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THE XXXXXXX XXXXX GROUP, INC.
$15,000,000,000
MEDIUM-TERM NOTES, SERIES B
DISTRIBUTION AGREEMENT
May 19, 1999
Xxxxxxx, Sachs & Co.,
00 Xxxxx Xxxxxx,
Xxx Xxxx, Xxx Xxxx 00000.
Ladies and Gentlemen:
The Xxxxxxx Xxxxx Group, Inc., a Delaware corporation (the "Company"),
proposes to issue and sell from time to time its Medium-Term Notes, Series B
(the "Securities") in an amount having an aggregate initial offering price of up
to $15,000,000,000 and agrees with each of you (individually, an "Agent" and,
collectively, the "Agents") as set forth in this Agreement. Each of the terms
"the Agents", "such Agent", "any Agent", "an Agent", "each Agent", "the
Purchasing Agent" and "the Selling Agent", when used in this Agreement or in any
Terms Agreement (as defined below) or in the Annexes hereto, shall mean Xxxxxxx,
Sachs & Co. except at any time when more than one Agent is acting as such
hereunder, as contemplated in Section 10 hereof.
The Company acknowledges and agrees that Xxxxxxx, Xxxxx & Co. may use
the Prospectus (as defined below) in connection with offers and sales of the
Securities as contemplated in the Prospectus under the caption "Plan of
Distribution of the Notes -- Plan of Distribution for Market-Making Resales by
Affiliates" ("Secondary Market Transactions"). The Company further acknowledges
and agrees that Xxxxxxx, Sachs & Co. is under no obligation to effect any
Secondary Market Transactions and, if it does so, it may discontinue effecting
such transactions at any time without providing any notice to the Company. The
term "Agent", whenever used in this Agreement, shall include Xxxxxxx, Xxxxx &
Co., whether acting in its capacity as an Agent or acting in connection with a
Secondary Market Transaction, except as may be specifically provided otherwise
herein.
Subject to the terms and conditions stated herein and to the
reservation by the Company of the right to sell Securities directly on its own
behalf, the Company hereby (i) appoints each Agent as an agent of the Company
for the purpose of soliciting and receiving offers to purchase Securities from
the Company pursuant to Section 2(a) hereof and (ii) agrees that, except as
otherwise contemplated herein, whenever it determines to sell Securities
directly to any Agent as principal, it will enter into a separate agreement
(each a "Terms Agreement"), substantially in the form of Annex I hereto or in
such other form as may be agreed by the parties to that particular agreement,
relating to such sale in accordance with Section 2(b) hereof. This Distribution
Agreement shall not be construed to create either an obligation on the part of
the Company to sell any Securities or an obligation of any of the Agents to
purchase Securities as principal.
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The Securities will be issued under an indenture, dated as of May 19,
1999 (as it may be amended from time to time, the "Indenture"), between the
Company and The Bank of New York, as trustee (including any successor trustee
thereunder, the "Trustee"). The Securities shall have the maturity ranges,
interest rates, if any, redemption provisions and other terms set forth in the
Prospectus referred to below as it may be amended or supplemented from time to
time. The Securities will be issued, and the terms and rights thereof
established, from time to time by the Company in accordance with the Indenture.
The Company succeeded to the business of The Xxxxxxx Sachs Group,
L.P., a Delaware limited partnership ("Group"), in a series of transactions
described in the Prospectus under the caption "Certain Relationships and Related
Transactions -- Incorporation and Related Transactions -- Incorporation
Transactions". Those transactions, which are hereinafter referred to as the
"Incorporation Transactions", were consummated on May 7, 1999. For purposes of
the representations and warranties set forth in Sections 1(d) and 1(p) hereof,
the conditions set forth in Section 6(e) hereof and the provisions of Annex III
hereof, references to the Company with respect to any time before the
consummation of the Incorporation Transactions shall be deemed to be references
to Group.
1. The Company represents and warrants to, and agrees with,
each Agent that:
(a) A registration statement on Form S-1 (File No.
333-75321) in respect of the Securities has been filed with the
Securities and Exchange Commission (the "Commission"); such
registration statement and any post-effective amendment thereto, each
in the form heretofore delivered or to be delivered to such Agent,
excluding exhibits to such registration statement, have been declared
effective by the Commission in such form; no other document with
respect to such registration statement has been filed with the
Commission (other than the prospectuses filed pursuant to Rule 424(b)
of the rules and regulations of the Commission under the Securities
Act of 1933, as amended (the "Act"), each in the form delivered to the
Agents); and no stop order suspending the effectiveness of such
registration statement has been issued and no proceeding for that
purpose has been initiated or threatened by the Commission (any
preliminary prospectus included in such registration statement or
filed with the Commission pursuant to Rule 424(a) of the rules and
regulations of the Commission under the Act, is hereinafter called a
"Preliminary Prospectus"; the various parts of such registration
statement, including all exhibits thereto but excluding Form T-1 and,
if applicable, including the information contained in the form of
final prospectus filed with the Commission pursuant to Rule 424(b)
under the Act, in accordance with Section 4(a) hereof and deemed by
virtue of Rule 430A under the Act to be part of the registration
statement, each as amended at the time such part of the registration
statement became effective, is hereinafter collectively called the
"Registration Statement"; the prospectus (including, if applicable,
any prospectus supplement) relating to the Securities, in the form in
which it has most recently been filed, or transmitted for filing, with
the Commission on or prior to the date of this Agreement, is
hereinafter called the "Prospectus"; any supplement to the Prospectus
that sets forth only the terms of a particular issue of the Securities
and is filed in accordance with Section 4(a) hereof is hereinafter
called a "Pricing Supplement"; and any reference herein to the
Prospectus as amended or supplemented shall be deemed to refer to and
include the Prospectus as amended and supplemented (including by the
applicable Pricing Supplement) in relation to Securities to be sold
pursuant to this Agreement, in the form filed or transmitted for
filing with the Commission pursuant to Rule 424(b) under the Act and
in accordance with Section 4(a) hereof);
(b) No order preventing or suspending the use of any
Preliminary Prospectus has been issued by the Commission, and each
Preliminary Prospectus, at the time of filing thereof, conformed in
all material respects to the requirements of the Act and the Trust
Indenture Act of
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1939, as amended (the "Trust Indenture Act"), and the rules and
regulations of the Commission thereunder, and did not contain an
untrue statement of a material fact or omit to state a material fact
required to be stated therein or necessary to make the statements
therein, in the light of the circumstances under which they were made,
not misleading; provided, however, that this representation and
warranty shall not apply to any statements or omissions made in
reliance upon and in conformity with information furnished in writing
to the Company by an Underwriter through Xxxxxxx, Xxxxx & Co.
expressly for use therein;
(c) The Registration Statement and the Prospectus conform,
and any further amendments or supplements to the Registration
Statement or the Prospectus will conform, in all material respects to
the requirements of the Act and the Trust Indenture Act, and the rules
and regulations of the Commission thereunder and do not and will not,
as of the applicable effective date as to the Registration Statement
and any amendment thereto and as of the applicable filing date as to
the Prospectus and any amendment or supplement thereto, contain an
untrue statement of a material fact or omit to state a material fact
required to be stated therein or necessary to make the statements
therein not misleading; provided, however, that this representation
and warranty shall not apply to any statements or omissions made in
reliance upon and in conformity with information furnished in writing
to the Company by any Agent expressly for use in the Prospectus as
amended or supplemented to relate to a particular issuance of
Securities;
(d) Neither the Company nor any of its subsidiaries has
sustained since the date of the latest audited financial statements
included in the Prospectus any material loss or interference with its
business from fire, explosion, flood or other calamity, whether or not
covered by insurance, or from any labor dispute or court or
governmental action, order or decree, otherwise than as set forth or
contemplated in the Prospectus; and, since the respective dates as of
which information is given in the Registration Statement and the
Prospectus, there has not been any change in the partners' capital or
capital stock, as applicable, or long-term debt of the Company or any
of its subsidiaries or any material adverse change, or any development
involving a prospective material adverse change, in or affecting the
general affairs, management, financial position, partners' capital or
stockholders' equity, as applicable, or results of operations of the
Company and its subsidiaries, otherwise than as set forth or
contemplated in the Prospectus;
(e) The Company has been duly incorporated and is validly
existing as a corporation in good standing under the laws of the State
of Delaware, with power and authority (corporate and other) to own its
properties and conduct its business as described in the Prospectus;
(f) The Company has an authorized capitalization as set
forth in the Prospectus, and all of the issued shares of capital stock
of the Company have been duly and validly authorized and issued and
are fully paid and non-assessable;
(g) The Securities have been duly authorized, and, when
issued and delivered pursuant to this Agreement and any Terms
Agreement, will have been duly executed, authenticated, issued and
delivered and will constitute valid and legally binding obligations of
the Company entitled to the benefits provided by the Indenture, which
will be substantially in the form filed as an exhibit to the
Registration Statement; the Indenture has been duly authorized and
duly qualified under the Trust Indenture Act and constitutes a valid
and legally binding instrument, enforceable in accordance with its
terms, subject, as to enforcement, to bankruptcy, insolvency,
reorganization and other laws of general applicability relating to or
affecting creditors' rights and to general equity principles; and the
Indenture conforms and the Securities of any particular issuance of
Securities will conform to the descriptions thereof contained in the
Prospectus as amended or supplemented to relate to such issuance of
Securities;
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(h) The issue and sale of the Securities, the compliance by
the Company with all of the provisions of the Securities, the
Indenture, this Agreement and any Terms Agreement, and the
consummation of the transactions herein and therein contemplated will
not conflict with or result in a breach or violation of any of the
terms or provisions of, or constitute a default under, any indenture,
mortgage, deed of trust, loan agreement or other agreement or
instrument to which the Company is a party or by which the Company is
bound or to which any of the property or assets of the Company is
subject, nor will such action result in any violation of the
provisions of the Certificate of Incorporation, as amended, or the
By-laws of the Company or any statute or any order, rule or regulation
of any court or governmental agency or body having jurisdiction over
the Company or any of its properties; and no consent, approval,
authorization, order, registration or qualification of or with any
court or governmental agency or body is required for the solicitation
of offers to purchase Securities, the issue and sale of the Securities
or the consummation by the Company of the other transactions
contemplated by this Agreement, any Terms Agreement or the Indenture,
except such as have been, or will have been prior to the Commencement
Date (as defined in Section 3 hereof), obtained under the Act or the
Trust Indenture Act and such consents, approvals, authorizations,
registrations or qualifications as may be required under state
securities or Blue Sky laws in connection with the solicitation by
such Agent of offers to purchase Securities from the Company and with
purchases of Securities by such Agent as principal, as the case may
be, in each case in the manner contemplated hereby;
(i) Neither the Company nor any of its subsidiaries is in
violation of its organizational documents or in default in the
performance or observance of any material obligation, covenant or
condition contained in any indenture, mortgage, deed of trust, loan
agreement, lease or other agreement or instrument to which it is a
party or by which it or any of its properties may be bound;
(j) The statements set forth in the Prospectus under the
caption "Description of Notes We May Offer", insofar as they purport
to constitute a summary of the terms of the Securities, and under the
captions "United States Taxation" and "Plan of Distribution of Notes",
insofar as they purport to describe the provisions of the laws and
documents referred to therein, are accurate, complete and fair;
(k) Other than as set forth in the Prospectus, there are no
legal or governmental proceedings pending to which the Company or any
of its subsidiaries is a party or to which any property of the Company
or any of its subsidiaries is subject, which, if determined adversely
to the Company or any of its subsidiaries, would individually or in
the aggregate have a material adverse effect on the current or future
consolidated financial position, stockholders' equity or results of
operations of the Company and its subsidiaries, and, to the best of
the Company's knowledge, no such proceedings are threatened or
contemplated by governmental authorities or threatened by others;
(l) The Company is not and, after giving effect to each
offering and sale of the Securities, will not be an "investment
company", as such terms are defined in the Investment Company Act of
1940, as amended (the "Investment Company Act");
(m) Immediately after any sale of Securities by the Company
hereunder or under any Terms Agreement, the aggregate amount of
Securities which shall have been issued and sold by the Company
hereunder or under any Terms Agreement and of any debt securities of
the Company (other than such Securities) that shall have been issued
and sold pursuant to the Registration Statement will not exceed the
amount of debt securities registered under the Registration Statement;
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(n) The Company and its subsidiaries possess all
concessions, permits, licenses, consents, exemptions, franchises,
authorizations, orders, registrations, qualifications and other
approvals issued by the appropriate Federal, state and foreign
governments, governmental or regulatory authorities, self-regulatory
organizations and all courts or other tribunals, and are members in
good standing of each Federal, state or foreign exchange, board of
trade, clearing house or association and self-regulatory or similar
organization necessary to conduct their respective businesses as
described in the Prospectus;
(o) The statements set forth in the Prospectus under the
captions "Management's Discussion and Analysis of Financial Condition
and Results of Operations -- Risk Management -- Operational and Year
2000 Risks -- Year 2000 Readiness Disclosure" and "Risk Factors -- Our
Computer Systems and Those of Third Parties May Not Achieve Year 2000
Readiness -- Year 2000 Readiness Disclosure" accurately and fairly set
forth the current state of the Company's efforts to address the Year
2000 Problem and the risks and costs relating to the Year 2000
Problem. The "Year 2000 Problem" as used herein means any significant
risk that computer hardware or software used in the receipt,
transmission, processing, manipulation, storage, retrieval,
transmission or other utilization of data or in the operation of
mechanical or electrical systems of any kind will not, in the case of
dates or time periods occurring after December 31, 1999, function at
least as effectively as in the case of dates or time periods occurring
prior to January 1, 2000; and
(p) PricewaterhouseCoopers LLP, who have certified certain
financial statements of the Company and its subsidiaries, are
independent public accountants as required by the Act and the rules
and regulations of the Commission thereunder.
2. (a) On the basis of the representations and warranties
herein contained, and subject to the terms and conditions herein set
forth, each of the Agents hereby severally and not jointly agrees, as
agent of the Company, to use its reasonable efforts to solicit and
receive offers to purchase the Securities from the Company upon the
terms and conditions set forth in the Prospectus as amended or
supplemented from time to time. So long as this Agreement shall remain
in effect with respect to any Agent, the Company shall not, without
the consent of such Agent, solicit or accept offers to purchase, or
sell, any debt securities with a maturity at the time of original
issuance of 12 months or more except pursuant to this Agreement or any
Terms Agreement, or except pursuant to a private placement not
constituting a public offering under the Act, except pursuant to an
offering outside the United States that is not subject to the
registration requirements of the Act or except in connection with a
firm commitment underwriting pursuant to an underwriting agreement
that does not provide for a continuous offering of medium-term debt
securities (other than in Secondary Market Transactions). However, the
Company reserves the right to sell, and may solicit and accept offers
to purchase, Securities directly on its own behalf in transactions
with persons other than broker-dealers, and, in the case of any such
sale not resulting from a solicitation made by any Agent, no
commission will be payable with respect to such sale. These provisions
shall not limit Section 4(f) hereof or any similar provision included
in any Terms Agreement.
Procedural details relating to the issue and delivery of
Securities, the solicitation of offers to purchase Securities and the
payment in each case therefor shall be as set forth in the
Administrative Procedure attached hereto as Annex II as it may be
amended from time to time by written agreement between the Agents and
the Company (the "Administrative Procedure"). The provisions of the
Administrative Procedure shall apply to all transactions contemplated
hereunder other than those made pursuant to a Terms Agreement. Each
Agent and the Company agree to perform the respective duties and
obligations specifically provided to be performed by each of them
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in the Administrative Procedure. The Company will furnish to the
Trustee a copy of the Administrative Procedure as from time to time in
effect.
The Company reserves the right, in its sole discretion, to
instruct the Agents to suspend at any time, for any period of time or
permanently, the solicitation of offers to purchase the Securities. As
soon as practicable, but in any event not later than one business day
in New York City, after receipt of notice from the Company, the Agents
will suspend solicitation of offers to purchase Securities from the
Company until such time as the Company has advised the Agents that
such solicitation may be resumed. During such period, the Company
shall not be required to comply with the provisions of Sections 4(h),
4(i), 4(j) and 4(k). Upon advising the Agents that such solicitation
may be resumed, however, the Company shall simultaneously provide the
documents required to be delivered by Sections 4(h), 4(i), 4(j) and
4(k), and the Agents shall have no obligation to solicit offers to
purchase the Securities until such documents have been received by the
Agents. In addition, any failure by the Company to comply with its
obligations hereunder, including its obligations to deliver the
documents required by Sections 4(h), 4(i), 4(j) and 4(k), shall
automatically terminate the Agents' obligations hereunder, including
its obligations to solicit offers to purchase the Securities hereunder
as agent or to purchase Securities hereunder as principal.
The Company agrees to pay each Agent a commission, at the
time of settlement of any sale of a Security by the Company as a
result of a solicitation made by such Agent, in an amount equal to the
following applicable percentage of the principal amount of such
Security sold:
Commission
(percentage of
aggregate
principal amount
Range of Maturities of Securities sold)
------------------- -------------------
From 1 year to 2 years .150%
From 2 years to less than 3 years .175%
From 3 years to less than 4 years .250%
From 4 years to less than 5 years .300%
From 5 years to less than 6 years .350%
From 6 years to less than 7 years .375%
From 7 years to less than 10 years .400%
From 10 years to less than 12 years .475%
From 12 years to less than 20 years .550%
From 20 years to less than 30 years .600%
From 30 years to less than 40 years .750%
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Commission
(percentage of
aggregate
principal amount
Range of Maturities of Securities sold)
------------------- -------------------
40 years and more .900%
(b) Each sale of Securities by the Company to any Agent as
principal shall be made in accordance with the terms of this Agreement
and (unless the Company and such Agent shall otherwise agree) a Terms
Agreement which will provide for the sale of such Securities by the
Company to, and the purchase thereof by, such Agent; a Terms Agreement
may also specify certain provisions relating to the reoffering of such
Securities by such Agent; the commitment of any Agent to purchase
Securities as principal, whether pursuant to any Terms Agreement or
otherwise, shall be deemed to have been made on the basis of the
representations and warranties of the Company herein contained and
shall be subject to the terms and conditions herein set forth; each
Terms Agreement shall specify the principal amount of Securities to be
purchased by any Agent pursuant thereto, the price to be paid to the
Company for such Securities, any provisions relating to rights of, and
default by, underwriters acting together with such Agent in the
reoffering of the Securities and the time and date and place of
delivery of and payment for such Securities; such Terms Agreement
shall also specify any requirements for opinions of counsel,
accountants' letters and officers' certificates pursuant to Section 4
hereof and such Terms Agreement may also include such other provisions
(including provisions that modify this Agreement insofar as it sets
forth the agreement between the Company and such Agent) as the Company
and such Agent may agree upon. Each Agent proposes to offer Securities
purchased by it as principal from the Company for sale at prevailing
market prices or prices related thereto at the time of sale, which may
be equal to, greater than or less than the price at which such
Securities are purchased by such Agent from the Company.
For each sale of Securities by the Company to an
Agent as principal that is not made pursuant to a Terms Agreement, the
procedural details relating to the issue and delivery of such
Securities and payment therefor shall be as set forth in the
Administrative Procedure. For each such sale of Securities by the
Company to an Agent as principal that is not made pursuant to a Terms
Agreement, the Company agrees to pay such Agent a commission (or grant
an equivalent discount) as provided in Section 2(a) hereof and in
accordance with the schedule set forth therein.
Each time and date of delivery of and payment for
Securities to be purchased from the Company by an Agent as principal,
whether set forth in a Terms Agreement or in accordance with the
Administrative Procedure, is referred to herein as a "Time of
Delivery".
(c) Each Agent agrees, with respect to any Security
denominated in a currency other than U.S. dollars, and whether acting
as agent, as principal under any Terms Agreement or otherwise
(including, in the case of Xxxxxxx, Xxxxx & Co., in any Secondary
Market Transaction), not to solicit offers to purchase or otherwise
offer, sell or deliver such Security, directly or indirectly, in, or
to residents of, the country issuing such currency, except as
permitted by applicable law.
3. The documents required to be delivered pursuant to Section 6
hereof on the Commencement Date (as defined below) shall be delivered to the
Agents at the offices of Xxxxxxxx & Xxxxxxxx, 000 Xxxxx Xxxxxx, Xxx Xxxx, Xxx
Xxxx 00000, at 11:00 a.m., New York City time, on the date of this Agreement,
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which date and time of such delivery may be postponed by agreement between the
Agents and the Company but in no event shall be later than the day prior to the
date on which solicitation of offers to purchase Securities is commenced or on
which any Terms Agreement is executed (such time and date being referred to
herein as the "Commencement Date").
4. The Company covenants and agrees with each Agent:
(a) (i) To make no amendment or supplement to the
Registration Statement or the Prospectus (A) prior to the Commencement
Date which shall be disapproved by any Agent promptly after reasonable
notice thereof, (B) after the date of any Terms Agreement or other
agreement by an Agent to purchase Securities as principal and prior to
the related Time of Delivery which shall be disapproved by any Agent
party to such Terms Agreement or so purchasing as principal promptly
after reasonable notice thereof or (C) during the period beginning on
the Commencement Date and continuing for as long as may be required
under applicable law, in the reasonable judgment of Xxxxxxx, Sachs &
Co. after consultation with the Company, in order to offer and sell
any Securities in Secondary Market Transactions as contemplated by the
Prospectus (the "Secondary Transactions Period") which shall be
disapproved by Xxxxxxx, Xxxxx & Co. promptly after reasonable notice
thereof;
(ii) to prepare, with respect to any Securities to
be sold by the Company through or to such Agent pursuant to this
Agreement, a Pricing Supplement with respect to such Securities in a
form previously approved by such Agent and to file such Pricing
Supplement pursuant to Rule 424(b) under the Act not later than the
close of business of the Commission on the fifth business day after
the date on which such Pricing Supplement is first used;
(iii) to make no amendment or supplement to the
Registration Statement or Prospectus, other than any Pricing
Supplement, at any time prior to having afforded each Agent a
reasonable opportunity to review and comment thereon;
(iv) to file promptly all reports and any
definitive proxy or information statements required to be filed by the
Company with the Commission pursuant to Section 13(a), 13(c), 14 or
15(d) of the Exchange Act for so long as the delivery of a prospectus
is required in connection with the offering or sale of the Securities
(including, in the case of Xxxxxxx, Sachs & Co., in any Secondary
Market Transactions during the Secondary Transactions Period), and
during such same period to advise such Agent, promptly after the
Company receives notice thereof, of the time when any amendment to the
Registration Statement has been filed or has become effective or any
supplement to the Prospectus or any amended Prospectus (other than any
Pricing Supplement that relates to Securities not purchased through or
by such Agent) has been filed with the Commission, of the issuance by
the Commission of any stop order or of any order preventing or
suspending the use of any prospectus relating to the Securities, of
the suspension of the qualification of the Securities for offering or
sale in any jurisdiction, of the initiation or threatening of any
proceeding for any such purpose, or of any request by the Commission
for the amendment or supplement of the Registration Statement or
Prospectus or for additional information; and
(v) in the event of the issuance of any such stop
order or of any such order preventing or suspending the use of any
such prospectus or suspending any such qualification, to use
promptly its best efforts to obtain its withdrawal;
It is understood and agreed that, if Form S-2 or S-3 under the Act is available
to the Company, the Company may amend the Registration Statement so as to be on
such form or may file a new registration statement on such form and have it
declared effective by the Commission, and thereafter any information
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required to be included in the Registration Statement or the Prospectus may be
incorporated therein by reference as permitted by such form, provided that:
(W) If a new registration statement is filed, the
Company shall be deemed to have made the representations
and warranties in Sections 1(a), 1(b) and 1(c) hereof with
respect to such new registration statement as of its
effective date, any preliminary prospectus included
therein, as of its date, and the prospectus included
therein in the form in which it is first filed pursuant to
Rule 424(b) under the Act, as of its date, and to have made
the agreements in Section 4(a)(i) hereof with respect to
the initial filing of such new registration statement, each
filing of a pre-effective amendment thereto and each filing
of a related prospectus pursuant to Rule 424(a) or (b)
under the Act;
(X) if a new registration statement is filed and
becomes effective, any reference herein to the Registration
Statement, any Preliminary Prospectus or the Prospectus
shall thereafter include, respectively, such new
registration statement, any preliminary prospectus included
therein and the prospectus included therein in the form
first filed pursuant to Rule 424(b) under the Act;
(Y) if a new registration statement is filed and
becomes effective, any reference in this Agreement to any
Preliminary Prospectus or the Prospectus shall thereafter
be deemed to refer to and include any documents filed after
the date of such Preliminary Prospectus or Prospectus, as
the case may be, under the Securities Exchange Act of 1934,
as amended (the "Exchange Act"), and incorporated by
reference in such Preliminary Prospectus or Prospectus, as
the case may be; and
(Z) if a new registration statement is filed and
becomes effective, any reference in this Agreement to any
amendment to the Registration Statement shall thereafter be
deemed to refer to and include any annual report of the
Company filed pursuant to Section 13(a) or 15(d) of the
Exchange Act after the effective date of the Registration
Statement that is incorporated by reference in the
Registration Statement;
(b) Promptly from time to time to take such action as such
Agent may reasonably request to qualify the Securities for offering
and sale under the securities laws of such jurisdictions as such
Agent may request and to comply with such laws so as to permit the
continuance of sales and dealings therein for as long as may be
necessary to complete the distribution or sale of the Securities
(including, in the case of Xxxxxxx, Xxxxx & Co., in any Secondary
Market Transactions during the Secondary Transactions Period);
provided, however, that in connection therewith the Company shall not
be required to qualify as a foreign corporation or to file a general
consent to service of process in any jurisdiction;
(c) (i) To furnish such Agent with copies of the
Registration Statement and each amendment thereto and with copies of
the Prospectus as each time amended or supplemented, other than any
Pricing Supplement (except as provided in the Administrative
Procedure), in the form in which it is filed with the Commission
pursuant to Rule 424 under the Act, all in such quantities as such
Agent may reasonably request from time to time;
(ii) if the delivery of a prospectus is required at any
time in connection with the offering or sale of the Securities
(including Securities purchased from the Company by such Agent as
principal and including, in the case of Xxxxxxx, Sachs & Co., in any
Secondary Market Transactions during the Secondary Transactions
Period) and if at such time any event shall have occurred as a result
of which the Prospectus as then amended or supplemented would include
an untrue statement of a material fact or omit to state any material
fact necessary in order to make
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the statements therein, in the light of the circumstances under which
they were made when such Prospectus is delivered, not misleading, or,
if for any other reason it shall be necessary during such same period
to amend or supplement the Prospectus in order to comply with the Act
or the Trust Indenture Act, to notify such Agent and request such
Agent, in its capacity as agent of the Company, to suspend
solicitation of offers to purchase Securities from the Company (and,
if so notified, such Agent shall cease such solicitations as soon as
practicable, but in any event not later than one business day later);
and if the Company shall decide to amend or supplement the
Registration Statement or the Prospectus as then amended or
supplemented, to so advise such Agent promptly by telephone (with
confirmation in writing) and to prepare and cause to be filed promptly
with the Commission an amendment or supplement to the Registration
Statement or the Prospectus as then amended or supplemented that will
correct such statement or omission or effect such compliance;
(iii) notwithstanding paragraph (ii) above, if during
the period specified in such paragraph such Agent continues to own
Securities purchased from the Company by such Agent as principal or
such Agent is otherwise required to deliver a prospectus in respect of
transactions in the Securities (including, in the case of Xxxxxxx,
Sachs & Co., in any Secondary Market Transactions during the Secondary
Transactions Period), the Company shall promptly prepare and file with
the Commission such an amendment or supplement and furnish without
charge to such Agent as many copies as it may from time to time during
such period reasonably request of such amendment or supplement;
provided, however, that the Company may elect, upon notice to Xxxxxxx,
Sachs & Co., not to comply with this paragraph (iii) with respect to
any Secondary Market Transaction, but only for a period or periods
that the Company reasonably determines are necessary in order to avoid
premature disclosure of material, non-public information, unless,
notwithstanding such election, such disclosure would otherwise be
required under this Agreement; and provided, further, that no such
period or periods described in the preceding proviso shall exceed 90
days in the aggregate during any period of 12 consecutive calendar
months. Upon receipt of any such notice, Xxxxxxx, Xxxxx & Co. shall
cease using the Prospectus or any amendment or supplement thereto in
connection with Secondary Market Transactions until it receives notice
from the Company that it may resume using such document (or such
document as it may be amended or supplemented);
(d) To make generally available to its securityholders as
soon as practicable, but in any event not later than eighteen months
after the effective date of the Registration Statement (as defined in
Rule 158(c) under the Act), an earnings statement of the Company and
its subsidiaries (which need not be audited) complying with Section
11(a) of the Act and the rules and regulations of the Commission
thereunder (including, at the option of the Company, Rule 158 under
the Act);
(e) So long as any Securities are outstanding, to furnish
to such Agent copies of all reports or other communications (financial
or other) furnished to stockholders generally, and to deliver to such
Agent (i) as soon as they are available, copies of any reports and
financial statements furnished to or filed with the Commission or any
national securities exchange on which any class of securities of the
Company is listed; and (ii) such additional information concerning the
business and financial condition of the Company as such Agent may from
time to time reasonably request (such financial statements to be on a
consolidated basis to the extent the accounts of the Company and its
subsidiaries are consolidated in reports furnished to its stockholders
generally or to the Commission);
(f) That, from the date of any Terms Agreement with such
Agent or other agreement by such Agent to purchase Securities as
principal and continuing to and including the later of (i) the
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termination of the trading restrictions for the Securities purchased
thereunder, as notified to the Company by such Agent, and (ii) the
related Time of Delivery, the Company will not, without the prior
written consent of such Agent, offer, sell, contract to sell or
otherwise dispose of any debt securities of the Company which both
mature more than 12 months after such Time of Delivery and are
substantially similar to the Securities;
(g) That each acceptance by the Company of an offer to
purchase Securities hereunder (including any purchase from the Company
by such Agent as principal not pursuant to a Terms Agreement), and
each execution and delivery by the Company of a Terms Agreement with
such Agent, shall be deemed to be an affirmation to such Agent that
the representations and warranties of the Company contained in or made
pursuant to this Agreement are true and correct as of the date of such
acceptance or of such Terms Agreement, as the case may be, as though
made at and as of such date, and an undertaking that such
representations and warranties will be true and correct as of the
settlement date for the Securities relating to such acceptance or as
of the Time of Delivery relating to such sale, as the case may be, as
though made at and as of such date (except that such representations
and warranties shall be deemed to relate to the Registration Statement
and the Prospectus as amended and supplemented relating to such
Securities);
(h) That reasonably in advance of each time the
Registration Statement or the Prospectus shall be amended or
supplemented (other than by a Pricing Supplement), and each time the
Company sells Securities to such Agent as principal pursuant to a
Terms Agreement and such Terms Agreement specifies the delivery of an
opinion or opinions by Xxxxxxxx & Xxxxxxxx, counsel to the Agents, as
a condition to the purchase of Securities pursuant to such Terms
Agreement, the Company shall furnish to such counsel such papers and
information as they may reasonably request to enable them to furnish
to such Agent the opinion or opinions referred to in Section 6(b)
hereof;
(i) That each time the Registration Statement or the
Prospectus shall be amended or supplemented (other than by a Pricing
Supplement), and each time the Company sells Securities to such Agent
as principal pursuant to a Terms Agreement and such Terms Agreement
specifies the delivery of an opinion under this Section 4(i) as a
condition to the purchase of Securities pursuant to such Terms
Agreement, the Company shall furnish or cause to be furnished
forthwith to such Agent a written opinion of one of the Company's
General Counsel, Xxxxxx X. Xxxx, Esq. or Xxxxxxx X. Palm, Esq., or
other counsel for the Company satisfactory to such Agent, dated the
date of such amendment or supplement or the Time of Delivery relating
to such sale, as the case may be, in form satisfactory to such Agent,
to the effect that such Agent may rely on the opinion of such counsel
referred to in Section 6(c) hereof which was last furnished to such
Agent to the same extent as though it were dated the date of such
letter authorizing reliance (except that the statements in such last
opinion shall be deemed to relate to the Registration Statement and
the Prospectus as amended and supplemented to such date) or, in lieu
of such opinion, an opinion of the same tenor as the opinion of such
counsel referred to in Section 6(c) hereof but modified to relate to
the Registration Statement and the Prospectus as amended and
supplemented to such date;
(j) That each time the Registration Statement or the
Prospectus shall be amended or supplemented to set forth financial
information included in or derived from the Company's consolidated
financial statements or accounting records, and each time the Company
sells Securities to such Agent as principal pursuant to a Terms
Agreement and such Terms Agreement specifies the delivery of a letter
under this Section 4(j) as a condition to the purchase of Securities
pursuant to such Terms Agreement, the Company shall cause the
independent certified public
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accountants who have certified the financial statements of the Company
and its subsidiaries included or incorporated by reference in the
Registration Statement forthwith to furnish such Agent a letter, dated
the date of such amendment or supplement or the Time of Delivery
relating to such sale, as the case may be, in form satisfactory to
such Agent, of the same tenor as the letter referred to in Section
6(d) hereof but modified to relate to the Registration Statement and
the Prospectus as amended or supplemented to the date of such letter,
with such changes as may be necessary to reflect changes in the
financial statements and other information derived from the accounting
records of the Company, to the extent such financial statements and
other information are available as of a date not more than five
business days prior to the date of such letter; provided, however,
that, with respect to any financial information or other matter, such
letter may reconfirm as true and correct at such date as though made
at and as of such date, rather than repeat, statements with respect to
such financial information or other matter made in the letter referred
to in Section 6(d) hereof which was last furnished to such Agent;
(k) That each time the Registration Statement or the
Prospectus shall be amended or supplemented (other than by a Pricing
Supplement), and each time the Company sells Securities to such Agent
as principal and the applicable Terms Agreement specifies the delivery
of a certificate under this Section 4(k) as a condition to the
purchase of Securities pursuant to such Terms Agreement, the Company
shall furnish or cause to be furnished forthwith to such Agent a
certificate, dated the date of such supplement or amendment or the
Time of Delivery relating to such sale, as the case may be, in such
form and executed by such officers of the Company as shall be
satisfactory to such Agent, to the effect that the statements
contained in the certificates referred to in Section 6(i) hereof which
was last furnished to such Agent are true and correct at such date as
though made at and as of such date (except that such statements shall
be deemed to relate to the Registration Statement and the Prospectus
as amended and supplemented to such date), or, in lieu of such
certificate, certificates of the same tenor as the certificates
referred to in said Section 6(i) but modified to relate to the
Registration Statement and the Prospectus as amended and supplemented
to such date; and
(l) To offer to any person who has agreed to purchase
Securities from the Company as the result of an offer to purchase
solicited by such Agent the right to refuse to purchase and pay for
such Securities if, on the related settlement date fixed pursuant to
the Administrative Procedure, any condition set forth in Section 6(a),
6(e), 6(f), 6(g) or 6(h) hereof shall not have been satisfied (it
being understood that the judgment of such person with respect to the
impracticability or inadvisability of such purchase of Securities
shall be substituted, for purposes of this Section 4(l), for the
respective judgments of an Agent with respect to certain matters
referred to in such Sections 6(e) and 6(g), and that such Agent shall
have no duty or obligation whatsoever to exercise the judgment
permitted under such Sections 6(e) and 6(g) on behalf of any such
person).
5. The Company covenants and agrees with each Agent that the Company
will pay or cause to be paid the following: (i) the fees, disbursements and
expenses of the Company's counsel and accountants in connection with the
registration of the Securities under the Act and all other expenses in
connection with the preparation, printing and filing of the Registration
Statement, any Preliminary Prospectus, the Prospectus and any Pricing
Supplements and all other amendments and supplements thereto and the mailing and
delivering of copies thereof to such Agent; (ii) the fees, disbursements and
expenses of counsel for the Agents in connection with the establishment of the
program contemplated hereby, any opinions to be rendered by such counsel
hereunder and under any Terms Agreement and the transactions contemplated
hereunder and under any Terms Agreement; (iii) the cost of printing, producing
or reproducing this Agreement, any Terms Agreement, any Indenture, closing
documents (including any compilations thereof) and any other
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documents in connection with the offering, purchase, sale and delivery
of the Securities; (iv) all expenses in connection with the
qualification of the Securities for offering and sale under state
securities laws as provided in Section 4(b) hereof, including the fees
and disbursements of counsel for the Agents in connection with such
qualification and in connection with the Blue Sky and legal investment
surveys; (v) any fees charged by securities rating services for rating
the Securities; (vi) any filing fees incident to, and the fees and
disbursements of counsel for the Agents in connection with, any
required review by the National Association of Securities Dealers,
Inc. of the terms of the sale of the Securities (other than, in the
case of Xxxxxxx, Sachs & Co., in any Secondary Market Transactions);
(vii) the cost of preparing the Securities; (viii) the fees and
expenses of any Trustee and any agent of any Trustee and any transfer
or paying agent of the Company and the fees and disbursements of
counsel for any Trustee or such agent in connection with any Indenture
and the Securities; (ix) any advertising expenses connected with the
solicitation of offers to purchase and the sale of Securities so long
as such advertising expenses have been approved by the Company; and
(x) all other costs and expenses incident to the performance of its
obligations hereunder which are not otherwise specifically provided
for in this Section. Except as provided in Sections 7 and 8 hereof,
each Agent shall pay all other expenses it incurs.
6. The obligation of any Agent, as agent of the Company, at any
time ("Solicitation Time") to solicit offers to purchase the Securities from the
Company and the obligation of any Agent to purchase Securities from the Company
as principal, pursuant to any Terms Agreement or otherwise, shall in each case
be subject, in such Agent's discretion, to the condition that all
representations and warranties and other statements of the Company herein (and,
in the case of an obligation of an Agent under a Terms Agreement, in or
incorporated by reference in such Terms Agreement) are true and correct at and
as of the Commencement Date and any applicable date referred to in Section 4(k)
hereof that is prior to such Solicitation Time or Time of Delivery, as the case
may be, and at and as of such Solicitation Time or Time of Delivery, as the case
may be; the condition that prior to such Solicitation Time or Time of Delivery,
as the case may be, the Company shall have performed all of its obligations
hereunder theretofore to be performed; and the following additional conditions:
(a) (i) With respect to any Securities sold at or prior to
such Solicitation Time or Time of Delivery, as the case may be, the
Prospectus as amended or supplemented (including the Pricing
Supplement) with respect to such Securities shall have been filed with
the Commission pursuant to Rule 424(b) under the Act within the
applicable time period prescribed for such filing by the rules and
regulations under the Act and in accordance with Section 4(a) hereof;
(ii) no stop order suspending the effectiveness of the Registration
Statement shall have been issued and no proceeding for that purpose
shall have been initiated or threatened by the Commission; and (iii)
all requests for additional information on the part of the Commission
shall have been complied with to the reasonable satisfaction of such
Agent;
(b) Xxxxxxxx & Xxxxxxxx, counsel to the Agents, shall have
furnished to such Agent (i) such opinion or opinions, dated the
Commencement Date, to the effect that the matters set forth in the
Prospectus under the caption "United States Taxation", insofar as they
purport to describe the provisions of the laws referred to therein,
are accurate, complete and fair and with respect to the matters
covered in paragraphs (i), (ii), (iv), (v), (viii), (ix) and (x) of
subsection (c) below, as well as such other related matters as such
Agent may reasonably request, and (ii) if and to the extent requested
by such Agent, with respect to each applicable date referred to in
Section 4(h) hereof that is on or prior to such Solicitation Time or
Time of Delivery, as the case may be, an opinion or opinions, dated
such applicable date, to the effect that such Agent may rely on the
opinion or
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opinions which were last furnished to such Agent pursuant to this
Section 6(b) to the same extent as though it or they were dated the
date of such letter authorizing reliance (except that the statements
in such last opinion or opinions shall be deemed to relate to the
Registration Statement and the Prospectus as amended and supplemented
to such date) or, in any case, in lieu of such an opinion or opinions,
an opinion or opinions of the same tenor as the opinion or opinions
referred to in clause (i) but modified to relate to the Registration
Statement and the Prospectus as amended and supplemented to such date;
and in each case such counsel shall have received such papers and
information as they may reasonably request to enable them to pass upon
such matters;
(c) Either Xxxxxx X. Xxxx, Esq. or Xxxxxxx X. Palm,
Esq., each a General Counsel of the Company, or other counsel for the
Company satisfactory to such Agent, shall have furnished to such Agent
such counsel's written opinions, dated the Commencement Date and each
applicable date referred to in Section 4(i) hereof that is on or prior
to such Solicitation Time or Time of Delivery, as the case may be, in
form and substance satisfactory to such Agent, to the effect that:
(i) The Company has been duly incorporated
and is validly existing as a corporation in good standing
under the laws of the State of Delaware, with corporate
power and authority to own its properties and conduct its
business as described in the Prospectus as amended or
supplemented;
(ii) The Company has an authorized
capitalization as set forth in the Prospectus as amended or
supplemented and all of the issued shares of capital stock
of the Company have been duly and validly authorized and
issued and are fully paid and non-assessable;
(iii) To the best of such counsel's knowledge
and other than as set forth in the Prospectus as amended or
supplemented, there are no legal or governmental proceedings
pending to which the Company or any of its subsidiaries is a
party or to which any property of the Company or any of its
subsidiaries is subject, that is reasonably likely,
individually or in the aggregate, to have a material adverse
effect on the current or future consolidated financial
position, stockholders' equity or results of operations of
the Company and its subsidiaries; and to the best of such
counsel's knowledge, no such proceedings are threatened or
contemplated by governmental authorities or threatened by
others;
(iv) This Agreement and any applicable Terms
Agreement have been duly authorized, executed and delivered
by the Company;
(v) [USE THE FOLLOWING IF THE OPINION IS
BEING DELIVERED AT ANY TIME OF DELIVERY -- The Indenture has
been duly authorized, executed and delivered by the Company;
the Securities being delivered at such Time of Delivery have
been duly authorized, executed, authenticated, issued and
delivered by the Company; and the Indenture and such
Securities constitute valid and legally binding obligations
of the Company enforceable in accordance with their
respective terms, subject to bankruptcy, insolvency,
reorganization and other laws of general applicability
relating to or affecting creditors' rights and to general
equity principles; the Indenture and such Securities conform
to the descriptions thereof in the Prospectus as amended or
supplemented; and the Indenture has been duly qualified
under the Trust Indenture Act;]
[USE THE FOLLOWING IF THE OPINION IS NOT BEING
DELIVERED AT A TIME OF DELIVERY -- The Indenture has been
duly authorized, executed and delivered by the Company and
constitutes a valid and legally binding obligation of the
Company enforceable in accordance with its terms, subject to
bankruptcy, insolvency, fraudulent transfer, reorganization,
moratorium and similar laws of general applicability
relating to or affecting creditors' rights
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and to general equity principles; the Series has been duly
authorized and established in conformity with the Indenture
and, when the terms of a particular Security and of its
issuance and sale have been duly authorized and established
by all necessary corporate action in conformity with the
Indenture, and such Security has been duly prepared,
executed, authenticated and issued in accordance with the
Indenture and delivered against payment in accordance with
this Agreement, such Security will constitute a valid and
legally binding obligation of the Company enforceable in
accordance with its terms, subject to bankruptcy,
insolvency, fraudulent transfer, reorganization, moratorium
and similar laws of general applicability relating to or
affecting creditors' rights and to general equity
principles; and the Indenture conforms to the description
thereof in the Prospectus as amended or supplemented and has
been duly qualified under the Trust Indenture Act;]
(vi) The issue and sale of the Securities by
the Company, the compliance by the Company with all of the
provisions of the Securities, the Indenture, this Agreement
and any applicable Terms Agreement and the consummation by
the Company of the transactions herein and therein
contemplated will not conflict with or result in a breach or
violation of any of the terms or provisions of, or
constitute a default under, any material indenture,
mortgage, deed of trust, loan agreement or other agreement
or instrument known to such counsel to which the Company is
then a party or by which the Company is then bound or to
which any of the property or assets of the Company is then
subject, nor will such action result in any violation of the
provisions of the Certificate of Incorporation or the
By-laws of the Company as then in effect or any statute, or
any order, rule or regulation known to such counsel of any
court or governmental agency or body having jurisdiction
over the Company or any of its properties, in each case as
then in effect; provided, however, that for the purposes of
this paragraph (vi), such counsel need not express any
opinion with respect to Federal or state securities laws,
fraudulent transfer laws, other antifraud laws and the
Employee Retirement Income Security Act of 1974, as amended
and related laws; and provided, further, that insofar as the
compliance by the Company with all the provisions of such
Securities, the Indenture, this Agreement and any applicable
Terms Agreement and the consummation of the transactions
herein and therein contemplated is concerned, such counsel
need not express any opinion as to bankruptcy, insolvency,
reorganization, moratorium and similar laws of general
applicability relating to or affecting creditors' rights (it
being understood that, in the case of any opinion to be
delivered at a Time of Delivery, the term "Securities" as
used in this paragraph (vi) shall mean the Securities to be
delivered at such time);
(vii) No consent, approval, authorization,
order, registration or qualification of or with any court or
governmental agency or body of the United States of America
or the State of New York is required for the issue and sale
of the Securities in accordance with this Agreement or the
consummation by the Company of the other transactions
contemplated by this Agreement, any applicable Terms
Agreement, the Securities or the Indenture, except the
registration of the Securities under the Act, and the
qualification of the Securities under the Trust Indenture
Act, each of which has been obtained or made, and such
consents, approvals, authorizations, registrations or
qualifications as may be required under state securities or
Blue Sky laws in connection with the solicitation by the
Agents of offers to purchase Securities from the Company and
in connection with any offers and sales by an Agent of
Securities purchased by it as principal, in each case in the
manner contemplated hereby (it being understood that, in the
case of any opinion to be delivered at a Time of Delivery,
the term "Securities" as used in this paragraph (vii) shall
mean the Securities to be delivered at such time);
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(viii) The statements set forth in the
Prospectus, as amended or supplemented, under the caption
"Description of Notes We May Offer", insofar as they purport
to constitute a summary of the terms of the Securities
described therein, and under the caption "Plan of
Distribution of Notes", insofar as they purport to describe
the provisions of the laws and documents referred to
therein, are accurate, complete and fair (it being
understood that, in the case of any opinion to be delivered
at a Time of Delivery, the term "Securities" as used in this
paragraph (viii) shall mean the Securities to be delivered
at such time);
(ix) The Company is not and, after giving
effect to the offering and sale of the Securities, will not
be an "investment company" as such term is defined in the
Investment Company Act (it being understood that, in the
case of any opinion to be delivered at a Time of Delivery,
the term "Securities" as used in this paragraph (ix) shall
mean the Securities to be delivered at such time); and
(x) The Registration Statement and the
Prospectus as amended and supplemented and any further
amendments and supplements thereto made by the Company prior
to the date of such opinion (other than the financial
statements and related schedules therein, other financial
data therein derived from the Company's accounting records
and the statement of the eligibility and qualification of
the Trustee under the Indenture, as to which such counsel
need not express any opinion) comply as to form in all
material respects with the requirements of the Act and the
Trust Indenture Act and the rules and regulations
thereunder; although he does not assume any responsibility
for the accuracy, completeness or fairness of the statements
contained in the Registration Statement or the Prospectus,
except for those referred to in the opinion in paragraphs
(ii) and (viii) of this Section 6(c), he has no reason to
believe that, as of its effective date, the Registration
Statement or any further amendment thereto made by the
Company prior to the date of such opinion (other than the
financial statements and related schedules therein, other
financial data therein derived from the Company's accounting
records and the statement of the eligibility and
qualification of the Trustee under the Indenture, as to
which such counsel need not express any opinion), contained
an untrue statement of a material fact or omitted to state a
material fact required to be stated therein or necessary to
make the statements therein not misleading or that, as of
its date and as of the time and date of delivery of such
opinion, the Prospectus as then amended or supplemented
(other than the financial statements and related schedules
therein, other financial data therein derived from the
Company's accounting records and the statement of the
eligibility and qualification of the Trustee under the
Indenture, as to which such counsel need not express any
opinion) contained or contains an untrue statement of a
material fact or omitted or omits to state a material fact
necessary to make the statements therein, in light of the
circumstances in which they were made, not misleading; and
such counsel does not know of any amendment to the
Registration Statement required to be filed or any contracts
or other documents of a character required to be filed as an
exhibit to the Registration Statement or required to be
described in the Registration Statement or the Prospectus as
amended or supplemented which are not filed or described as
required;
In rendering such opinion, such counsel may state that he
expresses no opinion as to the laws of any jurisdiction other than the
Federal laws of the United States, the laws of the State of New York
and the General Corporation Law of the State of Delaware; that,
insofar as such opinion involves factual matters, he has relied upon
certificates of officers of the Company and its subsidiaries and
certificates of public officials and other sources believed by such
counsel to be responsible; that he has assumed that the Indenture has
been duly authorized, executed and
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delivered by the Trustee, that any Securities then being delivered
conform to the forms thereof examined by him (or members of the
Company's legal department acting under his supervision), that the
Trustee's certificates of authentication of any Securities then being
delivered have been manually signed by one of the Trustee's authorized
signatories and that the signatures on all documents examined by him
(or members of the Company's legal department acting under his
supervision) are genuine (assumptions that he has not independently
verified); and that a judgment for money in an action based in any
country denominated in a foreign currency may not be enforced in such
currency. In addition, such counsel may state that he has examined, or
has caused members of the Company's legal department to examine, such
corporate and partnership records, certificates and other documents,
and such questions of law, as he has considered necessary or
appropriate for the purposes of such opinion. Furthermore, in any
opinion to be delivered otherwise than at a Time of Delivery, such
counsel may also state that he has assumed that, after his opinion is
delivered, the authorization of the Securities will not be modified or
rescinded; there will not be any change in law affecting the validity,
legally binding character or enforceability of the Securities or any
other matters covered by such opinion; the issue, sale, delivery and
performance of the Securities by the Company will comply with
applicable law and any applicable order under a registration and will
not result in any breach or violation of, or any default under or
conflict with, any agreement or instrument binding on the Company; and
the Securities will not include any alternative or additional terms
that are not specified in the forms of Securities examined by him and
that either would result in any conflict, breach, violation or default
of the kind described in paragraph (vi) above or would require any
consent, approval, authorization, order, registration or qualification
of the kind described in paragraph (vii) above to be obtained or made;
(d) Not later than 10:00 a.m., New York City time, on
the Commencement Date and on each applicable date referred to in
Section 4(j) hereof that is on or prior to such Solicitation Time or
Time of Delivery, as the case may be, the independent certified public
accountants who have certified the financial statements of the Company
and its subsidiaries included in the Registration Statement shall have
furnished to such Agent a letter, dated the Commencement Date or such
applicable date, as the case may be, in form and substance
satisfactory to such Agent, to the effect set forth in Annex III
hereto;
(e) (i) Neither the Company nor any of its
subsidiaries shall have sustained since the date of the latest audited
financial statements included in the Prospectus as amended or
supplemented prior to the date of the Pricing Supplement relating to
the Securities to be delivered at the relevant Time of Delivery any
loss or interference with its business from fire, explosion, flood or
other calamity, whether or not covered by insurance, or from any labor
dispute or court or governmental action, order or decree, otherwise
than as set forth or contemplated in the Prospectus as amended or
supplemented prior to the date of the Pricing Supplement relating to
the Securities to be delivered at the relevant Time of Delivery and
(ii) since the respective dates as of which information is given in
the Prospectus as amended or supplemented prior to the date of the
Pricing Supplement relating to the Securities to be delivered at the
relevant Time of Delivery there shall not have been any change in the
partners' capital or capital stock, as applicable, or long-term debt
of the Company or any of its subsidiaries or any change, or any
development involving a prospective change, in or affecting the
general affairs, management, financial position, partners' capital or
stockholders' equity, as applicable, or results of operations of the
Company and its subsidiaries, otherwise than as set forth or
contemplated in the Prospectus as amended or supplemented prior to the
date of the Pricing Supplement relating to the Securities to be
delivered at the relevant Time of Delivery, the effect of which, in
any such case described in clause (i) or (ii), is in the judgment of
such Agent so material and adverse as to make it impracticable or
inadvisable to proceed with
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the solicitation by such Agent of offers to purchase Securities from
the Company or the purchase by such Agent of Securities from the
Company as principal, as the case may be, on the terms and in the
manner contemplated in the Prospectus as amended or supplemented prior
to the date of the Pricing Supplement relating to the Securities to be
delivered at the relevant Time of Delivery;
(f) On or after the date hereof or on any applicable
Terms Agreement (i) no downgrading shall have occurred in the rating
accorded the Company's debt securities by any "nationally recognized
statistical rating organization", as that term is defined by the
Commission for purposes of Rule 436(g)(2) under the Act, and (ii) no
such organization shall have publicly announced that it has under
surveillance or review, with possible negative implications, its
rating of any of the Company's debt securities;
(g) On or after the date hereof or on any applicable
Terms Agreement there shall not have occurred any of the following:
(i) a suspension or material limitation in trading in securities
generally on the New York Stock Exchange; (ii) a suspension or
material limitation in trading in the Company's securities on the New
York Stock Exchange; (iii) a general moratorium on commercial banking
activities in New York declared by either Federal or New York State
authorities; or (iv) the outbreak or escalation of hostilities
involving the United States or the declaration by the United States of
a national emergency or war, if the effect of any such event specified
in this clause (iv) in the judgment of such Agent makes it
impracticable or inadvisable to proceed with the solicitation of
offers to purchase Securities or the purchase of the Securities from
the Company as principal pursuant to the applicable Terms Agreement or
otherwise, as the case may be, on the terms and in the manner
contemplated in the Prospectus;
(h) (i) With respect to any Security denominated in a
currency other than the U.S. dollar, more than one currency or a
composite currency or any Security the principal or interest of which
is indexed to such currency, currencies or composite currency, there
shall not have occurred a suspension or material limitation in foreign
exchange trading in such currency, currencies or composite currency by
a major international bank, a general moratorium on commercial banking
activities in the country or countries issuing such currency,
currencies or composite currency, the outbreak or escalation of
hostilities involving, the occurrence of any material adverse change
in the existing financial, political or economic conditions of, or the
declaration of war or a national emergency by, the country or
countries issuing such currency, currencies or composite currency or
the imposition or proposal of exchange controls by any governmental
authority in the country or countries issuing such currency,
currencies or composite currency; and (ii) with respect to any
Security linked to the capital stock of an issuer other than the
Company, additional conditions comparable to those set forth in
Sections 6(e), 6(f) and 6(g) shall have been satisfied with respect to
such issuer (with such additional conditions being identical to those
in Sections 6(e), (f) and (g), except that, for this purpose, all
references to the Company in such sections shall be deemed to mean
such other issuer and, if the principal trading market for such other
issuer's capital stock is not the New York Stock Exchange, the
reference to the New York Stock Exchange in Section 6(g)(i) shall be
deemed to mean either the New York Stock Exchange or such principal
trading market and in Section 6(g)(ii) shall be deemed to mean only
such principal trading market), it being understood that nothing in
this clause (ii) shall limit or otherwise affect conditions in
Sections 6(e), (f) and (g), which shall apply in addition to any
conditions applicable pursuant to this clause (ii); and
(i) The Company shall have furnished or caused to be
furnished to such Agent certificates of officers of the Company dated
the Commencement Date and each applicable date referred to in Section
4(k) hereof that is on or prior to such Solicitation Time or Time of
Delivery, as the case
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may be, in such form and executed by such officers of the Company as
shall be satisfactory to such Agent, as to the accuracy of the
representations and warranties of the Company herein at and as of the
Commencement Date or such applicable date, as the case may be, as to
the performance by the Company of all of its obligations hereunder to
be performed at or prior to the Commencement Date or such applicable
date, as the case may be, as to the matters set forth in subsections
(a) and (e) of this Section 6, and as to such other matters as such
Agent may reasonably request.
7. (a) The Company will indemnify and hold harmless each Agent
against any losses, claims, damages or liabilities, joint or several,
to which such Agent may become subject, under the Act or otherwise,
insofar as such losses, claims, damages or liabilities (or actions in
respect thereof) arise out of or are based upon an untrue statement or
alleged untrue statement of a material fact contained in any
Preliminary Prospectus, the Registration Statement, the Prospectus,
the Prospectus as amended or supplemented or any other prospectus
relating to the Securities, or any amendment or supplement thereto, or
arise out of or are based upon 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, and will
reimburse such Agent for any legal or other expenses reasonably
incurred by it in connection with investigating or defending any such
action or claim as such expenses are incurred; provided, however, that
the Company shall not be liable in any such case to the extent that
any such loss, claim, damage or liability arises out of or is based
upon an untrue statement or alleged untrue statement or omission or
alleged omission made in any Preliminary Prospectus, the Registration
Statement, the Prospectus, the Prospectus as amended or supplemented
or any other prospectus relating to the Securities, or any such
amendment or supplement, in reliance upon and in conformity with
written information furnished to the Company by such Agent expressly
for use therein.
(b) Each Agent will indemnify and hold harmless the Company
against any losses, claims, damages or liabilities to which the
Company may become subject, under the Act or otherwise, insofar as
such losses, claims, damages or liabilities (or actions in respect
thereof) arise out of or are based upon an untrue statement or alleged
untrue statement of a material fact contained in any Preliminary
Prospectus, the Registration Statement, the Prospectus, the Prospectus
as amended or supplemented or any other prospectus relating to the
Securities, or any amendment or supplement thereto, or arise out of or
are based upon 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, in each case to the extent, but
only to the extent, that such untrue statement or alleged untrue
statement or omission or alleged omission was made in any Preliminary
Prospectus, the Registration Statement, the Prospectus, the Prospectus
as amended or supplemented or any other prospectus relating to the
Securities, or any such amendment or supplement, in reliance upon and
in conformity with written information furnished to the Company by
such Agent expressly for use therein; and will reimburse the Company
for any legal or other expenses reasonably incurred by the Company in
connection with investigating or defending any such action or claim as
such expenses are incurred.
(c) Promptly after receipt by an indemnified party under
subsection (a) or (b) above of notice of the commencement of any
action, such indemnified party shall, if a claim in respect thereof is
to be made against the indemnifying party under such subsection,
notify the indemnifying party in writing of the commencement thereof;
but the omission so to notify the indemnifying party shall not relieve
it from any liability which it may have to any indemnified party
otherwise than under
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20
such subsection. In case any such action shall be brought against any
indemnified party and it shall notify the indemnifying party of the
commencement thereof, the indemnifying party shall be entitled to
participate therein and, to the extent that it shall wish, jointly
with any other indemnifying party similarly notified, to assume the
defense thereof, with counsel satisfactory to such indemnified party
(who shall not, except with the consent of the indemnified party, be
counsel to the indemnifying party), and, after notice from the
indemnifying party to such indemnified party of its election so to
assume the defense thereof, the indemnifying party shall not be liable
to such indemnified party under such subsection for any legal expenses
of other counsel or any other expenses, in each case subsequently
incurred by such indemnified party, in connection with the defense
thereof other than reasonable costs of investigation. No indemnifying
party shall, without the written consent of the indemnified party,
effect the settlement or compromise of, or consent to the entry of any
judgment with respect to, any pending or threatened action or claim in
respect of which indemnification or contribution may be sought under
this Section 7 (whether or not the indemnified party is an actual or
potential party to such action or claim) unless such settlement,
compromise or judgment (i) includes an unconditional release of the
indemnified party from all liability arising out of such action or
claim and (ii) does not include a statement as to, or an admission of,
fault, culpability or a failure to act, by or on behalf of any
indemnified party.
(d) If the indemnification provided for in this Section 7 is
unavailable or insufficient to hold harmless an indemnified party
under subsection (a) or (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 by 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 benefits received
by the Company on the one hand and each Agent on the other from the
offering of the Securities to which such loss, claim, damage or
liability (or action in respect thereof) relates. If, however, the
allocation provided by the immediately preceding sentence is not
permitted by applicable law or if the indemnified party failed to give
the notice required under subsection (c) above, then each indemnifying
party shall contribute to such amount paid or payable by such
indemnified party in such proportion as is appropriate to reflect not
only such relative benefits but also the relative fault of the Company
on the one hand and each Agent 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. The relative benefits received by
the Company on the one hand and each Agent on the other shall be
deemed to be in the same proportion as the total net proceeds from the
sale of Securities (before deducting expenses) received by the Company
bear to the total commissions or discounts received by such Agent from
the Company in respect thereof. 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
any Agent on the other and the parties' relative intent, knowledge,
access to information and opportunity to correct or prevent such
statement or omission. The Company and each Agent agree that it would
not be just and equitable if contribution pursuant to this subsection
(d) were determined by per capita allocation (even if all Agents were
treated as one entity for such purpose) or by any other method of
allocation which does not take account of the equitable considerations
referred to above in this subsection (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
subsection (d) shall be deemed to include any legal or other expenses
reasonably incurred by such indemnified party in connection
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21
with investigating or defending any such action or claim.
Notwithstanding the provisions of this subsection (d), an Agent shall
not be required to contribute any amount in excess of the amount by
which the total public offering price at which the Securities
purchased by or through it were sold exceeds the amount of any damages
which such Agent has otherwise been required to pay by reason of such
untrue or alleged untrue statement or omission or alleged omission. No
person guilty of fraudulent misrepresentation (within the meaning of
Section 11(f) of the Act) shall be entitled to contribution from any
person who was not guilty of such fraudulent misrepresentation. The
obligations of each of the Agents under this subsection (d) to
contribute are several in proportion to the respective purchases made
by or through it to which such loss, claim, damage or liability (or
action in respect thereof) relates and are not joint.
(e) The obligations of the Company under this Section 7
shall be in addition to any liability which the Company may otherwise
have and shall extend, upon the same terms and conditions, to each
person, if any, who controls any Agent within the meaning of the Act;
and the obligations of each Agent under this Section 7 shall be in
addition to any liability which such Agent may otherwise have and
shall extend, upon the same terms and conditions, to each officer and
director of the Company and to each person, if any, who controls the
Company within the meaning of the Act.
8. Each Agent, in soliciting offers to purchase Securities from
the Company and in performing the other obligations of such Agent hereunder
(other than in respect of any purchase by an Agent as principal, pursuant to a
Terms Agreement or otherwise), is acting solely as agent for the Company and not
as principal. Each Agent will make reasonable efforts to assist the Company in
obtaining performance by each purchaser whose offer to purchase Securities from
the Company was solicited by such Agent and has been accepted by the Company,
but such Agent shall not have any liability to the Company in the event such
purchase is not consummated for any reason. If the Company shall default on its
obligation to deliver Securities to a purchaser whose offer it has accepted, the
Company shall (i) hold each Agent harmless against any loss, claim or damage
arising from or as a result of such default by the Company and (ii)
notwithstanding such default, pay to the Agent that solicited such offer any
commission to which it would be entitled in connection with such sale.
9. The respective indemnities, agreements, representations,
warranties and other statements by any Agent and the Company set forth in or
made pursuant to this Agreement shall remain in full force and effect regardless
of any investigation (or any statement as to the results thereof) made by or on
behalf of any Agent or any controlling person of any Agent, or the Company, or
any officer or director or any controlling person of the Company, and shall
survive each delivery of and payment for any of the Securities.
10. (a) The provisions of this Agreement relating to the
solicitation of offers to purchase Securities from the Company may be suspended
or terminated at any time by the Company as to any Agent or by any Agent as to
such Agent upon the giving of written notice of such suspension or termination
to such Agent or the Company, as the case may be. In the event of such
suspension or termination with respect to any Agent, (i) this Agreement shall
remain in full force and effect with respect to any Agent as to which such
suspension or termination has not occurred, (ii) this Agreement shall remain in
full force and effect with respect to the rights and obligations of any party
which have previously accrued or which relate to Securities which are already
issued, agreed to be issued or the subject of a
21
22
pending offer at the time of such suspension or termination (including all
Securities that may be the subject of a Secondary Market Transaction at any time
during the Secondary Transactions Period) and (z) in any event, this Agreement
shall remain in full force and effect insofar as the fourth paragraph of Section
2(a) and Sections 4(d), 4(e), 5, 7, 8 and 9 hereof are concerned.
(b) The Company, in its sole discretion, may appoint one or more
additional parties to act as Agents hereunder from time to time. Any such
appointment shall be made in a writing signed by the Company and the party so
appointed. Such appointment shall become effective in accordance with its terms
after the execution and delivery of such writing by the Company and such other
party. When such appointment is effective, such other party shall be deemed to
be one of the Agents referred to in, and to have the rights and obligations of
an Agent under, this Agreement, subject to the terms and conditions of such
appointment. The Company shall deliver a copy of such appointment to each other
Agent promptly after it becomes effective.
11. Except as otherwise specifically provided herein or in the
Administrative Procedure, all statements, requests, notices and advices
hereunder shall be in writing, or by telephone if promptly confirmed in writing,
and shall be sufficient in all respects when delivered or sent by facsimile
transmission, personal delivery or registered mail to 00 Xxxxx Xxxxxx, Xxx Xxxx,
Xxx Xxxx 00000, Facsimile Transmission No. (000) 000-0000, Attention: Credit
Department; if to any Agent other than Xxxxxxx, Xxxxx & Co., shall be sufficient
in all respects when delivered or sent by facsimile transmission if to Xxxxxxx,
Sachs & Co., or registered mail to the facsimile number or address provided by
such Agent to the Company in the document appointing such Agent as an Agent
under this Agreement; and if to the Company, shall be sufficient in all respects
when delivered or sent by facsimile transmission, personal delivery or
registered mail to 00 Xxxxx Xxxxxx, Xxx Xxxx, Xxx Xxxx 00000, Facsimile No.
(000) 000-0000, Attention: Treasury Department. Any such statements, requests,
notices or advices shall take effect upon receipt thereof.
12. This Agreement and any Terms Agreement shall be binding upon, and
inure solely to the benefit of, each Agent and the Company and, to the extent
provided in Sections 7, 8 and 9 hereof, the officers and directors of the
Company and any person who controls any Agent or the Company, and their
respective personal representatives, successors and assigns, and no other person
shall acquire or have any right under or by virtue of this Agreement or any
Terms Agreement. No purchaser of any of the Securities through or from any Agent
hereunder shall be deemed a successor or assign by reason merely of such
purchase.
13. Time shall be of the essence in this Agreement and any Terms
Agreement. As used herein, the term "business day" shall mean any day when the
Commission's office in Washington, D.C. is open for business.
14. THIS AGREEMENT AND ANY TERMS AGREEMENT SHALL BE GOVERNED BY, AND
CONSTRUED IN ACCORDANCE WITH, THE LAWS OF THE STATE OF NEW YORK.
15. This Agreement and any Terms Agreement may be executed by any one
or more of the parties hereto and thereto in any number of counterparts, each of
which shall be an original, but all of such respective counterparts shall
together constitute one and the same instrument.
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23
If the foregoing is in accordance with your understanding, please sign
and return to us four counterparts hereof, whereupon this letter and the
acceptance by you thereof shall constitute a binding agreement between the
Company and you in accordance with its terms.
Very truly yours,
The Xxxxxxx Xxxxx Group, Inc.
By: /s/ Xxx X. Xxxxxx
.......................................
Name: Xxx X. Xxxxxx
Title: Treasurer and Vice President
Accepted in New York, New York,
as of the date hereof:
/s/ Xxxxxxx, Sachs & Co.
........................................
(Xxxxxxx, Xxxxx & Co.)
24
ANNEX I
THE XXXXXXX SACHS GROUP, INC.
$15,000,000,000
MEDIUM-TERM NOTES, SERIES B
TERMS AGREEMENT
..................................., 1999
Xxxxxxx, Xxxxx & Co.,
00 Xxxxx Xxxxxx,
Xxx Xxxx, Xxx Xxxx 00000.
[INSERT NAMES OF ANY OTHER PURCHASERS]
Ladies and Gentlemen:
The Xxxxxxx Sachs Group, Inc. (the "Company") proposes, subject to the
terms and conditions stated herein and in the Distribution Agreement, dated May
19, 1999 (the "Distribution Agreement"), between the Company on the one hand and
Xxxxxxx, Xxxxx & Co. and any other party acting as Agent thereunder on the
other, to issue and sell to you the securities specified in the Schedule hereto
(the "Purchased Securities"). Each of the provisions of the Distribution
Agreement not specifically related to the solicitation by the Agents, as agents
of the Company, of offers to purchase Securities is incorporated herein by
reference in its entirety, and shall be deemed to be part of this Terms
Agreement to the same extent as if such provisions had been set forth in full
herein. Nothing contained herein or in the Distribution Agreement shall make any
party hereto an agent of the Company or make such party subject to the
provisions therein relating to the solicitation of offers to purchase Securities
from the Company, solely by virtue of its execution of this Terms Agreement.
Each of the representations and warranties set forth therein shall be deemed to
have been made at and as of the date of this Terms Agreement, except that each
representation and warranty in Section 1 of the Distribution Agreement which
makes reference to the Prospectus shall be deemed to be a representation and
warranty as of the date of the Distribution Agreement in relation to the
Prospectus (as therein defined), and also a representation and warranty as of
the date of this Terms Agreement in relation to the Prospectus as amended and
supplemented to relate to the Purchased Securities.
An amendment to the Registration Statement, or a supplement to the
Prospectus, as the case may be, relating to the Purchased Securities, in the
form heretofore delivered to you is now proposed to be filed with the
Commission.
Subject to the terms and conditions set forth herein and in the
Distribution Agreement incorporated herein by reference, the Company agrees to
issue and sell to you and you agree to purchase from the Company the Purchased
Securities, at the time and place, in the principal amount and at the purchase
price set forth in the Schedule hereto.
25
If the foregoing is in accordance with your understanding, please sign
and return to us ...... counterparts hereof, and upon acceptance hereof by you
this letter and such acceptance hereof, including those provisions of the
Distribution Agreement incorporated herein by reference, shall constitute
a binding agreement between you and the Company
Very truly yours,
The Xxxxxxx Sachs Group, Inc.
By:..................................
Name:
Title:
Accepted in New York, New York,
as of the date hereof:
...............................
(Xxxxxxx, Xxxxx & Co.)
[Name(s) of other purchasers]
By:............................
Name:
Title:
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26
SCHEDULE TO ANNEX I
Title of Purchased Securities:
Medium-Term Notes, Series B
Aggregate Principal Amount:
[$ .................... or units of other Specified Currency]
[Price to Public:]
Purchase Price by Xxxxxxx, Sachs & Co. [Name(s) of other purchasers]:
% of the principal amount of the Purchased Securities [, plus
accrued interest from ............... to ...............] [and accrued
amortization, if any, from ................. to ................]
Method of and Specified Funds for Payment of Purchase Price:
[By certified or official bank check or checks, payable to the order
of the Company, in [[New York] Clearing House] [immediately available] funds]
[By wire transfer to a bank account specified by the Company in
[next day] [immediately available] funds]
Indenture:
Indenture, dated as of ....................., 1999, between the
Company and The Bank of New York, as Trustee
Time of Delivery:
Closing Location for Delivery of Securities:
Maturity:
Interest Rate:
[ %] [Zero Coupon] [Describe applicable floating rate provisions]
Interest Payment Dates:
[months and dates]
Documents to be Delivered:
The following documents referred to in the Distribution Agreement
shall be delivered as a condition to the Closing:
[(1) The opinion or opinions of counsel to the Agents referred to in
Section 4(h).]
[(2) The opinion of counsel to the Company referred to in
Section 4(i).]
[(3) The accountants' letter referred to in Section 4(j).]
[(4) The officers' certificate referred to in Section 4(k).]
Other Provisions (including Syndicate Provisions, if applicable):
I-1
27
ANNEX II
THE XXXXXXX XXXXX GROUP, INC.
ADMINISTRATIVE PROCEDURE
This Administrative Procedure relates to the Securities defined in the
Distribution Agreement, dated May 19, 1999 (the "Distribution Agreement"),
between The Xxxxxxx Sachs Group, Inc., a Delaware corporation (the "Company") on
the one hand and Xxxxxxx, Xxxxx & Co. and any other party acting as Agent
thereunder, on the other, to which this Administrative Procedure is attached as
Annex II. Defined terms used herein and not defined herein shall have the
meanings given such terms in the Distribution Agreement, the Prospectus as
amended or supplemented, the Indenture or the Securities. To the extent the
procedures set forth below conflict with the provisions of the Securities, the
Indenture or the Distribution Agreement, the relevant provisions of the
Securities, the Indenture and the Distribution Agreement shall control.
The procedures to be followed with respect to the settlement of sales
of Securities directly by the Company to purchasers solicited by an Agent, as
agent, are set forth below. The terms and settlement details related to a
purchase of Securities by an Agent, as principal, from the Company will be set
forth in a Terms Agreement pursuant to the Distribution Agreement, unless the
Company and such Agent otherwise agree as provided in Section 2(b) of the
Distribution Agreement, in which case the procedures to be followed in respect
of the settlement of such sale will be as set forth below. An Agent, in relation
to a purchase of a Security by a purchaser solicited by such Agent, is referred
to herein as the "Selling Agent" and, in relation to a purchase of a Security by
such Agent as principal other than pursuant to a Terms Agreement, as the
"Purchasing Agent".
The Company will advise each Agent in writing of those persons with
whom such Agent is to communicate regarding offers to purchase Securities and
the related settlement details.
Each Security will be issued only in fully registered form and will be
represented by either a global security (a "Global Security") delivered to the
Trustee, as agent for The Depository Trust Company (the "Depositary"), and
recorded in the book-entry system maintained by the Depositary (a "Book-Entry
Security"), or a certificate issued in definitive form (a "Certificated
Security") delivered to a person designated by an Agent, as set forth in the
applicable Pricing Supplement. An owner of a Book-Entry Security will not be
entitled to receive a certificate representing such a Security, except as
provided in the Indenture.
Book-Entry Securities will be issued in accordance with the
Administrative Procedure set forth in Part I hereof, and Certificated Securities
will be issued in accordance with the Administrative Procedure set forth in Part
II hereof.
PART I: ADMINISTRATIVE PROCEDURE FOR BOOK-ENTRY SECURITIES
In connection with the qualification of the Book-Entry Securities for
eligibility in the book-entry system maintained by the Depositary, the Trustee
will perform the custodial, document control and administrative functions
described below, in accordance with its respective obligations under a Letter of
Representation from the Company and the Trustee to the Depositary, dated the
date of the Distribution Agreement, and a Medium-Term Note Certificate Agreement
between the Trustee and the Depositary, dated as of April 14, 1989 (the
"Certificate Agreement"), and its obligations as a participant in the
Depositary, including the Depositary's Same-Day Funds Settlement System
("SDFS").
II-1
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Posting Rates by the Company:
The Company and the Agents will discuss from time to time the rates of
interest per annum to be borne by and the maturity of Book-Entry Securities that
may be sold as a result of the solicitation of offers by an Agent. The Company
may establish a fixed set of interest rates and maturities for an offering
period ("posting"). If the Company decides to change already posted rates, it
will promptly advise the Agents to suspend solicitation of offers until the new
posted rates have been established with the Agents.
Acceptance of Offers by the Company:
Each Agent will promptly advise the Company by telephone or other
appropriate means of all reasonable offers to purchase Book-Entry Securities,
other than those rejected by such Agent. Each Agent may, in its discretion
reasonably exercised, reject any offer received by it in whole or in part. Each
Agent also may make offers to the Company to purchase Book-Entry Securities as a
Purchasing Agent. The Company will have the sole right to accept offers to
purchase Book-Entry Securities and may reject any such offer in whole or in
part.
The Company will promptly notify the Selling Agent or Purchasing
Agent, as the case may be, of its acceptance or rejection of an offer to
purchase Book-Entry Securities. If the Company accepts an offer to purchase
Book-Entry Securities, it will confirm such acceptance in writing to the Selling
Agent or Purchasing Agent, as the case may be, and the Trustee.
Communication of Sale Information to the Company by Agent and Settlement
Procedures:
A. After the acceptance of an offer by the Company, the
Selling Agent or Purchasing Agent, as the case may be, will communicate
promptly, but in no event later than the time set forth under "Settlement
Procedure Timetable" below, the following details of the terms of such offer
(the "Sale Information") to the Company by telephone (confirmed in writing)
or by facsimile transmission or other acceptable written means:
(1) Principal Amount of Book-Entry Securities to be purchased;
(2) If a Fixed Rate Book-Entry Security, the interest rate and
initial interest payment date;
(3) Trade Date;
(4) Settlement Date;
(5) Maturity Date;
(6) Specified Currency and, if the Specified Currency is other
than U.S. dollars, the applicable Exchange Rate for such
Specified Currency (it being understood that currently the
Depositary accepts deposits of Global Securities denominated
in U.S. dollars only);
(7) The Exchange Rate Agent and the Exchange Rate Determination
Date, if applicable;
(8) Issue Price;
(9) Selling Agent's commission or Purchasing Agent's discount,
as the case may be;
(10) Net Proceeds to the Company;
(11) If a redeemable or repayable Book-Entry Security, such of
the following as are applicable:
(i) Redemption Commencement Date,
(ii) Initial Redemption Price (% of par),
(iii) Amount (% of par) that the Redemption Price shall
decline (but not below par) on each anniversary of
the Redemption Commencement Date,
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(iv) Repayment date, and
(v) Repayment price;
(12) If an Original Issue Discount Book-Entry Security, the total
amount of Original Issue Discount, the yield to Maturity and
the initial accrual period of Original Issue Discount;
(13) If a Floating Rate Book-Entry Security, such of the
following as are applicable:
(i) Interest Rate Basis,
(ii) Index Maturity and Index Currency,
(iii) Spread or Spread Multiplier,
(iv) Maximum Rate,
(v) Minimum Rate,
(vi) Initial Base Rate,
(vii) Initial Interest Rate,
(viii) Interest Reset Dates,
(ix) Calculation Dates,
(x) Interest Determination Dates,
(xi) Interest Payment Dates,
(xii) Regular Record Dates, and
(xiii) Calculation Agent;
(14) Name, address and taxpayer identification number of the
registered Holder(s);
(15) Denomination of certificates to be delivered at settlement;
(16) Book-Entry Security or Certificated Security; and
(17) Selling Agent or Purchasing Agent.
B. After receiving the Sale Information from the Selling Agent
or Purchasing Agent, as the case may be, the Company will communicate such Sale
Information to the Trustee by facsimile transmission or other acceptable written
means. The Trustee will assign a CUSIP number to the Global Security from a list
of CUSIP numbers previously delivered to the Trustee by the Company representing
such Book-Entry Security and then advise the Company and the Selling Agent or
Purchasing Agent, as the case may be, of such CUSIP number.
C. The Trustee will enter a pending deposit message through the
Depositary's Participant Terminal System, providing the following settlement
information to the Depositary, and the Depositary shall forward such information
to such Agent and Standard & Poor's Ratings Group (or such other entity that
assigns CUSIP numbers or any other identification designations being used for
the relevant Securities):
(1) The applicable Sale Information;
(2) CUSIP number of the Global Security representing such
Book-Entry Security;
(3) Whether such Global Security will represent any other
Book-Entry Security (to the extent known at such time);
II-3
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(4) Number of the participant account maintained by the
Depositary on behalf of the Selling Agent or Purchasing
Agent, as the case may be;
(5) The interest payment period; and
(6) Initial Interest Payment Date for such Book-Entry Security,
number of days by which such date succeeds the record date
for the Depositary's purposes (which in the case of Floating
Rate Securities which reset daily or weekly shall be the
date five calendar days immediately preceding the applicable
Interest Payment Date and in the case of all other
Book-Entry Securities shall be the Regular Record Date, as
defined in the Security) and, if calculable at that time,
the amount of interest payable on such Interest Payment
Date.
D. The Trustee will complete and authenticate the Global
Security previously delivered by the Company representing such Book-Entry
Security.
E. The Depositary will credit such Book-Entry Security to the
Trustee's participant account at the Depositary.
F. The Trustee will enter an SDFS deliver order through the
Depositary's Participant Terminal System instructing the Depositary to (i) debit
such Book-Entry Security to the Trustee's participant account and credit such
Book-Entry Security to such Agent's participant account and (ii) debit such
Agent's settlement account and credit the Trustee's settlement account for an
amount equal to the price of such Book-Entry Security less such Agent's
commission or discount, as the case may be. The entry of such a deliver order
shall constitute a representation and warranty by the Trustee to the Depositary
that (a) the Global Security representing such Book-Entry Security has been
issued and authenticated and (b) the Trustee is holding such Global Security
pursuant to the Certificate Agreement.
G. Such Agent will enter an SDFS deliver order through the
Depositary's Participant Terminal System instructing the Depositary (i) to debit
such Book-Entry Security to such Agent's participant account and credit such
Book-Entry Security to the participant accounts of the participants with respect
to such Book-Entry Security and (ii) to debit the settlement accounts of such
participants and credit the settlement account of such Agent for an amount equal
to the price of such Book-Entry Security.
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 confirmation of receipt of funds, the Trustee will
transfer to the account of the Company maintained at Citibank, N.A., New York,
New York, or such other account as the Company may have previously specified to
the Trustee, in funds available for immediate use in the amount transferred to
the Trustee in accordance with Settlement Procedure "F".
J. Upon request, the Trustee will send to the Company a
statement setting forth the principal amount of Book-Entry Securities
outstanding as of that date under the Indenture.
K. Such Agent will confirm the purchase of such Book-Entry
Security to the purchaser either by transmitting to the participants with
respect to such Book-Entry Security a confirmation order or orders through the
Depositary's institutional delivery system or by mailing a written confirmation
to such purchaser.
L. The Depositary will, at any time, upon request of the
Company or the Trustee, promptly furnish to the Company or the Trustee a list of
the names and addresses of the participants for whom the Depositary has credited
Book-Entry Securities.
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Preparation of Prospectus or Supplement:
If the Company accepts an offer to purchase a Book-Entry Security, it
will prepare a Pricing Supplement reflecting the terms of such Book-Entry
Security and arrange to have delivered to the Selling Agent or Purchasing Agent,
as the case may be, at least ten copies of such Pricing Supplement, not later
than 5:00 p.m., New York City time, on the business day following the Trade Date
(as defined below), or if the Company and the purchaser agree to settlement on
the business day following the date of acceptance of such offer, not later than
noon, New York City time, on such date. The Company will arrange to have the
Pricing Supplements filed with the Commission not later than the close of
business of the Commission on the fifth business day (or second business day, if
such Book-Entry Security is to be sold pursuant to Rule 430A under the
Securities Act) following the date on which such Pricing Supplement is first
used.
Delivery of Confirmation and Prospectus to Purchaser by Selling Agent:
The Selling Agent will deliver to the purchaser of a Book-Entry
Security a written confirmation of the sale and delivery and payment
instructions. In addition, the Selling Agent will deliver to such purchaser or
its agent the Prospectus as amended or supplemented (including the Pricing
Supplement) in relation to such Book-Entry Security prior to or together with
the earlier of the delivery to such purchaser or its agent of (a) the
confirmation of sale or (b) the Book-Entry Security.
Date of Settlement:
The receipt by the Company of immediately available funds in payment
for a Book-Entry Security and the authentication and issuance of the Global
Security representing such Book-Entry Security shall constitute "settlement"
with respect to such Book-Entry Security. All orders of Book-Entry Securities
solicited by a Selling Agent or made by a Purchasing Agent and accepted by the
Company on a particular date (the "Trade Date") will be settled on a date (the
"Settlement Date") which is the third business day after the Trade Date pursuant
to the "Settlement Procedure Timetable" set forth below, unless the Company and
the purchaser agree to settlement on another business day which shall be no
earlier than the next business day after the Trade Date.
Settlement Procedure Timetable:
For orders of Book-Entry Securities solicited by a Selling Agent and
accepted by the Company for settlement on the third business day after the Trade
Date, Settlement Procedures "A" through "I" set forth above shall be completed
as soon as possible but not later than the respective times (New York City time)
set forth below:
SETTLEMENT
PROCEDURE TIME
--------- ----
A 5:00 p.m. on the business day following the Trade Date or 10:00 a.m. on the
business day prior to the Settlement Date, whichever is earlier
B 12:00 noon on the second business day immediately preceding the Settlement
Date
C 2:00 p.m. on the second business day immediately preceding the Settlement
Date
D 9:00 a.m. on the Settlement Date
E 10:00 a.m. on the Settlement Date
F-G 2:00 p.m. on the Settlement Date
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H 4:45 p.m. on the Settlement Date
I 5:00 p.m. on the Settlement Date
If the initial interest rate for a Floating Rate Book-Entry Security
has not been determined at the time that Settlement Procedure "A" is completed,
Settlement Procedures "B" and "C" shall be completed as soon as such rate has
been determined but no later than 2:00 p.m. on the second business day
immediately preceding the Settlement Date. Settlement Procedure "H" is subject
to extension in accordance with any extension of Fedwire closing deadlines and
in the other events specified in the SDFS operating procedures in effect on the
Settlement Date.
If settlement of a Book-Entry Security is rescheduled or canceled, the
Trustee, upon obtaining knowledge thereof, will deliver to the Depositary,
through the Depositary's Participation Terminal System, a cancellation message
to such effect by no later than 2:00 p.m. on the business day immediately
preceding the scheduled Settlement Date.
Failure to Settle:
If the Trustee fails to enter an SDFS deliver order with respect to a
Book-Entry Security pursuant to Settlement Procedure "F", the Trustee may
deliver to the Depositary, through the Depositary's Participant Terminal System,
as soon as practicable a withdrawal message instructing the Depositary to debit
such Book-Entry Security to the Trustee's participant account, provided that the
Trustee's participant account contains a principal amount of the Global Security
representing such Book-Entry Security that is at least equal to the principal
amount to be debited. If a withdrawal message is processed with respect to all
the Book-Entry Securities represented by a Global Security, the Trustee will
xxxx such Global Security "canceled", make appropriate entries in the Trustee's
records and send such canceled Global Security to the Company. The CUSIP number
assigned to such Global Security shall, in accordance with CUSIP Service Bureau
procedures, be canceled and not immediately reassigned. If a withdrawal message
is processed with respect to one or more, but not all, of the Book-Entry
Securities represented by a Global Security, the Trustee will exchange such
Global Security for two Global Securities, one of which shall represent such
Book-Entry Security or Securities and shall be canceled immediately after
issuance and the other of which shall represent the remaining Book-Entry
Securities previously represented by the surrendered Global Security and shall
bear the CUSIP number of the surrendered Global Security.
If the purchase price for any Book-Entry Security is not timely paid
to the participants with respect to such Book-Entry Security by the beneficial
purchaser thereof (or a person, including an indirect participant in the
Depositary, acting on behalf of such purchaser), such participants and, in turn
the Agent for such Book-Entry Security may enter deliver orders through the
Depositary's Participant Terminal System debiting such Book-Entry Security to
such participant's account and crediting such Book-Entry Security to such
Agent's account and then debiting such Book-Entry Security to such Agent's
participant account and crediting such Book-Entry Security to the Trustee's
participant account and shall notify the Company and the Trustee thereof.
Thereafter, the Trustee will (i) immediately notify the Company of such order
and the Company shall transfer to such Agent funds available for immediate use
in an amount equal to the price of such Book-Entry Security which was credited
to the account of the Company maintained at the Trustee in accordance with
Settlement Procedure I, and (ii) 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 Agent to perform
its obligations hereunder or under the Distribution Agreement, the Company will
reimburse such Agent on an equitable basis for the loss of its use of funds
during the period when the funds were credited to the account of the Company.
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Notwithstanding the foregoing, upon any failure to settle with respect
to a Book-Entry Security, the Depositary 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 one or more, but not all, of the Book-Entry Securities to
have been represented by a Global Security, the Trustee will provide, in
accordance with Settlement Procedure "D", for the authentication and issuance of
a Global Security representing the other Book-Entry Securities to have been
represented by such Global Security and will make appropriate entries in its
records. The Company will, from time to time, furnish the Trustee with a
sufficient quantity of Securities.
PART II: ADMINISTRATIVE PROCEDURE FOR CERTIFICATED SECURITIES
Posting Rates by Company:
The Company and the Agents will discuss from time to time the rates of
interest per annum to be borne by and the maturity of Certificated Securities
that may be sold as a result of the solicitation of offers by an Agent. The
Company may establish a fixed set of interest rates and maturities for an
offering period ("posting"). If the Company decides to change already posted
rates, it will promptly advise the Agents to suspend solicitation of offers
until the new posted rates have been established with the Agents.
Acceptance of Offers by Company:
Each Agent will promptly advise the Company by telephone or other
appropriate means of all reasonable offers to purchase Certificated Securities,
other than those rejected by such Agent. Each Agent may, in its discretion
reasonably exercised, reject any offer received by it in whole or in part. Each
Agent also may make offers to the Company to purchase Certificated Securities as
a Purchasing Agent. The Company will have the sole right to accept offers to
purchase Certificated Securities and may reject any such offer in whole or in
part.
The Company will promptly notify the Selling Agent or Purchasing
Agent, as the case may be, of its acceptance or rejection of an offer to
purchase Certificated Securities. If the Company accepts an offer to purchase
Certificated Securities, it will confirm such acceptance in writing to the
Selling Agent or Purchasing Agent, as the case may be, and the Trustee.
Communication of Sale Information to Company by Agent:
After the acceptance of an offer by the Company, the Selling Agent or
Purchasing Agent, as the case may be, will communicate the following details of
the terms of such offer (the "Sale Information") to the Company by telephone
(confirmed in writing) or by facsimile transmission or other acceptable written
means:
(1) Principal Amount of Certificated Securities to be purchased;
(2) If a Fixed Rate Certificated Security, the interest rate and
initial interest payment date;
(3) Trade Date;
(4) Settlement Date;
(5) Maturity Date;
(6) Specified Currency and, if the Specified Currency is other
than U.S. dollars, the applicable Exchange Rate for such
Specified Currency;
(7) The Exchange Rate Agent and the Exchange Rate Determination
Date, if applicable;
(8) Issue Price;
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(9) Selling Agent's commission or Purchasing Agent's discount,
as the case may be;
(10) Net Proceeds to the Company;
(11) If a redeemable or repayable Certificated Security, such of
the following as are applicable:
(i) Redemption Commencement Date,
(ii) Initial Redemption Price (% of par),
(iii) Amount (% of par) that the Redemption Price shall
decline (but not below par) on each anniversary of
the Redemption Commencement Date,
(iv) Repayment date, and
(v) Repayment price;
(12) If an Original Issue Discount Certificated Security, the
total amount of Original Issue Discount, the yield to
Maturity and the initial accrual period of Original Issue
Discount;
(13) If a Floating Rate Certificated Security, such of the
following as are applicable:
(i) Interest Rate Basis,
(ii) Index Maturity and Index Currency,
(iii) Spread or Spread Multiplier,
(iv) Maximum Rate,
(v) Minimum Rate,
(vi) Initial Base Rate,
(vii) Initial Interest Rate,
(viii) Interest Reset Dates,
(ix) Calculation Dates,
(x) Interest Determination Dates,
(xi) Interest Payment Dates,
(xii) Regular Record Dates, and
(xiii) Calculation Agent;
(14) Name, address and taxpayer identification number of the
registered owner(s);
(15) Denomination of certificates to be delivered at settlement;
(16) Book-Entry Security or Certificated Security; and
(17) Selling Agent or Purchasing Agent.
Preparation of Prospectus or Pricing Supplement by Company:
If the Company accepts an offer to purchase a Certificated Security,
it will prepare a Prospectus Supplement or Pricing Supplement, as applicable,
reflecting the terms of such Certificated Security and arrange to have delivered
to the Selling Agent or Purchasing Agent, as the case may be, at least ten
copies of such Pricing Supplement, not later than 5:00 p.m., New York City time,
on the business day following the Trade Date, or if the Company and the
purchaser agree to settlement on the date of acceptance of such offer, not later
than noon, New York City time, on such date. The Company will arrange to have
the Pricing Supplement filed with the Commission not later than the close of
business
II-8
35
of the Commission on the fifth business day (or second business day, if such
Certificated Security is to be sold pursuant to Rule 430A under the Securities
Act) following the date on which such Pricing Supplement is first used.
Delivery of Confirmation and Prospectus to Purchaser by Selling Agent:
The Selling Agent will deliver to the purchaser of a Certificated
Security a written confirmation of the sale and delivery and payment
instructions. In addition, the Selling Agent will deliver to such purchaser or
its agent the Prospectus as amended or supplemented (including the Pricing
Supplement, as applicable) in relation to such Certificated Security prior to or
together with the earlier of the delivery to such purchaser or its agent of (a)
the confirmation of sale or (b) the Certificated Security.
Date of Settlement:
All offers of Certificated Securities solicited by a Selling Agent or
made by a Purchasing Agent and accepted by the Company will be settled on a date
(the "Settlement Date") which is the third business day after the date of
acceptance of such offer, unless the Company and the purchaser agree to
settlement (a) on another business day after the acceptance of such offer or (b)
with respect to an offer accepted by the Company prior to 10:00 a.m., New York
City time, on the date of such acceptance.
Instruction from Company to Trustee for Preparation of Certificated Securities:
After receiving the Sale Information from the Selling Agent or
Purchasing Agent, as the case may be, the Company will communicate such Sale
Information to the Trustee by telephone (confirmed in writing) or by facsimile
transmission or other acceptable written means.
The Company will instruct the Trustee by facsimile transmission or
other acceptable written means to authenticate and deliver the Certificated
Securities no later than 2:15 p.m., New York City time, on the Settlement Date.
Such instruction will be given by the Company prior to 3:00 p.m., New York City
time, on the business day immediately preceding the Settlement Date unless the
Settlement Date is the date of acceptance by the Company of the offer to
purchase Certificated Securities in which case such instruction will be given by
the Company by 11:00 a.m., New York City time.
Preparation and Delivery of Certificated Securities by Trustee and Receipt of
Payment Therefor:
The Trustee will prepare each Certificated Security and appropriate
receipts that will serve as the documentary control of the transaction.
In the case of a sale of Certificated Securities to a purchaser
solicited by a Selling Agent, the Trustee will, by 2:15 p.m., New York City
time, on the Settlement Date, deliver the Certificated Securities to the Selling
Agent for the benefit of the purchaser of such Certificated Securities against
delivery by the Selling Agent of a receipt therefor. On the Settlement Date the
Selling Agent will deliver payment for such Certificated Securities in
immediately available funds to the Company in an amount equal to the issue price
of the Certificated Securities less the Selling Agent's commission; provided
that the Selling Agent reserves the right to withhold payment for which it has
not received funds from the purchaser. The Company shall not use any proceeds
advanced by a Selling Agent to acquire securities.
In the case of a sale of Certificated Securities to a Purchasing
Agent, the Trustee will, by 2:15 p.m., New York City time, on the Settlement
Date, deliver the Certificated Securities to the Purchasing Agent against
delivery of payment for such Certificated Securities in immediately available
funds to the Company in an amount equal to the issue price of the Certificated
Securities less the Purchasing Agent's discount.
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Failure of Purchaser to Pay Selling Agent:
If a purchaser (other than a Purchasing Agent) fails to make payment
to the Selling Agent for a Certificated Security, the Selling Agent will
promptly notify the Trustee and the Company thereof by telephone (confirmed in
writing) or by facsimile transmission or other acceptable written means. The
Selling Agent will immediately return the Certificated Security to the Trustee.
Immediately upon receipt of such Certificated Security by the Trustee, the
Company will return to the Selling Agent an amount equal to the amount
previously paid to the Company in respect of such Certificated Security. The
Company will reimburse the Selling Agent on an equitable basis for its loss of
the use of funds during the period when they were credited to the account of the
Company.
The Trustee will cancel the Certificated Security in respect of which
the failure occurred, make appropriate entries in its records and, unless
otherwise instructed by the Company, destroy the Certificated Security.
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ANNEX III
ACCOUNTANTS' LETTER
Pursuant to Sections 4(j) and 6(d), as the case may be, of the
Distribution Agreement, the Company's independent certified public accountants
shall furnish letters to the effect that:
(i) They are independent certified public accountants with
respect to the Company and its subsidiaries within the meaning of the
Act and the applicable rules and regulations adopted by the
Commission;
(ii) In their opinion, the financial statements and any
supplementary financial information and schedules (and, if applicable,
financial forecasts and/or pro forma financial information) examined
by them and included in the Registration Statement or the Prospectus
as most recently amended or supplemented comply as to form in all
material respects with the applicable accounting requirements of the
Act or the Exchange Act, as applicable, and the related published
rules and regulations thereunder; and, if applicable, they have made a
review in accordance with standards established by the American
Institute of Certified Public Accountants of the consolidated interim
financial statements, selected financial data, pro forma financial
information, financial forecasts and/or condensed financial statements
derived from audited financial statements of the Company for the
periods specified in such letter, as indicated in their reports
thereon, copies of which have been furnished to the Agents;
(iii) They have made a review in accordance with standards
established by the American Institute of Certified Public Accountants
of the unaudited condensed consolidated statements of income,
consolidated balance sheets and consolidated statements of cash flows
included in the Prospectus as most recently amended or supplemented as
indicated in their reports thereon copies of which have been furnished
to the Agents; and on the basis of specified procedures including
inquiries of officials of the Company, who have responsibility for
financial and accounting matters regarding whether the unaudited
condensed consolidated financial statements referred to in paragraph
(vi)(A)(i) below comply as to form in all material respects with the
applicable accounting requirements of the Act and the Exchange Act and
the related published rules and regulations, nothing came to their
attention that caused them to believe that the unaudited condensed
consolidated financial statements do not comply as to form in all
material respects with the applicable accounting requirements of the
Act and the Exchange Act and the related published rules and
regulations;
(iv) The unaudited selected financial information with respect to
the consolidated results of operations and financial position of the
Company for the five most recent fiscal years included in the
Prospectus as most recently amended or supplemented agrees with the
corresponding amounts (after restatement where applicable) in the
audited consolidated financial statements for such fiscal years;
(v) They have compared the information in the Prospectus under
selected captions with the disclosure requirements of Regulation S-K
and on the basis of limited procedures specified in such letter
nothing came to their attention as a result of the foregoing
procedures that caused them to believe that this information does not
conform in all material respects with the disclosure requirements of
Items 301, 302, 402 and 503(d) respectively, of Regulation S-K;
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(vi) On the basis of limited procedures, not constituting an
examination in accordance with generally accepted auditing standards,
consisting of a reading of the unaudited financial statements
and other information referred to below, a reading of the latest
available interim financial statements of the Company and its
subsidiaries, inspection of the minute books of the Company and its
subsidiaries since the date of the latest audited financial statements
included in the Prospectus as amended or supplemented, inquiries of
officials of the Company and its subsidiaries responsible for
financial and accounting matters and such other inquiries and
procedures as may be specified in such letter, nothing came to their
attention that caused them to believe that:
(A) (i) the unaudited condensed consolidated
statements of income, consolidated balance sheets and
consolidated statements of cash flows included in the
Prospectus as most recently amended or supplemented do not
comply as to form in all material respects with the
applicable accounting requirements of the Exchange Act and
the related published rules and regulations, or (ii) any
material modifications should be made to the unaudited
condensed consolidated statements of income, consolidated
balance sheets and consolidated statements of cash flows
included in the Prospectus as most recently amended or
supplemented for them to be in conformity with generally
accepted accounting principles;
(B) any other unaudited income statement data and
balance sheet items included in the Prospectus as most
recently amended or supplemented do not agree with the
corresponding items in the unaudited consolidated financial
statements from which such data and items were derived, and
any such unaudited data and items were not determined on a
basis substantially consistent with the basis for the
corresponding amounts in the audited consolidated financial
statements included in the Prospectus as most recently
amended or supplemented;
(C) the unaudited financial statements which were
not included in the Prospectus as most recently amended or
supplemented but from which were derived the unaudited
condensed financial statements referred to in clause (A) and
any unaudited income statement data and balance sheet items
included in the Prospectus as most recently amended or
supplemented and referred to in clause (B) were not
determined on a basis substantially consistent with the
basis for the audited financial statements included in the
Prospectus as most recently amended or supplemented;
(D) any unaudited pro forma consolidated condensed
financial statements included in the Prospectus as most
recently amended or supplemented do not comply as to form in
all material respects with the applicable accounting
requirements of the Act and the published rules and
regulations thereunder or the pro forma adjustments have not
been properly applied to the historical amounts in the
compilation of those statements;
(E) as of a specified date not more than five days
prior to the date of such letter, there have been any
changes in the consolidated capital stock (other than
issuances of capital stock upon exercise of options and
stock appreciation rights, upon earn-outs of performance
shares and upon conversions of convertible securities, in
each case which were outstanding on the date of the latest
balance sheet included in the Prospectus as most recently
amended or supplemented) (or partners' capital as
applicable) or any increase in the consolidated long-term
debt of the Company and its subsidiaries, or any decreases
in consolidated net current assets or stockholders' equity
or other items specified by the Agents, or any increases in
any items specified by the Agents, in each case as compared
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with amounts comparable shown in the latest balance sheet included in
the Prospectus as most recently amended or supplemented, except in
each case for changes, increases or decreases which the Prospectus
discloses have occurred or may occur or which are described in such
letter; and
(F) for the period from the date of the latest
financial statements included in the Prospectus as most
recently amended or supplemented to the specified date
referred to in clause (E) there were any decreases in
consolidated total revenues or consolidated revenues, net of
interest expense, pre-tax earnings or total or per share
amounts of consolidated net income or other items specified
by the Agents, or any increases in any items specified by
the Agents, in each case as compared with the comparable
items in the comparable period of the preceding year and
with any other period of corresponding length specified by
the Agents, except in each case for increases or decreases
which the Prospectus discloses have occurred or may occur or
which are described in such letter; and
(vii) In addition to the audit referred to in their report(s)
included in the Prospectus and the limited procedures, inspection of
minute books, inquiries and other procedures referred to in paragraphs
(iii) and (vi) above, they have carried out certain specified
procedures, not constituting an audit in accordance with generally
accepted auditing standards, with respect to certain amounts,
percentages and financial information specified by the Agents which
are derived from the general accounting records of the Company and its
subsidiaries which appear in the Prospectus, or in Part II of, or in
exhibits and schedules to, the Registration Statement specified by the
Agents, and have compared certain of such amounts, percentages and
financial information with the accounting records of the Company and
its subsidiaries and have found them to be in agreement.
All references in this Annex III to the Prospectus shall be deemed to refer to
the Prospectus as defined in the Distribution Agreement as of the Commencement
Date referred to in Section 6(d) thereof and to the Prospectus as amended or
supplemented as of the date of the amendment, supplement or the Time of Delivery
relating to the Terms Agreement requiring the delivery of such letter under
Section 4(j) thereof.
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