoring the availability of Notes for sale under the Registration Statement. Each Agent will communicate to the Company, orally or in writing, each reasonable offer to purchase Notes, other than those offers rejected by such Agent. Each Agent shall have the right, in its discretion reasonably exercised, to reject any proposed purchase of Notes, as a whole or in part, and any such rejection shall not be deemed a breach of the Agent's agreement contained herein. The Company shall have the sole right to accept or reject any proposed purchase of the Notes, in whole or in part and any such rejection shall not be deemed a breach of the Company's agreement contained herein. (c) Solicitations as Agent; Purchases as Principal. In soliciting offers to purchase the Notes on behalf of the Company and in performing its other obligations hereunder (other than with respect to any purchase by the Agents as principal, pursuant to a Terms Agreement or otherwise), each Agent shall act solely as agent for the Company and not as principal. Each Agent shall make reasonable efforts to assist the Company in obtaining performance by each purchaser whose offer to purchase Notes has been solicited by such Agent and accepted by the Company. No Agent shall have any liability to the Company in the event any such purchase is not consummated for any reason. If the Company shall default on its obligation to deliver Notes to a purchaser whose offer it has accepted, the Company shall (i) hold the Agent harmless against any loss, claim or damage arising from or as a result of such default by the Company and (ii) notwithstanding such default, pay to the Agent any commission to which it would be entitled in connection with such sale. No Agent shall have any obligation to purchase Notes from the Company as principal, but an Agent may agree from time to time to purchase Notes as principal. Any such purchase of Notes by an Agent as principal shall be made in accordance with Section 3(b) hereof if requested by such Agent. (d) Reliance. The Company and the Agents agree that any Notes the placement of which the Agents arrange shall be placed by the Agents, and any Notes purchased by the Agents 3 shall be purchased, in reliance on the representations, warranties, covenants and agreements of the Company contained herein and on the terms and conditions and in the manner provided herein. Section 2. Representations and Warranties. ------------------------------ (a) Representations and Warranties by the Company. The Company represents and warrants to each Agent as of the date hereof, as of the date of each acceptance by the Company of an offer for the purchase of Notes (whether through an Agent as agent or from an Agent as principal), as of the date of each delivery of Notes (whether through an Agent as agent or to an Agent as principal) (the date of each such delivery to an Agent as principal being hereafter referred to as a "Settlement Date"), and as of any time that the Registration Statement or the Prospectus shall be amended or supplemented or there is filed with the Commission any document incorporated by reference into the Prospectus (each of the times referenced above being referred to herein as a "Representation Date") as follows: (i) Registration Statement and Prospectus. At the time the Registration Statement became effective, the Registration Statement complied, and as of each Representation Date will comply, in all material respects with the requirements of the 1933 Act, the 1933 Act Regulations, the 1939 Act and the rules and regulations of the Commission promulgated under the 1939 Act. The Registration Statement, at the time it became effective, did not, and at 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 each Representation Date, will not, contain an untrue statement of a material fact or omit to state a material fact required to be stated therein or necessary to make the statements therein not misleading. The Prospectus, as of the date hereof does not, and as of each Representation Date 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 the representations and warranties in this subsection shall not apply to statements in or omissions from the Registration Statement or Prospectus made in reliance upon and in conformity with information furnished to the Company in writing by or on behalf of the Agents expressly for use in the Registration Statement or Prospectus. The prospectus and any pricing supplement filed as part of the Registration Statement as originally filed or as part of any amendment thereto, or filed pursuant to Rule 424 under the 1933 Act, complied when so filed in all material respects with the 1933 Act Regulations and each preliminary prospectus and the Prospectus delivered to the Agents for use in connection with this offering was identical to the electronically transmitted copies thereof filed with the Commission pursuant to EDGAR, except to the extent permitted by Regulation S-T. (ii) Incorporated Documents. The documents incorporated or deemed to be incorporated by reference in the Registration Statement and the Prospectus, when they became effective or at the times they were or hereafter are filed with the Commission, complied and will comply in all material respects with the requirements of the 1934 Act 4 and the rules and regulations promulgated thereunder (the "1934 Act Regulations"), and, when read together with the other information in the Prospectus, at the times the Registration Statement became effective and at the time the Prospectus was issued did not and will not contain an untrue statement of a material fact or omit to state a material fact required to be stated therein or necessary to make the statements therein, not misleading. (iii) Accountants. The accountants who certified the financial statements and supporting schedules included or incorporated by reference in the Prospectus are, to the best knowledge of the Company, independent public accountants as required by the 1933 Act and the 1933 Act Regulations. (iv) Financial Statements. The financial statements included in the Registration Statement and the Prospectus present fairly the financial position of the Company and its consolidated subsidiaries as at the dates indicated and the results of their operations for the periods specified; except as otherwise stated in the Registration Statement, such financial statements have been prepared in conformity with generally accepted accounting principles applied on a consistent basis; and the supporting schedules included in the Registration Statement present fairly the information required to be stated therein. The selected financial data and the summary financial information included in the Prospectus present fairly the information shown therein and have been compiled on a basis consistent with that of the audited financial statements included in the Registration Statement. (v) Material Changes or Material Transactions. Since the respective dates as of which information is given in the Registration Statement and the Prospectus, except as otherwise stated therein, (a) there has been no material adverse change in the condition, financial or otherwise, or in the earnings, business affairs or business prospects of the Company and its subsidiaries considered as one enterprise, whether or not arising in the ordinary course of business, (b) there have been no transactions entered into by the Company or any of its subsidiaries, other than those in the ordinary course of business, which are material with respect to the Company and its subsidiaries considered as one enterprise, and (c) except for the regular dividends, there has been no dividend or distribution of any kind declared, paid or made by the Company on any class of its capital stock. (vi) Due Incorporation and Qualification. The Company has been duly incorporated and is validly existing as a corporation in good standing under the laws of the State of Utah with corporate power and authority to own, lease and operate its properties and to conduct its business as described in the Prospectus; and the Company is duly qualified as a foreign corporation to transact business and is in good standing in each jurisdiction in which such qualification is required, whether by reason of the ownership or leasing of property or the conduct of business, except where the failure to so qualify or be in good standing would not have a material adverse effect on the condition, financial or otherwise, or the earnings, business affairs or business prospects of the Company and its subsidiaries considered as one enterprise (a "Material Adverse Effect"). 5 (vii) Subsidiaries. Each subsidiary of the Company has been duly incorporated and is validly existing as a corporation in good standing under the laws of the jurisdiction of its incorporation, has corporate power and authority to own, lease and operate its properties and to conduct its business as described in the Prospectus and is duly qualified as a foreign corporation to transact business and is in good standing in each jurisdiction in which such qualification is required, whether by reason of the ownership of property or the conduct of business, except where the failure to so qualify or be in good standing would not have a Material Adverse Effect; and all of the issued and outstanding capital stock of each subsidiary has been duly authorized and validly issued, is fully paid and nonassessable and is owned by the Company, directly or through subsidiaries, free and clear of any security interest, mortgage, pledge, lien, encumbrance, claim or equity. (viii) Capital Stock. The shares of issued and outstanding common stock of the Company have been duly authorized and validly issued and are fully paid and nonassessable. (ix) Authorization of Agreement. This Agreement has been duly authorized, executed and delivered by the Company. (x) Authorization and Validity of the Indenture and the Notes. The Notes have been duly authorized for issuance and sale pursuant to this Agreement and, when issued and delivered pursuant to this Agreement against payment of the consideration therefor specified in the Prospectus or pursuant to any Terms Agreement, the Notes will have been duly executed by the Company and, when authenticated, issued and delivered in the manner provided for in the Indenture and delivered against payment of the purchase price therefor as provided in this Agreement, will constitute valid and legally binding obligations of the Company enforceable against the Company in accordance with their terms, subject to bankruptcy, insolvency, fraudulent transfer, reorganization, moratorium and similar laws of general applicability relating to or affecting creditors' rights and general equitable principles, and will be entitled to the benefits provided by the Indenture, which will be substantially in the form filed as an exhibit to the Registration Statement; the Indenture has been duly authorized by the Company and the Indenture has been duly qualified under the 1939 Act and constitutes a valid and legally binding instrument of the Company, enforceable against the Company in accordance with its terms, subject to bankruptcy, insolvency, fraudulent transfer, reorganization, moratorium and similar laws of general applicability relating to or affecting creditors' rights and general equitable principles; and the Notes and the Indenture conform to the respective descriptions thereof in the Prospectus. (xi) No Defaults; Regulatory Approvals. Neither the Company nor any of its subsidiaries is in violation of its charter or in default in the performance or observance of any obligation, agreement, covenant or condition contained in any contract, indenture, mortgage, loan agreement, note, lease or other instrument to which the Company or any of its subsidiaries is a party or by which it or any of them may be bound, or to which any of the property or assets of the Company or any of its subsidiaries is subject, which violations or defaults in the aggregate would have a Material Adverse Effect; and the execution and delivery of this Agreement and the consummation of the transactions 6 contemplated herein and therein and pursuant to any applicable Terms Agreement have been duly authorized by all necessary corporate action and will not conflict with or constitute a breach of, or a default under, or result in the creation or imposition of any lien, charge or encumbrance upon any property or assets of the Company or any of its subsidiaries, except as expressly contemplated in the Indenture or except as would not have a Material Adverse Effect, pursuant to any contract, indenture, mortgage, loan agreement, note, lease or other instrument to which the Company or any of its subsidiaries is a party or by which it or any of them may be bound, or to which any of the property or assets of the Company or any of its subsidiaries is subject, nor will such action result in any violation of the provisions of the charter or by-laws of the Company or, except as would not have a Material Adverse Effect, any applicable law, administrative regulation or administrative or court decree. (xii) Legal Proceedings; Contracts. There is no action, suit or proceeding before or brought by any court or governmental agency or body, domestic or foreign, now pending, or, to the knowledge of the Company, threatened against, the Company or any of its subsidiaries, which is required to be disclosed in the Registration Statement (other than as disclosed therein) or which would reasonably be expected to result in a Material Adverse Effect, all pending legal or governmental proceedings to which the Company or any of its subsidiaries is a party or which any of their respective property is subject which are not described in the Registration Statement, including ordinary routine litigation incidental to the business, considered in the aggregate, would not reasonably be expected to cause a Material Adverse Effect; and there are no contracts or documents of the Company or any of its subsidiaries which are required to be filed as exhibits to the Registration Statement by the 1933 Act or by the 1933 Act Regulations which have not been so filed. (xiii) No Governmental Authorization. No authorization, approval or consent of any court or governmental authority or agency is necessary in connection with the sale of the Notes hereunder, except such as may be required under the 1933 Act, the 1933 Act Regulations and state securities laws and except as have been obtained. (xiv) Possession of Permits. The Company and its subsidiaries possess such valid franchises, certificates of convenience and necessity, easements, rights-of-way, operating rights, licenses, permits, consents, authorizations and orders of governmental political subdivisions or regulatory authorities as are necessary to conduct the business now operated by them, except those the failure of which to possess would not have a Material Adverse Effect, and neither the Company nor any of its subsidiaries has received any notice of proceedings relating to the revocation or modification thereof which, singly or in the aggregate, if the subject of an unfavorable decision, ruling or finding would have a Material Adverse Effect. (xv) Investment Company Act. Neither the Company nor any of its subsidiaries is regulated or required to be registered as an "investment company" under the Investment Company Act of 1940, as amended (the "1940 Act"). 7 (xvi) Ratings. The Medium-Term Note Program under which the Notes are issued (the "Program"), as well as the Notes, are rated A1 by Moody's Investors Service, Inc. and A+ by Standard & Poor's Ratings Services, or such other rating as to which the Company shall have most recently notified the Agents pursuant to Section 4(a) hereof. (b) Additional Certifications. Any certificate signed by any director or officer of the Company and delivered to the Agents or to counsel for the Agents in connection with an offering of Notes or the sale of Notes to one or more Agents as principal shall be deemed a representation and warranty by the Company to the Agents as to the matters covered thereby on the date of such certificate and at each Representation Date subsequent thereto. Section 3. Solicitations as Agent; Purchases as Principal. ---------------------------------------------- (a) Solicitations as Agent. On the basis of the representations and warranties herein contained, but subject to the terms and conditions herein set forth, each Agent agrees, when acting as an agent of the Company, to use its reasonable efforts to solicit offers to purchase the Notes upon the terms and conditions set forth herein and in the Prospectus. In connection with the solicitation of offers to purchase Notes, the Agents are not authorized to provide any written information relating to the Company to any prospective purchaser other than the Prospectus and documents incorporated by reference in the Prospectus. The Company reserves the right, in its sole discretion, to suspend solicitation of offers to purchase the Notes through the Agents, as agents, commencing at any time for any period of time or permanently. Upon receipt of instructions from the Company, the Agents will forthwith suspend solicitation of offers to purchase from the Company until such time as the Company has advised the Agents that such solicitation may be resumed. The Company agrees to pay each Agent a commission, in the form of a discount, equal to the applicable percentage of the principal amount of each Note sold by the Company as a result of a solicitation made by such Agent as set forth in Schedule A hereto; provided, however, that the Company shall only be obligated to pay one such fee with respect to any particular Note so sold. The purchase price, interest rate, maturity date and other terms of the Notes shall be agreed upon by the Company and the Agents and set forth in a pricing supplement to the Prospectus to be prepared following each acceptance by the Company of an offer for the purchase of Notes. Except as may be otherwise provided in such supplement to the Prospectus, the Notes will be issued in denominations of $1,000 or any larger amount that is an integral multiple of $1,000. All Notes sold through the Agents as agents will be sold at 100% of their principal amount unless otherwise agreed to by the Company and the Agents. Each Agent acknowledges and agrees that any funds which such Agent receives in respect of a purchase of Notes, which purchase has been solicited by such Agent, as agent of the Company, will be received, held and disposed of by such Agent, as agent of the Company. (b) Purchases as Principal. Each sale of Notes to one or more Agents as principal shall be made in accordance with the terms contained herein and, if requested by such Agent, pursuant to a separate agreement which will provide for the sale of such Notes to, and the 8 purchase and reoffering thereof by, such Agent or Agents. Each such separate agreement (which may be an oral agreement) between one or more Agents and the Company is herein referred to as a "Terms Agreement". Unless the context otherwise requires, each reference contained herein to "this Agreement" shall be deemed to include any Terms Agreement between the Company and one or more Agents. Each such Terms Agreement, whether oral or in writing, shall be with respect to such information (as applicable) as is specified in Exhibit A hereto. An Agent's commitment to purchase Notes as principal pursuant to any Terms Agreement or otherwise 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 each Agent pursuant thereto, the price to be paid to the Company for such Notes (which, if not so specified in a Terms Agreement, shall be at a discount equivalent to the applicable commission set forth in Schedule A hereto), the time and place of delivery of and payment for such Notes, any provisions relating to rights of, and default by purchasers acting together with the Agents in the reoffering of the Notes, and such other provisions (including further terms of the Notes) as may be mutually agreed upon. The Agents may utilize a selling or dealer group in connection with the resale of the Notes purchased by the Agents. Such Terms Agreement shall also specify whether or not any officer's certificate, opinions of counsel or comfort letter specified in Sections 7(b), 7(c) and 7(d) hereof shall be required to be delivered by the Company on the related Settlement Date. (c) Administrative Procedures. Administrative procedures with respect to the sale of Notes shall be agreed upon from time to time by the Agents and the Company (the "Procedures"). The initial Procedures, which are set forth in Exhibit B hereto, shall remain in effect until changed by agreement between the Company and the Agents or, with respect to the sale of the Notes to one or more Agents as principal, unless modified by the applicable Terms Agreement. The Agents and the Company agree to perform the respective duties and obligations specifically provided to be performed by them in the Procedures. (d) Delivery of Closing Documents. The documents required to be delivered by Section 5 hereof shall be delivered at the office of Skadden, Arps, Slate, Meagher & Flom LLP, Four Times Square, New York, New York 10036 on the date hereof, or at such other time or place as the Agents and the Company may agree. Section 4. Covenants of the Company. ------------------------ The Company covenants with each Agent as follows: (a) Compliance with Securities Regulations and Commission Requests. The Company, subject to Section 4(b), will comply with the requirements of Rule 434, and will notify the Agents immediately, and confirm the notice in writing, (i) when any post-effective amendment to the Registration Statement shall become effective, or any supplement to the Prospectus or any document to be filed pursuant to the 1934 Act which will be incorporated by reference into the Prospectus shall have been filed, (ii) of the receipt of any comments from the Commission concerning the Registration Statement, (iii) of any request by the Commission for any amendment to the Registration Statement or any amendment or supplement to the Prospectus or for additional information, (iv) of the issuance by the Commission of any stop order suspending the effectiveness of the Registration Statement or of the suspension of the 9 qualification of the Securities for offering or sale in any jurisdiction, or of the initiation or threatening of any proceedings for any of such purposes and (v) any change in the rating assigned by any nationally recognized statistical rating organization to the Program or any debt securities (including the Notes) of the Company or the public announcement by any nationally recognized statistical rating organization that it has under surveillance or review, with possible negative implications, its rating of the Program or any such debt securities, or the withdrawal by any nationally recognized statistical rating organization of its rating of the Program or any such debt securities. The Company will promptly effect the filings necessary pursuant to Rule 424(b) and will take such steps as it deems necessary to ascertain promptly whether the form of prospectus transmitted for filing under Rule 424(b) was received for filing by the Commission and, in the event that it was not, it will promptly file such prospectus. The Company will make every reasonable effort to prevent the issuance of any stop order and, if any stop order is issued, to obtain the lifting thereof at the earliest possible moment. (b) Filing of Amendments. The Company will give the Agents notice of its intention to file or prepare any additional registration statement with respect to the registration of additional Notes, any amendment to the Registration Statement or any amendment or supplement to the Prospectus (other than an amendment or supplement providing solely for a change in the interest rates, maturity or price of Notes or relating solely to an offering of debt securities other than the Notes), whether by the filing of documents pursuant to the 1934 Act, the 1933 Act or otherwise, and (including any filing under Rule 462(b)), any Term Sheet or any amendment, supplement or revision to either the prospectus included in the Registration Statement at the times it became effective or to the Prospectus, whether pursuant to the 1933 Act, the 1934 Act or otherwise, will furnish the Agents with copies of any such documents a reasonable amount of time prior to such proposed filing or use, as the case may be, and will not file or use any such document to which the Agents or counsel for the Agents shall reasonably object. Such consent does not constitute a waiver of any of the conditions set out in Section 5. (c) Delivery of Registration Statements. The Company has furnished or will deliver to the Agents and counsel for the Agents, without charge, signed copies of the Registration Statement as originally filed and of each amendment thereto (including exhibits filed therewith or incorporated by reference therein and documents incorporated or deemed to be incorporated by reference therein) and signed copies of all consents and certificates of experts, and will also deliver to the Agents, without charge, a conformed copy of the Registration Statement as originally filed and of each amendment thereto (without exhibits) for each of the Agents. The copies of the Registration Statement and each amendment thereto furnished to the Agents will be identical to the electronically transmitted copies thereof filed with the Commission pursuant to EDGAR, except to the extent permitted by Regulation S-T. (d) Delivery of Prospectuses. The Company will furnish to each Agent, without charge, during the period when the Prospectus is required to be delivered under the 1933 Act or the 1934 Act, such number of copies of the Prospectus (as amended or supplemented) as such Agent may reasonably request. The Prospectus and any amendments or supplements thereto furnished to the Agents will be identical to the electronically transmitted copies thereof filed with the Commission pursuant to EDGAR, except to the extent permitted by Regulation S-T. 10 (e) Preparation of Pricing Supplements. The Company will prepare, with respect to any Notes to be sold through or to the Agents pursuant to this Agreement, a Pricing Supplement with respect to such Notes in a form previously approved by the Agents and will file such Pricing Supplement pursuant to Rule 424(b)(3) under the 1933 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. (f) Revisions of Prospectus -- Material Changes. Except as otherwise provided in subsection (l) of this Section, if at any time during the term of this Agreement any event shall occur or condition exist as a result of which it is necessary, in the reasonable opinion of counsel for the Agents or counsel for the Company, to further amend or supplement the Prospectus in order that the Prospectus will not include an untrue statement of a material fact or omit to state any material fact necessary in order to make the statements therein not misleading in the light of the circumstances existing at the time the Prospectus is delivered to a purchaser, or if it shall be necessary, in the reasonable opinion of either such counsel, to amend or supplement the Registration Statement or the Prospectus in order to comply with the requirements of the 1933 Act or the 1933 Act Regulations, immediate notice shall be given, and confirmed in writing, to the Agents to cease the solicitation of offers to purchase the Notes in the Agents' capacity as agents and to cease sales of any Notes the Agents may then own as principal pursuant to a Terms Agreement, and the Company will promptly prepare and file with the Commission such amendment or supplement, whether by filing documents pursuant to the 1934 Act, the 1933 Act or otherwise, as may be necessary to correct such untrue statement or omission or to make the Registration Statement and Prospectus comply with such requirements purchasing prior to the date on which such financial information is released to the general public. (g) Prospectus Revisions -- Periodic Financial Information. Except as otherwise provided in subsection (1) 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, the Company shall furnish such information to the Agents, confirmed in writing, and shall, prior to the delivery of the Prospectus to any purchaser of the Notes purchasing after the date on which such financial information is released to the general public, by the filing of documents pursuant to the 1934 Act in the ordinary course, the 1933 Act or otherwise cause the Prospectus to be amended or supplemented to include or incorporate by reference financial information with respect thereto and corresponding information for the comparable period of the preceding fiscal year included in such release (but not any narrative information included in each such release), as well as such other information and explanations as shall be necessary for an understanding thereof or as shall be required by the 1933 Act or the 1933 Act Regulations. (h) Prospectus Revisions -- Audited Financial Information. Except as otherwise provided in subsection (1) of this Section, on or prior to the date on which there shall be released to the general public financial information included in or derived from the audited financial statements of the Company for the preceding fiscal year, the Company shall furnish such information to the Agents, confirmed in writing, and shall, prior to the delivery of the Prospectus to any purchaser of the Notes purchasing after the date on which such financial information is released to the general public, cause the Registration Statement and the Prospectus to be 11 amended, by the filing of documents pursuant to the 1934 Act in the ordinary course, the 1933 Act or otherwise, to include or incorporate by reference such audited financial statements and the report or reports, and consent or consents to such inclusion or incorporation by reference, of the independent accountants with respect thereto, as well as such other information and explanations as shall be necessary for an understanding of such financial statements or as shall be required by the 1933 Act or the 1933 Act Regulations. (i) Earnings Statements. The Company, by applying the provisions of Rule 158 under the 1933 Act, will make generally available to its security holders as soon as practicable, but not later than 90 days after the close of the period covered thereby, an earnings statement (in form complying with the provisions of Rule 158 under the 1933 Act) covering each twelve month period beginning, in each case, not later than the first day of the Company's fiscal quarter next following the "effective date" (as defined in such Rule 158) of the Registration Statement. Nothing in this Section 4(h) shall require the Company to make such earnings statement available more frequently than once in any period of twelve months. (j) Blue Sky Qualifications. The Company will endeavor, in cooperation with the Agents, to qualify the Notes for offering and sale under the applicable securities laws of such states and other jurisdictions of the United States as the Agents may designate, and will maintain such qualifications in effect for as long as may be required for the distribution of the Notes; provided, however, that the Company shall not be obligated to file any general consent to service of process or to qualify as a foreign corporation in any jurisdiction in which it is not so qualified. The Company will file such statements and reports as may be required by the laws of each jurisdiction in which the Notes have been qualified as above provided. The Company will promptly advise the Agents of the receipt by the Company of any notification with respect to the suspension of the qualification of the Notes for sale in any such state or jurisdiction or the initiating or threatening of any proceeding for such purpose. (k) 1934 Act Filings. The Company, during the period when the Prospectus is required to be delivered under the 1933 Act, will file promptly all documents required to be filed with the Commission pursuant to Sections 13(a), 13(c), 14 or 15(d) of the 1934 Act. Such documents will comply in all material respects with the requirements of the 1934 Act and the 1934 Act Regulations and to the extent such documents are incorporated by reference in the Prospectus, when read together with the other information in or incorporated by reference into the Prospectus, will not contain any untrue statement of a material fact or omit to state a material fact required to be stated therein or necessary in order to make the statements therein, in the light of the circumstances under which they are made, not misleading. (l) Stand-Off Agreement. If required pursuant to the terms of a Terms Agreement, between the date of any Terms Agreement and the Settlement Date with respect to such Terms Agreement, the Company will not, without the prior written consent of each Agent party to such Terms Agreement, directly or indirectly, sell, offer to sell, contract to sell, grant any option for the sale of or otherwise dispose of, or announce the offering of, any debt securities of the Company (other than the Notes that are to be sold pursuant to such Terms Agreement and commercial paper or borrowings from commercial banks or affiliates of the Company in the ordinary course of business), except as may otherwise be provided in any such Terms Agreement. 12 (m) Suspension of Certain Obligations. The Company shall not be required to comply with the provisions of subsections (e), (f) or (g) of this Section or the provisions of Section 7 hereof during any period from the time (i) the Agents shall have been notified by the Company to suspend solicitation of offers to purchase the Notes in their capacity as agents and (ii) the earlier of the date on which no Agent shall then hold any Notes as principal purchased pursuant to a Terms Agreement and the date which is 30 days (nine months with respect to subsection (e) of this Section) from the date on which the Agents shall have received written notice from the Company to suspend solicitation of purchases of the Notes, to the time the Company shall determine that solicitation of offers to purchase the Notes should be resumed or shall subsequently enter into a new Terms Agreement with any Agent. Section 5. Conditions of Agents' Obligations. --------------------------------- The obligations of the several Agents hereunder to solicit offers to purchase the Notes as agents of the Company, the obligations of any purchasers of the Notes sold through the Agents as agents, and any obligation of the Agents to purchase Notes as principals pursuant to a Terms Agreement or otherwise will be subject to the accuracy of the representations and warranties on the part of the Company herein and to the accuracy of the statements of the Company's officers made in any certificate furnished pursuant to the provisions hereof, to the performance and observance by the Company of all its covenants and agreements herein contained and to the following further conditions: (a) Effectiveness of Registration Statement. The Registration Statement, including any Rule 462(b) Registration Statement, has become effective and as of the date hereof no stop order suspending the effectiveness of the Registration Statement shall have been issued under the 1933 Act or proceedings therefor initiated or threatened by the Commission, and any request on the part of the Commission for additional information shall have been complied with to the reasonable satisfaction of counsel to the Agents. If the Company has elected to rely upon Rule 434, a Term Sheet shall have been filed with the Commission in accordance with Rule 424(b). (1) Opinion of Connie C. Holbrook. On the date hereof, the Agents shall have received the favorable opinion, in form and substance reasonably satisfactory to the Agents, dated as of the date hereof, of Connie C. Holbrook, counsel for the Company, who may rely as to all matters governed by Federal and New York law upon the opinion of Skadden, Arps, Slate, Meagher & Flom LLP referred to below, to the effect that: (i) The Company has been duly incorporated and is an existing corporation in good standing under the laws of the State of Utah. (ii) The Company has corporate power and authority to own its properties and conduct its business as described in the Prospectus; and the Company is duly qualified to do business as a foreign corporation and is in good standing in all other jurisdictions in which it owns or leases substantial properties or in which the conduct of its business requires such qualification, except where the failure to be so qualified would not have a Material Adverse Effect. 13 (iii) The offering, sale and issuance of the Notes have been duly authorized by the requisite corporate action on the part of the Company and, the Notes, when executed and authenticated by the Trustee in accordance with the terms of the Indenture, will be valid and binding obligations of the Company, enforceable against the Company in accordance with their terms, except to the extent that enforcement thereof may be limited by (a) bankruptcy, insolvency, fraudulent transfer, reorganization, moratorium or other similar laws now or hereinafter in effect relating to or affecting creditors' rights generally and (b) general principles of equity (regardless of whether enforceability is considered in a proceeding at law or in equity); in expressing the opinion set forth in this paragraph (iii), such counsel may assume that the Trustee's certificate of authentication of the Notes have been manually signed by one of the Trustee's authorized officers and that the Notes, in the form delivered to the Agents, conform to the specimens of the Notes examined by such counsel, which facts need not be verified by an inspection of the individual Notes. (iv) The execution, delivery and performance of the Indenture and of this Agreement and any applicable Terms Agreement and the issuance and sale of the Notes and compliance with the terms and provisions hereof and thereof will not (a) result in a breach or violation of any of the terms or provisions of, or constitute a default under, (1) any order known to such counsel of any governmental agency having jurisdiction over the Company or any of its properties or any agreement or instrument known to such counsel to which the Company is a party or by which the Company is bound or to which any of the properties of the Company is subject, which would cause a material adverse change in the financial position, shareholders' equity or results of operations of the Company or affect the validity of the Notes or the legal authority of the Company to comply with the terms of the Notes, the Indenture, this Agreement or any applicable Terms Agreement or (2) the charter or by-laws of the Company or (b) result in the creation or imposition of any lien, charge or encumbrance upon any property or assets of the Company or any subsidiary pursuant to any contract, indenture, mortgage, deed of trust, loan or credit agreement, note, lease or any other agreement or instrument, known to such counsel, to which the Company or any subsidiary is a party or by which it or any of them may be bound, or to which any of the property or assets of the Company or any subsidiary is subject (except for such liens, charges or encumbrances that would not have a Material Adverse Effect); and the Company has full power and authority to authorize, issue and sell the Notes as contemplated by this Agreement and any Terms Agreement. (v) The Indenture has been duly authorized, executed and delivered by the Company and (assuming the due authorization, execution and delivery of the Indenture by the Trustee) is a valid and binding agreement of the Company, enforceable against the Company in accordance with its terms, except to the extent enforcement thereof may be limited by (a) bankruptcy, insolvency, fraudulent transfer, reorganization, moratorium or other similar laws now or hereinafter in effect relating to or affecting creditors' rights generally, and 14 (b) general principles of equity (regardless of whether enforceability is considered in a proceeding at law or in equity). (vi) This Agreement and any applicable Terms Agreement have each been duly authorized, executed and delivered by the Company. (vii) No authorization, approval or consent of any governmental authority or agency is necessary in connection with the transactions contemplated by this Agreement and any Terms Agreement, except such as may be required under the 1933 Act, the 1939 Act, state securities or Blue Sky laws, and except as have been obtained. (viii) The documents incorporated by reference in the Prospectus (other than the financial statements and supporting schedules included therein or omitted therefrom, as to which such counsel need express no opinion), when they were filed with the Commission complied as to form in all material respects with the requirements of the 1934 Act and the 1934 Act Regulations. (2) Opinion of Company Counsel. On the date hereof, the Agents shall have received the favorable opinion, dated as of the date hereof, of Skadden, Arps, Slate, Meagher & Flom LLP, special counsel for the Company, in form and substance reasonably satisfactory to counsel for the Agents, to the effect that: (i) The Notes, when executed and authenticated in accordance with the terms of the Indenture, will be valid and binding obligations of the Company under the laws of the State of New York, enforceable against the Company in accordance with their terms, except to the extent that enforcement thereof may be limited by (a) bankruptcy, insolvency, fraudulent transfer, reorganization, moratorium or other similar laws now or hereinafter in effect relating to or affecting creditors' rights generally and (b) general principles of equity (regardless of whether enforceability is considered in a proceeding at law or in equity); in expressing the opinion set forth in this paragraph (i), such counsel may assume that the Trustee's certificates of authentication of the Notes have been manually signed by one of the Trustee's authorized officers and that the Notes, in the form delivered to the Agents, conform to the specimens thereof, examined by such counsel, which facts need not be verified by an inspection of the individual Notes. (ii) The Notes and the Indenture conform in all material respects to the descriptions thereof contained in the Prospectus. (iii) The Indenture has been duly executed and delivered by the Company (to the extent such execution and delivery are matters governed by the laws of the State of New York) and (assuming the due authorization, execution and delivery of the Indenture by the Trustee) is a valid and binding agreement of the Company, enforceable against the Company in accordance with its terms under the laws of the State of New York, except to the extent enforcement thereof may be limited 15 by (a) bankruptcy, insolvency, fraudulent transfer, reorganization, moratorium or other similar laws now or hereinafter in effect relating to or affecting creditors' rights generally and (b) general principles of equity (regardless of whether enforceability is considered in a proceeding at law or in equity). (iv) This Agreement and any applicable Terms Agreement have each been duly executed and delivered by the Company (to the extent such execution and delivery are matters governed by the laws of the State of New York). (v) The Registration Statement and the Prospectus, as of their respective effective or issue dates (but excluding the Form T-1 and the financial statements and the related notes, schedules and other financial data included or incorporated by reference in or excluded from the Registration Statement or the exhibits thereto, as to which such counsel need express no opinion), appeared on their face to be appropriately responsive in all material respects to the requirements of the 1933 Act and the 1933 Act Regulations, as applicable, except that such counsel need not assume any responsibility for the accuracy, completeness or fairness of the statements contained or incorporated by reference in the Registration Statement or the Prospectus except to the extent set forth in paragraph (ii) above. (vi) Such counsel does not know of any legal or governmental proceedings required to be disclosed in the Registration Statement or the Prospectus pursuant to Regulation S-K of the 1933 Act Regulations which are not disclosed as required, nor of any contracts or documents required to be filed as exhibits to the Registration Statement which are not filed as required. (vii) No authorization, approval or consent of any governmental authority or agency is necessary in connection with the consummation by the Company of the transactions contemplated by this Agreement and any applicable Terms Agreement, except such as may be required by the 1933 Act, the 1939 Act, state securities or Blue Sky laws, and other than any that has been obtained. (viii) The statements set forth in the Prospectus under the caption "Description of the Medium-Term Notes", insofar as such statements purport to summarize certain provisions of the documents referred to therein, fairly summarize such provisions in all material respects. (3) Opinion of Counsel to the Agents. The opinion of Sidley Austin Brown & Wood LLP, counsel to the Agents, who may rely as to all matters governed by Utah law upon the opinion of Connie C. Holbrook, referred to above, covering the matters referred to in subparagraph (1) under the subheading (i) and subparagraph (2) under the subheadings (i) through (v), inclusive, above. (4) In giving their opinions as of the date hereof required by subsection (a)(2) and (a)(3) of this Section, Skadden, Arps, Slate, Meagher & Flom LLP and Sidley Austin Brown & Wood LLP shall each additionally state the time and date on which Registration 16 Statement was declared effective under the 1933 Act, or if such counsel have not received an effectiveness order from the Commission, that such counsel have been advised by the Commission of the time and date on which the Registration Statement was declared effective and the Indenture was qualified under the Trust Indenture Act and, to the best of such counsel's knowledge, that no stop order suspending the Registration Statement's effectiveness has been issued and no proceedings for that purpose have been instituted or are pending or threatened by the Commission. In addition, each such counsel (other than Connie C. Holbrook) shall state that they have participated in conferences with officers and representatives of the Company, representatives of the independent accountants of the Company, and the Agents, at which the contents of the Registration Statement, the Prospectus and any amendments or supplements thereto and related matters were discussed and, although such counsel are not passing upon, and do not assume any responsibility for, the accuracy, completeness or fairness of the statements contained in the Registration Statement or the Prospectus and have made no independent check or verification thereof, on the basis of the foregoing, no facts have come to such counsel's attention that lead them to believe that the Registration Statement, at the time it became effective, and if an amendment to the Registration Statement or an Annual Report on Form 10-K has been filed by the Company with the Commission subsequent to the effectiveness of the Registration Statement and prior to the date of such statement, then at the time such amendment became effective or at the time of the most recent such filing (to the extent deemed to be incorporated by reference in the Registration Statement and Prospectus), or (if such opinion is being delivered in connection with a Terms Agreement pursuant to Section 7(c) hereof) at the date of any Terms Agreement and at the Settlement Date with respect thereto, as the case may be, contained an untrue statement of a material fact or omitted to state a material fact required to be stated therein or necessary in order to make the statements therein not misleading or that the Prospectus, as amended or supplemented at the date hereof, or (if such opinion is being delivered in connection with a Terms Agreement pursuant to Section 7(c) hereof) at the date of any Terms Agreement and at the Settlement Date with respect thereto, as the case may be, contains or contained an untrue statement of a material fact or omits or omitted to state a material fact necessary in order to make the statements therein, in the light of the circumstances under which they were made, not misleading. Such counsel may state that they express no opinion or belief with respect to the Form T-1 or to the financial statements and the related notes, schedules and other financial data included in or excluded from the Registration Statement or the exhibits thereto or incorporated by reference in such Registration Statement or Prospectus. (b) Officer's Certificate. At the date hereof the Agents shall have received a certificate of the President or any Vice President and a principal financial or accounting officer of the Company, dated as of the date hereof, to the effect that (i) since the respective dates as of which information is given in the Registration Statement and the Prospectus or since the date of any applicable Terms Agreement, there has not been any material adverse change in the condition, financial or otherwise, or in the earnings, business affairs or business prospects of the Company and its subsidiaries considered as one enterprise, whether or not arising in the ordinary course of business, (ii) the other representations and warranties of the Company contained in Section 2 hereof are true and correct with the same force and effect as though expressly made at and as of the date of such certificate, (iii) the Company has complied with all agreements and 17 satisfied all conditions on its part to be performed or satisfied at or prior to the date of such certificate, and (iv) no stop order suspending the effectiveness of the Registration Statement under the 1933 Act has been issued and no proceedings for that purpose have been initiated or threatened by the Commission. As used in this Section 5(b), the term "Prospectus" means the Prospectus in the form first provided to the applicable Agent or Agents for use in confirming sales of the Notes. (c) Comfort Letter. On the date hereof, the Agents shall have received a letter from Ernst & Young LLP, dated as of the date hereof and in form and substance reasonably satisfactory to the Agents, to the effect that: (i) They are independent public accountants with respect to the Company and its subsidiaries within the meaning of the 1933 Act and the 1933 Act Regulations and no information concerning their relationship with or interest in the Company is required by Item 10 of the Registration Statement. (ii) It is their opinion that the consolidated financial statements and supporting schedules included or incorporated by reference in the Registration Statement and covered by their opinions incorporated therein comply as to form in all material respects with the applicable accounting requirements of the 1933 Act and the 1933 Act Regulations. (iii) They have read any unaudited financial statements included in the Registration Statement and Prospectus. (iv) On the basis of the reading referred to in clause (iii) above, a reading of the latest available interim financial statements of the Company, inquiries of officials of the Company who have responsibility for financial and accounting matters and other specified procedures, nothing came to their attention that caused them to believe that: (A) the unaudited financial statements, if any, included or incorporated by reference in the Registration Statement and Prospectus do not comply as to form in all material respects with the applicable accounting requirements of the 1933 Act, the 1933 Act Regulations, the 1934 Act and the regulations promulgated under the 1934 Act or are not in conformity with generally accepted accounting principles applied on a basis substantially consistent with that of the audited financial statements included or incorporated by reference therein; (B) at the date of the latest available balance sheet read by such accountants, or at a subsequent specified date not more than five days prior to the date of such letter, there was any change in the capital stock or any increase in the short-term indebtedness or long-term debt of the Company or, at the date of the latest available balance sheet read by such accountants, or at a subsequent specified date not more than five days prior to the date of such letter, there was any decrease in the net current assets or net assets, in each case as compared with amounts shown in the latest balance sheet included or incorporated by reference in the Prospectus; or (C) for the twelve-month period ending on the closing date of the latest available income statement read by such accountants, or from such latest available income statement read by such accountants to a specified date not more than five days prior to the date of such letter, there were any decreases, as compared with the corresponding period of the previous 18 year, in total revenues, operating income or income (in each case, from continuing operations), or (with respect only to quarterly accounting periods) in the ratio of earnings to fixed charges; except in all cases set forth in clauses (B) and (C) above for changes, increases or decreases which the Prospectus discloses have occurred or may occur. (v) They have compared specified dollar amounts (or percentages derived from such dollar amounts) and other financial information included or incorporated by reference in the Registration Statement and the Prospectus (in each case to the extent that such dollar amounts, percentages and other financial information are derived from the general accounting records of the Company and its subsidiaries subject to the internal controls of the Company's accounting system or are derived directly from such records by analysis or computation) with the results obtained from inquiries, a reading of such general accounting records and other procedures specified in such letter and have found such dollar amounts, percentages and other financial information to be in agreement with such results. (d) Other Documents. On the date hereof and on each Settlement Date with respect to any applicable Terms Agreement, counsel to the Agents shall have been furnished with such documents and opinions as such counsel may reasonably require for the purpose of enabling such counsel to pass upon the issuance and sale of Notes as herein contemplated and related proceedings, or in order to evidence the accuracy and completeness of any of the representations and warranties or the fulfillment of any of the conditions herein contained. If any condition specified in this Section 5 shall not have been fulfilled when and as required to be fulfilled, this Agreement (or, at the option of the Agent party thereto, any applicable Terms Agreement) may be terminated by any of the Agents (as to itself only) by notice to the Company at any time and any such termination shall be without liability of any party to any other party, except that the covenant regarding provision of an earnings statement set forth in Section 4(h) hereof, the provisions concerning payment of expenses under Section 10 hereof, the indemnity and contribution agreements set forth in Sections 8 and 9 hereof, the provisions concerning the representations, warranties and agreements to survive delivery set forth in Section 11 hereof, the provisions relating to governing law and forum set forth in Section 14 and the provisions set forth under "Parties" of Section 15 hereof shall remain in effect. Section 6. 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 Agent shall promptly notify the Company and deliver the Note to the Company, and, if the Agent has theretofore paid the Company for such Note, the Company will promptly return such funds to the Agent. If such failure occurred for any reason other than default by the Agent in the performance of its obligations hereunder, the Company will reimburse such Agent on an equitable basis for its reasonable loss of the use of the funds for the period such funds were credited to the Company's account. 19 Section 7. Additional Covenants of the Company. ----------------------------------- The Company covenants and agrees with the Agents that: (a) Reaffirmation of Representations and Warranties. Each acceptance by it of an offer for the purchase of Notes, and each delivery of Notes to one or more of the Agents pursuant to a Terms Agreement, shall be deemed to be an affirmation that the representations and warranties of the Company contained in this Agreement and in any certificate theretofore delivered to the Agents pursuant hereto are true and correct at the time of such acceptance or sale, as the case may be, and an undertaking that such representations and warranties will be true and correct at the time of delivery to the purchaser or his agent, or to the Agent or Agents, of the Note or Notes relating to such acceptance or sale, as the case may be, as though made at and as of each such time (and it is understood that such representations and warranties shall relate to the Registration Statement and Prospectus as amended and supplemented to each such time). (b) Subsequent Delivery of Certificates. Subject to the provisions of Section 4(l) hereof, each time that the Registration Statement or the Prospectus shall be amended or supplemented (other than by an amendment or supplement providing solely for the establishment of or a change in the interest rates, maturity or price of Notes or similar changes or an amendment or supplement which relates exclusively to an offering of debt securities other than the Notes), or there is filed with the Commission any document incorporated by reference into the Prospectus or (if required pursuant to the terms of a Terms Agreement) the Company sells Notes to one or more Agents pursuant to a Terms Agreement, the Company shall furnish or cause to be furnished to the Agents as soon as practicable a certificate dated the date of filing with the Commission of such supplement or document, the date of effectiveness of such amendment, or the date of such sale, as the case may be, in form satisfactory to the Agents and to counsel to the Agents to the effect that the statements contained in the certificate referred to in Section 5(b) hereof which was last furnished to the Agents are true and correct at the time of such amendment, supplement, filing or sale, as the case may be, as though made at and as of such time (except that such statements shall be deemed to relate to the Registration Statement and the Prospectus as amended and supplemented to such time) or, in lieu of such certificate, a certificate of the same tenor as the certificate referred to in said Section 5(b), modified as necessary to relate to the Registration Statement and the Prospectus as amended and supplemented to the time of delivery of such certificate. (c) Subsequent Delivery of Legal Opinions. Subject to the provisions of Section 4(l) hereof and unless the Agents shall otherwise specify, each time that the Registration Statement or the Prospectus shall be amended or supplemented (other than by an amendment or supplement providing solely for the establishment of or a change in the interest rates, maturity or price of the Notes or similar changes or an amendment or supplement which relates exclusively to an offering of debt securities other than the Notes), or there is filed with the Commission any document incorporated by reference into the Prospectus, or, if required pursuant to the terms of a Terms Agreement, the Company sells Notes to one or more Agents pursuant to a Terms Agreement, the Company shall furnish or cause to be furnished as soon as practicable to the Agents and to counsel to the Agents a written opinion of each of Connie C. Holbrook, counsel for the Company and Skadden, Arps, Slate, Meagher & Flom LLP, special counsel for the Company, or other counsel satisfactory to the Agents dated the date of filing with the 20 Commission of such supplement or document, the date of effectiveness of such amendment, or the date of such sale, as the case may be, in form and substance satisfactory to the Agents and to counsel to the Agents, of the same tenor as the opinions referred to in Section 5(a)(1), 5(a)(2) and 5(a)(5) hereof, but modified, as necessary, to relate to the Registration Statement and the Prospectus as amended and supplemented to the time of delivery of such opinions; or, in lieu of such opinions, counsel last furnishing such opinion to the Agents shall furnish the Agents with a letter substantially to the effect that the Agents may rely on such last opinion to the same extent as though it was dated the date of such letter authorizing reliance (except that statements in such last opinion shall be deemed to relate to the Registration Statement and the Prospectus as amended and supplemented to the time of delivery of such letter authorizing reliance). (d) Subsequent Delivery of Comfort Letters. Subject to the provisions of Section 4(l) hereof and unless the Agents shall otherwise specify, each time that the Registration Statement or the Prospectus shall be amended or supplemented to include additional financial information or there is filed with the Commission any document incorporated by reference into the Prospectus which contains additional financial information or, (if required pursuant to the terms of a Terms Agreement) the Company sells Notes to one or more Agents pursuant to a Terms Agreement, the Company shall cause Ernst & Young LLP or other independent certified public accountants reasonably satisfactory to the Agents, as soon as practicable to furnish the Agents a letter, dated the date of the date of filing with the Commission of such supplement or document, the date of effectiveness of such amendment, or the date of such sale, as the case may be, in form reasonably satisfactory to the Agents, of the same tenor as the letter referred to in Section 5(c) hereof but modified to relate to the Registration Statement and Prospectus, as amended and supplemented to the date of such letter, and 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; provided, however, that if the Registration Statement or the Prospectus is amended or supplemented solely to include financial information as of and for a fiscal quarter, Ernst & Young LLP may limit the scope of such letter to the unaudited financial statements included in such amendment or supplement unless any other information included therein of an accounting, financial or statistical nature is of such a nature that, in the reasonable judgment of the Agents, such letter should cover such other information. Section 8. Indemnification. --------------- (a) Indemnification of the Agents. 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 1933 Act or Section 20 of the 1934 Act as follows: (i) against any and all loss, liability, claim, damage and expense whatsoever, as incurred, arising out of any untrue statement or alleged untrue statement of a material fact contained in the Registration Statement (or any amendment thereto), or the omission or alleged omission therefrom of a material fact required to be stated therein or necessary to make the statements therein not misleading or arising out of any untrue statement or alleged untrue statement of a material fact contained in the Prospectus (or any amendment or supplement thereto) or the omission or alleged omission therefrom of a material fact necessary in order to make the statements therein, in the light of the circumstances under which they were made, not misleading; 21 (ii) against any and all loss, liability, claim, damage and expense whatsoever, as incurred, to the extent of the aggregate amount paid in settlement of any litigation, or any investigation or proceeding by any governmental agency or body, commenced or threatened, or of any claim whatsoever based upon any such untrue statement or omission, or any such alleged untrue statement or omission, if such settlement is effected with the written consent of the Company; and (iii) against any and all expense whatsoever, as incurred, (including, subject to Section 8(c) hereof, the fees and disbursements of counsel chosen by each Agent), reasonably incurred in investigating, preparing or defending against any litigation, or any investigation or proceeding by any governmental agency or body, commenced or threatened, or any claim whatsoever based upon any such untrue statement or omission, or any such alleged untrue statement or omission, to the extent that any such expense is not paid under (i) or (ii) above; provided, however, that this indemnity agreement shall not apply to any loss, liability, claim, damage or expense to the extent arising out of any untrue statement or omission or alleged untrue statement or omission made in reliance upon and in conformity with written information furnished to the Company or special counsel to the Company by or on behalf of any Agent expressly for use in the Registration Statement (or any amendment thereto), or the Prospectus (or any amendment or supplement thereto). The foregoing indemnity with respect to any untrue statement contained in or omitted from a preliminary prospectus shall not inure to the benefit of any Agent (or any person controlling such Agent) from whom the person asserting any such loss, liability, claim, damage or expense purchased any of the Notes which are the subject thereof if such person did not receive a copy of the Prospectus (or any amendment or supplement thereto) (in each case exclusive of the documents from which information is incorporated by reference) at or prior to the written confirmation of the sale of such Notes to such person and the untrue statement contained in or omission from such preliminary prospectus was corrected in the Prospectus (or any amendment or supplement thereto). (b) Indemnification of Company, Directors and Officers. Each Agent severally agrees to indemnify and hold harmless the Company, its directors, each of its officers who signed the Registration Statement, and each person, if any, who controls the Company within the meaning of Section 15 of the 1933 Act or Section 20 of the 1934 Act against any and all loss, liability, claim, damage and expense described in the indemnity contained in subsection (a) of this Section, as incurred, but only with respect to untrue statements or omissions, or alleged untrue statements or omissions, made in the Registration Statement (or any amendment thereto) including the Rule 424 Information, if applicable, or the Prospectus (or any amendment or supplement thereto) in reliance upon and in conformity with written information furnished to the Company by or on behalf of such Agent expressly for use in the Registration Statement (or any amendment thereto) or the Prospectus (or any amendment or supplement thereto) and will reimburse any legal or other expenses reasonably incurred by the Company in connection with investigating or defending any such loss, liability, claim, damage, expense or action as such expenses are incurred. (c) Actions Against Parties; Notification. Each indemnified party shall give notice as promptly as reasonably practicable to each indemnifying party of any action commenced against 22 it in respect of which indemnity may be sought hereunder, but failure to so notify an indemnifying party shall not relieve such indemnifying party from any liability hereunder to the extent it is not materially prejudiced as a result thereof and in any event shall not relieve it from any liability which it may have otherwise than on account of this indemnity agreement. In the case of parties indemnified pursuant to Section 8(a) above, counsel to the indemnified parties shall be selected by the Agents, and, in the case of parties indemnified pursuant to Section 8(b) above, counsel to the indemnified parties shall be selected by the Company. If it so elects within a reasonable time after receipt of such notice, an indemnifying party, jointly with any other indemnifying parties receiving such notice, may assume the defense of such action with counsel chosen by it and approved by the indemnified parties defendant in such action (which approval shall not be unreasonably withheld), unless such indemnified parties reasonably object to such assumption on the ground that there may be legal defenses available to them which are different from or in addition to those available to such indemnifying party. If an indemnifying party assumes the defense of such action, the indemnifying party shall not be liable for any fees and expenses of counsel for the indemnified parties incurred thereafter in connection with such action other than the reasonable costs of investigation. In no event shall the indemnifying parties be liable for fees and expenses of more than one counsel (in addition to any local counsel) separate from their own counsel for all indemnified parties in connection with any one action or separate but similar or related actions in the same jurisdiction arising out of the same general allegations or circumstances. No indemnifying party shall, without the prior written consent of the indemnified parties, settle or compromise or consent to the entry of any judgment with respect to any litigation, or any investigation or proceeding by any governmental agency or body, commenced or threatened, or any claim whatsoever in respect of which indemnification or contribution could be sought under this Section 8 or Section 9 hereof (whether or not the indemnified parties are actual or potential parties hereto), unless such settlement, compromise or consent (i) includes an unconditional release of each indemnified party from all liability arising out of such litigation, investigation, proceeding or claim and (ii) does not include a statement as to or an admission of fault, culpability or a failure to act by or on behalf of any indemnified party. (d) Settlement without Consent if Failure to Reimburse. If at any time an indemnified party shall have requested an indemnifying party to reimburse the indemnified party for fees and expenses of counsel, such indemnifying party agrees that it shall be liable for any settlement of the nature contemplated by Section 8(a)(ii) effected without its written consent if (i) such settlement is entered into more than 45 days after receipt by such indemnifying party of the aforesaid request, (ii) such indemnifying party shall have received notice of the terms of such settlement at least 30 days prior to such settlement being entered into and (iii) such indemnifying party shall not have reimbursed such indemnified party in accordance with such request prior to the date of such settlement. Notwithstanding the immediately preceding sentence, if at any time an indemnified party shall have requested an indemnifying party to reimburse the indemnified party for fees and expenses of counsel, an indemnifying party shall not be liable for any settlement of the nature contemplated by Section 8(a)(ii) effected without its consent if such indemnifying party (i) reimburses such indemnified party in accordance with such request to the extent it considers such request to be reasonable and (ii) provides written notice to the indemnified party substantiating the unpaid balance as unreasonable, in each case prior to the date of such settlement. 23 Section 9. Contribution. If the indemnification provided for in Section 8 hereof is for any reason (except as provided therein) unavailable to or insufficient to hold harmless an indemnified party in respect of any losses, liabilities, claims, damages or expenses referred to therein, then each indemnifying party shall contribute to the aggregate amount of such losses, liabilities, claims, damages and expenses incurred by such indemnified party, as incurred, (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 pursuant to this Agreement or (ii) if the allocation provided by clause (i) 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 of the Agents on the other hand in connection with the statements or omissions which resulted in such losses, liabilities, claims, damages 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 hand in connection with the offering of the Notes pursuant to this Agreement shall be deemed to be in the same respective proportions as the total net proceeds from the offering of the Notes pursuant to this Agreement (before deducting expenses) received by the Company and the total underwriting discount received by the Agents, in each case as set forth on the cover of the Prospectus, or, if Rule 434 is used, the corresponding location on the Term Sheet, bear to the aggregate initial public offering price of the Notes as set forth on such cover. 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 any such untrue or alleged untrue statement of a material fact or omission or alleged omission to state a material fact relates to information supplied by the Company or by the Agents and the parties' relative intent, knowledge, access to information and opportunity to correct or prevent such statement or omission. The Company and the Agents agree that it would not be just and equitable if contribution pursuant to this Section 9 were determined by pro rata allocation (even if the Agents were treated as one entity for such purpose) or by any other method of allocation which does not take account of the equitable considerations referred to above in this Section 9. The aggregate amount of losses, liabilities, claims, damages and expenses incurred by an indemnified party and referred to above in this Section 9 shall be deemed to include any legal or other expenses reasonably incurred by such indemnified party in investigating, preparing or defending against any litigation, or any investigation or proceeding by any governmental agency or body, commenced or threatened, or any claim whatsoever based upon any such untrue or alleged untrue statement or omission or alleged omission. Notwithstanding the provisions of this Section 9, no Agents shall be required to contribute any amount in excess of the amount by which the total price at which the Notes underwritten by it and distributed to the public were offered to the public exceeds the amount of any damages which such Agents has otherwise been required to pay by reason of any such untrue or alleged untrue statement or omission or alleged omission. 24 No person guilty of fraudulent misrepresentation (within the meaning of Section 11(f) of the 1933 Act) shall be entitled to contribution from any person who was not guilty of such fraudulent misrepresentation. For purposes of this Section 9, each person, if any, who controls an Agent within the meaning of Section 15 of the 1933 Act or Section 20 of the 1934 Act shall have the same rights to contribution as such Agent, and each director of the Company, each officer of the Company who signed the Registration Statement, and each person, if any, who controls the Company within the meaning of Section 15 of the 1933 Act or Section 20 of the 1934 Act shall have the same rights to contribution as the Company. The Agents' respective obligations to contribute pursuant to this Section 9 are several in proportion to the principal amount of Notes set forth opposite their respective names in Schedule A hereto and not joint. Section 10. Payment of Expenses. ------------------- The Company will pay all expenses incident to the performance of its obligations under this Agreement, including: (a) The printing and filing of the Registration Statement as originally filed and each amendment thereto and the Prospectus and any amendments or supplements thereto; (b) The preparation, filing and reproduction of this Agreement; (c) The preparation, printing, issuance and delivery of the Notes, including any fees and expenses relating to the use of book-entry notes; (d) The fees and disbursements of the Company's accountants and counsel, of the Trustee and its counsel, and of any Calculation Agent; (e) The reasonable fees and disbursements of counsel to the Agents incurred from time to time in connection with the transactions contemplated hereby; (f) The qualification of the Notes under state securities laws in accordance with the provisions of Section 4(i) hereof, including filing fees and the fees and disbursements of counsel for the Agents in connection therewith and in connection with the preparation of any Blue Sky Survey and any Legal Investment Survey; (g) The printing and delivery to the Agents of copies of the Registration Statement and any amendments thereto, and of the Prospectus and any amendments or supplements thereto, and the delivery by the Agents of the Prospectus and any amendments or supplements thereto in connection with solicitations or confirmations of sales of the Notes; (h) The preparation, printing, reproducing and delivery to the Agents of copies of the Indenture and all supplements and amendments thereto; (i) Any fees charged by rating agencies for the rating of the Notes; 25 (j) The fees and expenses, if any, incurred with respect to any filing with the National Association of Securities Dealers, Inc.; (k) Any advertising and other out-of-pocket expenses of the Agent incurred with the prior written approval of the Company; (l) The cost of providing any CUSIP or other identification numbers for the Notes; and (m) The fees and expenses of any Depositary (as defined in the Indenture) and any nominees thereof in connection with the Notes. Section 11. Representations, Warranties and Agreements to Survive Delivery. All representations, warranties and agreements contained in this Agreement or in certificates of officers of the Company or any of its subsidiaries submitted pursuant hereto, shall remain operative and in full force and effect, regardless of any investigation made by or on behalf of any Agent or controlling person of, or by or on behalf of the Company, and shall survive each delivery of and payment for any of the Notes. Section 12. Termination. ----------- (a) Termination of this Agreement. The Agents may terminate this Agreement (excluding any Terms Agreement) by notice to the Company at any time at or prior to the Settlement Date relating thereto; provided, however, that the termination of this Agreement by an Agent shall terminate this Agreement only between such Agent and the Company and the Company's notice of termination as to any one Agent shall terminate this Agreement only between itself and such Agent. (b) Termination of a Terms Agreement. The Agent or Agents party to a Terms Agreement may terminate any Terms Agreement, immediately upon notice to the Company, at any time prior to the Settlement Date relating thereto (i) if there has been, since the date of such Terms Agreement or since the respective dates as of which information is given in the Registration Statement, any material adverse change in the condition, financial or otherwise, or in the earnings, business affairs or business prospects of the Company and its subsidiaries considered as one enterprise, whether or not arising in the ordinary course of business, or (ii) if there has occurred any material adverse change in the financial markets in the United States or any outbreak of hostilities or escalation thereof or other calamity or crisis, in each case the effect of which is such as to make it, in the reasonable judgment of the Agent or Agents party to such Terms Agreement, impracticable to market the Notes subject to such Terms Agreement or enforce contracts for the sale of such Notes, or (iii) if trading in the Notes has been suspended or materially limited by the Commission, or if trading generally on either the American Stock Exchange or the New York Stock Exchange or in the Nasdaq National Market has been suspended or materially limited, or minimum or maximum prices for trading have been fixed, or maximum ranges for prices for securities have been required, by any of said exchanges or by such system has or by order of the Commission, the National Association of Securities Dealers, Inc. or any other governmental authority, or if a banking moratorium shall have been declared by either Federal, New York or Utah authorities or (iv) the rating assigned by any 26 nationally recognized statistical rating organization to the Program or any debt securities (including the Notes) of the Company as of the date of such agreement shall have been lowered since that date or if any such rating organization shall have publicly announced that it has under surveillance or review, with possible negative implications, its rating of the Program or any debt securities (including the Notes) of the Company, or (v) if there shall have come to the Agent's or Agents' attention any facts that would cause such Agent or Agents to believe that the Prospectus, at the time it was required to be delivered to a purchaser of Notes, contained an untrue statement of a material fact or omitted to state a material fact necessary in order to make the statements therein, in light of the circumstances existing at the time of such delivery, not misleading. As used in this Section 12(b), the term "Prospectus" means the Prospectus in the form first provided to the applicable Agent or Agents for use in confirming sales of the related Notes. (c) General. In the event of any such termination, neither party will have any liability to the other party hereto, except that (i) each Agent shall be entitled to any commission earned in accordance with the third paragraph of Section 3(a) hereof, (ii) if at the time of termination (a) the Agents shall own any Notes purchased pursuant to a Terms Agreement with the intention of reselling them or (b) an offer to purchase any of the Notes has been accepted by the Company but the time of delivery to the purchaser or his agent of the Note or Notes relating thereto has not occurred, the covenants set forth in Sections 4 and 7 hereof shall remain in effect until such Notes are so resold or delivered, as the case may be, and (iii) the covenant set forth in Section 4(h) hereof, the provisions of Section 10 hereof, the indemnity and contribution agreements set forth in Sections 8 and 9 hereof, and the provisions of Sections 11 and 15 hereof shall remain in effect. Section 13. Notices --------- Unless otherwise provided herein, all notices required under the terms and provisions hereof shall be in writing, either delivered by hand, by mail or by telex, telecopier or telegram, and any such notice shall be effective when received at the address specified below. If to the Company: Questar Pipeline Company 180 East 100 South Street P.O. Box 45360 Salt Lake City, Utah 84145-0360 Attention: Vice President, Treasurer and Chief Financial Officer Telecopy: (801) 324-5483 If to Merrill Lynch: Merrill Lynch & Co. Merrill Lynch, Pierce, Fenner & Smith Incorporated 4 World Financial Center New York, New York 10080 27 Attention: MTN Product Management, Telecopy: (212) 449-2234 If to Banc of America Securities LLC: Banc of America Securities LLC 100 North Tryon Street Charlotte, North Carolina Attention: _________________ Telecopy: _________________ If to Banc One Capital Markets, Inc.: BANC ONE CAPITAL MARKETS, INC. One Banc One Plaza Chicago, Illinois 60670 Attention: ________________ Telecopy: ________________ If to U.S. Bancorp Piper Jaffray: U.S. Bancorp Piper Jaffray U.S. Bancorp Center 800 Nicollet Mall Minneapolis, Minnesota 55402 Attention: _________________ Telecopy: _________________ or at such other address as such party may designate from time to time by notice duly given in accordance with the terms of this Section 13. Section 14. GOVERNING LAW AND TIME. THIS AGREEMENT SHALL BE GOVERNED BY AND CONSTRUED IN ACCORDANCE WITH THE LAWS OF THE STATE OF NEW YORK. SPECIFIED TIMES OF DAY REFER TO NEW YORK CITY TIME. Section 15. Parties. ------- This Agreement shall inure to the benefit of and be binding upon the Agents and the Company and their respective successors. Nothing expressed or mentioned in this Agreement is intended or shall be construed to give any person, firm or corporation, other than the parties hereto and their respective successors and the controlling persons and officers and directors referred to in Sections 8 and 9 and their heirs and legal representatives, any legal or equitable right, remedy or claim under or in respect of this Agreement or any provision herein contained. This Agreement and all conditions and provisions hereof are intended to be for the sole and exclusive benefit of the parties hereto and their respective successors and said controlling persons and officers and directors and their heirs and legal representatives, and for the benefit of 28 no other person, firm or corporation. No purchaser of Notes shall be deemed to be a successor by reason merely of such purchase. Section 16. Captions. -------- The captions in this Agreement are for convenience of reference only and shall not define or limit any of the terms or provisions hereof. 29 If the foregoing is in accordance with the Agents' understanding of our agreement, please sign and return to the Company a counterpart hereof, whereupon this instrument along with all counterparts will become a binding agreement between the Agents and the Company in accordance with its terms. Very truly yours, QUESTAR PIPELINE COMPANY By: ______________________________ Stephen E. Parks Vice President, Treasurer and Chief Financial Officer Accepted: MERRILL LYNCH, PIERCE, FENNER & SMITH INCORPORATED By: _________________________________ Name: Title: BANC OF AMERICA SECURITIES LLC By: _________________________________ Name: Title: U.S. BANCORP PIPER JAFFRAY By: _________________________________ Name: Title: 30 BANC ONE CAPITAL MARKETS, INC. By: _________________________________ Name: Title: 31 EXHIBIT A Questar Pipeline Company 180 East 100 South Street Salt Lake City, Utah 84145 Re: Distribution Agreement by and among Questar Pipeline Company, Merrill Lynch & Co., Merrill Lynch, Pierce, Fenner & Smith Incorporated, Bank of America Securities LLC, Banc One Capital Markets, Inc. and U.S. Bancorp Piper Jaffray dated ___________, 2001 The undersigned agrees to purchase the following principal amount of the Medium-Term Notes, Series B, referred to in the above-mentioned Agreement: $___________________ [The undersigned agrees to purchase the aggregate principal amount of Medium-Term Notes, Series B, referred to in the above-mentioned Agreement set forth below:] [Merrill Lynch, Pierce, Fenner & Smith Incorporated ......... $_____] [Banc of America Securities LLC .............................. $_____] [U.S. Bancorp Piper Jaffray .................................. $_____] The terms of such Medium-Term Notes, Series B, shall be as set forth below. Interest Rate: If Fixed Rate Note: Interest Rate: Interest Payment Dates (if other than June 1 and December 1): Regular Record Dates (if other than May 15 and November 15): If Floating Rate Note: Base Rate or Rates: Initial Interest Rate: Initial Interest Reset Date: Spread, if any: Spread Multiplier, if any: Interest Reset Date(s): Interest Payment Date(s): Index Maturity: Maximum Interest Rate, if any: Minimum Interest Rate, if any: Interest Payment Period: Interest Reset Period: A-1 Calculation Agent (if other than First Security Bank, N.A.): If Redeemable: Redemption Commencement Date: Redemption Percentage: Annual Redemption Percentage: If Repayable: Optional Repayment Date(s): Principal Amount: $ ------------ Stated Maturity: Trade Date: Issue Price: % ------- Agent's Discount or Commission: Original Issue Date: Settlement Date and Time: Additional Terms: The Certificate referred to in Section 7(b), the opinions of counsel referred to in Section 7(c) and the accountants' letter referred to in Section 7(d) of the above-mentioned Agreement will [not] be required, and the stand-off agreement set forth in Section 4(k) of the above-mentioned Agreement will [not] be applicable. This Agreement and all of the rights and obligations of the parties hereto shall be governed by and construed in accordance with the laws of the State of New York applicable to agreements made and to be performed in such State. A-2 EXHIBIT B ADMINISTRATIVE PROCEDURES B-1 If the foregoing is in accordance with our agreement, please indicate your acceptance hereof in the space provided for that purpose below. MERRILL LYNCH, PIERCE, FENNER & SMITH INCORPORATED By: ______________________________ Authorized Signatory BANC ONE CAPITAL MARKETS By: ______________________________ Authorized Signatory U.S. BANCORP PIPER JAFFRAY By: ______________________________ Authorized Signatory BANC OF AMERICA SECURITIES LLC By: ______________________________ Authorized Signatory CONFIRMED AND ACCEPTED, as of the date first above written. QUESTAR PIPELINE COMPANY By: ______________________________ Name: Title: B-2 SCHEDULE A As compensation for the services of the Agents hereunder, the Company shall pay the related Agent, on a discount basis, a commission for the sale of each Note by such Agent equal to the principal amount of such Note multiplied by the appropriate percentage set forth below: PERCENT OF MATURITY RANGES PRINCIPAL AMOUNT - --------------- ---------------- % From 9 months to less than 1 year............................. From 1 year to less than 18 months............................ From 18 months to less than 2 years........................... From 2 years to less than 3 years............................. From 3 years to less than 4 years............................. From 4 years to less than 5 years............................. From 5 years to less than 6 years............................. From 6 years to less than 7 years............................. From 7 years to less than 10 years............................ From 10 years to less than 15 years........................... From 15 years to less than 20 years........................... From 20 years to 30 years..................................... B-3 SCHEDULE B NAME OF UNDERWRITER PRINCIPAL AMOUNT OF SECURITIES B-4 EX-4 3 s501937.txt EX-4.02 Exhibit 4.02 THIS SECURITY IS A GLOBAL SECURITY AS REFERRED TO IN THE INDENTURE HEREINAFTER REFERENCED. UNLESS AND UNTIL IT IS EXCHANGED IN WHOLE OR IN PART FOR THE INDIVIDUAL SECURITIES REPRESENTED HEREBY, THIS GLOBAL SECURITY MAY NOT BE TRANSFERRED EXCEPT 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 OR BY THE DEPOSITARY OR ANY SUCH NOMINEE TO A SUCCESSOR DEPOSITARY OR A NOMINEE OF SUCH SUCCESSOR DEPOSITARY. UNLESS THIS CERTIFICATE IS PRESENTED BY AN AUTHORIZED REPRESENTATIVE OF THE DEPOSITORY TRUST COMPANY (55 WATER STREET, NEW YORK, NEW YORK) 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 SUCH OTHER NAME AS REQUESTED BY AN AUTHORIZED REPRESENTATIVE OF THE DEPOSITORY TRUST COMPANY AND ANY PAYMENT IS MADE TO CEDE & CO., ANY TRANSFER, PLEDGE OR OTHER USE HEREOF FOR VALUE OR OTHERWISE BY OR TO ANY PERSON IS WRONGFUL SINCE THE REGISTERED OWNER HEREOF, CEDE & CO., HAS AN INTEREST HEREIN.
QUESTAR PIPELINE COMPANY MEDIUM-TERM NOTE, SERIES B (Fixed Rate) REGISTERED PRINCIPAL AMOUNT NO. FXR-__ $___________ CUSIP No.:_________ Original Issue Date:____ Interest Rate:__% Stated Maturity:____ Sinking Fund/Repayment Provision:__ Interest Payment Date(s): Optional Repayment Date:__ June 1 and December 1 Regular Record Date(s): Optional Redemption: see below May 15 and November 15 Authorized Determination: Redemption Percentage: see below Specified Currency: Annual Redemption Percentage: see below Exchange Rate Agent: Redemption Commencement Date: see below Default Rate: Redemption Date: see below Other Provisions: Terms are not completed for certain Redemption Price: see below items above either because such items are not applicable or because the terms are as specified in the Prospectus.
1 QUESTAR PIPELINE COMPANY, a corporation duly organized and existing under the laws of the State of Utah (herein called the "Company", which term includes any successor corporation under the Indenture hereinafter referred to), for value received, hereby promises to pay to CEDE & CO., or registered assigns, the principal sum of _________________________________________ DOLLARS ($______________) at Stated Maturity as specified above (except to the extent redeemed or repaid prior to the Stated Maturity), and to pay interest thereon from the Original Issue Date specified above or from the most recent Interest Payment Date (subject to the provisions below) to which interest has been paid or duly provided for, periodically on each Interest Payment Date, commencing with the first such Interest Payment Date next succeeding the Original Issue Date specified above, and at Stated Maturity (the date on each such Stated Maturity, Redemption Date, and Optional Repayment Date and the date on which principal or an installment of principal is due and payable by declaration of acceleration pursuant to the Indenture being referred to hereinafter as a "Maturity" with respect to principal payable on such date), at the Interest Rate specified above, until the principal hereof is paid or made available for payment; provided, that if such Original Issue Date is after a Regular Record Date and before the Interest Payment Date immediately following such Regular Record Date, interest payments will commence on the second Interest Payment Date following the Original Issue Date. The interest so payable, and punctually paid or duly provided for, on any Interest Payment Date (except at Maturity) will, as provided in the Indenture, be paid to the Person in whose name this Note (or one or more Notes which are Predecessor Securities) is registered at the close of business on the Regular Record Date next preceding such Interest Payment Date. Any such interest which is payable, but not so punctually paid or duly provided for on any Interest Payment Date, will forthwith cease to be payable to the Holder on such Regular Record Date and may either be paid to the Person in whose name this Note (or one or more Notes which are Predecessor Securities) is registered at the close of business on a Special Record Date for the payment of such Defaulted Interest to be fixed by the Trustee, notice whereof shall be given to the Holder of this Note not less than 10 days prior to such Special Record Date, or be paid at any time in any other lawful manner not inconsistent with the requirements of any securities exchange on which the Notes of this series may be listed, upon such notice as may be required by such exchange, all as more fully provided in the Indenture. Reference herein to "this Note", "hereof", "herein" and comparable terms shall include an Addendum hereto if an Addendum is specified above. 2 Any provision contained herein with respect to the calculation of the rate of interest applicable to this Note, its payment dates or any other matter relating hereto may be modified as specified in an Addendum relating hereto if so specified above. This Note is one of a duly authorized series of debt securities of the Company (herein called the "Securities"), and the series thereof to which this Note belongs, being issued and to be issued under an Indenture, dated as of August 17, 1998 (herein called the "Indenture"), between the Company and Wells Fargo Bank Northwest, National Association (f/k/a First Security Bank, N.A.) (herein called the "Trustee", which term includes any successor trustee under the Indenture), and reference is hereby made to the Indenture and all indentures supplemental thereto for a statement of the respective rights, limitations of rights, duties and immunities thereunder of the Company, the Trustee and the Holders of the Notes and of the terms upon which the Notes are, and are to be, authenticated and delivered. This Note is one of the series of Securities designated as "Medium-Term Notes, Series B." The Notes may be issued from time to time at varying maturities, interest rates and other terms and in an aggregate principal amount up to $250,000,000, which amount may be increased if duly authorized by the Company. Unless otherwise specified on the first page hereof, the Interest Payment Dates with respect to this Note will be June 1 and December 1 of each year, and the Regular Record Dates in respect of such Interest Payment Dates will be the immediately preceding May 15 and November 15 (whether or not a Business Day), respectively. If any Interest Payment Date or Maturity with respect to this Note falls on a day that is not a Business Day, the payment due on such Interest Payment Date or at Maturity will be made on the following day that is a Business Day with respect to this Note as if it were made on the date such payment was due and no interest shall accrue on the amount so payable for the period from and after such Interest Payment Date or Maturity, as the case may be. Unless otherwise specified on the first page of this Note, the Interest Rate on this Note will be computed on the basis of a 360-day year of twelve 30-day months. "Business Day" means any day that is not a Saturday or Sunday and that in the Place of Payment is not a day on which banking institutions are authorized or obligated by law or executive order to close. If this Note is a definitive Note, payments of the principal, premium, if any, and interest payable at Maturity on this Note will be made in immediately available funds at the Corporate Trust Office of the Trustee in Salt Lake City, Utah, or at such other place as the Company may designate, provided that this Note is presented 3 to the Trustee in time for the Trustee to make such payments in such funds in accordance with its normal procedures. Interest (other than interest payable at Maturity) will be paid by check mailed to the address of the Person entitled thereto as it appears in the Security Register as of the Regular Record Date or, at the option of the Company, by wire transfer to an account maintained by such Person with a bank located within the United States; provided, however, that the Holder of this Note may be entitled to receive payments of principal, premium, if any, and interest by wire transfer to an account maintained by such Holder with a bank located in the United States if an appropriate written request has been received by the Trustee prior to the Regular Record Date in respect of any interest payment, or the date which is fifteen days before the Stated Maturity of the Note, as the case may be. If this Note is a Global Security representing Book-Entry Securities, payments of the principal of, premium, if any, and interest on the Note will be made by check or by wire transfer to an account maintained by the Depositary for such purpose. This Note will be redeemable as a whole or in part, at the option of the Company at any time, at a Redemption Price equal to the greater of (i) 100% of its principal amount and (ii) the sum of the present values of the remaining scheduled payments of principal and interest thereon discounted to the Redemption Date on a semiannual basis (assuming a 360-day year consisting of twelve 30-day months) at the Treasury Rate plus [15] basis points, plus in each case accrued and unpaid interest thereon to the date of redemption. "Treasury Rate" means, with respect to any Redemption Date, the rate per annum equal to the semiannual equivalent yield to maturity or interpolated (on a day count basis) of the Comparable Treasury Issue, assuming a price for the Comparable Treasury Issue (expressed as a percentage of its principal amount) equal to the Comparable Treasury Price for such Redemption Date. "Comparable Treasury Issue" means the United States Treasury security or securities selected by an Independent Investment Banker as having a maturity or interpolated (on a day count basis) comparable to the remaining term of this Note that would be utilized, at the time of selection and in accordance with customary financial practice, in pricing new issues of corporate debt securities of a comparable maturity to the remaining term of this Note. "Independent Investment Banker" means one of the Reference Treasury Dealers appointed by the Trustee after consultation with the Company. 4 "Comparable Treasury Price" means, with respect to any Redemption Date, (i) the average of the Reference Treasury Dealer Quotations for such Redemption Date, after excluding the highest and lowest such Reference Treasury Dealer Quotations, or (ii) if the Trustee obtains fewer than four such Reference Treasury Dealer Quotations, the average of all such quotations. "Reference Treasury Dealer Quotations" means, with respect to each Reference Treasury Dealer and any redemption date, the average, as determined by the Trustee, of the bid and asked prices for the Comparable Treasury Issue (expressed in each case as a percentage of its principal amount) quoted in writing to the Trustee by such Reference Treasury Dealer at 3:30 p.m. New York time on the third business day preceding such Redemption Date. "Reference Treasury Dealer" means each of Merrill Lynch, Pierce, Fenner & Smith Incorporated, Banc of America Securities LLC, Banc One Capital Markets, Inc. and U.S. Bancorp Piper Jaffray and their respective successors; provided, however, that if any of the foregoing or their affiliates shall cease to be a primary U.S. Government securities dealer in The City of New York (a "Primary Treasury Dealer"), the Company shall substitute therefor another Primary Treasury Dealer. Notice of any redemption will be mailed at least 30 days but not more than 60 days before the Redemption Date to the Holder of this Note. Unless the Company defaults in payment of the Redemption Price, on and after the Redemption Date interest will cease to accrue on this Note or portions thereof called for redemption. In the event of redemption of this Note in part only, a new Note for the unredeemed portion hereof will be issued in the name of the Holder hereof upon the cancellation hereof. If so provided on the first page of this Note, this Note will be subject to repayment at the option of the Holder hereof on the Optional Repayment Date, if any, indicated on the first page hereof. If no Optional Repayment Date is set forth on the first page hereof, this Note will not be repayable at the option of the Holder prior to Stated Maturity. On any Optional Repayment Date, this Note will be repayable in whole or in part in increments of $1,000 at the option of the Holder hereof at a price equal to 100% of the principal amount to be repaid, together with interest thereon payable to the Optional Repayment Date, on notice in the form entitled "Option to 5 Elect Repayment" below, duly completed, given together with this Note by such Holder to the Company not more than 60 nor less than 30 days prior to the Optional Repayment Date. In the event of repayment of this Note in part only, a new Note for the portion hereof not repaid will be issued in the name of the Holder hereof upon the surrender hereof. Exercise of such repayment option by the Holder shall be irrevocable. If an Event of Default with respect to the Notes shall occur and be continuing, the principal of all of the Notes may be declared due and payable in the manner and with the effect provided in the Indenture. The Notes are subject to satisfaction, discharge and defeasance as provided in Section 403 of the Indenture. The Indenture permits, with certain exceptions as therein provided, the amendment thereof and the modification of the rights and obligations of the Company and the rights of the Holders of the Securities of each series to be affected under the Indenture at any time by the Company and the Trustee with the consent of the Holders of a majority in principal amount of the Securities at the time Outstanding or, in the case less than all of the several series of Securities are affected, the holders of a majority in aggregate principal amount of the Securities at the time Outstanding of each series to be affected. The Indenture also contains provisions permitting the Holders of specified percentages in aggregate principal amount of the Securities of each series at the time Outstanding, on behalf of the Holders of all Securities of such series, to waive compliance by the Company with certain provisions of the Indenture and certain past defaults under the Indenture and their consequences. Any such consent or waiver by the Holder of this Note shall be conclusive and binding upon such Holder and upon such future Holders of this Note and of any Note issued upon the registration or transfer hereof or in exchange herefor or in lieu hereof, whether or not 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, premium, if any, and interest on this Note at the times, place and rate, and in the coin or currency, herein prescribed. 6 As provided in the Indenture and subject to certain limitations therein set forth, the transfer of this Note is registrable in the Security Register, upon surrender of this Note for registration of transfer at the office or agency of the Company in Salt Lake City, Utah, or at such other place as the Company may designate from time to time, duly endorsed by, or accompanied by a written instrument of transfer in form satisfactory to the Company and the Security Register duly executed by, the 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, will be issued to the designated transferee or transferees. The Notes are issuable in registered form without coupons in minimum denominations of $1,000 or any amount in excess thereof that is an integral multiple of $1,000. As provided in the Indenture and subject to certain limitations therein set forth, Notes are exchangeable for a like aggregate principal amount of Notes of different authorized denominations, as requested by the Holder surrendering the same. No service charge shall be made for any such registration of transfer or exchange, but the Company may require payment of a sum sufficient to cover any tax or other governmental charge payable in connection therewith. Prior to due presentment of this Note for registration of transfer, the Company, the Trustee and any agent of the Company or the Trustee may treat the Person in whose name this Note is registered as the owner hereof for all purposes, whether or not this Note be overdue, and neither the Company, the Trustee nor any such agent shall be affected by notice to the contrary. All terms used in this Note which are defined in the Indenture shall have the meaning assigned to them in the Indenture. THE INDENTURE AND THE NOTES, INCLUDING THIS NOTE, SHALL BE GOVERNED BY AND CONSTRUED IN ACCORDANCE WITH THE LAWS OF THE STATE OF NEW YORK APPLICABLE TO AGREEMENTS MADE AND TO BE PERFORMED IN SUCH STATE. Unless the certificate of authentication hereon has been executed by Wells Fargo Bank Northwest, National Association (f/k/a/ First Security Bank, N.A.), the Trustee under the Indenture, or its successor thereunder, by the manual 7 signature of one of its authorized officers, this Note shall not be entitled to any benefit under the Indenture or be valid or obligatory for any purpose. 8 IN WITNESS WHEREOF, the Company has caused this instrument to be duly executed, manually or in facsimile, and a facsimile of its corporate seal to be imprinted hereon. QUESTAR PIPELINE COMPANY By:_________________________ Name: Title: ATTEST: By:_____________________ Name: Title: [SEAL] Date: TRUSTEE'S CERTIFICATE OF AUTHENTICATION: This is one of the Securities of the series designated herein, referred to in the within-mentioned Indenture. Wells Fargo Bank Northwest, National Association (f/k/a First Security Bank, N.A.), as Trustee By:______________________________ Authorized Signatory 9 ------------------------ The following abbreviations when used in the inscription on this Note, shall be construed as though they were written out in full according to applicable laws or regulations: TEN COM - as tenants in common UNIF GIFT MIN ACT - ______ Custodian_________ TEN ENT - as tenants by the (Cust) (Minor) entireties Under Uniform Gifts to Minor JT TEN - as joint tenants with Act_________________________ right of survivorship (State) and not as tenants in common Additional abbreviations may also be used though not in the above list. ------------------------ FOR VALUE RECEIVED, the undersigned hereby sells, assigns and transfers unto PLEASE INSERT SOCIAL SECURITY OR OTHER IDENTIFYING NUMBER OF ASSIGNEE - ------------------------------------ - ------------------------------------ - ----------------------------------------------------------------------------- (Please print or typewrite name and address including postal zip code of assignee) - ------------------------------------------------------------------------------ the within Note of Questar Pipeline Company and does hereby irrevocably constitute and appoint _____________________________________________Attorney to transfer said Note on the books of said Company, with full power of substitution in the premises. Dated: NOTICE: The signature of the Holder to this assignment must correspond with the name as it appears upon the face of the within Note in every particular, without alteration or enlargement or any change whatsoever, and be guaranteed by an acceptable bank or broker. OPTION TO ELECT REPAYMENT The undersigned hereby irrevocably requests and instructs the Company to repay the within Note (or portion hereof specified below) pursuant to its terms at a price equal to 100% of the principal amount hereof, together with interest thereon payable to the Optional Repayment Date, to the undersigned at - ------------------ - ---------------------------------------------------------------- (Please Print or Typewrite Name and Address of the Undersigned) For this Note to be repaid, the trustee must receive this "Option to Elect Repayment" form, duly completed, together with this Note not more than 60 nor less than 30 days prior to an Optional Repayment Date shown on the face of this Note at its Corporate Trust Office, or at such other place or places designated by the Company and notified by it to the Holder of this Note. If less than the entire principal amount of the within Note is to be repaid, specify the portion thereof which the Holder elects to have repaid __________________ ___________________________________________; and specify the denomination or denominations (which shall be authorized denominations) of the Notes to be issued to the Holder for the portion of the within Note not being repaid (in the absence of any specification, one such Note will be issued for the portion not being repaid)_____________________. Date: ______________ -------------------------------- Note: The signature on this Option to Elect Repayment must correspond with the name as written in this Note in every particular without alteration or enlargement or any change whatsoever. EX-4 4 s501934.txt EX-4.03 Exhibit 4.03 THIS SECURITY IS A GLOBAL SECURITY AS REFERRED TO IN THE INDENTURE HEREINAFTER REFERENCED. UNLESS AND UNTIL IT IS EXCHANGED IN WHOLE OR IN PART FOR THE INDIVIDUAL SECURITIES REPRESENTED HEREBY, THIS GLOBAL SECURITY MAY NOT BE TRANSFERRED EXCEPT 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 OR BY THE DEPOSITARY OR ANY SUCH NOMINEE TO A SUCCESSOR DEPOSITARY OR A NOMINEE OF SUCH SUCCESSOR DEPOSITARY. UNLESS THIS CERTIFICATE IS PRESENTED BY AN AUTHORIZED REPRESENTATIVE OF THE DEPOSITORY TRUST COMPANY (55 WATER STREET, NEW YORK, NEW YORK) 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 SUCH OTHER NAME AS REQUESTED BY AN AUTHORIZED REPRESENTATIVE OF THE DEPOSITORY TRUST COMPANY AND ANY PAYMENT IS MADE TO CEDE & CO., ANY TRANSFER, PLEDGE OR OTHER USE HEREOF FOR VALUE OR OTHERWISE BY OR TO ANY PERSON IS WRONGFUL SINCE THE REGISTERED OWNER HEREOF, CEDE & CO., HAS AN INTEREST HEREIN.
REGISTERED PRINCIPAL AMOUNT NO. FLR-__ $_____________ CUSIP No.:_________ QUESTAR PIPELINE COMPANY MEDIUM-TERM NOTE, SERIES B (Floating Rate) Original Issue Date: Minimum Rate: Stated Maturity: Maximum Rate: Interest Payment Date(s): Interest Reset Dates: Regular Record Date(s): Interest Reset Period: Base Rate(s): Interest Determination Date: Default Rate: Sinking Fund/Repayment Provision: Index Maturity: Optional Repayment Date: Initial Interest Rate: Optional Redemption: see below Spread: Redemption Percentage: see below Spread Multiplier: Annual Redemption Percentage: see below Interest Category: Redemption Commencement Date: see below
1
Authorized Determination: Redemption Date: see below Specified Currency: Redemption Price: see below Calculation Agent: Exchange Rate Agent: Other Provisions:
The Redemption Price (if applicable) shall initially be the Redemption Percentage of the principal amount of this Note to be redeemed and shall decline (but not below par) at each anniversary of the Redemption Commencement Date by the Annual Redemption Percentage of the principal amount to be redeemed until the Redemption Price is 100% of such principal amount. "N/A" as used herein means "Not Applicable". "A/S" as used herein means "As stated in this Note". QUESTAR PIPELINE COMPANY, a corporation duly organized and existing under the laws of the State of Utah (herein called the "Company", which term includes any successor corporation under the Indenture hereinafter referred to), for value received, hereby promises to pay to CEDE & CO., or registered assigns, the principal sum of _________________________________________ DOLLARS ($______________) at Stated Maturity as specified above (except to the extent redeemed or repaid prior to the Stated Maturity), and to pay interest thereon from the Original Issue Date specified above or from the most recent Interest Payment Date (subject to the provisions below) to which interest has been paid or duly 2 provided for, periodically on each Interest Payment Date, commencing with the first such Interest Payment Date next succeeding the Original Issue Date specified above, and at Stated Maturity (the date on each such Stated Maturity, Redemption Date, and Optional Repayment Date and the date on which principal or an installment of principal is due and payable by declaration of acceleration pursuant to the Indenture being referred to hereinafter as a "Maturity" with respect to principal payable on such date), at the Interest to be determined in accordance with the provisions below, depending on the Base Rate(s) shown above (the "Floating Interest Rate"), until the principal hereof is paid or made available for payment; provided, that if such Original Issue Date is after a Regular Record Date and before the Interest Payment Date immediately following such Regular Record Date, interest payments will commence on the second Interest Payment Date following the Original Issue Date. The interest so payable, and punctually paid or duly provided for, on any Interest Payment Date (except at Maturity) will, as provided in the Indenture, be paid to the Person in whose name this Note (or one or more Notes which are Predecessor Securities) is registered at the close of business on the Regular Record Date next preceding such Interest Payment Date. Any such interest which is payable, but not so punctually paid or duly provided for on any Interest Payment Date, will forthwith cease to be payable to the Holder on such Regular Record Date and may either be paid to the Person in whose name this Note (or one or more Notes which are Predecessor Securities) is registered at the close of business on a Special Record Date for the payment of such Defaulted Interest to be fixed by the Trustee, notice whereof shall be given to the Holder of this Note not less than 10 days prior to such Special Record Date, or be paid at any time in any other lawful manner not inconsistent with the requirements of any securities exchange on which the Notes of this series may be listed, upon such notice as may be required by such exchange, all as more fully provided in the Indenture. Reference herein to "this Note", "hereof", "herein" and comparable terms shall include an Addendum hereto if an Addendum is specified above. Any provision contained herein with respect to the calculation of the rate of interest applicable to this Note, its payment dates or any other matter relating hereto may be modified as specified in an Addendum relating hereto if so specified above. This Note is one of a duly authorized series of debt securities of the Company (herein called the "Securities"), and the series thereof to which this Note belongs, being issued and to be issued under an Indenture, dated as of August 17, 1998 (herein called the "Indenture"), between the Company and Wells Fargo Bank Northwest, National Association (f/k/a First Security Bank, N.A.) (herein called the "Trustee", which term includes any successor trustee under the Indenture), and reference is hereby made to the Indenture and all indentures supplemental thereto for a statement of the respective rights, limitations of rights, duties and immunities thereunder of the Company, the Trustee and the Holders of the Notes and of the terms upon which the Notes are, and are to be, authenticated and delivered. This Note is one of the series of Securities designated as "Medium-Term Notes, Series B." The Notes may be issued from time to time at varying maturities, interest rates and other terms and in an aggregate principal amount up to $250,000,000, which amount may be increased if duly authorized by the Company. If this Note is a definitive Note, payments of the principal, premium, if any, and interest payable at Maturity on this Note will be made in immediately available funds at the Corporate Trust Office of the Trustee in Salt Lake City, Utah or at such other place as the Company may designate, provided that this Note is presented to the Trustee in time for the Trustee to make such payments in such funds in accordance with its normal procedures. Interest (other than interest payable at Maturity) will be paid by check mailed to the address of the Person entitled thereto as it appears in the Security Register as of the Regular Record Date or, at the option of 3 the Company, by wire transfer to an account maintained by such Person with a bank located within the United States; provided, however, that the Holder of this Note may be entitled to receive payments of principal, premium, if any, and interest by wire transfer to an account maintained by such Holder with a bank located in the United States if an appropriate written request has been received by the Trustee prior to the Regular Record Date in respect of any interest payment, or the date which is fifteen days before the Stated Maturity of the Note, as the case may be. If this Note is a Global Security representing Book-Entry Securities, payments of the principal of, premium, if any, and interest on the Note will be made by check or by wire transfer to an account maintained by the Depositary for such purpose. This Note will be redeemable as a whole or in part, at the option of the Company at any time, at a Redemption Price equal to the greater of (i) 100% of its principal amount and (ii) the sum of the present values of the remaining scheduled payments of principal and interest thereon discounted to the Redemption Date on a semiannual basis (assuming a 360-day year consisting of twelve 30-day months) at the Treasury Rate plus [15] basis points, plus in each case accrued and unpaid interest thereon to the date of redemption. "Treasury Rate" means, with respect to any Redemption Date, the rate per annum equal to the semiannual equivalent yield to maturity or interpolated (on a day count basis) of the Comparable Treasury Issue, assuming a price for the Comparable Treasury Issue (expressed as a percentage of its principal amount) equal to the Comparable Treasury Price for such Redemption Date. "Comparable Treasury Issue" means the United States Treasury security or securities selected by an Independent Investment Banker as having a maturity or interpolated (on a day count basis) comparable to the remaining term of this Note that would be utilized, at the time of selection and in accordance with customary financial practice, in pricing new issues of corporate debt securities of a comparable maturity to the remaining term of this Note. "Independent Investment Banker" means one of the Reference Treasury Dealers appointed by the Trustee after consultation with the Company. "Comparable Treasury Price" means, with respect to any Redemption Date, (i) the average of the Reference Treasury Dealer Quotations for such Redemption Date, after excluding the highest and lowest such Reference Treasury Dealer Quotations, or (ii) if the Trustee obtains fewer than four such Reference Treasury 4 Dealer Quotations, the average of all such quotations. "Reference Treasury Dealer Quotations" means, with respect to each Reference Treasury Dealer and any redemption date, the average, as determined by the Trustee, of the bid and asked prices for the Comparable Treasury Issue (expressed in each case as a percentage of its principal amount) quoted in writing to the Trustee by such Reference Treasury Dealer at 3:30 p.m. New York time on the third business day preceding such Redemption Date. "Reference Treasury Dealer" means each of Merrill Lynch, Pierce, Fenner & Smith Incorporated, Banc of America Securities LLC, Banc One Capital Markets, Inc. and U.S. Bancorp Piper Jaffray and their respective successors; provided, however, that if any of the foregoing or their affiliates shall cease to be a primary U.S. Government securities dealer in The City of New York (a "Primary Treasury Dealer"), the Company shall substitute therefor another Primary Treasury Dealer. Notice of any redemption will be mailed at least 30 days but not more than 60 days before the Redemption Date to the Holder of this Note. Unless the Company defaults in payment of the Redemption Price, on and after the Redemption Date interest will cease to accrue on this Note or portions thereof called for redemption. In the event of redemption of this Note in part only, a new Note for the unredeemed portion hereof will be issued in the name of the Holder hereof upon the cancellation hereof. If so provided on the first page of this Note, this Note will be subject to repayment at the option of the Holder hereof on the Optional Repayment Date, if any, indicated on the first page hereof. If no Optional Repayment Date is set forth on the first page hereof, this Note will not be repayable at the option of the Holder prior to Stated Maturity. On any Optional Repayment Date, this Note will be repayable in whole or in part in increments of $1,000 at the option of the Holder hereof at a price equal to 100% of the principal amount to be repaid, together with interest thereon payable to the Optional Repayment Date, on notice in the form entitled "Option to Elect Repayment" below, duly completed, given together with this Note by such Holder to the Company not more than 60 nor less than 30 days prior to the Optional Repayment Date. In the event of repayment of this Note in part only, a new Note for the portion hereof not repaid will be issued in the name of the Holder hereof upon the surrender hereof. Exercise of such repayment option by the Holder shall be irrevocable. 5 The "Floating Interest Rate" on this Note will be calculated by reference to the Base Rate(s), as specified on the first page hereof, (a) plus or minus the Spread, if any, and/or (b) multiplied by the Spread Multiplier, if any. The Base Rate may be one or more of: (a) the Commercial Paper Rate, (b) the Federal Funds Rate, (c) LIBOR, (d) the Prime Rate, (e) the Treasury Rate or (f) such other interest rate formula as is set forth on the first page hereof. The "Index Maturity" is the period to maturity of the instrument or obligation with respect to which the related Base Rate or Rates are calculated. Except as otherwise provided herein, all percentages resulting from any calculation will be rounded out to the nearest one hundred-thousandth of a percentage point (with five one-millionths of a percentage point rounded upward), and all dollar amounts used in or resulting from such calculation will be rounded to the nearest cent (with one-half cent being rounded upward). Notwithstanding the foregoing, if this Note is designated above as having an Addendum attached, the Note shall bear interest in accordance with the terms described in such Addendum. Unless otherwise specified on the first page hereof, the "Regular Record Date" with respect to this Note shall be the fifteenth calendar day immediately preceding the related Interest Payment Date or Dates, whether or not such date shall be a Business Day, and interest will be payable, in the case of Notes which reset daily, each Business Day, in the case of Notes which reset weekly, on Wednesday of each week (with the exception of weekly reset Floating Rate Notes as to which the Treasury Rate is an applicable Base Rate, which will reset Tuesday of each week, except as described below), in the case of Notes which reset monthly, on the third Wednesday of each month, in the case of Notes which reset quarterly, on the third Wednesday of March, June, September and December of each year, in the case of Notes which reset semi-annually, on the third Wednesday of the two months of each year specified on the first page hereof, and in the case of Notes which reset annually, on the third Wednesday of the month specified on the first page hereof (each an "Interest Payment Date"); and, in each case, at Maturity. Payments of Interest with respect to any Interest Payment Date will include interest accrued to but excluding such Interest Payment Date. Accrued interest is calculated by multiplying the face amount of this Note by an accrued interest factor. Such accrued interest factor is computed by adding the interest factor calculated for each day from the later of the Original Issue Date, or from the last date to which interest has been paid or duly provided for, to the date for which accrued interest is being calculated. The interest factor (expressed as a decimal rounded to 6 the nearest one hundred-thousandth of a percentage point) for each such day is computed by dividing the interest rate (expressed as a decimal rounded to the nearest one-hundred-thousandth of a percentage point) applicable to such day by 360, in the case of Commercial Paper Rate Notes, Federal Funds Rate Notes, LIBOR Notes, or Prime Rate Notes or by the actual number of days in the year, in the case of Treasury Rate Notes. The interest factor for Floating Rate Notes for which the interest rate is calculated with reference to two or more Base Rates will be calculated in each period in the same manner as if only the lowest of the applicable Base Rates applied. If any Interest Payment Date for this Note falls on a day that is not a Business Day with respect to this Note, such Interest Payment Date for this Note will be the following day that is a Business Day for this Note, except that, in the case of a LIBOR Note (or a Note for which LIBOR is the applicable Base Rate), if such Business Day is in the next succeeding calendar month, such Interest Payment Date will be the immediately preceding day that is a Business Day for this Note. If the Maturity of this Note falls on a day that is not a Business Day with respect to this Note, the payment of principal, premium, if any, and interest will be made on the next succeeding Business Day, and no interest on such payment shall accrue for the period from and after Maturity. Unless otherwise specified on the first page hereof or in an Addendum hereto, "Business Day" means any day that is not a Saturday or Sunday and that in the Place of Payment is not a day on which banking institutions are authorized or obligated by law or executive order to close, and, with respect to any LIBOR Note, is a London Business Day. "London Business Day" means any day on which dealings in deposits in United States dollars are transacted in the London interbank market. Except as provided on the first page hereof, the rate of interest on this Note will be reset daily, weekly, monthly, quarterly, semi-annually or annually (each an "Interest Reset Date"), as specified on the first page hereof. Except as provided on the first page hereof, if this Note resets daily, the Interest Reset Date will be each Business Day, if this Note resets weekly, the Interest Reset Date will be on Wednesday of each week (with the exception of weekly reset Floating Rate Notes as to which the Treasury Rate is an applicable Base Rate, which will reset on Tuesday of each week, except as described below), if this Note resets monthly, the Interest Reset Date will be the third Wednesday of each month, if this Note resets quarterly, the Interest Reset Date will be the third Wednesday of each March, June, September and December of each year, if this Note resets semi-annually the Interest Reset Date will be the third Wednesday of each of the two months of each year specified on the first page hereof, and if this Note resets annually, the Interest Reset Date will be the third Wednesday of the month of each year as specified on the first page hereof, provided, however, that (a) the interest rate in effect from the Original Issue Date to the first Interest Reset Date will be the Initial Interest Rate (as set forth on the first page 7 hereof), and (b) the interest rate in effect for the ten calendar days immediately prior to Maturity will be the interest rate in effect on the tenth calendar day preceding such Maturity. If any Interest Reset Date would otherwise be a day that is not a Business Day, such Interest Reset Date shall be the next succeeding Business Day (or, in the case of a LIBOR Note or a Note for which LIBOR is an applicable Base Rate, if such Business Day falls in the next calendar month, such Interest Reset Date shall be the last Business Day in the preceding month). The interest rate applicable to each Interest Reset Period commencing on the Interest Reset Date or Dates with respect to such Interest Reset Period will be the rate determined as of the applicable "Interest Determination Date." The Interest Determination Date with respect to the Commercial Paper Rate, the Federal Funds Rate and the Prime Rate will be the second Business Day preceding each Interest Reset Date. The Interest Determination Date with respect to LIBOR will be the second London Business Day preceding each Interest Reset Date. With respect to the Treasury Rate, the Interest Determination Date will be the day in the week in which the Interest Reset Date falls on which day Treasury Bills are normally auctioned (Treasury Bills are normally sold at auction on Monday of each week, unless that day is a legal holiday, in which case the auction is normally held on the following Tuesday, except that such auction may be held on the preceding Friday); provided, however, that if, as a result of a legal holiday, an auction is held on the Friday of the week preceding the Interest Reset Date, the related Interest Determination Date shall be such preceding Friday; and provided, further, that if an auction shall fall on any Interest Reset Date, then the related Interest Reset Date shall instead be the first Business Day immediately following such auction. If the interest rate of this Note is determined with reference to two or more Base Rates, the Interest Determination Date will be the first Business Day which is at least two Business Days prior to such Interest Reset Date on which each Base Rate shall be determinable. Each Base Rate shall be determined and compared on such date, and the applicable interest rate shall take effect on the related Interest Reset Date. The Calculation Agent (which shall be the Trustee unless otherwise specified on the first page hereof and which may be changed by the Company from time to time) shall calculate the Floating Interest Rate on this Note on or before each Calculation Date and, upon request, provide to holders the Floating Interest Rate then in effect and, if different, the interest rate which will become effective as a result of a determination made for the next succeeding Interest Reset Date with respect to this Note. The Calculation Agent's determination of any Floating Interest Rate will be final and binding in the absence of manifest error. Unless otherwise specified on the first page hereof or in an Addendum hereto, the "Calculation Date", where applicable, 8 pertaining to any Interest Determination Date will be the earlier of (i) the tenth calendar day after such Interest Determination Date, or if any such day is not a Business Day, the next succeeding Business Day or (ii) the Business Day immediately preceding the applicable Interest Payment Date or Maturity, as the case may be. Notwithstanding the other provisions herein, the Floating Interest Rate hereon which may accrue during any interest period shall not be greater than the Maximum Interest Rate, if any, or less than the Minimum Interest Rate, if any, shown on the first page hereof and, in addition, the Floating Interest Rate shall in no event be higher than the maximum rate permitted by New York law, as the same may be modified by United States law of general application. Determination of Commercial Paper Rate. - -------------------------------------- The "Commercial Paper Rate" will be determined by the Calculation Agent in accordance with the following provisions: "Commercial Paper Rate" means, with respect to any Interest Determination Date relating to a Commercial Paper Rate Note or to any Note for which the Commercial Paper Rate is one of the Base Rates (a "Commercial Paper Rate Interest Determination Date"), the Money Market Yield (as defined below) on such date of the rate for commercial paper having the Index Maturity specified on the first page hereof as published by the Board of Governors of the Federal Reserve System in "Statistical Release H.15(519), Selected Interest Rates" or any successor publication ("H.15 (519)") under the heading "Commercial Paper--Nonfinancial" or, if unavailable, under such other heading representing commercial paper issued by non-financial entities whose bond rating is "AA", or the equivalent, from a nationally recognized statistical rating organization. In the event that such rate is not published by 3:00 P.M., New York City time, on the Calculation Date pertaining to such Commercial Paper Rate Interest Determination Date, then the Commercial Paper Rate shall be the Money Market Yield on such Commercial Paper Rate Interest Determination Date of the rate for commercial paper having the Index Maturity specified on the first page hereof as published by the Federal Reserve Bank of New York in its daily statistical release "Composite 3:30 P.M. Quotations for U.S. Governmental Securities" or any successor publication ("Composite Quotations") under the heading "Commercial Paper" (with an Index Maturity of one month or three months being deemed to be equivalent to an Index Maturity of thirty days or ninety days, respectively). If such rate is not published in either H.15 (519) or Composite Quotations by 3:00 P.M., New York City time, on such Calculation Date, then the Commercial Paper Rate will be calculated by the Calculation Agent and will 9 be the Money Market Yield of the arithmetic mean of the offered rates, as of approximately 11:00 A.M., New York City time, on such Commercial Paper Rate Interest Determination Date, of three leading dealers of commercial paper in The City of New York (which may include one or more of the Agents or their affiliates) selected by the Calculation Agent (after consultation with the Company) for commercial paper having the specified Index Maturity placed for a nonfinancial issuer whose bond rating is "AA," or the equivalent, from a nationally recognized statistical rating organization; provided, however, that if the dealers selected as aforesaid by the Calculation Agent are not quoting as mentioned in this sentence, the Commercial Paper Rate determined as of such Commercial Paper Interest Determination Date will be the Commercial Paper Rate in effect on such Commercial Paper Rate Interest Determination Date. "Money Market Yield" shall be a yield (expressed as a percentage) calculated in accordance with the following formula: D x 360 Money Market Yield = [----------------] x 100 360 - (DxM) where "D" refers to the applicable per annum rate for commercial paper quoted on a bank discount basis and expressed as a decimal and "M" refers to the actual number of days in the interest period for which interest is being calculated. Determination of Federal Funds Rate. - ----------------------------------- The "Federal Funds Rate" will be determined by the Calculation Agent in accordance with the following provisions: "Federal Funds Rate" means, with respect to any Interest Determination Date relating to a Federal Funds Rate Note or a Floating Rate Note for which the interest rate is determined with reference to the Federal Funds Rate (a "Federal Funds Rate Interest Determination Date"), the rate on such date for United States dollar federal funds as published in H.15(519) under the heading "Federal Funds (Effective)" or, if not published by 3:00 P.M., New York City time, on the related Calculation Date, the rate on such Federal Funds Rate Interest Determination Date as published in Composite Quotations under the heading "Federal Funds/Effective Rate." If such rate is not published in either H.15(519) or Composite Quotations by 3:00 P.M., New York City time, on the related Calculation Date, then the Federal Funds Rate on such Federal Funds Rate Interest Determination Date will be calculated 10 by the Calculation Agent and will be the arithmetic mean of the rates for the last transaction in overnight Untied States dollar federal funds arranged by three leading brokers of federal funds transactions in The City of New York (which may include the Agents or their affiliates) selected by the Calculation Agent prior to 9:00 A.M., New York City time, on such Federal Funds Rate Interest Determination Date; provided, however, that if the brokers so selected by the Calculation Agent are not quoting as mentioned in this sentence, the Federal Funds Rate determined as of such Federal Funds Rate Interest Determination Date will be the Federal Funds Rate in effect on such Federal Funds Rate Interest Determination Date. Determination of LIBOR. - ---------------------- "LIBOR" will be determined by the Calculation Agent in accordance with the following provisions: (i) With respect to an Interest Determination Date relating to a LIBOR Note or any Floating Rate Note for which LIBOR is an applicable Base Rate (a "LIBOR Interest Determination Date"), either, as specified on the first page hereof: (a) the arithmetic mean of the offered rates for deposits in U.S. dollars for the period of the Index Maturity specified on the first page hereof, commencing on the second London Business Day immediately following such LIBOR Interest Determination Date, which appear on the Reuters Screen LIBO Page as of 11:00 A.M., London time, on the LIBOR Interest Determination Date, if at least two such offered rates appear on the Reuters Screen LIBO Page ("LIBOR Reuters"), or (b) the rate for deposits in U.S. dollars having the Index Maturity designated on the first page hereof, commencing on the second London Business Day immediately following that LIBOR Interest Determination Date, that appears on the Telerate Page 3750 as of 11:00 A.M., London time, on that LIBOR Interest Determination Date ("LIBOR Telerate"). Unless otherwise indicated on the first page hereof, "Reuters Screen LIBO Page" means the display designated as Page "LIBO" on the Reuters Monitor Money Rate Service (or such other page as may replace the LIBO page on that service for the purpose of displaying London interbank offered rates of major banks). "Telerate Page 3750" means the display designated as page "3750" on the Telerate Service (or such other page as may replace the 3750 page on that service or such other service or services as may be nominated by the British Bankers' Association for the purpose of displaying London interbank offered rates for U.S. dollar deposits). If neither LIBOR Reuters nor LIBOR Telerate is specified on the first page hereof, LIBOR will be determined as if LIBOR Telerate had been specified. If fewer than two offered rates appear on the Reuters Screen LIBO Page, or if no rate appears on the Telerate Page 3750, as applicable, LIBOR in respect of that LIBOR Interest 11 Determination Date will be determined as if the parties had specified the rate described in (ii) below. (ii) With respect to a LIBOR Interest Determination Date on which fewer than two offered rates appear on the Reuters Screen LIBO Page, as described in (i)(a) above, or on which no rate appears on the Telerate Page 3750, as specified in (i)(b) above, as applicable, LIBOR will be determined on the basis of the rates at which deposits in U.S. dollars having the Index Maturity designated on the first page hereof are offered at approximately 11:00 A.M., London time, on such LIBOR Interest Determination Date by four major banks ("Reference Banks") in the London interbank market selected by the Calculation Agent (after consultation with the Company) to prime banks in the London interbank market commencing on the second London Business Day immediately following such LIBOR Interest Determination Date and in a principal amount of not less than U.S. $1,000,000 that is representative for a single transaction in such market at such time. The Calculation Agent will request the principal London office of each of the Reference Banks to provide a quotation of its rate. If at least two such quotations are provided, LIBOR for such LIBOR Interest Determination Date will be the arithmetic mean of such quotations. If fewer than two quotations are provided, LIBOR for such LIBOR Interest Determination Date will be the arithmetic mean of the rates quoted at approximately 11:00 a.m., New York City time, on such LIBOR Interest Determination Date by three major banks (which may include the Agents or their affiliates) in The City of New York selected by the Calculation Agent (after consultation with the Company) for loans in U.S. dollars to leading European banks having the specified Index Maturity designated on the first page hereof commencing on the second London Business Day immediately following such LIBOR Interest Determination Date and in a principal amount equal to an amount of not less than U.S. $1,000,000 that is representative for a single transaction in such market at such time; provided, however, that if the banks selected as aforesaid by the Calculation Agent are not quoting as mentioned in this sentence, LIBOR determined as of such LIBOR Determination Date will be LIBOR then in effect on such LIBOR Interest Determination Date. Determination of Prime Rate. - --------------------------- The "Prime Rate" will be determined by the Calculation Agent in accordance with the following provisions: "Prime Rate" means, with respect to any Interest Determination Date relating to a Prime Rate Note or a Floating Rate Note for which the interest rate is determined with reference to the Prime Rate (a "Prime Rate Interest Determination 12 Date"), the rate on such date as such rate is published in H.15(519) under the heading "Bank Prime Loan." If such rate is not published prior to 3:00 P.M., New York City time, on the related Calculation Date, then the Prime Rate shall be the arithmetic mean of the rates of interest publicly announced by each bank that appears on the Reuters Screen USPRIME1 Page (as hereinafter defined) as such bank's prime rate or base lending rate as in effect for such Prime Rate Interest Determination Date. If fewer than four such rates appear on the Reuters Screen USPRIME1 Page for such Prime Rate Interest Determination Date, then the Prime Rate shall be the arithmetic mean of the prime rates or base lending rates quoted on the basis of the actual number of days in the year divided by a 360-day year as of the close of business on such Prime Rate Interest Determination Date by four major money center banks (which may include affiliates of the Agents) in The City of New York selected by the Calculation Agent. If fewer than four such quotations are so provided, then the Prime Rate shall be the arithmetic mean of four prime rates quoted on the basis of the actual number of days in the year divided by a 360-day year as of the close of business on such Prime Rate Interest Determination Date as furnished in The City of New York by the major money center banks, if any, that have provided such quotations and by a reasonable number of substitute banks or trust companies (which may include affiliates of the Agents) to obtain four such prime rate quotations, provided such substitute banks or trust companies are organized and doing business under the laws of the United States, or any State thereof, each having total equity capital of at least $500 million and being subject to supervision or examination by Federal or State authority. "Reuters Screen USPRIME1 Page" means the display on the Reuter Monitor Money Rates Service (or any successor service) on the "USPRIME1" page (or such other page as may replace the USPRIME1 page on such service) for the purpose of displaying prime rates or base lending rates of major United States banks. Determination of Treasury Rate. - ------------------------------ The "Treasury Rate" will be determined by the Calculation Agent in accordance with the following provisions: "Treasury Rate" means, with respect to any Interest Determination Date relating to a Treasury Rate Note or any Note for which the interest rate is determined by reference to the Treasury Rate (a "Treasury Rate Interest Determination Date"), the rate applicable to the most recent auction of direct obligations of the United States ("Treasury Bills") having the Index Maturity specified on the first page 13 hereof, as such rate is published in H.15(519) under the heading "Treasury Bills -- auction average (investment)" or, if not published by 3:00 P.M., New York City time, on the Calculation Date pertaining to such Treasury Rate Interest Determination Date, the auction average rate (expressed as a bond equivalent on the basis of a year of 365 or 366 days, as applicable, and applied on a daily basis) as otherwise announced by the United States Department of the Treasury. In the event that the results of the auction of Treasury Bills having the specified Index Maturity are not reported as provided by 3:00 P.M., New York City time, on such Calculation Date, or if no such auction is held in a particular week, then the Treasury Rate shall be calculated by the Calculation Agent and shall be a yield to maturity (expressed as a bond equivalent on the basis of a year of 365 days or 366 days, as applicable, and applied on a daily basis) of the arithmetic mean of the secondary market bid rates, as of approximately 3:30 P.M., New York City time on such Treasury Rate Interest Determination Date, of three leading primary United States government securities dealers (which may include one or more of the Agents or their affiliates) selected by the Calculation Agent (after consultation with the Company), for the issue of Treasury Bills with a remaining maturity closest to the specified Index Maturity; provided, however, that if the dealers selected as aforesaid by the Calculation Agent are not quoting as mentioned in this sentence, the Treasury Rate determined as of such Treasury Rate Interest Determination Date will be the Treasury Rate in effect on such Treasury Rate Interest Determination Date. If an Event of Default with respect to the Notes shall occur and be continuing, the principal of all of the Notes may be declared due and payable in the manner and with the effect provided in the Indenture. The Notes are subject to satisfaction, discharge and defeasance as provided in Section 403 of the Indenture. The Indenture permits, with certain exceptions as therein provided, the amendment thereof and the modification of the rights and obligations of the Company and the rights of the Holders of the Securities of each series to be affected under the Indenture at any time by the Company and the Trustee with the consent of the Holders of a majority in principal amount of the Securities at the time Outstanding or, in the case less than all of the several series of Securities are affected, the holders of a majority in aggregate principal amount of the Securities at the time Outstanding of each series to be affected. The Indenture also contains provisions permitting the Holders of specified percentages in aggregate principal amount of the Securities of each series at the time Outstanding, on behalf of the Holders of all Securities of such series, to waive compliance by the Company with certain provisions 14 of the Indenture and certain past defaults under the Indenture and their consequences. Any such consent or waiver by the Holder of this Note shall be conclusive and binding upon such Holder and upon such future Holders of this Note and of any Note issued upon the registration of transfer hereof or in exchange herefor or in lieu hereof, whether or not 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, premium, if any, and interest on this Note at the times, place and rate, and in the coin or currency, herein prescribed. As provided in the Indenture and subject to certain limitations therein set forth, the transfer of this Note is registrable in the Security Register, upon surrender of this Note for registration of transfer at the office or agency of the Company in Salt Lake City, Utah, or at such other place as the Company may designate from time to time, duly endorsed by, or accompanied by a written instrument of transfer in form satisfactory to the Company and the Security Register duly executed by, the 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, will be issued to the designated transferee or transferees. The Notes are issuable in registered form without coupons in minimum denominations of $1,000 or any amount in excess thereof that is an integral multiple of $1,000. As provided in the Indenture and subject to certain limitations therein set forth, Notes are exchangeable for a like aggregate principal amount of Notes of different authorized denominations, as requested by the Holder surrendering the same. No service charge shall be made for any such registration of transfer or exchange, but the Company may require payment of a sum sufficient to cover any tax or other governmental charge payable in connection therewith. Prior to due presentment of this Note for registration of transfer, the Company, the Trustee and any agent of the Company or the Trustee may treat the Person in whose name this Note is registered as the owner hereof for all purposes, whether or not this Note be overdue, and neither the Company, the Trustee nor any such agent shall be affected by notice to the contrary. All terms used in this Note which are defined in the Indenture shall have the meaning assigned to them in the Indenture. 15 THE INDENTURE AND THE NOTES, INCLUDING THIS NOTE, SHALL BE GOVERNED BY AND CONSTRUED IN ACCORDANCE WITH THE LAWS OF THE STATE OF NEW YORK APPLICABLE TO AGREEMENTS MADE AND TO BE PERFORMED IN SUCH STATE. Unless the certificate of authentication hereon has been executed by Wells Fargo Bank Northwest, National Association (f/k/a First Security Bank, N.A.), the Trustee under the Indenture, or its successor thereunder, by the manual signature of one of its authorized officers, this Note shall not be entitled to any benefit under the Indenture or be valid or obligatory for any purpose. 16 IN WITNESS WHEREOF, the Company has caused this instrument to be duly executed, manually or in facsimile, and a facsimile of its corporate seal to be imprinted hereon. QUESTAR PIPELINE COMPANY By:___________________________ Name: Title: ATTEST: By:______________________ Name: Title: [SEAL] Date: TRUSTEE'S CERTIFICATE OF AUTHENTICATION: This is one of the Securities of the series designated herein, referred to in the within-mentioned Indenture. Wells Fargo Bank Northwest, National Association (f/k/a First Security Bank, N.A.), as Trustee By:__________________________________ Authorized Signatory 17 ------------------------ The following abbreviations when used in the inscription on this Note, shall be construed as though they were written out in full according to applicable laws or regulations: TEN COM - as tenants in common UNIF GIFT MIN ACT - ______ Custodian_________ TEN ENT - as tenants by the (Cust) (Minor) entireties Under Uniform Gifts to Minor JT TEN - as joint tenants with Act_________________________ right of survivorship (State) and not as tenants in common Additional abbreviations may also be used though not in the above list. ------------------------ FOR VALUE RECEIVED, the undersigned hereby sells, assigns and transfers unto PLEASE INSERT SOCIAL SECURITY OR OTHER IDENTIFYING NUMBER OF ASSIGNEE - ------------------------------------ - ------------------------------------ - ------------------------------------------------------------------------------- (Please print or typewrite name and address including postal zip code of assignee) - ------------------------------------------------------------------------------- the within Note of Questar Pipeline Company and does hereby irrevocably constitute and appoint ___________________________________________________________________Attorney to transfer said Note on the books of said Company, with full power of substitution in the premises. Dated: -------------------------------------- -------------------------- NOTICE: The signature of the Holder to this assignment must correspond with the name as it appears upon the face of the within Note in every particular, without alteration or enlargement or any change whatsoever, and be guaranteed by an acceptable bank or broker. OPTION TO ELECT REPAYMENT The undersigned hereby irrevocably requests and instructs the Company to repay the within Note (or portion hereof specified below) pursuant to its terms at a price equal to 100% of the principal amount hereof, together with interest thereon payable to the Optional Repayment Date, to the undersigned at _________________ - ------------------------------------------------------------------------------- (Please Print or Typewrite Name and Address of the Undersigned) For this Note to be repaid, the trustee must receive this "Option to Elect Repayment" form, duly completed, together with this Note not more than 60 nor less than 30 days prior to an Optional Repayment Date shown on the face of this Note at its Corporate Trust Office, or at such other place or places designated by the Company and notified by it to the Holder of this Note. If less than the entire principal amount of the within Note is to be repaid, specify the portion thereof which the Holder elects to have repaid ________________ ______________________________; and specify the denomination or denominations (which shall be authorized denominations) of the Notes to be issued to the Holder for the portion of the within Note not being repaid (in the absence of any specification, one such Note will be issued for the portion not being repaid) _______________. Date:___________________ ------------------------------ Note: The signature on this Option to Elect Repayment must correspond with the name as written in this Note in every particular without alteration or enlargement or any change whatsoever. EX-5 5 s54388.txt EX-5.01 Exhibit 5.01 Questar Corporation 180 East 100 South P.O. Box 45433 Salt Lake City, UT 84145 Connie C. Holbrook Senior Vice President, General Counsel, and Corporate Secretary 801 324 5202 Fax: 801 324 5483 E-mail: ConnieH@questar.com May 11, 2001 Questar Pipeline Company 180 East 100 South Street P.O. Box 45360 Salt Lake City, Utah 84145-0360 Ladies and Gentlemen: Re: Questar Pipeline Company, Registration Statement on Form S-3 Relating to $250,000,000 Aggregate Principal Amount of Medium-Term Notes, Series B I am acting as counsel for Questar Pipeline Company, a Utah corporation (the "Company"), in connection with the preparation of a Registration Statement on Form S-3 to be filed by the Company with the Securities and Exchange Commission (the "Commission") on the date of this letter (the "Registration Statement"). The Registration Statement relates to the issuance and sale from time to time, pursuant to Rule 415 of the General Rules and Regulations promulgated under the Securities Act of 1933 (the "1933 Act"), of up to $250,000,000 aggregate principal amount of the Company's Medium-Term Notes, Series B (the "Series B Notes") to be issued pursuant to an indenture (the "Indenture") by and between the Company and Wells Fargo Bank Northwest, National Association (formerly known as First Security Bank, N.A.), as trustee (the "Trustee"). This opinion is delivered in accordance with the requirements of Item 601(b)(5) of Regulation S-K under the 1933 Act, as amended. -2- In connection with this opinion, I have examined and am familiar with originals or copies, certified or otherwise identified to my satisfaction, of such documents, agreements, certificates and corporate or other records as I have deemed necessary or appropriate as a basis for this opinion. This includes: (i) the Registration Statement (together with the form of preliminary prospectus that is a part of it) in the form to be filed by the Company with the Commission on the date of this letter; (ii) the Indenture; (iii) the form of the Series B Notes issuable under the Indenture; (iv) the Form T-1 of the Trustee being filed with the Commission as Exhibit 25.01 to the Registration Statement pursuant to the Trust Indenture Act of 1939, as amended; (v) the Restated Articles of Incorporation and Bylaws of the Company, each as amended through the date of this letter; (vi) resolutions of the Board of Directors of the Company relating to the filing of the Registration Statement and the proposed issuance of the Series B Notes; and (vii) the form of Distribution Agreement to be entered into among the Company, Merrill Lynch & Co., Merrill Lynch, Pierce, Fenner & Smith Incorporated, Banc of America Securities LLC, Banc One Capital Markets, Inc., and U.S. Bancorp Piper Jaffray, and being filed as Exhibit 1.01 to the Registration Statement. In my examination, I have assumed the genuineness of all signatures, the legal capacity of all natural persons, the authenticity of all documents submitted to me as originals, the conformity to the original documents submitted to me as certified or photostatic copies and the authenticity of the originals of such latter documents. As to any facts material to this opinion that were not independently established or verified, I have relied upon statements and representations of officers and other representatives of the Company and others. I am admitted to the Bar of the State of Utah, and I express no opinion as to the laws of any other jurisdiction. To the extent that the opinion set forth below relates to matters under the laws of the State of New York, I have relied on the opinion of Skadden, Arps, Slate, Meagher & Flom LLP, special counsel for the company, which is being filed as Exhibit 5.02 to the Registration Statement. Based on and subject to the foregoing, I have formed the following opinion: When (1) the Registration Statement has become effective under the 1933 Act, (2) the definitive terms of the Series B Notes and of their issue and sale have been duly established in conformity with the Indenture so as not to violate any applicable law or agreement or instrument then binding on the Company, and (3) the Series B Notes have been duly executed and authenticated in accordance with such Indenture and have been issued and sold as contemplated in the Registration Statement, the prospectus contained in it and any supplement (the "Prospectus"), the Series B Notes will constitute valid and legally binding obligations of the Company, entitled to the benefits provided by the Indenture and enforceable against the Company in accordance with their terms, except to the extent that enforcement may be limited by (a) bankruptcy, insolvency, fraudulent transfer, -3- reorganization, moratorium or other similar laws now or hereafter in effect relating to creditors' rights generally and (b) general principles of equity (regardless of whether enforceability is considered in a proceeding at law or in equity). I further consent to the reference made to me under the heading "Legal Matters" in the Prospectus and the filing of this opinion as Exhibit 5.01 to the Registration Statement. In giving such consent, I do not admit that I am in the category of persons whose consent is required under Section 7 of the 1933 Act. Sincerely, /s/ Connie C. Holbrook --------------------------------------- Connie C. Holbrook Questar Corporation Senior Vice President, General Counsel, and Corporate Secretary EX-5 6 s501755.txt EX-5.02 Exhibit 5.02 Skadden, Arps, Slate, Meagher & Flom LLP Four Times Square New York, New York 10036-6522 May 11, 2001 Questar Pipeline Company 180 East 100 South Street P.O. Box 45360 Salt Lake City, Utah 84145-0360 Re: Questar Pipeline Company Registration Statement on Form S-3 Ladies and Gentlemen: We have acted as special counsel to Questar Pipeline Company, a Utah corporation (the "Company"), in connection with the preparation of a Registration Statement on Form S-3 to be filed by the Company with the Securities and Exchange Commission (the "Commission") on the date hereof (the "Registration Statement"). The Registration Statement relates to the issuance and sale from time to time, pursuant to Rule 415 of the General Rules and Regulations promulgated under the Securities Act of 1933, as amended (the "1933 Act"), of up to $250,000,000 aggregate principal amount of the Company's Medium-Term Notes, Series B (the "Notes") to be issued pursuant to the indenture, dated as of August 17, 1998 (the "Indenture"), between the Company and Wells Fargo Bank Northwest, National Association (f/k/a First Security Bank, N.A.), as trustee (the "Trustee"). This opinion is being furnished in accordance with the requirements of Item 601(b)(5) of Regulation S-K under the 1933 Act. In connection with this opinion, we have examined originals or copies, certified or otherwise identified to our satisfaction, of (i) the Registration Statement, (ii) an executed copy of the Indenture, (iii) the forms of the Notes issuable under the Indenture, (iv) the Form T-1 of the Trustee filed as an exhibit to the Registration Statement and (v) the form of the Distribution Agreement (the "Distri- bution Agreement") proposed to be entered into between the Company, as issuer, and Merrill Lynch & Co., Merrill Lynch, Pierce, Fenner & Smith Incorporated, Banc of America Securities LLC, Banc One Capital Markets, Inc. and U.S. Bancorp Piper Jaffray, as agents (the "Agents"), filed as an exhibit to the Registration Statement. We have also examined originals or copies, certified or otherwise identified to our satisfaction, of such records of the Company and such agreements, certificates of public officials, certificates of officers or other representatives of the Company and others, and such other documents, certificates and records as we have deemed necessary or appropriate as a basis for the opinions set forth herein. In our examination, we have assumed the legal capacity of all natural persons, the genuineness of all signatures, the authenticity of all documents submitted to us as originals, the conformity to original documents of all documents submitted to us as certified, conformed or photostatic copies and the authenticity of the originals of such latter documents. In making our examination of executed documents or documents to be executed, we have assumed that the parties thereto (including the Company) had or will have the power, corporate or other, to enter into and to perform all obligations thereunder and have also assumed the due authorization by all requisite action, corporate or other, and due execution and delivery by such parties of such documents and, except to the extent set forth below with respect to the Company, the validity and binding effect thereof on such parties. We have also assumed that the Company has been duly incorporated and is validly existing and in good standing under the laws of the State of Utah and that the Company has complied and will comply with all aspects of Utah law in connection with the Indenture and the transactions contemplated by the Registration Statement. In addition, we have assumed that the Notes will be executed in substantially the form reviewed by us. We have also assumed that the terms of the Notes will have been established so as not to, and the execution and delivery by the Company of the Indenture and the Notes and the performance of its obligations thereunder do not and will not, violate, conflict with or constitute a default under (i) any agreement or instrument to which the Company or its properties is subject, (ii) any law, rule, or regulation to which the Company is subject, (iii) any judicial or regulatory order or decree of any governmental authority or (iv) any consent, approval, license, authorization or validation of, or filing, recording or registration with any governmental authority. As to any facts material to the opinions expressed herein which we have not independently established or verified, we have relied upon statements and representations of officers and other representatives of the Company and others. Our opinions set forth herein are limited to the laws of the State of New York which are normally applicable to transactions of the type contemplated by 2 the Indenture and the Notes and, to the extent that judicial or regulatory orders or decrees or consents, approvals, licenses, authorizations, validations, filings, recordings or registrations with governmental authorities are relevant, to those required under such laws (all of the foregoing being referred to as "Opined on Law"). We do not express any opinion with respect to the law of any jurisdiction other than the Opined on Law or as to the effect of any such non opined law on the opinions herein stated. Based upon and subject to the foregoing and the limitations, qualifications, exceptions and assumptions set forth herein, we are of the opinion that, when the Notes have been duly executed and authenticated in accordance with the terms of the Indenture and have been delivered to and paid for by the Agents as contemplated by the Distribution Agreement, the Notes will constitute valid and binding obligations of the Company enforceable against the Company in accordance with their terms, except to the extent that enforcement thereof may be limited by (i) bankruptcy, insolvency, reorganization, moratorium, fraudulent conveyance or other similar laws now or hereafter in effect relating to creditors' rights generally and (ii) general principles of equity (regardless of whether enforceability is considered in a proceeding at law or in equity). We hereby consent the filing of this opinion with the Commission as an exhibit to the Registration Statement. We also consent to the reference to our firm under the caption "Legal Matters" in the Registration Statement. In giving this consent, we do not thereby admit that we are in the category of persons whose consent is required under Section 7 of the 1933 Act or the rules and regulations of the Commission. Very truly yours, /s/ Skadden, Arps, Slate, Meagher & Flom LLP 3 EX-12 7 ques12.txt EX-12 .01 Exhibit No. 12.01
Questar Pipeline Company and Subsidiaries Ratio of Earnings to Fixed Charges 12 Months Year Ended December 31, Ended March 31, 1996 1997 1998 1999 2000 2001 -------------------------------------------------------------------------------- (Dollars in Thousands) EARNINGS Income (loss) before income taxes $36,058 $42,906 $42,831 ($13,651) $43,514 $44,180 Income from Overthrust Pipeline Company ($182) Plus debt expense 13,416 13,536 14,456 17,466 17,584 17,154 Plus allowance for borrowed funds used during construction 229 210 625 2,677 3,315 3,299 Plus interest portion of rental expense 280 261 342 173 367 363 ----------------------------------------------------------------------------- $49,801 $56,913 $58,254 $6,665 $64,780 $64,996 ============================================================================= FIXED CHARGES Debt expense $13,416 $13,536 $14,456 $17,466 $17,584 $17,154 Plus allowance for borrowed funds used during construction 229 210 625 2,677 3,315 3,299 Plus interest portion of rental expense 280 261 342 173 367 363 ----------------------------------------------------------------------------- $13,925 $14,007 $15,423 $20,316 $21,266 $20,816 ============================================================================= Ratio of Earnings to Fixed Charges (1) 3.58 4.06 3.78 0.33 3.05 3.12 (1) For purposes of this presentation, earnings represent income from continuing operations before income taxes and fixed charges. Fixed charges consist of total interest charges, amortization of debt issuance costs and debt discounts and the interest portion of rental costs.
EX-23 8 s502975.txt EX-23.01 Exhibit 23.01 Consent of Independent Auditors We consent to the reference to our firm under the caption "Experts" in the Registration Statement (Form S-3) and related Prospectus of Questar Pipeline Company for the registration of $250,000,000 medium-term notes and to the incorporation by reference therein of our report dated March 6, 2001, with respect to the consolidated financial statements of Questar Pipeline Company included in its Annual Report (Form 10-K) for the year ended December 31, 2000, filed with the Securities and Exchange Commission. /s/ Ernst & Young LLP Salt Lake City, UT May 7, 2001 EX-25 9 t1.txt EX-25.01 Exhibit 25.01 FORM T-1 SECURITIES AND EXCHANGE COMMISSION Washington D.C. 20549 ------------------------- STATEMENT OF ELIGIBILITY UNDER THE TRUST INDENTURE ACT OF 1939 OF A CORPORATION DESIGNATED TO ACT AS TRUSTEE CHECK IF AN APPLICATION TO DETERMINE ELIGIBILITY OF A TRUSTEE PURSUANT TO SECTION 305(b)(2) WELLS FARGO BANK NORTHWEST, NATIONAL ASSOCIATION (Exact name of trustee as specified in its charter) NOT APPLICABLE 87-0131890 (Jurisdiction of Incorporation (I.R.S. Employer if not a U.S. national bank) identification No.) 79 SOUTH MAIN STREET SALT LAKE CITY, UTAH 84111 (Address of principal executive offices) (Zip Code) NOT APPLICABLE (Name, address and telephone number of agent for service) QUESTAR PIPELINE COMPANY (Exact name of obligor as specified in its charter) UTAH 87-0307414 (State or other jurisdiction (I.R.S. Employer of incorporation or organization) Identification No.) 180 East 100 South P.O. Box 45360 Salt Lake City, Utah 84145-0360 (Address or principal executive offices) (Zip Code) Medium-Term Notes, Series B (Title of Securities) Item 1. General Information. Furnish the following information as to the trustee: (a) Name and address of each examining of supervising authority to which it is subject. Comptroller of the Currency, Washington, D.C. 20230; Federal Reserve Bank of San Francisco, San Francisco, CA 94120; Federal Deposit Insurance Corporation, Washington, D.C. 20429. (b) Whether it is authorized to exercise corporate trust powers. The Trustee is authorized to exercise corporate trust powers. Item 2. Affiliations With The Obligor. If the obligor is an affiliate of the trustee, describe each such affiliation. Neither the obligor nor any underwriter for the obligor is an affiliate of the Trustee. Item 16. List of Exhibits. List below all exhibits filed as part of this statement of eligibility and qualification. Exhibit 1: copy of the articles of association as now in effect Exhibit 2: certificate of authority to commence business including a certificate of the Comptroller of the Currency evidencing the change of the Trustee's name Exhibit 3: copy of the authorization of the trustee to exercise corporate trust powers Exhibit 4: copy of the bylaws of the trustee Exhibit 5: Not applicable Exhibit 6: Not applicable Exhibit 7: A copy of the latest report published pursuant to law or its supervising or examining authority Exhibit 8: Not applicable Exhibit 9: Not applicable Signature Pursuant to the requirements of the Trust Indenture Act of 1939, as amended, the trustee, Wells Fargo Bank Northwest, National Association, a national banking association organized and existing under the laws of the United States, has duly caused this statement of eligibility and qualification to be signed on its behalf by the undersigned thereunder duly authorized, all in the City of Salt Lake City, and State of Utah, on the 9th day of May, 2001. WELLS FARGO BANK NORTHWEST, NATIONAL ASSOCIATION, Trustee By: /s/ David L. Blackner -------------------------- David L. Blackner Vice President EXHIBIT 1 ARTICLES OF ASSOCIATION OF WELLS FARGO BANK NORTHWEST, NATIONAL ASSOCIATION (As Amended) FIRST. The name and title of this Association shall be Wells Fargo Bank Northwest, National Association; the Association in conjunction with its said legal name may also use Wells Fargo Bank Northwest, N.A. SECOND. The place where the main banking house or office of this Association shall be located shall be Ogden, County of Weber, State of Utah. Its general business and its operations of discount and deposit shall also be carried on in said city, and the branch or branches established or maintained by it in accordance with the provisions of Section 36 of Title 12, United States Code. The Board of Directors shall the power to change the location of the main office of this Association (i) to any other authorized branch location within the limits of Ogden, Utah, without the approval of the shareholders of this Association and upon notice to the Comptroller of the Currency or, (ii) to any other place within Ogden, Utah, or within thirty (30) miles of Ogden, Utah, with the approval of the shareholders and the Comptroller of the Currency. The Board of Directors shall have the power to change the location of any branch or branches of this Association to any other location, without the approval of the shareholders of this Association but subject to the approval of the Comptroller of the Currency. THIRD. The Board of Directors of the consolidated association shall consist of not less than five (5) nor more than twenty-five (25) of its shareholders. FOURTH. There shall be an annual meeting of the shareholders the purpose of which shall be the election of Directors and the transaction of whatever other business may be brought before said meeting. It shall be held at the main office of the Bank or other convenient place as the Board of Directors may designate, on the third Monday of March of each year, but if no election is held on that day, it may be held on any subsequent day according to such lawful rules as may be prescribed by the Board of Directors. Nominations for election to the Board of Directors may be made by the Board of Directors or by any stockholder of any outstanding class of capital stock of the Bank entitled to vote for election of directors. Nominations, other than those made by or on behalf of the existing management of the Bank, shall be made in writing and shall be delivered or mailed to the President of the Bank and to the Comptroller of the Currency, Washington, D.C., not less than 14 days nor more than 50 days prior to any meeting of stockholders called for the election of directors, provided, however, that if less than 21 days notice of the meeting is given to shareholders, such nomination shall be mailed or delivered to the President of the Bank and to the Comptroller of the Currency not later than the close of business on the seventh day following the day on which the notice of meeting was mailed. Such notification shall contain the following information to the extent known to the notifying shareholder: (a) the name and address of each proposed nominee; (b) the principal occupation of each proposed nominee; (c) the total number of shares of capital stock of the Bank that will be voted for each proposed nominee; (d) the name and residence address of the notifying shareholder; and (e) the number of shares of capital stock of the Bank owned by the notifying shareholder. Nominations not made in accordance herewith may, in his discretion, be disregarded by the Chairman of the meeting, and upon his instructions, the voting inspectors may disregard all votes cast for each such nominee. FIFTH. The authorized amount of capital stock of this Association shall be One Hundred Million Dollars ($100,000,000.00), divided into 4,000,000 shares of common stock of the par value of Twenty-five Dollars ($25.00) each; provided, however, that said capital stock may be increased or decreased from time to time, in accordance with the provision of the laws of the United States. The shareholders of this Association shall not have any pre-emptive rights to acquire unissued shares of this Association. SIXTH. (1) The Board of Directors shall appoint one of its members President of this Association. It may also appoint a Chairman of the Board, and one or more Vice Chairman. The Board of Directors shall have the power to appoint one or more Vice Presidents, at least one of whom shall also be a member of the Board of Directors, and who shall be authorized, in the absence of the President, to perform all acts and duties pertaining to the office of the President; to appoint a Cashier and such other officers and employees as may be required to transact the business of this Association; to fix the salaries to be paid to such officers or employees and appoint others to take their place. (2) The Board of Directors shall have the power to define the duties of officers and employees of this Association and to require adequate bonds from them for the faithful performance of their duties; to make all By-Laws that may be lawful for the general regulation of the business of this Association and the management of its affairs, and generally to do and perform all acts that may be lawful for a Board of Directors to do and perform. (3) Each person who was or is a party or is threatened to be made a party to any threatened, pending or completed action, suit or proceeding, whether civil, administrative or investigative (other than an action by or in the right of the Association) by reason of the fact that he is or was a director, officer, employee or agent of the Association or is or was serving at the request of the Association as a director, officer, employee, fiduciary or agent of another corporation, partnership, joint venture, trust, estate or other enterprise or was acting in furtherance of the Association's business shall be indemnified against expenses (including attorney's fees), judgments, fines and amounts paid in settlement actually and reasonably incurred by him in connection with such action, suit or proceeding if he acted in good faith and in a manner he reasonably believed to be in or not opposed to the best interests of the Association; provided, however, no indemnification shall be given to a person adjudged guilty of, or liable for, willful misconduct, gross neglect of duty, or criminal acts or where there is a final order assessing civil money penalties or requiring affirmative action by such person in the form of payments to the Association. The termination of any action, suit or proceeding by judgment, order, settlement, or its equivalent, shall not of itself, create a presumption that the person did not act in good faith and in a manner which he reasonably believed to be in or not opposed to the best interests of the Association. (4) Each person who was or is a party or is threatened to be made a party to any threatened, pending or completed action or suit by or in the right of the Association (such action or suit being known as a "derivative proceeding") to procure a judgment in its favor by reason of the fact that he is or was a director, officer, employee or agent of the Association or is or was serving at the request of the Association as a director, officer, employee, fiduciary or agent of another corporation, partnership, joint venture, trust, estate or other enterprise shall be indemnified against expenses (including attorney's fees) actually and reasonably incurred by him in connection with the defense or settlement of such action or suit if he acted in good faith and in a manner he reasonably believed to be in or not opposed to the best interests of the Association; provided, however, that no indemnification shall be given where there is a final order assessing civil money penalties or requiring affirmative action by such person in the form of payments to the Association; and provided further that no indemnification shall be made in respect of any claim, issue or matter as to which such person shall have been adjudged to be liable for negligence or misconduct in the performance of his duty to the Association, unless and only to the extent that the court in which such action or suit was brought shall determine upon application that, despite the adjudication of liability but in view of all circumstances of the case, such person is fairly and reasonably entitled to indemnity for such expenses which such court shall deem proper. (5) To the extent that a director, officer, employee or agent of a corporation has been successful on the merits or otherwise in defense of any action, suit or proceeding referred to in (3) or (4) of this Article or in defense of any claim, issue or matter therein, he shall be indemnified against expenses (including attorney's fees) actually and reasonably incurred by him in connection therewith. (6) Any indemnification under (3) or (4) of this Article (unless ordered by a court) shall be made by the Association only as authorized in the specific case upon a reasonable determination that indemnification of the director, officer, employee or agent is proper in the circumstances because he has met the applicable standard of conduct set forth in (3) or (4) of this Article. Such determination shall be made (a) by the Board of Directors by a majority vote of a quorum consisting of directors who were not parties to such action, suit or proceeding, or (b) if such a quorum is not obtainable, or, even if obtainable a quorum of disinterested directors so directs, by independent legal counsel in written opinion, or (c) by the stockholders. (7) Expenses incurred in defending a civil or criminal action, suit or proceeding may be paid by the Association in advance of the final disposition of such action, suit or proceeding as authorized in the manner provided in (6) of this Article (i) if the Board of Directors determines, in writing, that (1) the director, officer, employee or agent has a substantial likelihood or prevailing on the merits; (2) in the event the director, officer, employee or agent does not prevail, he or she will have the financial capability or reimburse the Association; and (3) payment of expenses by the Association will not adversely affect its safety and soundness; and (ii) upon receipt of an undertaking by or on behalf of the director, officer, employee or agent to repay such amount unless it shall ultimately be determined that he is entitled to be indemnified by the Association as authorized in this Article. (8) The indemnification provided by this Article shall not be deemed exclusive of any other rights to which those indemnified may be entitled under any By-Law, agreement, vote of shareholders or disinterested directors or otherwise, both as to action in his official capacity and as to action in another capacity while holding such office and shall continue as to a person who has ceased to be a director, officer, employee or agent and shall inure to the benefit of the heirs, executors, successors in interest, and administrators of such a person. SEVENTH. This Association shall have succession from the date of its organization certificate until such time as it be dissolved by the act of its shareholders in accordance with the provisions of the banking laws of the United States, or until its franchise becomes forfeited by reason of violation of law, or until terminated by either a general or a special act of Congress, or until its affairs be placed in the hands of a receiver and finally wound up by him. EIGHTH. The Board of Directors of this Association, or any three or more shareholders owning, in the aggregate, not less than ten per centum of the stock of this Association, may call a special meeting of shareholders at any time: Provided, however, that unless otherwise provided by law, not less than ten days prior to the date fixed for any such meeting, a notice of the time, place and purpose of the meeting shall be given by first-class mail, postage prepaid, to all shareholders of record of this Association. These Articles of Association may be amended at any regular or special meeting of the Shareholders by the affirmative vote of the shareholders owning at least a majority of the stock of this Association, subject to the provisions of the banking laws of the United States. The notice of any shareholders' meeting, at which an amendment to the Articles of Association of this Association is to be considered shall be given as hereinabove set forth. EXHIBIT 2 CERTIFICATE TREASURY DEPARTMENT ) Office of ) ss: Comptroller of the Currency ) I, Thomas G. DeShazo, Deputy Comptroller of the Currency, do hereby certify that: Pursuant to Revised Statutes 324, et seq., as amended, 12 U.S.C. 1, et seq., the Comptroller of the Currency charters and exercises regulatory and supervisory authority over all national banking associations; On December 9, 1881, The First National Bank of Ogden, Ogden, Utah was chartered as a National Banking Association under the laws of the United States and under Charter No. 2597; The document hereto attached is a true and complete copy of the Comptroller Certificate issued to The First National Bank of Ogden, Ogden, Utah, the original of which certificate was issued by this Office on December 9, 1881; On October 2, 1922, in connection with a consolidation of The First Bank of Ogden, Ogden, Utah, and The Utah National Bank of Ogden, Ogden, Utah, the title was charged to "The First & Utah National Bank of Ogden"; on January 18, 1923, The First & Utah National Bank of Ogden changed its title to "First Utah National Bank of Ogden"; on January 19, 1926, the title was changed to "First National Bank of Ogden"; and on February 24, 1934, the title was changed to "First Security Bank of Utah, National Association"; and First Security Bank of Utah, National Association, Ogden, Utah, continues to hold a valid certificate to do business as a National Banking Association. IN TESTIMONY WHEREOF, I have hereunto subscribed my name and caused the seal of Office of the Comptroller of the Currency to be affixed to these presents at the Treasury Department, in the City of Washington and District of Columbia, this fourth day of April, A.D. 1972. Thomas G. DeShazo ----------------------------------- Deputy Comptroller of the Currency TREASURY DEPARTMENT Comptroller of the Currency, Washington, December 9th, 1881 WHEREAS, by satisfactory evidence presented to the undersigned it has been made to appear that "The First National Bank of Ogden" in Ogden City in the County of Weber, and Territory of Utah has complied with all the provisions of the Revised Statutes of the United States, required to be complied with before an association shall be authorized to commence the business of Banking. Now, therefore, I, John Jay Knox, Comptroller of the Currency, do hereby certify that "The First National Bank of Ogden" in Ogden City in the County of Weber, and Territory of Utah is authorized to commence the business of Banking, as provided in Section Fifty-one hundred and sixty-nine of the Revised Statutes of the United States. In testimony whereof, witness my hand and seal of office this 9th day of December, 1881. John Jay Knox --------------------------- Comptroller of the Currency EXHIBIT 3 FEDERAL RESERVE BOARD WASHINGTON, D.C. I, S.R. Carpenter, Assistant Secretary of the Federal Reserve Board, do hereby certify that it appears from the records of the Federal Reserve Board that: (1) Pursuant to authority vested in the Federal Reserve Board by an Act of Congress approved December 23, 1913, known as the Federal Reserve Act, as amended, the Federal Reserve Board has heretofore granted to the First National Bank of Ogden, Ogden, Utah, the right to act when not in contravention of State or local law, as trustee, executor, administrator, registrar of stocks and bonds, guardian of estates, assignee, receiver, committee of estates of lunatics, or in any other fiduciary capacity in which State banks, trust companies or other corporations which come into competition with national banks are permitted to act under the laws of the State of Utah; (2) On February 24, 1934, the First National Bank of Ogden, Ogden, Utah, changed its title to First Security Bank of Utah, National Association, under the provisions of an Act of Congress approved May 1, 1886, whereby all of the rights, liabilities and powers of such national bank under its old name devolved upon and inured to the bank under its new name; and (3) Pursuant to the permission heretofore granted by the Federal Reserve Board to the First National Bank of Ogden, Ogden, Utah, as aforesaid, and by virtue of the change in the title of such bank, the First Security Bank of Utah, National Association has authority to act, when not in contravention of State or local law, as trustee, executor, administrator, registrar of stocks and bonds, guardian of estates of lunatics, or in any other fiduciary capacity in which State banks, trust companies or other corporations which come into competition with national banks are permitted to act under the laws of the State of Utah, subject to regulations prescribed by the Federal Reserve Board. IN WITNESS WHEREOF, I have hereunto subscribed my name and caused the seal of the Federal Reserve Board to be affixed at the City of Washington, in the District of Columbia, on the 1st day of March, 1934. S.R. Carpenter ------------------------------------------------ Assistant Secretary, Federal Reserve Board. FEDERAL RESERVE BOARD WASHINGTON ADDRESS OFFICIAL CORRESPONDENCE TO THE FEDERAL RESERVE BOARD March 1, 1934. First Security Bank of Utah, National Association, Ogden, Utah. Dear Sirs: Reference is made to the change in the name of the First National Bank of Ogden, Ogden, Utah, pursuant to the provisions of the Act of May 1, 1886, to First Security Bank of Utah, National Association, and there is inclosed a certificate issued by the Federal Reserve Board showing the trust powers heretofore granted to the bank under its former name and that it is authorized to exercise such powers under its new name. Very truly yours, S.R. Carpenter S.R. Carpenter, Assistant Secretary. Enclosure - ------------------------------------------------------------------------------- Comptroller of the Currency Administrator of National Banks - ------------------------------------------------------------------------------- Licensing Unit (Applications) 50 Fremont Street, Suite 3900 San Francisco, CA 94105 (415) 545-5900, FAX (415) 545-5925 June 20, 1996 Board of Directors First Security Bank of Utah, N.A. c/o First Security Corporation Attn: Brad D. Hardy, EVP Post Office Box 30006 Salt Lake City, Utah 84130 Re: Merger - First Security Bank of Idaho, N.A., Boise, Idaho into First Security Bank of Utah, N.A., Ogden, Utah, under the title of First Security Bank, N.A., Odgen, Utah. Control No: 96-WE-02-010 Dear Members of the Board: This letter is the official certification of the Comptroller of the Currency to merge First Security Bank of Idaho, National Association, Boise, Idaho into First Security Bank of Utah, National Association, Ogden, Utah, effective as of June 21, 1996. The resulting bank title is First Security Bank, National Association and charter number is 2597. This is also the official authorization given to First Security Bank, National Association to operate the branches of the target institution and to operate the main office of the target institution as a branch. Branches of a national bank target are not listed since they are automatically carried over to the resulting bank and retain their current OCC branch numbers. Please be advised that the Charter Certificate for the merged bank, First Security Bank of Idaho, National Association, must be returned to the Western District Office for cancellation. Very truly yours, Robert G. Tornborg Robert G. Tornborg Acting Director of Bank Supervision - Compliance and Analysis - ------------------------------------------------------------------------------- Comptroller of the Currency Administrator of National Banks - ------------------------------------------------------------------------------- Large Bank Licensing, LIC #3-8 Washington, DC 20219 May 1, 2001 Mr. Brad D. Hardy Executive Vice President First Security Corporation Post Office Box 30006 Salt Lake City, Utah 84130 Dear Mr. Hardy: This is to confirm that the Officer of the Comptroller of the Currency (OCC) received your April 20, 2001 letter concerning the title change by First Security Bank, National Association, accompanied by the appropriate amendment to the Bank's articles of association. The OCC has recorded that as of April 21, 2001, the title of First Security Bank, National Association, Ogden, Utah, Charter NR 2597, changed to Wells Fargo Bank Northwest, National Association. As a result of the Garn-St. Germain Depository Institutions Act of 1982, the OCC is no longer responsible for the approval of nations bank name changes nor does it maintain official records on the use of alternate titles. The retention of the rights to any previously used title is the responsibility of the Bank's board of directors. Legal counsel should be consulted to determine whether or not the new title, or previously used title, could be challenged by competing institutions under the provisions of federal or state law. Sincerely, Richard T. Erb Richard T. Erb Licensing Manager 2001-ML-04-0001 EXHIBIT 4 BY-LAWS OF WELLS FARGO BANK NORTHWEST, NATIONAL ASSOCIATION Organized under the National Banking laws of the United States. MEETINGS SECTION 1. Unless otherwise provided by the articles of association a notice of each shareholder's meeting, setting forth clearly the time, place and purpose of the meeting, shall be given, by mail, to each shareholder of record of this bank at lease 10 days prior to the date of such meeting. Any failure to mail such notice or any irregularity therein, shall not affect the validity of such meeting or of any of the proceedings thereat. SECTION 2. A record shall be made of the shareholders represented in person and by proxy, after which the shareholders shall proceed to the transaction of any business that may properly come before the meeting. A record of the shareholder's meeting, giving the names of the shareholders present and the number of shares of stock held by each, the names of the shareholders represented by proxy and the number of shares held by each, and the names of the proxies, shall be entered in the records of the meeting in the minute book of the bank. This record shall show the names of the shareholders and the number of shares voted for each resolution or voted for each candidate for director. Proxies shall be secured for the annual meeting alone, shall be dated, and shall be filed with the records of the meeting. No officer, director, employee, or attorney for the bank may act as proxy. The chairman or Secretary of the meeting shall notify the directors-elect of their election and of the time at which they are required to meet at the banking house for the purpose of organizing the new board. At the appointed time, which as closely as possible shall follow their election, the directors-elect shall convene and organize. The president or cashier shall then forward to the office of the Comptroller of the Currency a letter stating that a meeting of the shareholders was held in accordance with these by-laws, stating the number of shares represented in person and the number of shares represented by proxy, together with a list of the directors elected and the report of the appointment and signatures of officers. OFFICERS SECTION 3. Each officer and employee of this bank shall be responsible for all such moneys, funds, valuables, and property of every kind as may be entrusted to his care or otherwise come into his possession, and shall faithfully and honestly discharge his duties and apply and account for all such moneys, funds, valuables and other property that may come into his hands as such officer or employee and pay over and deliver the same to the order of the Board of Directors or to such person or persons as may be authorized to demand and receive same. SECTION 4. If the Board of Directors shall not require separate bonds, it shall require a blanket bond in an amount deemed by it to be sufficient. SECTION 5. The following is an impression of the seal adopted by the Board of Directors of this bank: (Here in the original resolution was imprinted the Association's seal). SECTION 6. The various branches of this bank shall be open for business during such hours as shall be customary in the vicinity, or as shall be fixed, as to any branch, by the clearing house association of which such branch shall be a member. SECTION 7. The regular meeting of the board of directors shall be held on the first Wednesday after the first Tuesday of each month. When any regular meeting of the board of directors falls upon a holiday, the meeting shall be held on such other day as the board may previously designate. Special meetings may be called by the president, any vice-president, the secretary or the cashier, or at the request of three or more directors. MINUTE BOOK SECTION 8. The organization papers of this bank, the returns of the elections, the proceedings of all regular and special meetings of the directors and of the shareholders, the by-laws and any amendments thereto, and reports of the committees of directors shall be recorded in the minute book; and the minutes of each meeting shall be signed by the chairman and attest by the secretary of the meeting. TRANSFERS OF STOCK SECTION 9. The stock of this bank shall be assignable and transferable only on the books of this bank, subject to the restrictions and provisions of the national banking laws; and a transfer book shall be provided in which all assignments and transfers of stock shall be made. SECTION 10. Certificates of stock, signed by the president or vice-president, and the secretary or the cashier or any assistant cashier, may be issued to shareholders, and when stock is transferred the certificates thereof shall be returned to the association, cancelled, preserved, and new certificates issued. Certificates of stock shall state upon the face thereof that the stock is transferable only upon the books of the association, and shall meet the requirements of section 5139, United States Revised Statutes, as amended. EXPENSES SECTION 11. All the current expenses of the bank shall be paid by the cashier, except that the current expenses of each branch shall be paid by the manager thereof; and such officer shall, every six months, or more often if required, make to the board a report thereof. EXAMINATIONS SECTION 12. There shall be appointed by the board of directors a committee of three members, exclusive of the active officers of the bank, whose duty it shall be to examine, at least once in each period of eighteen months, the affairs of each branch as well as the head office of the association, count its cash, and compare its assets and liabilities with the accounts of the general ledgers, ascertain whether the accounts are correctly kept and that the condition of the bank corresponds therewith, and whether the bank is in a sound and solvent condition, and to recommend to the board such changes in the manner of doing business, etc., as shall seem to be desirable, the result of which examination shall be reported in writing to the board at the next regular meeting thereafter, provided that the appointment of such committee and the examinations by it may be dispensed with if the board shall cause such examination to be made and reported to the board by accountants approved by it. CHANGES IN BY-LAWS SECTION 13. These by-laws may be changed or amended by the vote of a majority of the directors at any regular or special meeting of the board, provided, however, that the directors shall have been given 10 days notice of the intention to change or offer an amended thereto. REPEAL SECTION 14. All by-laws heretofore adopted are repealed. First Security Bank, N.A. Call Date: 12/31/2000 State #: 49-0290 FFIEC 031 P.O. Box 30011 Vendor ID: D Cart #: 13718 RC-1 Salt Lake City, UT 84130 Transmitted to EDS as 0113958 on 01/30/01 at 18:30:02 EST CONSOLIDATED REPORT OF CONDITION FOR INSURED COMMERCIAL AND STATE-CHARTERED SAVINGS BANKS FOR DECEMBER 31, 2000 All schedules are to be reported in thousands of dollars. Unless otherwise indicated, report the amount outstanding as of the last business day of the quarter. SCHEDULE RC - BALANCE SHEET
C400 Dollar Amounts in Thousands - --------------------------------------------------------------------------------------------------------------------------- ASSETS 1. Cash and balances due from depository institutions (from Schedule RC-A): RCFD a. Noninterest-bearing balances and currency and coin (1)________________________________ 0081 783,068 1.a b. Interest-bearing balances and currency and coin (2)___________________________________ 0071 5,198 1.b 2. Securities a. Held-to-maturity securities (from Schedule RC-B, column A)____________________________ 1754 0 2.a b. Available-for-sale securities (from Schedule RC-B, column D)__________________________ 1773 1,655,688 2.b 3. Federal funds sold and securities purchased under agreements to resell___________________ 1350 380,431 3 4. Loans and lease financing receivables: RCFD a. Loans and leases, net of unearned income (from Schedule RC-C)______ 2122 11,297,120 4.a b. LESS: Allowance for loan and lease losses__________________________ 3123 191,347 4.b c. LESS: Allocated transfer risk reserve______________________________ 3128 0 4.c RCFD d. Loans and leases, net of unearned income, ---- allowance, and reserve (item 4.a minus 4.b and 4.c)___________________________________ 2125 11,105,773 4.d 5. Trading assests (from Schedule RC-D)_____________________________________________________ 3545 0 5. 6. Premises and fixed assets (including capitalized leases)_________________________________ 2145 181,823 6. 7. Other real estate owned (from Schedule RC-M)_____________________________________________ 2150 5,459 7. 8. Investments in unconsolidated subsidiaries and associated companies (from Schedule RC-M)_ 2130 0 8. 9. Customers' liability to this bank on acceptances outstanding_____________________________ 2155 1,670 9. 10. Intangible assets (from Schedule RC-M)___________________________________________________ 2143 76,770 10. 11. Other assets (from Schedule RC-F)________________________________________________________ 2160 891,664 11. 12. Total assets (sum of items 1 through 11)_________________________________________________ 2170 15,087,544 12. - --------- (1) Includes cash items in process of collection and unposted debits. (2) Includes time certificates of deposit not held for trading.
First Security Bank, N.A. Call Date: 12/31/2000 State #: 49-0290 FFIEC 031 P.O. Box 30011 Vendor ID: D Cart #: 13718 RC-1 Salt Lake City, UT 84130 Transit #: 12400001 Transmitted to EDS as 0113958 on 01/30/01 at 18:30:02 EST
Schedule RC - Continued - -------------------------------------------------------------------------------------------------------------------------------- LIABILITIES 13. Deposits: a. In domestic offices (sum of totals of columns A and C from Schedule RC-E. RCON part I)____________________________________________________________ RCON 2200 8,961,661 13.a (1) Noninterest-bearing (1)________________________________________ 6631 1,664,311 13.a.1 (2) Interest-bearing_______________________________________________ 6636 7,297,350 13.a.2 b. In foreign offices. Edge and Agreement subsidiaries, and IBFs (from Schedule RCFN RC-E, part II)_____________________________________________________ RCFN 2200 415,006 13.b (1) Noninterest-bearing____________________________________________ 6631 0 13.b.1 (2) Interest-bearing_______________________________________________ 6636 415,006 13.b.2 RCFD 14. Federal funds purchased and securities sold under agreements to repurchase_______________ 2800 2,011,360 14 RCON 15.a. Demand notes issued to the U.S. Treasury_______________________________________________ 2840 31,984 15.a RCFD b. Trading liabilities (from Schedule RC-D)_______________________________________________ 3548 0 15.b 16. Other borrowed money (includes mortgage indebtedness and obligations under capitalized leases): a. With a remaining maturity of one year or less_________________________________________ 2332 29,879 16.a b. With a remaining maturity of more than one year through three years___________________ A547 587,896 16.b c. With a remaining maturity of more than three years____________________________________ A548 732,565 16.c 17. Not applicable 18. Bank's liability on acceptances executed and outstanding_________________________________ 2920 1,670 18 19. Subordinated notes and debentures(2)_____________________________________________________ 3200 269,198 19 20. Other liabilities (from Schedule RC-G)___________________________________________________ 2930 641,373 20 21. Total liabilities (sum of items 13 through 20)___________________________________________ 2948 13,682,592 21 22. Not applicable EQUITY CAPITAL 23. Perpetual preferred stock and related surplus____________________________________________ 3838 0 23 24. Common Stock_____________________________________________________________________________ 3230 64,307 24 25. Surplus (exclude all surplus related to preferred stock)_________________________________ 3839 392,199 25 26. a. Undivided profits and capital reserves________________________________________________ 3632 934,938 26.a b. Net unrealized holding gains (losses) on available-forsale securities________________ 8434 13,508 26.b c. Accumulated net gains (losses) on cash flow hedges____________________________________ 4336 0 26.c 27. Cumulative foreign currency translation adjustments______________________________________ 3284 0 27 28. Total equity capital (sum of items 23 through 27)________________________________________ 3210 1,404,952 28 29. Total liabilities and equity capital (sum or items 21 and 28)____________________________ 3300 15,087,544 29 MEMORANDUM To be reported only with the March Report of Condition. 1. Indicate in the box at the right the number of the statement below that best describes the most comprehensive level of auditing work performed for the bank by independent external RCFD Number auditors as of any date during 1999______________________________________________________ 6724 N/A M.1 1= Independent audit of the bank conducted in accordance 4= Directors' examination of the bank performed by other with generally accepted auditing standards by a certified external auditors (may be required by state chartering public accounting firm which submits a report on the bank authority) 2= Independent audit of the bank's parent holding company 5= Review of the bank's financial statements by external conducted in accordance with generally accepted auditing auditors standards by a certified public accounting firm which 6= Compilation of the bank's financial statements by submits a report on the consolidated holding company (but external auditors. not on the bank separately) 7= Other audit procedures (excluding tax preparation work) 3= Directors' examination of the bank conducted in accordance 8= No external audit work with generally accepted auditing standards by a certified public accounting firm (may be required by state chartering authority) ______ (1) includes total demand deposits and noninterest-bearing time and savings deposits. (2) includes limited-life preferred stock and related surplus.
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