Exhibit 1.3
U.S. $1,500,000,000
CONSOLIDATED NATURAL GAS COMPANY
Medium-Term Notes
Series __
FORM OF DISTRIBUTION AGREEMENT
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The undersigned, Consolidated Natural Gas Company (the Company), hereby
confirms its agreement with each of you with respect to the issuance and sale by
the Company of the below-described Notes.
Subject to the terms and conditions stated herein, the Company (i) hereby
appoints each of ____________________, _________________, ________________, as
an agent of the Company, for the purpose of soliciting and receiving offers to
purchase such Notes from the Company by others, and (ii) hereby agrees that
whenever the Company determines to sell such Notes directly to one or more of
you as principal for resale to others it will, if requested by any of you to
whom such Notes are to be sold, enter into a Terms Agreement relating to such
sale in accordance with the provisions of Section 3(b) hereof. The Company
reserves the right to sell such Notes directly on its own behalf to investors,
and to or through any of you or any other person whom the Company may appoint as
agent in the future. As used herein, the terms "you", "your" and the like shall
refer to each of ____________________, _________________, ________________, and
any other agent named by the Company who becomes a party to this Agreement,
individually, and, as the context requires, to all of such firms collectively.
1. Description of Notes. The Company proposes to issue and sell up to
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U.S. $_____________* aggregate principal amount of its Medium-Term Notes,
Series __ due 9 months or more from the date of issue (the Notes). The Notes
will have the maturity ranges, interest rates per annum, redemption and
repayment provisions and other terms specified from time to time in the
Prospectus referred to below. The Notes are to be issued pursuant to the
Company's Indenture, dated as of April 1, 2001, between the Company and the Bank
One Trust Company, National Association, as Trustee (the Trustee), as previously
supplemented, and as further supplemented by a _____ Supplemental Indenture,
dated as of ___________ (such Indenture, as supplemented, is referred to herein
as the Indenture). All capitalized terms not defined herein have the meanings
ascribed to them in the Indenture.
2. Representations and Warranties of the Company. The Company represents
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and warrants to you that:
(a) The registration statement on Form S-3 (Reg. No. 333-_____) for
the registration of debt securities, including the Notes, junior
subordinated debentures, trust preferred securities and related guarantee,
common stock, preferred stock, stock purchase contracts and stock purchase
units under the Securities Act of 1933, as amended (the Securities Act),
heretofore filed with the Securities and Exchange Commission (the
Commission), has been declared effective. The registration statement,
including all exhibits thereto, (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 as an
exhibit) and the prospectus constituting a part of such registration
statement, and any prospectus supplement relating to the Notes, as from
time to time amended or supplemented by the filing of documents pursuant to
the Securities Act, the Securities Exchange Act of 1934, as amended (the
Exchange Act) or otherwise, are referred to herein as the "Registration
Statement" and the "Prospectus", respectively. As used herein, the terms
"Registration Statement" and "Prospectus" include all documents or portions
thereof (including any Current Report on Form 8-K) incorporated therein by
reference, and shall include any documents or portions thereof (including
any Current Report on Form 8-K) filed after the date of such Registration
Statement or Prospectus and incorporated therein by reference from the date
of filing of such incorporated documents (collectively, the Incorporated
Documents).
(b) No order suspending the effectiveness of the Registration
Statement or otherwise preventing or suspending the use of the Prospectus
has been issued by the Commission and is in effect and no proceedings for
that purpose are pending before or, to the knowledge of the Company,
threatened by the Commission. The Registration Statement and the
Prospectus comply in all material respects with the provisions of the
Securities Act, the Exchange Act, the
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*Or the equivalent in foreign currencies or composite currencies as specified
in a pricing supplement (with U.S. dollars or such specified foreign currencies
or composite currencies being referred to herein as the "Specified Currency").
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Trust Indenture Act of 1939, as amended (the Trust Indenture Act), and the
related rules, regulations and releases of the Commission (the Rules and
Regulations), and neither the Registration Statement on the date it was
declared effective (the Effective Date) nor the Prospectus on the date
hereof contained or contains an untrue statement of a material fact or
omitted or omits to state a material fact required to be stated therein or
necessary to make the statements therein not misleading; provided, however,
that the foregoing representations and warranties in this Section 3(b)
shall not apply to statements in or omissions from the Registration
Statement or the Prospectus made in reliance upon and in conformity with
information furnished in writing to the Company by you or on behalf of any
of you for use in the Registration Statement or Prospectus or to that part
of the Registration Statement constituting the Trustee's Statement of
Eligibility and Qualification under the Trust Indenture Act; and provided,
further, that the foregoing representations and warranties are given on the
basis that any statement contained in an Incorporated Document shall be
deemed not to be contained in the Registration Statement or Prospectus if
such statement has been modified or superseded by any statement in a
subsequently filed Incorporated Document or in the Registration Statement
or Prospectus.
(c) The Indenture qualifies under, and conforms in all material
respects to the requirements of, the Trust Indenture Act.
(d) Deloitte & Touche LLP, who have audited certain of the
Company's financial statements filed with the Commission and incorporated
by reference in the Registration Statement, are independent public
accountants as required by the Securities Act and the Rules and Regulations
relating to the Securities Act.
(e) Except as reflected in, or contemplated by, the Registration
Statement and Prospectus (exclusive of any amendments or supplements after
the date hereof), since the respective most recent dates as of which
information is given in the Registration Statement and Prospectus
(exclusive of any amendments or supplements after the date hereof), there
has not been any material adverse change or event which would result in a
material adverse effect on the condition of the Company and its
subsidiaries taken as a whole, financial or otherwise (a Material Adverse
Effect). The Company and its subsidiaries taken as a whole has no material
contingent liability which is not disclosed in the Registration Statement
and the Prospectus.
(f) The Company has taken all corporate action necessary to be
taken by it to authorize the execution by it of this Agreement and the
performance by it of all obligations on its part to be performed hereunder;
and the consummation of the transactions contemplated in this Agreement and
in the Registration Statement (including the issuance and sale of the Notes
and the use of the proceeds from the sale of the Notes as described in the
Prospectus under the caption "Use of Proceeds") and compliance by the
Company with its obligations under this
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Agreement, the Indenture and the Notes do not and will not, whether with or
without the giving of notice or lapse of time or both, conflict with or
constitute a breach of, or 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 subsidiary pursuant to any contract, indenture,
mortgage, deed of trust, loan or credit agreement, note, lease or any other
agreement or instrument, 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
conflicts, breaches or defaults or liens, charges or encumbrances that
would not have a Material Adverse Effect), nor will such action result in
any violation of the provisions of the charter or bylaws of the Company or
any subsidiary, or any applicable law, statute, rule, regulation, judgment,
order, writ or decree of any government, government instrumentality or
court, domestic or foreign, having jurisdiction over the Company or any
subsidiary or any of their respective properties, assets or operations, and
the Company has full power and authority to authorize, issue and sell the
Notes as contemplated by this Agreement, except to the extent that the
issuance of some or all of the Notes is not authorized by an order or
orders of the Commission pursuant to the Public Utility Holding Company Act
of 1935, as amended (the 0000 Xxx) in effect at the time of such issuance,
in which case the Company will issue only an amount of Notes that is
authorized by the order or orders of the Commission under the 1935 Act then
in effect.
(g) The Notes, upon issuance thereof, will conform in all
respects to the terms of the relevant order or orders of the Commission
pursuant to the 1935 Act then in effect with respect to the Notes.
(h) This Agreement has been duly authorized, executed and
delivered by the Company.
(i) The Indenture has been duly authorized, executed and
delivered by the Company and is a valid and legally binding agreement of
the Company, enforceable against the Company in accordance with its terms,
except as enforcement thereof may be limited by bankruptcy, insolvency,
reorganization, moratorium or other similar laws affecting the enforcement
of creditors' rights generally or by general equitable principles
(regardless of whether enforcement is considered in a proceeding in equity
or at law), and except further as enforcement thereof may be limited by
requirements that a claim with respect to any debt securities issued under
the Indenture that are payable in a foreign or composite currency (or a
foreign or composite currency judgment in respect of such claim) be
converted into U.S. dollars at a rate of exchange prevailing on a date
determined pursuant to applicable law or by governmental authority to
limit, delay or prohibit the making of payments outside the United States.
(j) The Notes have been duly authorized by the Company for offer,
sale, issuance and delivery pursuant to this Agreement and, when issued,
authenticated
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and delivered in the manner provided for in the Indenture and delivered
against payment of the consideration therefor, will constitute valid and
legally binding obligations of the Company, enforceable against the Company
in accordance with their terms, except as enforcement thereof may be
limited by bankruptcy, insolvency, reorganization, moratorium or other
similar laws affecting the enforcement of creditors' rights generally or by
general equitable principles (regardless of whether enforcement is
considered in a proceeding in equity or at law), and except further as
enforcement thereof may be limited by requirements that a claim with
respect to any Notes payable in a foreign or composite currency (or a
foreign or composite currency judgment in respect of such claim) be
converted into U.S. dollars at a rate of exchange prevailing on a date
determined pursuant to applicable law or by governmental authority to
limit, delay or prohibit the making of payments outside the United States;
the Notes will be substantially in the form attached as Exhibits 4.2 and
4.3 to the Company's Current Report on Form 8-K, filed with the Commission
on or about ____________; and each holder of Notes will be entitled to the
benefits of the Indenture.
(k) The Peoples Natural Gas Company, The East Ohio Gas Company,
Dominion Exploration & Production, Inc., Dominion Oklahoma, Texas
Exploration & Production, Inc. and Dominion Transmission, Inc. are the only
Significant Subsidiaries of the Company as such term is defined in Rule 1-
02 of Regulation S-X. All of the issued and outstanding capital stock of
each Significant Subsidiary has been duly authorized and validly issued, is
fully paid and nonassessable, and, the capital stock of each Significant
Subsidiary is owned by the Company, directly or through subsidiaries, free
and clear of any security interest, mortgage, pledge, lien, claim,
encumbrance or equitable right.
(l) The Company is not, and, after giving effect to the offering
and sale of the Notes and the application of the proceeds thereof as
described in the Prospectus, will not be, an "investment company" or a
company "controlled" by an "investment company" which is required to be
registered under the Investment Company Act of 1940, as amended.
3. Solicitations as Agent; Purchases as Principal.
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(a) Solicitations as Agent. On the basis of the representations
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and warranties herein contained, but subject to the terms and conditions
herein set forth, each of you agree, as agent of the Company, to use your
best efforts to solicit offers to purchase the Notes upon the terms and
conditions set forth in the Prospectus.
The Company reserves the right, in its sole discretion, to
suspend solicitation of offers to purchase the Notes in any Specified
Currency, for any period of time or permanently. Upon receipt of
instructions from the Company, you will, as soon as practicable, but in no
event later than one business day after receipt of instruction from the
Company, suspend solicitation of offers to
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purchase the Notes from the Company until such time as the Company has
advised you that such solicitation may be resumed.
The Company agrees to pay you a commission, at the time of settlement
of each sale of Notes by the Company as a result of a solicitation made by
you, in an amount in U.S. dollars (which, in the case of Notes denominated
in currency units or in currencies other than U.S. dollars, shall be based
on the Exchange Rate (as defined below)) equal to the applicable percentage
of the aggregate principal amount of each Note sold as set forth in
Schedule A attached hereto.
Unless otherwise agreed to, as agent, you are authorized to solicit
orders for the Notes at the principal amount thereof only in the
denominations specified in the applicable pricing supplement (which will be
either U.S. $25* or U.S. $1,000* and integral multiples of such
denominations in excess thereof) at a purchase price equal to 100% of the
principal amount thereof, unless otherwise specified in a supplement to the
Prospectus. You shall communicate to the Company, orally or in writing,
each offer to purchase Notes received by you as agent, other than those
rejected by you. The Company shall have the sole right to accept offers to
purchase Notes and may reject any such offer in whole or in part. You
shall have the right, in your discretion reasonably exercised, to reject
any offer received by you to purchase the Notes, in whole or in part, and
any such rejection shall not be deemed a breach of your agreement contained
herein.
No Note which the Company has agreed to sell pursuant to this
Agreement shall be deemed to have been purchased and paid for, or sold, by
the Company until such Note shall have been delivered to the purchaser
thereof against payment by such purchaser.
The "Exchange Rate" on a given date for a Specified Currency other
than U.S. dollars means the noon dollar buying rate in New York City on
such date for cable transfers for the Specified Currency as certified for
customs purposes (or if not so certified, as otherwise determined) by the
Federal Reserve Bank of New York.
(b) Purchases as Principal. Each sale of Notes to you as principal
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shall be made in accordance with the terms of this Agreement and a separate
agreement which will provide for the sale of such Notes to, and the
purchase and reoffering thereof by, you. Each such separate agreement
(which may be oral or written, and which may be substantially in the form
of Exhibit A hereto or which may take the form of an exchange of any
standard form of written telecommunication between you and the Company) is
herein referred to as a "Terms Agreement". Your commitment to purchase
Notes as principal, whether pursuant to a 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 agreement by you to
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* Or the equivalent of U.S. $25 or U.S. $1,000, as the case may be, in the
Specified Currency.
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purchase Notes as principal shall specify the principal amount of Notes to
be purchased by you pursuant thereto, the price to be paid to the Company
for such Notes, and such other terms, conditions and requirements as may be
agreed upon between us. Each such agreement shall also specify any
requirements for officers' certificates, opinions of counsel and letters
from the independent public accountants of the Company pursuant to Section
7 hereof. A Terms Agreement may also specify certain provisions relating to
the reoffering of such Notes by you. You may utilize a selling or dealer
group in connection with the resale of the Notes purchased by you as
principal.
4. Administrative Procedures. Procedural details relating to the
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issuance and delivery of Notes, the solicitation of offers to purchase by
others, and purchase by you as principal, of Notes, and the payment in each case
therefor, shall be agreed upon between the Company and each of you, as
applicable (the Administrative Procedures), and shall be furnished to the
Trustee. Each of you and the Company agree to perform, and the Company agrees
to cause the Trustee to perform, the respective duties and obligations
substantially as provided to be performed by each in the Administrative
Procedures, attached hereto as Exhibit D, as amended from time to time.
5. Time and Place of Closing. The documents required to be delivered on
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the "Closing Date" pursuant to Section 7 hereof shall be delivered at the
offices of McGuireWoods LLP, 000 X. Xxxx Xxxxxx, Xxxxxxxx, Xxxxxxxx, at 10:00
a.m., Richmond, Virginia time, on ____________, or at such other time and/or
place as you and the Company may agree upon in writing, the time and date of
such delivery being herein called the "Closing Date".
6. Covenants of the Company. The Company agrees that:
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(a) On or prior to the Closing Date, the Company will deliver to you
conformed copies of the Registration Statement as originally filed and of
all amendments or supplements thereto, including any post-effective
amendment (in each case including all exhibits filed therewith and
including copies of each consent and certificate included therein or filed
as an exhibit thereto, except exhibits incorporated by reference unless
specifically requested). After the Closing Date, the Company will deliver
to you as many copies of the Registration Statement and Prospectus and of
all amendments thereto (in each case without exhibits) as you may
reasonably request for the purposes contemplated by the Securities Act or
the Exchange Act.
(b) As soon as the Company is advised thereof, it will advise you
orally of: (i) the issuance of any stop order under the Securities Act with
respect to the Registration Statement, or the institution of any
proceedings therefor of which the Company shall have received notice, and
(ii) any change in the rating assigned by any "nationally recognized
statistical rating organization" (as that term is defined by the Commission
for purposes of Rule 436(g)(2) under the Securities Act) to any debt
securities (including the Notes) of the Company, or
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any notification from such an organization of any intended or potential
downgrading or of any review for a possible change with possible negative
implications in its ratings of such securities. The Company will use its
best efforts to prevent the issuance of any stop order and to secure the
prompt removal thereof, if issued.
(c) The Company will pay all expenses in connection with (i) the
preparation and filing by it of the Registration Statement and Prospectus,
(ii) the preparation, issuance and delivery of the Notes, (iii) any fees
and expenses of the Trustee and (iv) the printing and delivery to you in
accordance with this Agreement of copies of the Registration Statement and
Prospectus (each as originally filed and as subsequently amended or
supplemented). The Company also will pay all taxes, if any, on the
issuance of the Notes. In addition, the Company will pay the reasonable
fees and disbursements of your counsel, Xxxxxxxx Xxxxxxx LLP, including
fees and disbursements incurred in connection with qualifying the Notes
under state securities or blue-sky laws or investment laws (if and to the
extent such qualification is required by you or the Company), your
reasonable out-of-pocket expenses in connection with the transactions
contemplated hereby and your advertising expenses, which have been
approved, in writing in advance, by the Company.
(d) The Company will furnish you with copies of each further
amendment and supplement to the Prospectus in such quantities as you may
from time to time reasonably request. If at any time when the delivery of
the Prospectus shall be required by law in connection with the sale of any
Note, any event relating to or affecting the Company, or of which the
Company shall be advised in writing by you, shall occur, which in the
opinion of the Company or of your counsel should be set forth in a
supplement to or an amendment of the Prospectus in order to make the
Prospectus not misleading in the light of the circumstances when it is
delivered, or if for any other reason it shall be necessary during such
period to amend or supplement the Prospectus or any document incorporated
by reference in the Prospectus in order to comply with the Securities Act,
the Exchange Act or the Trust Indenture Act, the Company forthwith will (i)
notify you to suspend solicitation of purchases of Notes and (ii) at its
expense, prepare and furnish to you a reasonable number of copies of the
supplement or supplements or the amendment or amendments to the Prospectus
so that the Prospectus, as supplemented or amended, will not contain any
untrue statement of a material fact or omit to state any material fact
necessary in order to make the statements therein, in the light of the
circumstances when the Prospectus is delivered, not misleading or which
will effect any other necessary compliance. During the period specified in
the preceding sentence, the Company will continue to prepare and file with
the Commission on a timely basis all documents or amendments required to be
filed by the Company pursuant to Sections 13(a), 13(c), 14 or 15(d) of the
Exchange Act; provided, however, that the Company shall not file its
reports on Forms 10-Q or 10-K, including any amendments thereto (other than
amendments to Form 10-K filed solely pursuant to General
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Instruction A to Form 11-K), without also furnishing copies thereof to you
and Xxxxxxxx Xxxxxxx LLP. Notwithstanding any other provision of this
Section 6(d), if before the earlier of: (i) the expiration of thirty (30)
days after the Prospectus has been amended or (ii) the distribution of any
Notes you may own as principal has been completed, an event described above
in this Section 6(d) occurs, the Company will, at its own expense,
forthwith prepare and cause to be filed promptly with the Commission an
amendment or supplement to the Registration Statement or Prospectus, as
then amended or supplemented, satisfactory in all respects to you; will
supply such amended or supplemented Prospectus to you in such quantities as
you may reasonably request; and will furnish to you pursuant to Sections
7(c), 7(d) and 7(h) such documents, certificates, opinions and letters as
you may request in connection with the preparation and filing of such
amendment or supplement.
(e) The Company will advise you promptly of any proposal to amend or
supplement the Registration Statement or the Prospectus relating to the
Notes (other than by filing a document under the Exchange Act which will be
incorporated by reference into the Registration Statement or Prospectus, or
an amendment or supplement providing solely for a specification of the
interest rates or other terms of the Notes commonly included in a pricing
supplement, or an amendment or supplement relating solely to an offering of
securities other than the Notes) and will afford you a reasonable
opportunity to comment on any such proposed amendment or supplement.
(f) The Company will make generally available to its security
holders, as soon as it is practicable to do so, but not later than 90 days
after the close of the period covered thereby, an earnings statement of the
Company (which need not be audited, but which will comply with the
provisions of Rule 158 under the Securities Act), covering each 12-month
period beginning, in each case, not later than the first day of the
Company's fiscal quarter next following the "effective date" of the
Registration Statement (as defined in such Rule 158) with respect to each
sale of Notes.
(g) The Company will use its best efforts promptly to do and perform
all things to be done and performed by it hereunder prior to the Closing
Date and to satisfy all conditions precedent to the delivery by it of the
Notes.
(h) The Company will furnish such proper information as may be
lawfully required and otherwise cooperate in qualifying the Notes for offer
and sale under the securities or blue-sky laws of such states as you may
designate; provided, however, that the Company shall not be required in any
state to qualify as a foreign corporation, or to file a general consent to
service of process, or to submit to any requirements that it deems unduly
burdensome.
(i) If required pursuant to the terms of a Terms Agreement, between
the dates of any Terms Agreement and the settlement date with respect to
such
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Terms Agreement, the Company will not, without your prior written consent,
offer, sell, contract to sell or otherwise dispose of any debt securities
of the Company in a public offering which are substantially similar to the
Notes.
(j) If the Company enters into any amendment to this Agreement, then
such amendment shall be entered into by each of you; provided, however,
that this Agreement may be terminated in accordance with Sections 7 or 12
herein as to any one of you without being terminated as to the others of
you.
(k) If the Company adds a new agent with respect to the Notes, then
such agent shall enter into an agreement substantially similar to this
Agreement, as such may be amended from time to time.
7. Conditions of Your Obligations. Your obligations as agent of the
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Company to initiate solicitations of offers to purchase Notes and to continue
such solicitations, as the case may be, and your obligations to purchase Notes
as principal pursuant to any Terms Agreement or otherwise, shall be subject to
the continuing accuracy of the representations and warranties on the part of the
Company contained herein, 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 covenants and agreements
contained herein on its part to be performed and observed and to the following
additional conditions:
(a) An order or orders of the Commission pursuant to the 1935 Act
permitting the issuance and sale of the relevant amount of Notes shall be
in full force and effect and shall contain no provision unacceptable to you
or the Company (but all provisions of such order or orders heretofore
entered, copies of which have heretofore been delivered to you, are deemed
acceptable to you and the Company, and all provisions of such order or
orders hereafter entered shall be deemed acceptable to you and the Company
unless within 24 hours after receiving a copy of any such order any party
to this Agreement shall give notice to the other parties to the effect that
such order contains an unacceptable provision).
(b) You shall receive on the Closing Date the opinion of Xxxxxxxx
Xxxxxxx LLP, dated the Closing Date, substantially in the form attached
hereto as Exhibit B.
(c) You shall receive (i) on the Closing Date, (ii) on any date that
the Registration Statement or the Prospectus shall be amended or
supplemented (other than by an amendment or supplement providing solely for
the specification of the variable terms of the Notes commonly included in a
pricing supplement or an amendment or supplement relating solely to an
offering of securities other than the Notes), including an amendment
effected by the filing of a document that is incorporated by reference into
the Registration Statement or Prospectus (other than (A) a Current Report
on Form 8-K containing only information responsive to Item 5 or Item 9
thereof and any exhibits relating to such information, (B) the
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proxy materials of the Company that are distributed in connection with the
annual meeting of shareholders and do not contain disclosures pursuant to
Items 11, 12, 13, 14, 15 or 16 of Schedule 14A or (C) an amendment to the
Company's annual report on Form 10-K filed solely pursuant to General
Instruction A to Form 11-K) and (iii) each time, if so indicated in the
applicable Terms Agreement or otherwise, the Company sells Notes to you as
principal, the legal opinion of McGuireWoods LLP or other counsel
satisfactory to you in your reasonable judgment, dated the Closing Date,
the date of such amendment, supplement, incorporation by reference or
settlement date, relating to a sale of Notes pursuant to a Terms Agreement
or otherwise, as the case may be, substantially in the form attached hereto
as Exhibit C. In lieu of such opinion to be delivered upon such amendment,
supplement, incorporation by reference or settlement date relating to a
sale of Notes under a Terms Agreement or otherwise, each counsel last
furnishing such an opinion to you shall furnish you with a letter to the
effect that you may rely upon such last opinion to the same extent as
though it were 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) You shall receive (i) on the Closing Date, (ii) on any date that
the Registration Statement or the Prospectus shall be amended or
supplemented to include additional financial information (other than by an
amendment or supplement relating solely to the issuance and/or offering of
securities other than the Notes), including an amendment effected by the
filing of a document that is incorporated by reference into the
Registration Statement or Prospectus (other than (A) a Current Report on
Form 8-K containing only information responsive to Item 5 or Item 9 thereof
and any exhibits relating to such information or (B) the proxy materials of
the Company that do not contain disclosures pursuant to Items 11, 12, 13,
14, 15 or 16 of Schedule 14A) and (iii) each time, if so indicated in the
applicable Terms Agreement or otherwise, the Company sells Notes to you as
principal, from Deloitte & Touche LLP, or another independent public
accounting firm satisfactory to you, a letter addressed to you, dated the
Closing Date, the date of such amendment, supplement, incorporation or
settlement date relating to a sale pursuant to a Terms Agreement or
otherwise, as the case may be, containing statements and information of the
type ordinarily included in accountants' SAS 72 "comfort letters" to
underwriters with respect to financial statements and certain financial
information contained or incorporated by reference into the Prospectus,
including any pro forma financial information.
(e) Since the date of the most recent audited or unaudited financial
statements included in or incorporated by reference in the Registration
Statement and Prospectus, and, in the case of your obligation to solicit
offers to purchase Notes, up to the time of such solicitations or since the
date of any agreement by you to purchase Notes as principal and, in the
case of your obligation to purchase Notes as principal, up to the
settlement date relating to such purchase pursuant to
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a Terms Agreement or otherwise, there shall not have been any material
adverse change or event which would result in a Material Adverse Effect.
(f) Since the respective most recent dates as of which information is
given (i) in the Registration Statement and Prospectus, as amended or
supplemented through the date of this Agreement, including by incorporation
by reference therein, and up to the Closing Date, the Company shall not
have any material contingent liability, except as reflected in or
contemplated by the Registration Statement or Prospectus as so amended or
supplemented, (ii) in the Registration Statement and Prospectus as amended
or supplemented through the date of any agreement by you to purchase Notes
as principal, including by incorporation by reference, and prior to each
corresponding settlement date, the Company shall not have any material
contingent liability, except as reflected in or contemplated by the
Registration Statement or Prospectus as so amended or supplemented.
(g) The representations and warranties of the Company in this
Agreement shall be true and correct and the Company shall have performed
all obligations and satisfied all conditions required of it under this
Agreement (i) on the Closing Date and (ii) on any date that the
Registration Statement or the Prospectus shall be amended or supplemented
(other than by an amendment or supplement providing solely for the
specification of the variable terms of the Notes commonly included in a
pricing supplement or an amendment or supplement relating solely to an
offering of securities other than the Notes), including an amendment
effected by the filing of a document that is incorporated by reference into
the Registration Statement or Prospectus (other than (A) a Current Report
on Form 8-K containing only information responsive to Item 5 or Item 9
thereof and any exhibits relating to such information, (B) the proxy
materials of the Company that are distributed in connection with the annual
meeting of shareholders and do not contain disclosures pursuant to Items
11, 12, 13, 14, 15 or 16 of Schedule 14A or (C) an amendment to the
Company's annual report on Form 10-K filed solely pursuant to General
Instruction A to Form 11-K) and (iii) each time, if so indicated in the
applicable Terms Agreement or otherwise, the Company sells Notes to you as
principal.
(h) On the Closing Date and on any applicable date referred to in
Section 7(g)(ii) or (iii) hereof, as the case may be, you shall have
received a certificate to such effect, signed by the Chairman of the Board,
the President or any Vice President of the Company, it being understood
that such certificate shall relate to the Registration Statement and
Prospectus as amended or supplemented to the date of such certificate.
(i) All legal proceedings to be taken in connection with the
transactions contemplated by this Agreement shall have been satisfactory to
Xxxxxxxx Xxxxxxx LLP.
12
In case any of the conditions specified above in this Section 7 shall
not have been fulfilled, this Agreement may be terminated by any of you, as to
yourself only, upon mailing or delivering written notice thereof to the Company;
provided, however, that it shall not be considered a failure to fulfill the
conditions specified in Sections 7(c), 7(d) or 7(h) above if the Company
temporarily suspends its obligations under such sections in accordance with
Section 7A below. Any termination pursuant to the preceding sentence shall be
without liability of the terminating party and the Company to each other, except
as otherwise provided in Sections 6(c), 9(e) and 10 hereof.
7A. Temporary Suspension of Certain Obligations. After the Closing Date,
-------------------------------------------
if the Company shall determine that it does not intend to be in the market with
respect to the Notes during the three months after the date of filing of a
quarterly report on Form 10-Q, an annual report on Form 10-K, or an amendment
thereto, the Company may deliver to each of you a notice, which shall be dated
the date of delivery thereof to each of you, to such effect (a Notice of
Temporary Suspension), in which event the obligations of the Company pursuant to
Sections 7(c), 7(d) and 7(h) with respect to such filings shall be deemed
suspended until such time as the Company notifies each of you that it wishes to
re-enter the market with respect to the Notes (which could be earlier than three
months after the date of the Notice of Temporary Suspension) and delivers to
each of you the documents required by Sections 7(c), 7(d) and 7(h), but dated as
of the date the Company re-enters the market with respect to the Notes.
8. Additional Covenant of the Company. The Company agrees that each
----------------------------------
acceptance by it of an offer for the purchase of Notes hereunder shall be deemed
to be an affirmation to you that the representations and warranties of the
Company contained in this Agreement are true and correct as of the date of such
acceptance as though made at and as of such time, and a covenant that such
representations and warranties will be true and correct as of the date of
delivery to the purchaser or the purchaser's agent of the Note or Notes relating
to such acceptance and, in the case of your obligation to purchase Notes as
principal, as of the settlement date relating to such purchase pursuant to a
Terms Agreement or otherwise, as though made at and as of each such date (except
that such representations and warranties shall be deemed to relate to the
Registration Statement and the Prospectus as amended and supplemented to each
such date).
9. Indemnification and Contribution.
--------------------------------
(a) The Company agrees to indemnify and hold harmless you, your
officers and directors and each person who controls you within the meaning
of Section 15 of the Securities Act or Section 20(a) of the Exchange Act,
against any and all losses, claims, damages or liabilities, joint or
several, to which you or any of them may become subject under the
Securities Act, the Exchange Act or any other statute or common law and to
reimburse you and each of your officers, directors and controlling persons
for any legal or other expenses (including, to the extent hereinafter
provided, reasonable outside counsel fees) incurred by you or them in
connection with investigating or defending any such losses, claims,
damages, liabilities, or in connection with defending any actions, insofar
as such
13
losses, claims, damages, liabilities, expenses or actions arise out of or
are based upon any untrue statement or alleged untrue statement of a
material fact contained in the Registration Statement or the Prospectus, in
either such document as originally filed or as amended or supplemented (if
such amendments or supplements thereto shall have been furnished pursuant
to Section 2(a) hereof), or the omission or alleged omission to state
therein a material fact required to be stated therein or necessary to make
the statements therein not misleading; provided that the indemnity
agreement contained in this Section 9 shall not apply to any such losses,
claims, damages, liabilities, expenses or actions arising out of or based
upon any such untrue statement or alleged untrue statement, or any such
omission or alleged omission, if such statement or omission was made in
reliance upon information furnished in writing to the Company by any of you
or on behalf of any of you for use in the Registration Statement or any
amendment thereto, in the Prospectus or in any supplement thereto. The
indemnity agreement of the Company contained in this Section 9(a) and the
representations and warranties of the Company contained in Section 2 hereof
shall remain operative and in full force and effect, regardless of any
investigation made by you or on behalf of you or any such controlling
person, and shall survive the delivery of the Notes.
(b) Each of you agree, severally and not jointly, to indemnify and
hold harmless the Company, its officers and directors and each person who
controls the Company within the meaning of Section 15 of the Securities Act
or Section 20(a) of the Exchange Act, against any and all losses, claims,
damages or liabilities, joint or several, to which they or any of them may
become subject under the Securities Act, the Exchange Act or any other
statute or common law and to reimburse each of them for any legal or other
expenses (including, to the extent hereinafter provided, reasonable outside
counsel fees) incurred by them in connection with investigating or
defending any such losses, claims, damages or liabilities or in connection
with defending any actions, insofar as such losses, claims, damages,
liabilities, expenses or actions arise out of or are based upon any untrue
statement or alleged untrue statement of a material fact contained in the
Registration Statement or the Prospectus, as originally filed or as amended
or supplemented (if such amendments or supplements thereto shall have been
furnished pursuant to Section 2(a) hereof) or the omission or alleged
omission to state therein a material fact required to be stated therein or
necessary to make the statements therein not misleading, if such statement
or omission was made in reliance upon information furnished in writing to
the Company by you or on your behalf for use in the Registration Statement
or the Prospectus or any amendment or supplement to either thereof. The
indemnity agreement of each of you contained in this Section 9(b) shall
remain operative and in full force and effect, regardless of any
investigation made by or on behalf of the Company or any such controlling
person, and shall survive the delivery of the Notes.
(c) Each of you and the Company agree that, upon the receipt of notice
of the commencement of any action against the Company or any of its
officers or directors, or any person controlling the Company, or against
you, your
14
officers, directors or any controlling person as aforesaid, in
respect of which indemnity may be sought on account of any indemnity
agreement contained herein, you or the Company, as the case may be, will
promptly give written notice of the commencement thereof to the party or
parties against whom indemnity shall be sought hereunder, but the omission
so to notify such indemnifying party or parties of any such action shall
not relieve such indemnifying party or parties from any liability which it
or they may have to the indemnified party or parties otherwise than on
account of such indemnity agreement. In case such notice of any such action
shall be so given, such indemnifying party shall be entitled to participate
at its own expense in the defense or, if it so elects, to assume (in
conjunction with any other indemnifying parties) the defense of such
action, in which event such defense shall be conducted by counsel chosen by
such indemnifying party (or parties) and reasonably satisfactory to the
indemnified party or parties who shall be defendant or defendants in such
action, and such defendant or defendants shall bear the fees and expenses
of any additional outside counsel retained by them; provided that, if the
defendants (including impleaded parties) in any such action include both
the indemnified party and the indemnifying party (or parties) and the
indemnified party shall have reasonably concluded that there may be legal
defenses available to it and/or other indemnified parties which are
different from or additional to those available to the indemnifying party
(or parties), the indemnified party shall have the right to select separate
counsel to assert and direct such different or additional legal defenses
and to participate otherwise in the defense of such action on behalf of
such indemnified party. The indemnifying party shall bear the reasonable
fees and expenses of outside counsel retained by the indemnified party if
(i) the indemnified party shall have retained such counsel in connection
with the assertion of legal defenses in accordance with the proviso to the
preceding sentence (it being understood, however, that the indemnifying
party shall not be liable for the expenses of more than one separate
counsel (in addition to one local counsel), representing the indemnified
parties under Section 9(a) or 9(b), as the case may be, who are parties to
such action), (ii) the indemnifying party shall have elected not to assume
the defense of such action, (iii) the indemnifying party shall not have
employed counsel reasonably satisfactory to the indemnified party to
represent the indemnified party within a reasonable time after notice of
the commencement of the action, or (iv) the indemnifying party has
authorized the employment of outside counsel for the indemnified party at
the expense of the indemnifying party. Notwithstanding the foregoing
sentence, an indemnifying party shall not be liable for any settlement of
any proceeding effected without its written consent (such consent not to be
unreasonably withheld), but if settled with such consent or if there be a
final judgment for the plaintiff, the indemnifying party agrees to
indemnify the indemnified party from and against any loss or liability by
reason of such settlement or judgment. No indemnifying party shall,
without the prior written consent of the indemnified party, effect any
settlement of any pending or threatened proceeding in respect of which
indemnification may be sought hereunder (whether or not the indemnified
party is an actual or potential party to such a proceeding), by such
indemnified party, unless such settlement (x)
15
includes an unconditional release of such indemnified party from all
liability on claims that are the subject matter of such proceeding and (y)
does not include a statement as to or an admission of fault, culpability or
failure to act by or on behalf of any indemnified party.
(d) If the indemnification provided for in this Section 9 is
unavailable to or insufficient to hold harmless an indemnified party under
Section 9(a) or 9(b) above in respect of any losses, claims, damages or
liabilities (or actions in respect thereof) referred to therein, then each
indemnifying party shall contribute to the amount paid or payable to such
indemnified party as a result of such losses, claims, damages or
liabilities (or actions in respect thereof) in such proportion as is
appropriate to reflect the relative fault of the Company, on the one hand,
and of any of you participating in the transaction at issue, on the other,
in connection with the statements or omissions which resulted in such
losses, claims, damages or liabilities (or actions in respect thereof), as
well as any other relevant equitable considerations, including relative
benefit. The relative fault shall be determined by reference to, among
other things, whether the untrue or alleged untrue statement of a material
fact or the omission or alleged omission to state a material fact required
to be stated therein or necessary in order to make the statements therein
not misleading relates to information supplied by the Company on the one
hand or by you on the other hand and the parties' relative intent,
knowledge, access to information and opportunity to correct or prevent such
statement or omission. The Company and each of you agree that it would not
be just and equitable if contribution pursuant to this Section 9(d) were
determined by pro rata allocation (even if all of you 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(d). The amount paid or payable by an indemnified party as a
result of the losses, claims, damages or liabilities (or actions in respect
thereof) referred to above in this Section 9(d) shall be deemed to include
any legal or other expenses reasonably incurred by such indemnified party
in connection with investigating or defending any such action or claim. No
person guilty of fraudulent misrepresentation (within the meaning of
Section 11(f) of the Securities Act) shall be entitled to contribution from
any person who was not guilty of such fraudulent misrepresentation. The
obligations of each of you under this Section 9(d) to contribute are
several in proportion to the respective purchases made by or through you to
which such loss, claim, damage or liability (or action in respect thereof)
relates and are not joint.
(e) The remedies provided for in this Section 9 are not exclusive and
shall not limit any rights or remedies which may otherwise be available to
any indemnified party at law or in equity.
10. Representations, Warranties and Agreements to Survive Delivery. All
--------------------------------------------------------------
representations, warranties and agreements contained in this Agreement or
contained in certificates of officers of the Company submitted pursuant to this
Agreement shall remain operative and in full force and effect regardless of any
investigation made by you or on
16
your behalf or on behalf of any controlling person of you, or by or on behalf of
the Company, and shall survive each delivery of and payment for any of the
Notes.
11. Status as Agent. In soliciting offers by others to purchase Notes
---------------
from the Company, you are acting solely as agent for the Company, and not as
principal. You will make reasonable efforts to assist the Company in obtaining
performance by each purchaser whose offer to purchase Notes has been accepted by
the Company, but you shall not have any liability to the Company in the event
such purchase is not consummated for any reason. If the Company shall default
on its obligation to deliver Notes to a purchaser whose offer it has accepted,
the Company shall hold you harmless against any loss, claim or damage arising
from or as a result of such default by the Company.
12. Termination. This Agreement may be terminated for any reason, at any
-----------
time by any of you as to the Company or by the Company as to any of you upon the
giving by the terminating party of five (5) business days' written notice of
such termination to the other parties hereto. Each of you may also terminate
any agreement by you to purchase Notes as principal, immediately upon notice to
the Company, at any time prior to the settlement date relating thereto if during
such period (a) there shall have occurred any material adverse change in the
financial markets in the United States or in the financial markets of the
country or countries of origin of any foreign currency or currencies in which
the Notes are denominated or payable or any outbreak or escalation of
hostilities or other national or international calamity or crisis the effect of
which is such as to make it, in your judgment, impracticable or inadvisable to
market the Notes or enforce contracts for the sale of Notes on the terms and in
the manner contemplated in the Prospectus, or (b) if trading in any securities
of the Company has been suspended by the Commission or a national securities
exchange, or if trading generally on either the American Stock Exchange or the
New York Stock Exchange shall have been suspended, or any limitation on prices
in such trading or any restrictions on the distribution of securities are
established by either of such exchanges or by order of the Commission or any
other governmental authority, or if a banking moratorium shall have been
declared either by federal or New York authorities or by the relevant
authorities in the country or countries of origin of any foreign currency or
currencies in which the Notes are denominated or payable, or (c) after the
acceptance by you of such agreement to purchase Notes as principal and at or
prior to the settlement date relating thereto, the Company shall have sustained
a substantial loss by fire, flood, accident or other calamity which in your
judgment renders it inadvisable to consummate the sale of the Notes and the
delivery of the Notes upon the terms set forth in such agreement, regardless of
whether or not such loss shall have been insured, or (d) there shall have
occurred a downgrading in the rating accorded the Company's unsecured debt
securities by any "nationally recognized statistical rating organization" (as
that term is defined by the Commission for purposes of Rule 436(g)(2) under the
Securities Act) or such an organization shall have given notice of any intended
or potential downgrading or of any review for a possible change with possible
negative implications in its ratings of such securities.
17
In the event of any such termination, neither the terminating party nor the
terminated party shall have any liability to the other except as provided in the
third full paragraph of Section 3(a), Section 6(c), Section 9 and Section 10 and
except that, if at the time of termination you shall own any of the Notes with
the intention of reselling them or an offer for the purchase of Notes shall have
been accepted by the Company but the time of delivery to the purchaser or such
purchaser's agent of the Note or Notes relating thereto shall not yet have
occurred, you shall comply with the Administrative Procedures, and the Company
shall also have the obligations provided in Sections 7(c) through (h) and
Section 8 hereof until such Notes have been resold or delivered, as the case may
be; provided, however, that the Company's obligation to comply with the
provisions of Sections 7(c) through (h) and Section 8 hereof as set forth in the
immediately preceding clause of this sentence shall be subject to the following
conditions: (i) no stop order suspending the effectiveness of the Registration
Statement shall be in effect on the Closing Date and no proceedings for that
purpose shall be pending before, or to the knowledge of the Company threatened
by, the Commission on such date, and (ii) at the Closing Date, except as
provided in Section 3(f) herein, an order or orders of the Commission pursuant
to the 1935 Act permitting the issuance and sale of the Notes substantially in
accordance with the terms and conditions hereof shall be in full force and
effect and shall contain no provision unacceptable to you or the Company (but
all provisions of such order or orders heretofore entered, copies of which have
heretofore been delivered to you, are deemed acceptable to you and the Company,
and all provisions of such order or orders hereafter entered shall be deemed
acceptable to you and the Company unless within 24 hours after receiving a copy
of any such order any party to this Agreement shall give notice to the other
parties to the effect that such order contains an unacceptable provision).
13. Miscellaneous. The validity and interpretation of this Agreement
-------------
shall be governed by the laws of the State of New York. This Agreement shall
inure to your benefit, the benefit of the Company and, with respect to the
provisions of Section 9 hereof, each person who controls you and each of your
officers and directors and each controlling person and each officer and director
of the Company referred to in Section 9, and their respective successors,
assigns, executors and administrators. Nothing in this Agreement is intended or
shall be construed to give to any person, firm or corporation any legal or
equitable right, remedy or claim under or in respect of this Agreement or any
provision herein contained. The term "successors" as used in this Agreement
shall not include any of the purchasers, as such, of any of the Notes.
14. Notices. Except as otherwise specifically provided herein or in the
-------
Administrative Procedures, all communications hereunder shall be in writing and,
if to you, shall be sent by facsimile transmission, registered mail or delivered
to the address set forth under your signature below and, if to the Company,
shall be sent by facsimile transmission, registered mail or delivered to it,
attention of Treasurer, Consolidated Natural Gas Company, 000 Xxxxxxxx Xxxxxx,
Xxxxxxxx, Xxxxxxxx 00000 (facsimile: (000) 000-0000).
[the rest of this page is left blank intentionally]
18
Please sign and return to us a counterpart of this letter, whereupon this
letter will become a binding agreement between the Company and you in accordance
with its terms.
Very truly yours,
CONSOLIDATED NATURAL GAS COMPANY
By:
------------------------
Name: ____________________________
Title: _____________________________
[the rest of this page is left blank intentionally]
19
The foregoing agreement is
hereby confirmed and accepted,
as of the date first above written.
___________________________________
___________________________________
By: /s/
---------------------------------------
Authorized Signatory
Address for Notices:
___________________________________
___________________________________
___________________________________
___________________________________
___________________________________
___________________________________
[the rest of this page is left blank intentionally]
20
SCHEDULE A
The Company will pay each Agent a commission, at the time of settlement of
each sale of Notes by the Company as a result of a solicitation made by such
Agent, in an amount equal to the following percentage of the aggregate principal
amount of such Notes sold:
Percentage of Aggregate
Principal Amount
Maturity Ranges of Notes Sold
--------------- -------------
More than 9 months to less than 1 year .125%
From 1 year to less than 18 months .150%
From 18 months to less than 2 years .200%
From 2 years to less than 3 years .250%
From 3 years to less than 4 years .350%
From 4 years to less than 5 years .450%
From 5 years to less than 6 years .500%
From 6 years to less than 7 years .550%
From 7 years to less than 10 years .600%
From 10 years to less than 15 years .625%
From 15 years to less than 20 years .700%
From 20 years to 30 years .750%
More than 30 years As agreed
EXHIBIT A
CONSOLIDATED NATURAL GAS COMPANY
MEDIUM-TERM NOTES, SERIES A
FORM OF TERMS AGREEMENT
(Date)
Consolidated Natural Gas Company
000 Xxxxxxxx Xxxxxx
Xxxxxxxx, Xxxxxxxx 00000
Attention: Treasurer
Re: Distribution Agreement dated ____________
The undersigned agrees to purchase the following principal amount of Notes,
subject to the following terms, where applicable:
$_______________
(or principal amount of foreign or composite currency)
Minimum Denomination:
Interest Rate or Formula:
If Fixed Rate Note,
Fixed Rate:
Interest Payment Dates:
If Floating Rate Note,
___ Regular Floating Rate Note
___ Inverse Floating Rate Note
___ Floating/Fixed Rate Note
Base Rate or formula:
Spread and/or Spread Multiplier, if any:
Initial Interest Rate, if any:
Initial Interest Reset Date:
Interest Reset Dates:
Interest Payment Dates:
Index Currency, if any:
Index Maturity:
Maximum Interest Rate, if any:
Minimum Interest Rate, if any:
Fixed Rate Commencement Date, if any:
A-1
Fixed Interest Rate, if any:
Day Count Convention:
Calculation Agent:
If Redeemable at the Option of the Company,
Initial Redemption Date:
Initial Redemption Percentage: ____ % of par
Annual Redemption Percentage Reduction:
Limitation Date:
Refunding Rate:
If Repayment at the Option of the Holder,
Repayment Date(s):
Repayment Rate(s):
Original Issue Date:
Stated Maturity:
Purchase Price: _____% of par
Specified Currency:
Settlement Date and Time:
Requirements pursuant to Section 6(i) of the Distribution Agreement, if
any:
Additional/Other Terms:
Requirements pursuant to Sections 7(h), (c) and (d) of the Distribution
Agreement (check any that apply):
___ Officer's Certificate
___ Legal Opinion
___ Comfort Letter
[Name of Agent Purchasing as Principal]
By: ---------------------------------------
Title:
Accepted:
CONSOLIDATED NATURAL GAS COMPANY
By: -------------------------------
Name:
Title:
A-2
EXHIBIT B
PROPOSED FORM OF OPINION
OF
XXXXXXXX XXXXXXX LLP
CONSOLIDATED NATURAL GAS COMPANY
U.S. $_____________ Medium-Term Notes, Series A
____________
________________________________
________________________________
________________________________
________________________________
________________________________
________________________________
________________________________
________________________________
________________________________
Dear Ladies and Gentlemen:
We have acted as counsel for you in connection with arrangements for the
issuance by Consolidated Natural Gas Company (the Company) of up to U.S.
$_____________ aggregate principal amount of its Medium-Term Notes, Series A due
9 months or more from the date of issue (the Notes) under and pursuant to the
Company's Indenture, dated as of April 1, 2001, between the Company and Bank One
Trust Company, National Association, as Trustee (the Trustee), as previously
supplemented, and as further supplemented by a _____ Supplemental Indenture,
dated as of ____________ (such Indenture, as supplemented, is referred to herein
as the Indenture), and the offering of the Notes by you pursuant to a
Distribution Agreement, dated ____________, by and between you and the Company
(the Distribution Agreement). All terms not otherwise defined herein shall have
the meanings set forth in the Distribution Agreement.
We have examined originals, or copies certified to our satisfaction, of
such corporate records of the Company, indentures, agreements and other
instruments, certificates of public officials, certificates of officers and
representatives of the Company and of the Trustee, and other documents, as we
have deemed necessary as a basis for the
B-1
opinions hereinafter expressed. As to various questions of fact material to such
opinions, we have, when relevant facts were not independently established,
relied upon certifications by officers of the Company, the Trustee and other
appropriate persons and statements contained in the Registration Statement
hereinafter mentioned. All legal proceedings taken as of the date hereof in
connection with the transactions contemplated by the Distribution Agreement have
been satisfactory to us.
In addition, we attended the closing held today at the offices of
McGuireWoods LLP, 000 X. Xxxx Xxxxxx, Xxxxxxxx, Xxxxxxxx, at which the Company
satisfied the conditions contained in Section 7 of the Distribution Agreement
which are required to be satisfied as of the Closing Date.
Based upon the foregoing, and having regard to legal considerations which
we deem relevant, as of the date hereof, we are of the opinion that:
A. The Company is a corporation duly incorporated and existing as a
corporation in good standing under the laws of Delaware and has the corporate
power to transact its business as described in the Prospectus.
B. The Distribution Agreement has been duly authorized by all necessary
corporate action and has been duly executed and delivered by the Company.
C. The Indenture has been duly authorized, executed and delivered by the
Company and has been duly qualified under the Trust Indenture Act, and
constitutes a valid and binding obligation of the Company, except as enforcement
thereof may be limited by bankruptcy, insolvency, reorganization, moratorium or
other similar laws affecting the enforcement of creditors' rights generally or
by general equitable principles (regardless of whether enforcement is considered
in a proceeding in equity or at law), and except further as enforcement thereof
may be limited by requirements that a claim with respect to any debt securities
issued under the Indenture that are payable in a foreign or composite currency
(or a foreign or composite currency judgment in respect of such claim) be
converted into U.S. dollars at a rate of exchange prevailing on a date
determined pursuant to applicable law or by governmental authority to limit,
delay or prohibit the making of payments outside the United States.
D. The Notes have been duly authorized by the Company and, when executed
by the Company and completed and authenticated by the Trustee in accordance with
the Indenture and delivered and paid for as provided in the Distribution
Agreement, will have been duly issued under the Indenture and will constitute
valid and binding obligations of the Company entitled to the benefits provided
by the Indenture, except as enforcement thereof may be limited by bankruptcy,
insolvency, reorganization, moratorium or other similar laws affecting the
enforcement of creditors' rights generally or by general equitable principles
(regardless of whether enforcement is considered in a proceeding in equity or at
law), and except further as enforcement thereof may be limited by requirements
that a claim with respect to any Notes payable in a foreign or composite
currency (or a foreign or composite currency judgment in respect of such claim)
be converted into U.S. dollars at a
B-2
rate of exchange prevailing on a date determined pursuant to applicable law or
by governmental authority to limit, delay or prohibit the making of payments
outside the United States.
E. The Registration Statement with respect to the Notes filed pursuant to
the Securities Act (Reg. No. 333-_____), has become effective and remains in
effect at this date, and the Prospectus may lawfully be used for the purposes
specified in the Securities Act in connection with the offer for sale and the
sale of Notes in the manner therein specified.
F. The Registration Statement (which includes the Incorporated Documents)
and the Prospectus (except that we express no comment or belief with respect to
the financial statements and schedules and other financial or statistical
information contained in the Registration Statement or Prospectus) appear on
their face to be appropriately responsive in all material respects to the
requirements of the Securities Act, and to the applicable rules and regulations
of the Commission thereunder.
G. As to the statements relating to the Notes under DESCRIPTION OF SENIOR
DEBT SECURITIES and ADDITIONAL TERMS OF SENIOR DEBT SECURITIES in the prospectus
initially filed as part of the Registration Statement, as supplemented by the
statements under DESCRIPTION OF THE NOTES in the prospectus supplement dated
____________ (the Prospectus Supplement), we are of the opinion that the
statements are accurate and do not omit any material fact required to be stated
therein or necessary to make such statements not misleading.
I. As to the statistical statements in the Registration Statement (which
includes statistical statements in the Incorporated Documents), we have relied
solely on the officers of the Company. As to other matters, we have not
undertaken to determine independently the accuracy or completeness of the
statements contained or incorporated by reference in the Registration Statement
or in the Prospectus. We accordingly assume no responsibility for the accuracy
or completeness of the statements made in the Registration Statement except as
stated above in regard to the above captions. We note that the Incorporated
Documents were prepared and filed by the Company without our participation. We
have, however, participated in conferences with counsel for and representatives
of the Company in connection with the preparation of the Registration Statement,
the Prospectus as it was initially issued and each time as it has been
supplemented or amended and the Prospectus Supplement, and we have reviewed all
Incorporated Documents and such of the corporate records of the Company as we
deemed advisable. None of the foregoing disclosed to us any information which
gives us reason to believe that the Registration Statement (except the financial
statements incorporated by reference therein, as to which we express no opinion)
contained on the date the Registration Statement became effective, or the
Prospectus contained on the date it was issued or the date it was supplemented
or amended or that the Registration Statement or Prospectus now contain any
untrue statement of a material fact or omitted on such dates or now omits to
state a material fact required to be stated therein or necessary to make the
statements therein not misleading. The foregoing opinion is given
B-3
on the basis that any statement contained in an Incorporated Document shall be
deemed not to be contained in the Registration Statement or Prospectus if the
statement has been modified or superseded by any statement in a subsequently
filed Incorporated Document or in the Registration Statement or Prospectus.
J. The Commission's Order No. ____________, issued on ____________
pursuant to the Company's application on Form U-1/File No. 70-9517 (the
"____________"), constitutes an appropriate order of the Commission with respect
to the sale of a portion of the Notes under the 1935 Act, on the terms and
conditions set forth in the Distribution Agreement and constitutes valid and
sufficient authorization for the sale of a portion of the Notes. Issuances of
Notes not permitted under the ____________ will require a further order of the
Commission, and such further order shall be in full force and effect, prior to
the issuance of any Notes not authorized under the ____________, as contemplated
by the Distribution Agreement. No approval or consent by any public regulatory
body, other than such order and notification of effectiveness by the Commission,
is legally required in connection with the sale of the Notes as contemplated by
the Distribution Agreement (except compliance with the provisions of securities
or blue-sky laws of certain states in connection with the sale of the Notes in
such states) and the carrying out of the provisions of the Distribution
Agreement.
We do not purport to express an opinion on any laws other than those of the
Commonwealth of Virginia, the State of Delaware, the State of New York and the
United States of America. This opinion may not be relied upon by, nor may copies
be delivered to, any person without our prior written consent.
Very truly yours.
XXXXXXXX XXXXXXX LLP
B-4
EXHIBIT C
PROPOSED FORM OF OPINION
OF
MCGUIREWOODS LLP
CONSOLIDATED NATURAL GAS COMPANY
U.S. $_____________ Medium-Term Notes, Series A
____________, 200_
________________________________
________________________________
________________________________
________________________________
________________________________
________________________________
________________________________
________________________________
________________________________
Dear Ladies and Gentlemen:
The arrangements for issuance of up to U.S. $____________ aggregate
principal amount of Medium-Term Notes, Series A due 9 months or more from the
date of issue (the Notes) of Consolidated Natural Gas Company (the Company)
under the Company's Indenture, dated as of April 1, 2001, between the Company
and Bank One Trust Company, National Association, as Trustee (the Trustee), as
previously supplemented, and as further supplemented by a _____ Supplemental
Indenture, dated as of ____________ (such Indenture, as supplemented, is
referred to herein as the Indenture), pursuant to a Distribution Agreement,
dated ____________, by and between you and the Company (the Distribution
Agreement), have been taken under our supervision as counsel for the Company.
Terms not otherwise defined herein have the meanings set forth in the
Distribution Agreement.
We have examined originals, or copies certified to our satisfaction, of
such corporate records of the Company, indentures, agreements and other
instruments, certificates of public officials, certificates of officers and
representatives of the Company and of the Trustee, and other documents, as we
have deemed it necessary to require as a basis for the opinions hereinafter
expressed. As to various questions of fact material to such opinions, we have,
when relevant facts were not independently established, relied
C-1
upon certifications by officers of the Company, the Trustee and other
appropriate persons and statements contained in the Registration Statement
hereinafter mentioned. All legal proceedings taken as of the date hereof in
connection with the transactions contemplated by the Distribution Agreement have
been satisfactory to us.
On this basis, as of the date hereof, we are of the opinion that:
1. The Company has been duly incorporated and is validly existing as a
corporation under the laws of Delaware, and has the corporate power and
authority to own, lease and operate its properties and to conduct its business
as described in the Prospectus and to enter into and perform its obligations
under the Distribution Agreement; and the Company is duly qualified as a foreign
corporation to transact business and is in good standing in each other
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 to be in good standing would not result in a Material
Adverse Effect.
2. No filing with, or authorization, approval, consent, license, order,
registration, qualification or decree of, any court or governmental authority or
agency, domestic or foreign (other than those required under the 1935 Act, the
Securities Act and the Rules and Regulations, which have been obtained, or as
may be required under the securities or blue sky laws of the various states) is
necessary or required in connection with the due authorization, execution and
delivery of the Distribution Agreement or the due execution, delivery or
performance of the Indenture by Dominion or for the offering, issuance, sale or
delivery of the Notes. An appropriate order or orders of the Commission with
respect to the sale of the Notes under the 1935 Act has been issued, and such
order or orders remains in effect at this date and constitutes valid and
sufficient authorization for the sale of the Notes as contemplated by the
Distribution Agreement.
3. The Distribution Agreement has been duly authorized by all necessary
corporate action and has been duly executed and delivered by the Company.
4. The Indenture has been duly authorized, executed and delivered by the
Company and has been duly qualified under the Trust Indenture Act and
constitutes a valid and binding obligation of the Company, except as enforcement
thereof may be limited by bankruptcy, insolvency, reorganization, moratorium or
other similar laws affecting the enforcement of creditors' rights generally or
by general equitable principles (regardless of whether enforcement is considered
in a proceeding in equity or at law), and except further as enforcement thereof
may be limited by requirements that a claim with respect to any debt securities
issued under the Indenture that are payable in a foreign or composite currency
(or a foreign or composite currency judgment in respect of such claim) be
converted into U.S. dollars at a rate of exchange prevailing on a date
determined pursuant to applicable law or by governmental authority to limit,
delay or prohibit the making of payments outside the United States.
C-2
5. The Notes have been duly authorized by the Company and, when duly
executed by the Company and completed and authenticated by the Trustee in
accordance with the Indenture and issued, delivered and paid for in accordance
with the Distribution Agreement, will have been duly issued under the Indenture
and will constitute valid and binding obligations of the Company entitled to the
benefits provided by the Indenture, except as enforcement thereof may be limited
by bankruptcy, insolvency, reorganization, moratorium or other similar laws
affecting the enforcement of creditors' rights generally or by general equitable
principles (regardless of whether enforcement is considered in a proceeding in
equity or at law), and except further as enforcement thereof may be limited by
requirements that a claim with respect to any Notes payable in a foreign or
composite currency (or a foreign or composite currency judgment in respect of
such claim) be converted into U.S. dollars at a rate of exchange prevailing on a
date determined pursuant to applicable law or by governmental authority to
limit, delay or prohibit the making of payments outside the United States.
6. The Registration Statement with respect to the Notes filed pursuant to
the Securities Act (Reg. No. 333-_____), has become effective and remains in
effect at this date, and the Prospectus may lawfully be used for the purposes
specified in the Securities Act in connection with the offer for sale and the
sale of the Notes in the manner therein specified.
7. The Registration Statement (which includes the Incorporated Documents)
and the Prospectus (except that we express no comment or belief with respect to
the financial statements and schedules and other financial or statistical
information contained in the Registration Statement or Prospectus) appear on
their face to be appropriately responsive in all material respects to the
requirements of the Securities Act, and to the applicable rules and regulations
of the Commission thereunder.
8. We are of the opinion that the statements relating to the Notes under
DESCRIPTION OF SENIOR DEBT SECURITIES and ADDITIONAL TERMS OF SENIOR DEBT
SECURITIES in the prospectus initially filed as part of the Registration
Statement, as supplemented by the statements under DESCRIPTION OF THE NOTES in
the prospectus supplement dated ____________, are substantially accurate and
fair.
9. With regard to the discussion in the Prospectus Supplement under the
caption CERTAIN UNITED STATES FEDERAL INCOME TAX CONSIDERATIONS, we are of the
opinion that under current United States federal income tax law, although the
discussion does not purport to discuss all possible United States federal income
tax consequences of the purchase, ownership and disposition of the Notes, such
discussion constitutes a fair and accurate summary of the matters discussed
therein in all material respects. In rendering the aforementioned tax opinion,
we have considered the current provisions of the Internal Revenue Code of 1986,
as amended, Treasury regulations promulgated thereunder, judicial decisions and
Internal Revenue Service rulings, all of which are subject to change, which
changes may be retroactively applied. A change in the authorities upon which our
opinion is based could affect our conclusions. There can
C-3
be no assurance, moreover, that any of the opinions expressed herein will be
accepted by the Internal Revenue Service, or, if challenged, by a court.
10. We have participated in conferences with officers and other
representatives of the Company and your representatives at which the contents of
the Registration Statement and the Prospectus were discussed, and we have
consulted with officers and other employees of the Company to inform them of the
disclosure requirements of the Securities Act. We have examined various reports,
records, contracts and other documents of the Company and orders and instruments
of public officials, which our investigation led us to deem pertinent. In
addition, we attended the due diligence meetings with representatives of the
Company and the closing at which the Company satisfied the conditions contained
in Section 7 of the Distribution Agreement. We have not, however, undertaken to
make any independent review of other records of the Company which our
investigation did not lead us to deem pertinent. As to the statistical
statements in the Registration Statement, we have relied solely on the officers
of the Company. We accordingly assume no responsibility for the accuracy or
completeness of the statements made in the Registration Statement, except as
stated above in regard to the above captions. But such conferences,
consultation, examination and attendance disclosed to us no information with
respect to such other matters that gives us reason to believe that the
Registration Statement contained on the date the Registration Statement became
effective, or the Prospectus contained on the date it was issued, or that the
Registration Statement or the Prospectus contains now, any untrue statement of a
material fact or omitted on such date or omits now to state a material fact
required to be stated therein or necessary to make the statements therein not
misleading. We are of the opinion that the Registration Statement (excepting the
financial statements incorporated therein by reference, as to which we express
no opinion) complies as to form in all material respects with all legal
requirements. The foregoing opinion is given on the basis that any statement
contained in an Incorporated Document shall be deemed not to be contained in the
Registration Statement or Prospectus if the statement has been modified or
superseded by any statement in a subsequently filed Incorporated Document or in
the Registration Statement or Prospectus.
11. There are no actions, suits or proceedings pending or, to the best of
our knowledge, threatened, to which the Company or one of its subsidiaries is a
party or to which any of the Company's or any of its subsidiaries' properties is
subject other than any proceedings described in the Prospectus and proceedings
which we believe are not likely to have a material adverse effect on the power
or ability of the Company to perform its obligations under the Distribution
Agreement or to consummate the transactions contemplated thereby or by the
Prospectus.
We do not purport to express an opinion on any laws other than those of the
Commonwealth of Virginia, the State of Delaware, the State of New York and the
United States of America. This opinion may not be relied upon by, nor may copies
be delivered to, any person without our prior written consent.
C-4
Yours very truly,
MCGUIREWOODS LLP
C-5
EXHIBIT D
CONSOLIDATED NATURAL GAS COMPANY
ADMINISTRATIVE PROCEDURES
for Fixed Rate and Floating Rate Medium-Term Notes, Series A
(Dated as of ____________)
Medium-Term Notes Due Nine Months or More From Date of Issue (the "Notes")
are to be offered on a continuous basis by CONSOLIDATED NATURAL GAS COMPANY, a
Delaware corporation (the "Company"), to or through ______________,
__________________, _________________, (each, an "Agent" and, collectively, the
"Agents") pursuant to a Distribution Agreement, dated ____________, (the
"Distribution Agreement"), by and among the Company and the Agents. The
Distribution Agreement provides for the sale of Notes by the Company to one or
more of the Agents as principal for resale to investors and other purchasers,
for the sale of Notes by the Company through one or more of the Agents who
solicit offers to purchase the Notes and receive a commission (as may from time
to time be agreed to by the Company and the related Agent or Agents) and for the
sale of Notes by the Company directly to investors.
Unless otherwise agreed by the related Agent or Agents and the Company,
Notes will be purchased by the related Agent or Agents as principal. Such
purchases will be made in accordance with terms agreed upon by the related Agent
or Agents and the Company (which terms shall be agreed upon orally, with written
confirmation prepared by the related Agent or Agents and mailed to the Company).
If agreed upon by any Agent or Agents and the Company, the Agent or Agents,
acting solely as agent or agents for the Company and not as principal, will use
best efforts to solicit offers to purchase the Notes. Only those provisions in
these Administrative Procedures that are applicable to the particular role to be
performed by the related Agent or Agents shall apply to the offer and sale of
the relevant Notes.
The Notes will be issued as a series of debt securities under an Indenture,
dated as of April 1, 2001, between the Company and Bank One Trust Company,
National Association, as trustee (together with any successor in such capacity,
the "Trustee") as previously supplemented and as further supplemented by a _____
Supplemental Indenture, dated as of ____________ (such Indenture as supplemented
is referred to herein as the "Indenture"). The Company has filed a Registration
Statement with the Securities and Exchange Commission (the "Commission")
registering, among other securities, debt securities (which includes the Notes)
(the "Registration Statement", which term shall include any additional
registration statements filed in connection with the Notes). The most recent
base prospectus deemed part of the Registration Statement, as supplemented with
respect to the Notes, is herein referred to as "Prospectus". The most recent
supplement to the Prospectus setting forth the purchase price, interest rate or
formula, maturity date and other terms of the Notes (as applicable) is herein
referred to as the "Pricing Supplement".
D-1
The Notes will either be issued (a) in book-entry form and represented by
one or more fully registered Notes without coupons (each, a "Global Note")
delivered to the Trustee, as agent for The Depository Trust Company ("DTC"), and
recorded in the book-entry system maintained by DTC, or (b) in certificated form
(each, a "Certificated Note") delivered to the investor or other purchaser
thereof or a person designated by such investor or other purchaser.
General procedures relating to the issuance of all Notes are set forth in
Part I hereof. Additionally, Notes issued in book-entry form will be issued in
accordance with the procedures set forth in Part II hereof and Certificated
Notes will be issued in accordance with the procedures set forth in Part III
hereof. Capitalized terms used but not otherwise defined herein shall have the
meanings ascribed thereto in the Indenture or the Notes, as the case may be.
PART I: PROCEDURES OF GENERAL APPLICABILITY
Date of Issuance/
Authentication: Each Note will be dated as of the date of its
authentication by the Trustee. Each Note shall also
bear an original issue date (each, an "Original Issue
Date"). The Original Issue Date shall remain the same
for all Notes subsequently issued upon transfer,
exchange or substitution of an original Note regardless
of their dates of authentication.
Maturities: Each Note will mature on a date nine months or more
from its Original Issue Date (the "Stated Maturity
Date") selected by the investor or other purchaser and
agreed to by the Company.
Registration: Unless otherwise provided in the applicable Pricing
Supplement, Notes will be issued only in fully
registered form.
Denominations: Unless otherwise provided in the applicable Pricing
Supplement, the Notes, except for Notes denominated in
a Specified Currency other than U.S. dollars, shall be
issued only in denominations of $25 or $1,000, as
specified in the applicable Pricing Supplement, and any
integral multiple of such denominations in excess
thereof. Notes denominated in a Specified Currency
other than U.S. dollars will be issued in equivalent
denominations, as determined by reference to the Market
Exchange Rate on the Business Day immediately preceding
the date of issuance unless otherwise specified in the
applicable Pricing Supplement.
D-2
Base Rates
applicable to
Floating Rate
Notes: Unless otherwise provided in the applicable Pricing
Supplement, Floating Rate Notes will bear interest at a
rate or rates determined by reference to the CD Rate,
the CMT Rate, the Commercial Paper Rate, the Federal
Funds Rate, LIBOR, the Prime Rate, the Treasury Rate,
or such other Base Rate or formula as may be set forth
in applicable Pricing Supplement, or by reference to
two or more such rates, as adjusted by the Spread
and/or Spread Multiplier, if any, applicable to such
Floating Rate Notes.
Redemption/Repayment: The Notes will be subject to redemption by the Company
in accordance with the terms of the Notes, which will
be fixed at the time of sale and set forth in the
applicable Pricing Supplement. If no Initial Redemption
Date is indicated with respect to a Note, such Note
will not be redeemable prior to its Stated Maturity
Date.
The Notes will be subject to repayment at the option of
the Holders thereof in accordance with the terms of the
Notes, which will be fixed at the time of sale and set
forth in the applicable Pricing Supplement. If no
Optional Repayment Date is indicated with respect to a
Note, such Note will not be repayable at the option of
the Holder prior to its Stated Maturity Date.
Calculation of
Interest: In case of Fixed Rate Notes, interest (including
payments for partial periods) will be calculated and
paid on the basis of a 360-day year of twelve 30-day
months.
The interest rate on each Floating Rate Note will be
calculated by reference to the specified Base Rate(s)
plus or minus the applicable Spread, if any, and/or
multiplied by the applicable Spread Multiplier, if any.
Unless otherwise provided in the applicable Pricing
Supplement, interest on each Floating Rate Note will be
calculated by multiplying its principal amount by an
accrued interest factor. Such accrued interest factor
is computed by adding the interest factor calculated
for each day in the period for which accrued interest
is being accrued. Unless otherwise provided in the
applicable Pricing Supplement, the interest factor for
each such day is computed by dividing the interest
D-3
rate applicable to such day by 360 if the CD Rate,
Commercial Paper Rate, Federal Funds Rate, LIBOR
(except for LIBOR Notes denominated in pounds sterling)
or Prime Rate is an applicable Base Rate, by 365 if
LIBOR in the case of LIBOR Notes denominated in pounds
sterling is an applicable Base Rate, or by the actual
number of days in the year if the CMT Rate or Treasury
Rate is an applicable Base Rate. As provided in the
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, highest or average of the applicable Base Rates
applied.
Interest: General. Each Note will bear interest in accordance
-------
with its terms. Unless otherwise provided in the
applicable Pricing Supplement, interest on each Note
will accrue from and including the Original Issue Date
of such Note for the first interest period or from the
most recent Interest Payment Date (as defined below) to
which interest has been paid or duly provided for all
subsequent interest periods to but excluding applicable
Interest Payment Date or the Stated Maturity Date or
date of earlier redemption or repayment, as the case
may be (the Stated Maturity Date or date of earlier
redemption or repayment is referred to herein as the
"Maturity Date" with respect to the principal repayable
on such date).
If an Interest Payment Date or the Maturity Date with
respect to any Fixed Rate Note falls on a day that is
not a Business Day (as defined below), the required
payment to be made on such day need not be made on such
day, but may be made on the next succeeding Business
Day with the same force and effect as if made on such
day, and no interest shall accrue on such payment for
the period from and after such day to the next
succeeding Business Day. If an Interest Payment Date
other than the Maturity Date with respect to any
Floating Rate Note would otherwise fall on a day that
is not a Business Day, such Interest Payment Date will
be postponed to the next succeeding Business Day,
except that in the case of a Note for which LIBOR is an
applicable Base Rate, if such Business Day falls in the
next succeeding calendar month, such Interest Payment
Date will be the immediately preceding Business Day. If
the Maturity Date with respect to any Floating Rate
Note falls on a day that is not a Business Day, the
required payment to be made on such day need not be
made on such day, but may be made on the next
succeeding Business Day with the same force and effect
as if made on such day, and no interest shall accrue
D-4
on such payment for the period from and after the
Maturity Date to the next succeeding Business Day.
Unless otherwise provided in the applicable Pricing
Supplement, "Business Day" means with respect to any
Note, any day, other than a Saturday or Sunday, that is
neither (a) a legal holiday nor (b) a day on which
banking institutions are authorized or required by law,
regulation or executive order to close in New York
City; provided, however, that for Notes denominated in
a Specified Currency other than United States dollars
that day is also not a day on which commercial banking
institutions are authorized or required by law,
regulation or executive order to close in the Principal
Financial Center of the country issuing the Specified
Currency (or for Notes denominated in euros, that day
is also a day on which the Trans-European Automated
Real-time Gross Settlement Express Transfer System,
commonly referred to as "TARGET," is operating);
provided, further, that with respect to a LIBOR Note,
the day must also be a London Business Day.
"London Business Day" means any day on which commercial
banks are open for business (including for dealings in
deposits in the relevant Index Currency) in London.
"Principal Financial Center" means as applicable, the
capital city of the country issuing the Specified
Currency; or the capital city of the country to which
the Index Currency relates; provided, however, that the
Principal Financial Center will be New York City for
United States dollars, Sydney and Melbourne (the latter
solely in the case of the Index Currency) for
Australian dollars, Toronto for Canadian dollars,
Brussels for euros, Johannesburg for South African rand
and Zurich for Swiss francs.
Regular Record Dates. Unless otherwise provided in the
--------------------
applicable Pricing Supplement, the "Regular Record
Date" for a Note shall be the close of business on the
fifteenth calendar day (whether or not a Business Day)
preceding the applicable Interest Payment Date.
Interest Payment Dates. Interest payments will be made
----------------------
on each Interest Payment Date commencing with the first
Interest Payment Date following the Original Issue
Date; provided,
D-5
however, the first payment of interest on any Note
originally issued between a Regular Record Date and an
Interest Payment Date will occur on the Interest
Payment Date following the next succeeding Regular
Record Date.
Unless otherwise provided in the applicable Pricing
Supplement, interest payments on Fixed Rate Notes will
be made semiannually in arrears on May 1 and November 1
of each year and on the Maturity Date, while interest
payments on Floating Rate Notes will be made as
specified in the applicable Pricing Supplement.
Acceptance and
Rejection of Offers
from Solicitation
as Agents: If agreed upon by any Agent and the Company, then such
Agent acting solely as agent for the Company and not as
principal will solicit purchases of the Notes. Each
Agent will communicate to the Company, orally or in
writing, each reasonable offer to purchase Notes
solicited by such Agent on an agency basis, other than
those offers rejected by such Agent. Each Agent has the
right, in its discretion reasonably exercised, to
reject any proposed purchase of Notes, as a whole or in
part, and any such rejection shall not be a breach of
such Agent's agreement contained in the Distribution
Agreement. The Company has the sole right to accept or
reject any proposed purchase of Notes, in whole or in
part, and any such rejection shall not a breach of the
Company's agreement contained in the Distribution
Agreement. Each Agent has agreed to make best efforts
to assist the Company in obtaining performance by each
purchaser whose offer to purchase Notes has been
solicited by such Agent and accepted by the Company.
Preparation of
Pricing Supplement: If any offer to purchase a Note is accepted by the
Company, the Company will promptly prepare a Pricing
Supplement reflecting the terms of such Note.
Information to be included in the Pricing Supplement
shall include:
1. the name of the Company;
2. the title of the Notes;
3. the date of the Pricing Supplement and the date of
the Prospectus to which the Pricing Supplement
relates;
D-6
4. the name of the Offering Agent (as defined below);
5. whether such Notes are being sold to the Offering
Agent as principal or to an investor or other
purchaser through the Offering Agent acting as
agent for the Company;
6. with respect to Notes sold to the Offering Agent as
principal, whether such Notes will be resold by the
Offering Agent to investors and other purchasers at
(i) a fixed public offering price of a specified
percentage of their principal amount or (ii) at
varying prices related to prevailing market prices
at the time of resale to be determined by the
Offering Agent;
7. with respect to Notes sold to an investor or other
purchaser through the Offering Agent acting as
agent for the Company, whether such Notes will be
sold at (i) 100% of their principal amount or (ii)
a specified percentage of their principal amount;
8. the Offering Agent's discount or commission;
9. the net proceeds to the Company;
10. the Principal Amount, Specified Currency, Original
Issue Date, Stated Maturity Date, Interest Payment
Date(s), Authorized Denomination, Initial
Redemption Date, if any, Initial Redemption
Percentage, if any, Annual Redemption Percentage
Reduction, if any, Optional Repayment Date(s), if
any, Exchange Rate Agent, if any, Default Rate, if
any, and, in the case of Fixed Rate Notes, the
Interest Rate, and whether such Fixed Rate Note is
an Original Issue Discount Note (and, if so, the
Issue Price), and, in the case of Floating Rate
Notes, the Interest Category, the Base Rate or
Bases, the Day Count Convention, Index Maturity (if
applicable), Initial Interest Rate, if any, Maximum
Interest Rate, if any, Minimum Interest Rate, if
any, Initial Interest Reset Date, Interest Reset
Dates, Spread and/or Spread Multiplier, if any, and
Calculation Agent; and
11. any other additional provisions of the Notes
material to investors or other purchasers of the
Notes not otherwise specified in the Prospectus.
The Company shall use its best efforts to send such
Pricing Supplement by email, facsimile or overnight
express (for
D-7
delivery by the close of business on the applicable
trade date, but in no event later than 11:00 a.m. New
York City time, on the Business Day following the
applicable trade date) to the Agent which made or
presented the offer to purchase the applicable Note (in
such capacity, the "Offering Agent") and the Trustee at
the following applicable address: if to
_______________________________________________________
_______________________________________________________
_______________________________________________________
_______________________________________________________
______________________________________; and to:
Xxxxxxxx Xxxxxxx LLP, 0000 Xxxx Xxxx Xxxxxx, Xxxxxxxx,
Xxxxxxxx 00000, Attention: F. Xxxxxxxxx Xxxxxxxx, Xx.,
Esquire, (000) 000-0000, facsimile: (000) 000-0000.
In each instance that a Pricing Supplement is prepared,
the Offering Agent will provide a copy of such Pricing
Supplement to each investor or purchaser of the
relevant Notes or its agent. Pursuant to Rule 434
("Rule 434") of the Securities Act of 1933, as amended,
the Pricing Supplement may be delivered separately from
the Prospectus. Outdated Pricing Supplements (other
than those retained for files) will be destroyed.
Settlement: The receipt of immediately available funds by the
Company in payment for a Note and the authentication
and delivery of such Note shall, with respect to such
Note, constitute "settlement". Offers accepted by the
Company will be settled in three Business Days, or at
such time as the purchaser, the applicable Agent and
the Company shall agree, pursuant to the timetable for
settlement set forth in Parts II and III hereof under
"Settlement Procedure Timetable" with respect to Global
Notes and Certificated Notes, respectively (each such
date fixed for settlement is hereinafter referred to as
a "Settlement Date"). If procedures A and B of the
applicable Settlement Procedures with respect to a
particular offer are not completed on or before the
time set forth under the applicable "Settlement
Procedures Timetable", such offer shall not be settled
until the Business Day following the completion of
settlement procedures A and B or such later date as the
purchaser and the Company shall agree.
The foregoing settlement procedures may be modified
with respect to any purchase of Notes by an Agent as
principal if so agreed by the Company and such Agent.
Procedure for Changing
D-8
Rates or Other
Variable Terms: When a decision has been reached to change the interest
rate or any other variable term on any Notes being sold
by the Company, the Company will promptly advise the
Agents and the Trustee by facsimile transmission and the
Agents will forthwith suspend solicitation of offers to
purchase such Notes. The Agents will telephone the
Company with recommendations as to the changed interest
rates or other variable terms. At such time as the
Company notifies the Agents and the Trustee of the new
interest rates or other variable terms, the Agents may
resume solicitation of offers to purchase such Notes.
Until such time, only "indications of interest" may be
recorded. Immediately after acceptance by the Company of
an offer to purchase Notes at a new interest rate or new
variable term, the Company, the Offering Agent and the
Trustee shall follow the procedures set forth under the
applicable "Settlement Procedures".
Suspension of
Solicitation;
Amendment or
Supplement: The Company may instruct the Agents to suspend
solicitation of offers to purchase Notes at any time.
Upon receipt of such instructions, the Agents will
forthwith suspend solicitation of offers to purchase from
the Company until such time as the Company has advised
the Agents that solicitation of offers to purchase may be
resumed. If the Company decides to amend or supplement
the Registration Statement or the Prospectus (other than
to establish or change interest rates or formulas,
maturities, prices or other similar variable terms with
respect to the Notes), it will promptly advise the Agents
and will furnish the Agents and their counsel with copies
of the proposed amendment or supplement. Copies of such
amendment or supplement will be delivered or mailed to
the Agents, their counsel and the Trustee in quantities
which such parties may reasonably request at the
following respective addresses: if to
_________________________________________________________
_________________________________________________________
_________________________________________________________
_____________________________________________; and if to
the Trustee, to: Bank One Trust Company, National
Association, 000 Xxxx 00xx Xxxxxx, Xxx Xxxx, Xxx Xxxx
00000, Attention: ______________________. For record
keeping purposes, one copy of each such amendment or
supplement shall also be mailed or sent by facsimile
D-9
to:________________________________; and to: Xxxxxxxx
Xxxxxxx LLP, 0000 Xxxx Xxxx Xxxxxx, Xxxxxxxx, Xxxxxxxx
00000, Attention: F. Xxxxxxxxx Xxxxxxxx, Xx., Esquire,
(000) 000-0000, facsimile: (000) 000-0000.
In the event that at the time the solicitation of offers
to purchase from the Company is suspended (other than to
establish or change interest rates or formulas,
maturities, prices or other similar variable terms with
respect to the Notes) there shall be any offers to
purchase Notes that have been accepted by the Company
which have not been settled, the Company will promptly
advise the Offering Agent and the Trustee whether such
offers may be settled and whether copies of the
Prospectus as theretofore amended and/or supplemented as
in effect at the time of the suspension may be delivered
in connection with the settlement of such offers. The
Company will have the sole responsibility for such
decision and for any arrangements which may be made in
the event that the Company determines that such offers
may not be settled or that copies of such Prospectus may
not be so delivered.
Delivery of Prospectus
and applicable
Pricing Supplement: A copy of the most recent Prospectus and the applicable
Pricing Supplement, which pursuant to Rule 434 may be
delivered separately from the Prospectus, must accompany
or precede the earlier of (a) the written confirmation of
a sale sent to an investor or other purchaser or its
agent and (b) the delivery of Notes to an investor or
other purchaser or its agent.
Authenticity of
Signatures: The Agents will have no obligation or liability to the
Company or the Trustee in respect of the authenticity of
the signature of any officer, employee or agent of the
Company or the Trustee on any Note.
Documents Incorporated
by Reference: The Company shall supply the Agents with an adequate
supply of all documents incorporated by reference in the
Registration Statement and the Prospectus.
D-10
PART II: PROCEDURES FOR NOTES ISSUED IN BOOK-ENTRY FORM
In connection with the qualification of Notes issued in book-entry form for
eligibility in the book-entry system maintained by DTC, Bank One Trust Company,
National Association ("Bank One") will perform the custodial, document control
and administrative functions described below, in accordance with its respective
obligations under a Letter of Representations from the Company and Bank One to
DTC, dated ____________, and a Certificate Agreement, dated December 2, 1988,
between Bank One and DTC, as amended (the "Certificate Agreement"), and its
obligations as a participant in DTC, including DTC's Same-Day Funds Settlement
System ("SDFS").
Issuance: All Fixed Rate Notes issued in book-entry form having the
same Original Issue Date, Specified Currency, Interest
Rate, Default Rate, Interest Payment Dates, redemption
and/or repayment terms, if any, and Stated Maturity Date
(collectively, the "Fixed Rate Terms") will be
represented initially by a single Global Note; and all
Floating Rate Notes issued in book-entry form having the
same Original Issue Date, Specified Currency, Interest
Category, formula for the calculation of interest
(including the Base Rate or Bases, which may be the CD
Rate, the CMT Rate, the Commercial Paper Rate, the
Federal Funds Rate, LIBOR, the Prime Rate or the Treasury
Rate or any other Base Rate or formula, and Spread and/or
Spread Multiplier, if any), Day Count Convention, Initial
Interest Rate, Default Rate, Index Maturity (if
applicable), Minimum Interest Rate, if any, Maximum
Interest Rate, if any, redemption and/or repayment terms,
if any, Interest Payment Dates, Initial Interest Reset
Date, Interest Reset Dates and Stated Maturity Date
(collectively, the "Floating Rate Terms") will be
represented initially by a single Global Note.
For other variable terms with respect to the Fixed Rate
Notes and Floating Rate Notes, see the Prospectus and the
applicable Pricing Supplement.
Owners of beneficial interests in Global Notes will be
entitled to physical delivery of Certificated Notes equal
in principal amount to their respective beneficial
interests only upon certain limited circumstances
described in the Prospectus.
Identification: The Company has arranged with the CUSIP Service Bureau of
Standard & Poor's Corporation (the "CUSIP Service
Bureau") for the reservation of one series of CUSIP
numbers, which series consists of approximately 900 CUSIP
numbers which
D-11
have been reserved for and relating to Global Notes and
the Company has delivered to each of Bank One and DTC
such list of such CUSIP numbers. The Company will assign
CUSIP numbers to Global Notes as described below under
Settlement Procedure B. DTC will notify the CUSIP Service
Bureau periodically of the CUSIP numbers that the Company
has assigned to Global Notes. Bank One will notify the
Company at any time when fewer than 100 of the reserved
CUSIP numbers remain unassigned to Global Notes, and, if
it deems necessary, the Company will reserve and obtain
additional CUSIP numbers for assignment to Global Notes.
Upon obtaining such additional CUSIP numbers, the Company
will deliver a list of such additional numbers to Bank
One and DTC. Notes issued in book-entry form in excess of
$400,000,000 (or the equivalent thereof in one or more
foreign or composite currencies) aggregate principal
amount and otherwise required to be represented by the
same Global Note will instead be represented by two or
more Global Notes which shall all be assigned the same
CUSIP number.
Registration: Unless otherwise specified by DTC, each Global Note will
be registered in the name of Cede & Co., as nominee for
DTC, on the register maintained by Bank One under the
Indenture. The beneficial owner of a Note issued in book-
entry form (i.e., an owner of a beneficial interest in a
----
Global Note) (or one or more indirect participants in DTC
designated by such owner) will designate one or more
participants in DTC (with respect to such Note issued in
book-entry form, the "Participants") to act as agent for
such beneficial owner in connection with the book-entry
system maintained by DTC, and DTC will record in book-
entry form, in accordance with instructions provided by
such Participants, a credit balance with respect to such
Note issued in book-entry form in the account of such
Participants. The ownership interest of such beneficial
owner in such Note issued in book-entry form will be
recorded through the records of such Participants or
through the separate records of such Participants and one
or more indirect participants in DTC.
Transfers: Transfers of beneficial ownership interests in a Global
Note will be accomplished by book entries made by DTC
and, in turn, by Participants (and in certain cases, one
or more indirect participants in DTC) acting on behalf of
beneficial transferors and transferees of such Global
Note.
Exchanges: Bank One may deliver to DTC and the CUSIP Service Bureau
at any time a written notice specifying (a) the CUSIP
numbers
D-12
of two or more Global Notes outstanding on such date that
represent Global Notes having the same Fixed Rate Terms
or Floating Rate Terms, as the case may be (other than
Original Issue Dates), and for which interest has been
paid to the same date; (b) a date, occurring at least 30
days after such written notice is delivered and at least
30 days before the next Interest Payment Date for the
related Notes issued in book-entry form, on which such
Global Notes shall be exchanged for a single replacement
Global Note; and (c) a new CUSIP number, obtained from
the Company, to be assigned to such replacement Global
Note. Upon receipt of such a notice, DTC will send to its
Participants (including Bank One) a written
reorganization notice to the effect that such exchange
will occur on such date. Prior to the specified exchange
date, Bank One will deliver to the CUSIP Service Bureau
written notice setting forth such exchange date and the
new CUSIP number and stating that, as of such exchange
date, the CUSIP numbers of the Global Notes to be
exchanged will no longer be valid. On the specified
exchange date, Bank One will exchange such Global Notes
for a single Global Note bearing the new CUSIP number and
the CUSIP numbers of the exchanged Notes will, in
accordance with CUSIP Service Bureau procedures, be
canceled and not immediately reassigned. Notwithstanding
the foregoing, if the Global Notes to be exchanged exceed
$400,000,000 (or the equivalent thereof in one or more
foreign or composite currencies) in aggregate principal
amount, one replacement Note will be authenticated and
issued to represent each $400,000,000 (or the equivalent
thereof in one or more foreign or composite currencies)
in aggregate principal amount of the exchanged Global
Notes and an additional Global Note or Notes will be
authenticated and issued to represent any remaining
principal amount of such Global Notes (See
"Denominations" below).
Denominations: Unless otherwise provided in the applicable Pricing
Supplement, Notes issued in book-entry form will be
issued in denominations of $25 or $1,000 and integral
multiples of such denominations in excess thereof. Global
Notes will not be denominated in excess of $400,000,000
(or
D-13
the equivalent thereof in one or more foreign or
composite currencies) aggregate principal amount. If one
or more Notes are issued in book-entry form in excess of
$400,000,000 (or the equivalent thereof in one or more
foreign or composite currencies) aggregate principal
amount and would, but for the preceding sentence, be
represented by a single Global Note, then one Global Note
will be issued to represent each $400,000,000 (or the
equivalent thereof in one or more foreign or composite
currencies) in aggregate principal amount of such Notes
issued in book-entry form and an additional Global Note
or Notes will be issued to represent any remaining
aggregate principal amount of such Note or Notes issued
in book-entry form. In such a case, each of the Global
Notes representing Notes issued in book-entry form shall
be assigned the same CUSIP number.
Payments of Principal
and Interest: Payments of Interest Only. Promptly after each Regular
-------------------------
Record Date, Bank One will deliver to the Company and DTC
a written notice specifying by CUSIP number the amount of
interest to be paid on each Global Note on the following
Interest Payment Date (other than an Interest Payment
Date coinciding with the Maturity Date) and the total of
such amounts, to the extent then ascertainable. DTC will
confirm the amount payable on each Global Note on such
Interest Payment Date by reference to the daily bond
reports published by Standard & Poor's Corporation. On
such Interest Payment Date, the Company will pay to Bank
One in immediately available funds an amount sufficient
to pay the interest then due and owing on the Global
Notes, and upon receipt of such funds from the Company,
Bank One in turn will pay to DTC such total amount of
interest due on such Global Notes (other than on the
Maturity Date) which is payable in U.S. dollars, at the
times and in the manner set forth below under "Manner of
Payment". Bank One shall make payment of that amount of
interest due and owing on any Global Notes that
Participants have elected to receive in foreign or
composite currencies directly to such Participants.
Notice of Interest Rates. Promptly after each Interest
------------------------
Determination Date or Calculation Date, as the case may
be, for Floating Rate Notes issued in book-entry form,
Bank One will notify each of Xxxxx'x Investors Service,
Inc. and Standard & Poor's Corporation of the interest
rates determined as of such Interest Determination Date.
Payments at Maturity. On or about the first Business Day
--------------------
of each month, Bank One will deliver to the Company and
DTC a written list of principal, premium, if any, and
interest to be paid on each Global Note maturing or
otherwise becoming due in the following month, to the
extent then ascertainable. Bank One, the Company and DTC
will confirm the amounts of such principal, premium, if
any, and interest payments with respect to each such
Global Note on or about the fifth Business Day
D-14
preceding the Maturity Date of such Global Note. On the
Maturity Date, the Company will pay to Bank One in
immediately available funds an amount sufficient to make
the required payments, and upon receipt of such funds
Bank One in turn will pay to DTC the principal amount of
Global Notes, together with premium, if any, and interest
due on the Maturity Date, which are payable in U.S.
dollars, at the times and in the manner set forth below
under "Manner of Payment". Bank One shall make payment of
the principal, premium, if any, and interest to be paid
on the Maturity Date of each Global Note that
Participants have elected to receive in foreign or
composite currencies directly to such Participants.
Promptly after (i) payment to DTC of the principal,
premium, if any, and interest due on the Maturity Date of
such Global Note which are payable in U.S. dollars and
(ii) payment of the principal, premium, if any, and
interest due on the Maturity Date of such Global Note to
those Participants who have elected to receive such
payments in foreign or composite currencies, the Trustee
will cancel such Global Note and deliver it to the
Company with an appropriate debit advice. On the first
Business Day of each month, the Trustee will deliver to
the Company a written statement indicating the total
principal amount of outstanding Global Notes as of the
close of business on the immediately preceding Business
Day.
Manner of Payment. The total amount of any principal,
-----------------
premium, if any, and interest due on Global Notes on any
Interest Payment Date or the Maturity Date, as the case
may be, which is payable in U.S. dollars shall be paid by
the Company to Bank One in funds available for use by
Bank One no later than 10:00 a.m., New York City time, on
such date. The Company will make such payment on such
Global Notes to an account specified by Bank One. Upon
receipt of such funds, Bank One will pay by separate wire
transfer (using Fedwire message entry instructions in a
form previously specified by DTC) to an account at the
Federal Reserve Bank of New York previously specified by
DTC, in funds available for immediate use by DTC, each
payment in U.S. dollars of principal, premium, if any,
and interest due on Global Notes on such date. Thereafter
on such date, DTC will pay, in accordance with its SDFS
operating procedures then in effect, such amounts in
funds available for immediate use to the respective
Participants in whose names the beneficial interests in
such Global Notes are recorded in the book-entry system
maintained by DTC. Neither the Company nor Bank One shall
have any responsibility or liability for the payment in
U.S. dollars by
D-15
DTC of the principal of, or premium, if any, or interest
on, the Global Notes. Bank One shall make all payments of
principal, premium, if any, and interest on each Global
Note that Participants have elected to receive in foreign
or composite currencies directly to such Participants.
Withholding Taxes. The amount of any taxes required under
-----------------
applicable law to be withheld from any interest payment
on a Global Note will be determined and withheld by the
Participant, indirect participant in DTC or other Person
responsible for forwarding payments and materials
directly to the beneficial owner of such Global Note.
Settlement
Procedures: Settlement Procedures with regard to each Note in book-
entry form sold by an Agent, as agent of the Company, or
purchased by an Agent, as principal, will be as follows:
A. The Offering Agent will advise the Company by
telephone, confirmed by facsimile, of the following
settlement information:
1. Principal amount, Authorized Denomination, and
Specified Currency.
2. Exchange Rate Agent, if any.
3. (a) Fixed Rate Notes:
(i) Interest Rate.
(ii) Interest Payment Dates.
(iii) Whether such Note is being issued
with Original Issue Discount and, if
so, the terms thereof.
(b) Floating Rate Notes:
(i) Interest Category.
(ii) Base Rate(s).
(iii) Initial Interest Rate.
D-16
(iv) Spread and/or Spread Multiplier, if
any.
(v) Initial Interest Reset Date or
Interest Reset Dates.
(vi) Interest Payment Dates.
(viii) Maximum and/or Minimum Interest
Rates, if any.
(ix) Day Count Convention.
(x) Calculation Agent.
4. Price to public, if any, of such Note (or whether
such Note is being offered at varying prices
relating to prevailing market prices at time of
resale as determined by the Offering Agent).
5. Trade Date.
6. Settlement Date (Original Issue Date).
7. Stated Maturity Date.
8. Redemption provisions, if any.
9. Repayment provisions, if any.
10. Default Rate, if any.
11. Net proceeds to the Company.
12. The Offering Agent's discount or commission.
13. Whether such Note is being sold to the Offering
Agent as principal or to an investor or other
purchaser through the Offering Agent acting as
agent for the Company.
14. Such other information specified with respect to
such Note (whether by Addendum or otherwise).
D-17
B. The Company will assign a CUSIP number to the Global
Note representing such Note and then advise the
Trustee by facsimile transmission or other electronic
transmission (promptly confirmed in writing) of the
above settlement information received from the
Offering Agent, such CUSIP number and the name of the
Offering Agent. The Company will also advise the
Offering Agent of the CUSIP number assigned to the
Global Note.
C. Bank One will communicate to DTC and the Offering
Agent through DTC's Participant Terminal System a
pending deposit message specifying the following
settlement information:
1. The information set forth in the Settlement
Procedure A.
2. Identification numbers of the participant
accounts maintained by DTC on behalf of Bank One
and the Offering Agent.
3. Identification of the Global Note as a Fixed Rate
Global Note or Floating Rate Global Note.
4. Initial Interest Payment Date for such Note,
number of days by which such date succeeds the
related record date for DTC purposes (or, in the
case of Floating Rate Notes which reset daily or
weekly, the date five calendar days preceding the
Interest Payment Date) and, if then calculable,
the amount of interest payable on such Interest
Payment Date (which amount shall have been
confirmed by Bank One).
5. CUSIP number of the Global Note representing such
Note.
6. Whether such Global Note represents any other
Notes issued or to be issued in book-entry form.
DTC will arrange for each pending deposit message
described above to be transmitted to Standard &
Poor's Corporation, which will use the information in
the message to include certain terms of the related
Global Note in the appropriate daily bond report
published by Standard & Poor's Corporation.
D-18
D. The Trustee will complete and authenticate the Global
Note representing such Note.
E. DTC will credit such Note to the participant account
of Bank One maintained by DTC.
F. Bank One will enter an SDFS deliver order through
DTC's Participant Terminal System instructing DTC (i)
to debit such Note to Bank One's participant account
and credit such Note to the participant account of
the Offering Agent maintained by DTC and (ii) to
debit the settlement account of the Offering Agent
and credit the settlement account of Bank One
maintained by DTC, in an amount equal to the price of
such Note less such Offering Agent's discount or
underwriting commission, as applicable. Any entry of
such a deliver order shall be deemed to constitute a
representation and warranty by the Trustee to DTC
that (i) the Global Note representing such Note has
been issued and authenticated and (ii) Bank One is
holding such Global Note pursuant to the Certificate
Agreement.
G. In the case of Notes in book-entry form sold through
the Offering Agent, as agent, the Offering Agent will
enter an SDFS deliver order through DTC's Participant
Terminal System instructing DTC (i) to debit such
Note to the Offering Agent's participant account and
credit such Note to the participant account of the
Participants maintained by DTC and (ii) to debit the
settlement accounts of such Participants and credit
the settlement account of the Offering Agent
maintained by DTC in an amount equal to the initial
public offering price of such Note.
H. Transfers of funds in accordance with SDFS deliver
orders described in Settlement Procedures F and G
will be settled in accordance with SDFS operating
procedures in effect on the Settlement Date.
I. Upon receipt, Bank One will pay the Company, by wire
transfer of immediately available funds to an account
specified by the Company to Bank One from time to
time, the amount transferred to Bank One in
accordance with Settlement Procedure F.
D-19
J. Bank One will send a copy of the Global Note by
first class mail to the Company together with a
statement setting forth the principal amount of
Notes Outstanding as of the related Settlement
Date after giving effect to such transaction and
all other offers to purchase Notes of which the
Company has advised Bank One but which have not
yet been settled.
K. If such Note was sold through the Offering Agent,
as agent, the Offering Agent will confirm the
purchase of such Note to the investor or other
purchaser either by transmitting to the
Participant with respect to such Note a
confirmation order through DTC's Participant
Terminal System or by mailing a written
confirmation to such investor or other purchaser.
Settlement Procedures
Timetable: For offers to purchase Notes accepted by the Company,
Settlement Procedures A through K set forth above shall
be completed as soon as possible following the trade
but not later than the respective times (New York City
time) set forth below:
Settlement
Procedure Time
--------- ----
A 11:00 a.m. on the trade date or within
one hour following the trade
B 12:00 noon on the trade date or within
one hour following the trade
C No later than the close of business on
the trade date
D 9:00 a.m. on Settlement Date
E 10:00 a.m. on Settlement Date
F-G No later than 2:00 p.m. on Settlement
Date
H 4:00 p.m. on Settlement Date
I-K 5:00 p.m. on Settlement Date
D-20
Settlement Procedure H is subject to extension in
accordance with any extension of Fedwire closing
deadlines and in the other events specified in the SDFS
operating procedures in effect on the Settlement Date.
If settlement of a Note issued in book-entry form is
rescheduled or canceled, Bank One will deliver to DTC,
through DTC's Participant Terminal System, a cancellation
message to such effect by no later than 5:00 p.m., New
York City time, on the Business Day immediately preceding
the scheduled Settlement Date.
Failure to Settle: If Bank One fails to enter an SDFS deliver order with
respect to a Note issued in book-entry form pursuant to
Settlement Procedure F, Bank One may deliver to DTC,
through DTC's Participant Terminal System, as soon as
practicable a withdrawal message instructing DTC to debit
such Note to the participant account of Bank One
maintained at DTC. DTC will process the withdrawal
message, provided that such participant account contains
a principal amount of the Global Note representing such
Note that is at least equal to the principal amount to be
debited. If withdrawal messages are processed with
respect to all the Notes represented by a Global Note,
the Trustee will xxxx such Global Note "canceled", make
appropriate entries in its records and send certification
of cancellation of such canceled Global Note to the
Company. The CUSIP number assigned to such Global Note
shall, in accordance with CUSIP Service Bureau
procedures, be canceled and not immediately reassigned.
If withdrawal messages are processed with respect to a
portion of the Notes represented by a Global Note, the
Trustee will exchange such Global Note for two Global
Notes, one of which shall represent the Global Notes for
which withdrawal messages are processed and shall be
canceled immediately after issuance and the other of
which shall represent the other Notes previously
represented by the surrendered Global Note and shall bear
the CUSIP number of the surrendered Global Note.
In the case of any Note in book-entry form sold through
the Offering Agent, as agent, if the purchase price for
any such Note is not timely paid to the Participants with
respect thereto by the beneficial investor or other
purchaser thereof (or a person, including an indirect
participant in DTC, acting on behalf of such investor or
other purchaser), such Participants and, in turn, the
related Offering Agent may enter SDFS
D-21
deliver orders through DTC's Participant Terminal System
reversing the orders entered pursuant to Settlement
Procedures F and G, respectively. Thereafter, the Trustee
will deliver the withdrawal message and take the related
actions described in the preceding paragraph. If such
failure shall have occurred for any reason other than
default by the applicable Offering Agent to perform its
obligations hereunder or under the Distribution
Agreement, the Company will reimburse such Offering Agent
on an equitable basis for its reasonable loss of the use
of funds during the period when the funds were credited
to the account of the Company.
Notwithstanding the foregoing, upon any failure to settle
with respect to a Note in book-entry form, DTC may take
any actions in accordance with its SDFS operating
procedures then in effect. In the event of a failure to
settle with respect to a Note that was to have been
represented by a Global Note also representing other
Notes, the Trustee will provide, in accordance with
Settlement Procedure D, for the authentication and
issuance of a Global Note representing such remaining
Notes and will make appropriate entries in its records.
D-22
PART III: PROCEDURES FOR CERTIFICATED NOTES
Denominations: Unless otherwise provided in the applicable Pricing
Supplement, the Certificated Notes will be issued in
denominations of $25 or $1,000 and integral multiples of
such denominations in excess thereof.
Payments of Principal,
Premium, if any,
and Interest: Upon presentment and delivery of the Certificated Note,
the Trustee upon receipt of immediately available funds
from the Company will pay the principal of, premium, if
any, and interest on, each Certificated Note on the
Maturity Date in immediately available funds. All
interest payments on a Certificated Note, other than
interest due on the Maturity Date, will be made by check
mailed to the address of the person entitled thereto as
such address shall appear in the Security Register at the
applicable Regular Record Date; provided, however, that
Holders shall be entitled to receive such interest
payments by wire transfer of immediately available funds
if appropriate wire transfer instructions have been
received in writing by the Trustee not less than 15
calendar days prior to the applicable Interest Payment
Date.
The Trustee will provide monthly to the Company a list of
the principal, premium, if any, and interest to be paid
on Certificated Notes maturing in the next succeeding
month. The Trustee will be responsible for withholding
taxes on interest paid as required by applicable law.
Certificated Notes presented to the Trustee on the
Maturity Date for payment will be canceled by the
Trustee. All canceled Certificated Notes held by the
Trustee shall be disposed of in accordance with its
customary procedures, and the Trustee shall furnish to
the Company a certificate with respect to such
disposition.
Settlement
Procedures: Settlement Procedures with regard to each Certificated
Note purchased by an Agent, as principal, or through an
Agent, as agent, shall be as follows:
D-23
A. The Offering Agent will advise the Company by
telephone of the following Settlement information
with regard to each Certificated Note:
1. Exact name in which the Certificated Note(s)
is to be registered (the "Registered Owner").
2. Exact address or addresses of the Registered
Owner for delivery, notices and payments of
principal, premium, if any, and interest.
3. Taxpayer identification number of the
Registered Owner.
4. Principal amount, Authorized Denomination and
Specified Currency.
5. Exchange Rate Agent, if any.
6. (a) Fixed Rate Notes:
(i) Interest Rate.
(ii) Interest Payment Dates.
(iii) Whether such Note is being
issued with Original Issue
Discount and, if so, the
terms thereof.
(b) Floating Rate Notes:
(i) Interest Category.
(ii) Base Rate or Bases.
(iii) Initial Interest Rate.
(iv) Spread and/or Spread
Multiplier, if any.
(v) Initial Interest Reset Date
and Interest Reset Dates.
(vi) Interest Payment Dates.
D-24
(vii) Index Maturity, if any.
(viii) Maximum and/or Minimum
Interest Rates, if any.
(ix) Day Count Convention.
(x) Calculation Agent.
7. Price to public of such Certificated Note (or
whether such Note is being offered at varying
prices relating to prevailing market prices
at time of resale as determined by the
Offering Agent).
8. Trade Date.
9. Settlement Date (Original Issue Date).
10. Stated Maturity Date.
11. Redemption provisions, if any.
12. Repayment provisions, if any.
13. Default Rate, if any.
14. Net proceeds to the Company.
15. The Offering Agent's discount or commission.
16. Whether such Note is being sold to the
Offering Agent as principal or to an investor
or other purchaser through the Offering Agent
acting as agent for the Company.
17. Such other information specified with respect
to such Note (whether by Addendum or
otherwise).
B. After receiving such settlement information from
the Offering Agent, the Company will advise the
Trustee of the above settlement information by
facsimile transmission confirmed by telephone (and
promptly confirmed in writing as well). The Company
will cause the Trustee to issue, authenticate and
deliver the Certificated Note.
D-25
C. The Trustee will complete the Certificated Note in
the form approved by the Company and the Offering
Agent, and will make three copies thereof (herein
called "Stub 1", "Stub 2" and "Stub 3"):
1. Certificated Note with the Offering Agent's
confirmation, if traded on a principal basis,
or the Offering Agent's customer
confirmation, if traded on an agency basis.
2. Stub 1 for Trustee.
3. Stub 2 for Offering Agent.
4. Stub 3 for the Company.
D. With respect to each trade, the Trustee will
deliver the Certificated Note and Stub 2 thereof to
the Offering Agent at the following applicable
address: if to
__________________________________________________
__________________________________________________
__________________________________________________
_________________________________________________;
and the Trustee will keep Stub 1. The Offering
Agent will acknowledge receipt of the Certificated
Note through a broker's receipt and will keep Stub
2. Delivery of the Certificated Note will be made
only against such acknowledgment of receipt. Upon
determination that the Certificated Note has been
authorized, delivered and completed as
aforementioned, the Offering Agent will wire the
net proceeds of the Certificated Note after
deduction of its applicable commission to the
Company pursuant to standard wire instructions
given by the Company.
E. In the case of a Certificated Note sold through the
Offering Agent, as agent, the Offering Agent will
deliver such Certificated Note (with the
confirmation) to the purchaser against payment in
immediately available funds.
F. The Trustee will send Stub 3 to the Company.
Settlement
Procedures
D-26
Timetable: For offers to purchase Certificated Notes accepted by
the Company, Settlement Procedures A through F set
forth above shall be completed as soon as possible
following the trade but not later than the respective
times (New York City time) set forth below:
Settlement
Procedure Time
---------- ----
A 11:00 a.m. on the trade date or
within one hour following the trade
B 12:00 noon on the trade date or
within one hour following the trade
C-D 2:15 p.m. on Settlement Date
E 3:00 p.m. on Settlement Date
F 5:00 p.m. on Settlement Date
Failure to Settle: In the case of Certificated Notes sold through the
Offering Agent, as agent, if an investor or other
purchaser of a Certificated Note from the Company shall
either fail to accept delivery of or make payment for
such Certificated Note on the date fixed for
settlement, the Offering Agent will forthwith notify
the Trustee and the Company by telephone, confirmed in
writing, and return such Certificated Note to the
Trustee.
The Trustee, upon receipt of such Certificated Note
from the Offering Agent, will immediately advise the
Company and the Company will promptly arrange to credit
the account of the Offering Agent in an amount of
immediately available funds equal to the amount
previously paid to the Company by such Offering Agent
in settlement for such Certificated Note. Such credits
will be made on the Settlement Date if possible, and in
any event not later than the Business Day following the
Settlement Date; provided that the Company has received
notice on the same day. If such failure shall have
occurred for any reason other than failure by such
Offering Agent to perform its obligations hereunder or
under the Distribution Agreement, the Company will
reimburse such Offering Agent on an equitable basis for
its reasonable loss of the use of funds during the
period when the funds were credited to the account of
the Company. Immediately upon receipt of the
Certificated Note in respect of which the failure
occurred, the Trustee will
D-27
cancel and dispose of such Certificated Note in
accordance with its customary procedures, make
appropriate entries in its records to reflect the fact
that such Certificated Note was never issued, and
accordingly notify in writing the Company.
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