EXHIBIT 1.1
EXECUTION COPY
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XXXXXX RESTAURANTS, INC.
(a Florida corporation)
DISTRIBUTION AGREEMENT
November 10, 2000
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TABLE OF CONTENTS
Page
SECTION 1. Representations and Warranties..............................3
SECTION 2. APPOINTMENT OF AGENTS; PURCHASES AS PRINCIPAL..............12
SECTION 3. COVENANTS OF THE COMPANY...................................14
SECTION 4. PAYMENT OF EXPENSES........................................18
SECTION 5. CONDITIONS OF AGENTS' OBLIGATIONS..........................18
SECTION 6. INDEMNIFICATION............................................21
SECTION 7. CONTRIBUTION...............................................23
SECTION 8. AGENT AS AGENT, NOT PRINCIPAL..............................25
SECTION 9. REPRESENTATIONS, WARRANTIES AND AGREEMENTS TO SURVIVE
DELIVERY.................................................25
SECTION 10. TERMINATION................................................25
SECTION 11. NOTICES....................................................26
SECTION 12. PARTIES....................................................26
SECTION 13. GOVERNING LAW AND TIME.....................................27
SECTION 14. EFFECT OF HEADINGS.........................................27
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XXXXXX RESTAURANTS, INC.
(a Florida corporation)
Medium-Term Notes, Series A
DISTRIBUTION AGREEMENT
November 10, 0000
Xxxx xx Xxxxxxx Securities LLC
000 Xxxxx Xxxxx Xxxxxx, 0xx Xxxxx
Xxxxxxxxx, XX 00000
First Union Securities, Inc.
One First Union Center
000 X. Xxxxxxx Xxxxxx, 0xx Xxxxx
Xxxxxxxxx, XX 00000
SunTrust Equitable Securities Corporation
Mail Code 3943
X.X. Xxx 0000
Xxxxxxx, XX 00000-0000
Wachovia Securities, Inc.
000 Xxxxxxxxx Xxxxxx, XX
Xxxxxxx, XX 00000
The Xxxxxxxx Capital Group, L.P.
000 Xxxxx Xxxxxx, 00xx Xxxxx
Xxx Xxxx, XX 00000
Ladies and Gentlemen:
Xxxxxx Restaurants, Inc., a Florida corporation (the "Company"),
confirms its agreement with each of you (each an "Agent" and collectively the
"Agents") with respect to the issue and sale from time to time by the Company of
its Medium-Term Notes (the "Notes") having an aggregate initial offering price
of up to $350,000,000 (or the equivalent thereof if any of the Notes are
denominated in one or more foreign currencies or foreign composite currency
units). It is understood, however, that the Company may from time to time
authorize the issuance of additional Notes, and that such additional Notes may
be sold to or through the Agents pursuant
to the terms of this Distribution Agreement, all as though the issuance of such
Notes were authorized as of the date hereof.
The Notes will be issued under an indenture, dated as of January 1,
1996 (the "Indenture"), between the Company and Xxxxx Fargo Bank Minnesota,
National Association (formerly known as Norwest Bank Minnesota, National
Association), as trustee (the "Trustee"). The Notes may vary, as applicable, as
to title, aggregate principal amount, interest rate or formula and timing of
payments thereof, stated maturity date, redemption and/or payment provisions,
sinking fund requirements, guarantors and any other variable terms established
by or pursuant to the Indenture and set forth in a pricing supplement specifying
the interest rates, maturity dates and, if appropriate, other material terms of
the Notes sold pursuant hereto or the offering thereof (a "Pricing Supplement").
The Notes will be issued, and the terms thereof established, in
accordance with the Indenture and the Medium-Term Notes Administrative
Procedures attached hereto as Exhibit A (the "Procedures") unless the Company
and the Agents enter into an agreement for the purpose of soliciting purchases
of the Notes from the Company or selling the Notes directly to the Agents as
principal for resale to others (a "Terms Agreement") which modifies or otherwise
supersedes such Procedures with respect to the Notes issued pursuant to such
Terms Agreement. Any Terms Agreement, which shall be substantially in the form
of EXHIBIT B hereto, may take the form of an exchange of any standard form of
written telecommunication. Each offering of the Notes will be governed by this
Distribution Agreement, as supplemented by the Procedures and any applicable
Terms Agreement or Pricing Supplement. In acting under this Distribution
Agreement, in whatever capacity, each Agent is acting individually and not
jointly.
The Company has filed with the Securities and Exchange Commission (the
"Commission") a registration statement on Form S-3 (No. 333-41350) for the
registration of the Notes under the Securities Act of 1933, as amended (the
"1933 Act"), and the offering thereof from time to time in accordance with Rule
415 of the rules and regulations of the Commission under the 1933 Act (the "1933
Act Regulations"), and the Company has filed such post-effective amendments
thereto as may be required prior to the execution of any applicable Terms
Agreement or the issuance of any Pricing Supplement. Such registration statement
(as so amended, if applicable) has been declared effective by the Commission and
each Indenture has been duly qualified under the Trust Indenture Act of 1939, as
amended (the "1939 Act"). Such registration statement (as so amended, if
applicable), including the information, if any, deemed to be a part thereof
pursuant to Rule 430A(b) of the 1933 Act Regulations (the "Rule 430A
Information") or Rule 434(d) of the 1933 Act Regulations (the "Rule 434
Information"), is referred to herein as the "Registration Statement;" and the
final prospectus, the final prospectus supplement and the Pricing Supplement
relating to the offering of the particular issue of Notes, in the form first
furnished to the Agents by the Company for use in connection with the offering
of the Notes, are collectively referred to herein as the "Prospectus;" PROVIDED,
HOWEVER, that all references to the "Registration Statement" and the
"Prospectus" shall also be deemed to include all documents incorporated therein
by reference pursuant to the Securities Exchange Act of 1934, as amended (the
"1934 Act"), prior to the execution of any applicable Terms Agreement or Pricing
Supplement; PROVIDED FURTHER, that if the Company files a registration statement
with the Commission pursuant to Rule 462(b) of the 1933 Act Regulations (the
"Rule
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462(b) Registration Statement"), then, after such filing, all references to
"Registration Statement" shall also be deemed to include the Rule 462(b)
Registration Statement; and PROVIDED FURTHER, that if the Company elects to rely
upon Rule 434 of the 1933 Act Regulations, then all references to "Prospectus"
shall also be deemed to include the final or preliminary prospectus and the
applicable term sheet or abbreviated term sheet (the "Term Sheet"), as the case
may be, in the form first furnished to the Agents by the Company in reliance
upon Rule 434 of the 1933 Act Regulations, and all references in this
Distribution Agreement to the date of the Prospectus shall mean the date of the
Term Sheet. A "preliminary prospectus" shall be deemed to refer to (i) any
prospectus used in connection with the offering of the Notes before the
registration statement became effective and (ii) any prospectus that omitted, as
applicable, the Rule 430A Information, the Rule 434 Information or other
information to be included upon pricing in a form of prospectus filed with the
Commission pursuant to Rule 424(b) of the 1933 Act Regulations, that was used
after such effectiveness and prior to the execution and delivery of any
applicable Terms Agreement or Pricing Supplement. For purposes of this
Distribution Agreement, all references to (i) the Registration Statement,
Prospectus, Term Sheet or preliminary prospectus or to any amendment or
supplement to any of the foregoing shall be deemed to include any copy filed
with the Commission pursuant to its Electronic Data Gathering, Analysis and
Retrieval system ("XXXXX") and (ii) the Indenture shall be deemed to include, as
applicable, any indenture supplemental thereto.
All references in this Distribution Agreement to financial statements
and schedules and other information which is "contained," "included," "referred
to" or "stated" (or other references of like import) in the Registration
Statement, Prospectus or preliminary prospectus shall be deemed to mean and
include all such financial statements and schedules and other information which
is incorporated by reference in the Registration Statement, Prospectus or
preliminary prospectus, as the case may be; and all references in this
Distribution Agreement to amendments or supplements to the Registration
Statement, Prospectus or preliminary prospectus shall be deemed to mean and
include the filing of any document under the 1934 Act which is incorporated by
reference in the Registration Statement, Prospectus or preliminary prospectus,
as the case may be.
SECTION 1. Representations and Warranties.
(a) REPRESENTATIONS AND WARRANTIES BY THE COMPANY. The Company
represents and warrants to each Agent named in any applicable Terms Agreement or
Pricing Supplement, as of the date this Distribution Agreement is executed, or
such other time as the Agents and the Company may agree upon in writing (the
"Closing Time"), as of the date of each acceptance by the Company of an offer
for the purchase of Notes and as of each date the Company receives payment for
Notes and Notes are authenticated and issued (a "Settlement Date").
(i) COMPLIANCE WITH REGISTRATION REQUIREMENTS. The Company meets
the requirements for use of Form S-3 under the 1933 Act. Each
of the Registration Statement and any Rule 462(b) Registration
Statement has become effective under the 1933 Act and no stop
order suspending the effectiveness of the Registration
Statement or any Rule 462(b) Registration Statement has been
issued
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under the 1933 Act and no proceedings for that purpose have
been instituted or are pending or, to the knowledge of the
Company, are contemplated by the Commission, and any request
on the part of the Commission for additional information has
been complied with. In addition, the Indenture has been duly
qualified under the 1939 Act. At the respective times the
Registration Statement, any Rule 462(b) Registration Statement
and any post-effective amendments thereto became effective and
at each Representation Date, the Registration Statement, the
Rule 462(b) Registration Statement and any amendments and
supplements thereto complied and will comply in all material
respects with the requirements of the 1933 Act and the 1933
Act Regulations and the 1939 Act and the rules and regulations
of the Commission under the 1939 Act (the "1939 Act
Regulations") and did not and will not contain an untrue
statement of a material fact or omit to state a material fact
required to be stated therein or necessary to make the
statements therein not misleading. At the date of the
Prospectus, at the Closing Time and at each Settlement Date,
if any, the Prospectus and any amendments and supplements
thereto did not and will not include an untrue statement of a
material fact or omit to state a material fact necessary in
order to make the statements therein, in the light of the
circumstances under which they were made, not misleading. If
the Company elects to rely upon Rule 434 of the 1933 Act
Regulations, the Company will comply with the requirements of
Rule 434. Notwithstanding the foregoing, the representations
and warranties in this subsection shall not apply to the
Statement of Eligibility of the Trustee on Form T-1 or
statements in or omissions from the Registration Statement or
the Prospectus made in reliance upon and in conformity with
information furnished to the Company in writing by any Agent
expressly for use in the Registration Statement or Prospectus.
Each preliminary prospectus and the prospectus filed as part
of the Registration Statement as originally filed or as part
of any amendment thereto, or filed pursuant to Rule 424 under
the 1933 Act, complied when so filed in all material respects
with the 1933 Act Regulations and each preliminary prospectus
and the Prospectus delivered to the Agents for use in
connection with the offering of Notes will, at the time of
such delivery, be identical to any electronically transmitted
copies thereof filed with the Commission pursuant to XXXXX,
except for format and other variations permitted or required
by Regulation S-T.
(ii) INCORPORATED DOCUMENTS. The documents incorporated or deemed
to be incorporated by reference in the Registration Statement
and the Prospectus (including the filing of the Company's most
recent Annual Report on Form 10-K with the Commission), at the
time they were or hereafter are filed with the Commission,
complied and will comply in all material respects with the
requirements of the 1934 Act and the rules and regulations of
the Commission thereunder (the "1934 Act Regulations") and,
when read together with the other information in the
Prospectus, at the date of the Prospectus, at the Closing Time
and at each Settlement Date, if any, did not and will not
include an untrue statement of a material fact or omit to
state a material fact necessary to make the
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statements therein, in the light of the circumstances under
which they were made, not misleading.
(iii) INDEPENDENT ACCOUNTANTS. The accountants who certified the
financial statements and supporting schedules thereto included
in the Registration Statement and the Prospectus are
independent public accountants as required by the 1933 Act and
the 1933 Act Regulations.
(iv) FINANCIAL STATEMENTS. The financial statements of the Company
included in the Registration Statement and the Prospectus,
together with the related schedules and notes, as well as
those financial statements, schedules and notes of any other
entity included therein, present fairly the financial position
of the Company and its consolidated subsidiaries, or such
other entity, as the case may be, at the dates indicated and
the statement of operations, stockholders' equity and cash
flows of the Company and its consolidated subsidiaries, or
such other entity, as the case may be, for the periods
specified. Such financial statements have been prepared in
conformity with generally accepted accounting principles
("GAAP") applied on a consistent basis throughout the periods
involved. The supporting schedules, if any, included in the
Registration Statement and the Prospectus present fairly in
accordance with GAAP the information required to be stated
therein. The selected financial data and the summary financial
information included in the Prospectus, if any, present fairly
the information shown therein and have been compiled on a
basis consistent with that of the audited financial statements
included in the Registration Statement and the Prospectus. In
addition, any pro forma financial statements of the Company
and its subsidiaries and the related notes thereto included in
the Registration Statement and the Prospectus present fairly
the information shown therein, have been prepared in
accordance with the Commission's rules and guidelines with
respect to pro forma financial statements and have been
properly compiled on the bases described therein, and the
assumptions used in the preparation thereof are reasonable and
the adjustments used therein are appropriate to give effect to
the transactions and circumstances referred to therein.
(v) NO MATERIAL ADVERSE CHANGE IN BUSINESS. Since the respective
dates as of which information is given in the Registration
Statement and the Prospectus, except as otherwise stated
therein, (A) there has been no material adverse change in the
condition (financial or otherwise), earnings, assets,
properties, operations, or business, or to the knowledge of
the Company in the business prospects, of the Company and its
subsidiaries considered as one enterprise, whether or not
arising in the ordinary course of business (a "Material
Adverse Effect"), (B) there have been no transactions entered
into by the Company or any of its subsidiaries, other than
those in the ordinary course of business, which are material
with respect to the Company and its subsidiaries considered as
one enterprise, and (C) except for regular dividends on the
Company's common stock or preferred stock, in amounts per
share that are
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consistent with past practice, there has been no dividend or
distribution of any kind declared, paid or made by the Company
on any class of its capital stock.
(vi) GOOD STANDING OF THE COMPANY. The Company has been duly
organized and is validly existing as a corporation in good
standing under the laws of the State of Florida and has
corporate power and authority to own, lease and operate its
properties and to conduct its business as described in the
Prospectus and to enter into and perform its obligations
under, or as contemplated under, this Distribution Agreement,
the Prospectus and any applicable Terms Agreement. The Company
is duly qualified as a foreign corporation to transact
business and is in good standing in each other jurisdiction in
which such qualification is required, whether by reason of the
ownership or leasing of property or the conduct of business,
except where the failure to so qualify or be in good standing
would not result in a Material Adverse Effect.
(vii) GOOD STANDING OF SUBSIDIARIES. Each material subsidiary (as
set forth on Annex I, each a "Material Subsidiary" and,
collectively, the "Material Subsidiaries") of the Company has
been duly organized and is validly existing as a corporation
in good standing under the laws of the jurisdiction of its
incorporation, has corporate power and authority to own, lease
and operate its properties and to conduct its business as
described in the Prospectus and is duly qualified as a foreign
corporation to transact business and is in good standing in
each jurisdiction in which such qualification is required,
whether by reason of the ownership or leasing of property or
the conduct of business, except where the failure to so
qualify or be in good standing would not result in a Material
Adverse Effect. Except as otherwise stated in the Registration
Statement and the Prospectus, all of the issued and
outstanding capital stock of each such Material Subsidiary has
been duly authorized and is validly issued, fully paid and
non-assessable and is owned by the Company, directly or
through Material Subsidiaries, free and clear of any security
interest, mortgage, pledge, lien, encumbrance, claim or
equity. None of the outstanding shares of capital stock of any
Material Subsidiary was issued in violation of preemptive or
other similar rights of any securityholder of such Material
Subsidiary.
(viii) CAPITALIZATION. If the Prospectus contains a "Capitalization"
section, the authorized, issued and outstanding shares of
capital stock of the Company is as set forth in the column
entitled "Actual" under such section (except for subsequent
issuances or repurchases thereof, if any, (A) contemplated
under this Distribution Agreement, (B) pursuant to
reservations, agreements or employee benefit plans referred to
in the Prospectus, (C) pursuant to the exercise of convertible
securities or options referred to in the Prospectus, or (D)
which are not in excess of three percent of the Company's
outstanding common stock, in the aggregate). The shares of
capital stock of the Company have been duly authorized and
validly issued by the Company and are fully paid and
non-assessable; and none of such shares of capital stock was
issued in violation of preemptive or other similar rights of
any securityholder of the Company.
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(ix) AUTHORIZATION OF THIS DISTRIBUTION AGREEMENT AND ANY TERMS
AGREEMENT. This Distribution Agreement has been, and any
applicable Terms Agreement as of the date thereof will have
been, duly authorized, executed and delivered by the Company.
(x) AUTHORIZATION OF NOTES. The Notes have been, duly authorized
by the Company for issuance and sale pursuant to this
Distribution Agreement and any applicable Terms Agreement or
Pricing Supplement. Such Notes, when issued and authenticated
in the manner provided for in the Indenture and delivered
against payment of the consideration therefor specified in the
Prospectus, will constitute valid and legally binding
obligations of the Company, enforceable against the Company in
accordance with their terms, subject, as to enforcement, to
bankruptcy, insolvency, reorganization and other laws of
general applicability relating to or affecting creditors'
rights and to general principles of equity. Such Notes will be
in the form contemplated by, and each registered holder
thereof is entitled to the benefits of, the Indenture.
(xi) AUTHORIZATION OF THE INDENTURE. The Indenture has been, or
prior to the issuance of the Notes thereunder will have been,
duly authorized, executed and delivered by the Company and,
upon such authorization, execution and delivery, will
constitute a valid and legally binding agreement of the
Company, enforceable against the Company in accordance with
its terms, subject, as to enforcement, to bankruptcy,
insolvency, reorganization and other laws of general
applicability relating to or affecting creditors' rights and
to general principles of equity.
(xii) DESCRIPTION OF THE NOTES AND INDENTURE. The Notes being sold
pursuant to this Distribution Agreement and the Indenture, as
of the date of the Prospectus, will conform in all material
respects to the statements relating thereto contained in the
Prospectus and will be in substantially the form filed or
incorporated by reference, as the case may be, as an exhibit
to the Registration Statement.
(xiii) ABSENCE OF DEFAULTS AND CONFLICTS. Neither the Company nor any
of its Material Subsidiaries is in violation of its charter or
by-laws or in default in the performance or observance of any
obligation, agreement, covenant or condition contained in any
contract, indenture, mortgage, deed of trust, loan or credit
agreement, note, lease or other agreement or instrument to
which the Company or any of its Material Subsidiaries is a
party or by which it or any of them may be bound, or to which
any of the property or assets of the Company or any Material
Subsidiary is subject (collectively, "Agreements and
Instruments"), except, in each case other than with respect to
the charter or by-laws of the Company or any of its Material
Subsidiaries, for such violations or defaults that would not
result in a Material Adverse Effect. The execution, delivery
and performance of this Distribution Agreement, any applicable
Terms Agreement or Pricing Supplement and the Indenture, and
any other agreement or instrument
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entered into or issued or to be entered into or issued by the
Company in connection with the transactions contemplated
hereby or thereby or in the Registration Statement and the
Prospectus and the consummation of the transactions
contemplated herein and in the Registration Statement and the
Prospectus (including the issuance and sale of the Notes and
the use of the proceeds from the sale of the Notes as
described under the caption "Use of Proceeds" in the
Prospectus relating to such Notes) and compliance by the
Company with its obligations hereunder and thereunder have
been duly authorized by all necessary corporate action and do
not and will not, whether with or without the giving of notice
or passage of time or both, conflict with or constitute a
breach of, or default or Repayment Event (as defined below)
under, or result in the creation or imposition of any lien,
charge or encumbrance upon any assets, property or operations
of the Company or any of its Material Subsidiaries pursuant
to, any Agreements and Instruments nor will such action result
in any violation of the provisions of the charter or by-laws
of the Company or any of its Material Subsidiaries or any
applicable law, statute, rule, regulation, judgment, order,
writ or decree of any government, government instrumentality
or court, domestic or foreign, having jurisdiction over the
Company ("Relevant Laws") or any of its Material Subsidiaries
or any of their assets, properties or operations except, in
each case other than with respect to the charter or by-laws of
the Company or any of its Material Subsidiaries or Relevant
Laws, for such conflicts, breaches, defaults, Repayment
Events, liens, charges, encumbrances, or violations that would
not result in a Material Adverse Effect. As used herein, a
"Repayment Event" means any event or condition which gives the
holder of any note, debenture or other evidence of
indebtedness (or any person acting on such holder's behalf)
the right to require the repurchase, redemption or repayment
of all or a portion of such indebtedness by the Company or any
of its Material Subsidiaries.
(xiv) ABSENCE OF PROCEEDINGS. There is not an action, suit,
proceeding, inquiry or investigation before or brought by any
court or governmental agency or body, domestic or foreign, now
pending or, to the knowledge of the Company, threatened,
against the Company or any of its Material Subsidiaries which
is required to be disclosed in the Registration Statement and
the Prospectus (other than as stated therein), or which might
reasonably be expected to result in a Material Adverse Effect,
or which might reasonably be expected to materially and
adversely affect the consummation of the transactions
contemplated under this Distribution Agreement, any applicable
Terms Agreement or Pricing Supplement or the Indenture or the
performance by the Company of its obligations hereunder and
thereunder. The aggregate of all pending legal or governmental
proceedings to which the Company or any of its Material
Subsidiaries is a party or of which any of their respective
assets, properties or operations is the subject which are not
described in the Registration Statement and the Prospectus,
including ordinary routine litigation incidental to the
business, could not reasonably be expected to result in a
Material Adverse Effect.
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(xv) COMPLIANCE WITH STATE LAW. Neither the Company nor any of its
affiliates does business with the government of Cuba or with
any person or affiliate located in Cuba within the meaning of
Section 517.075, Florida Statues.
(xvi) ACCURACY OF EXHIBITS. There are no contracts or documents
which are required to be described in the Registration
Statement, the Prospectus or the documents incorporated by
reference therein or to be filed as exhibits thereto which
have not been so described and filed as required.
(xvii) ABSENCE OF FURTHER REQUIREMENTS. No filing with, or
authorization, approval, consent, license, order,
registration, qualification or decree of, any court or
governmental authority or agency, domestic or foreign, is
necessary or required for the performance by the Company of
its obligations under this Distribution Agreement, the
Prospectus or any applicable Terms Agreement or in connection
with the transactions contemplated under this Distribution
Agreement, the Prospectus or any such Terms Agreement or any
Indenture, except such as have been already made or obtained
or as may be required under state securities laws.
(xviii) POSSESSION OF INTELLECTUAL PROPERTY. The Company and its
Material Subsidiaries own or possess, or can acquire on
reasonable terms, adequate patents, patent rights, licenses,
inventions, copyrights, know-how (including trade secrets and
other unpatented and/or unpatentable proprietary or
confidential information, systems or procedures), trademarks,
service marks, trade names or other intellectual property
(collectively, "Intellectual Property") necessary to carry on
the business now operated by them, except where the failure to
possess or acquire would not, singly or in the aggregate
result in the Material Adverse Effect. Neither the Company nor
any of its Material Subsidiaries has received any notice or is
otherwise aware of any infringement of or conflict with
asserted rights of others with respect to any Intellectual
Property or of any facts or circumstances which would render
any Intellectual Property invalid or inadequate to protect the
interest of the Company or any of its Material Subsidiaries
therein, and which infringement or conflict (if the subject of
any unfavorable decision, ruling or finding) or invalidity or
inadequacy, singly or in the aggregate, would result in a
Material Adverse Effect.
(xix) POSSESSION OF LICENSES AND PERMITS. The Company and its
Material Subsidiaries possess such permits, licenses,
approvals, consents and other authorizations (collectively,
"Governmental Licenses") issued by the appropriate federal,
state, local or foreign regulatory agencies or bodies
necessary to conduct the business now operated by them, and
the Company and its Material Subsidiaries are in compliance
with the terms and conditions of all such Governmental
Licenses, except where the failure so to possess or comply
would not, singly or in the aggregate, result in a Material
Adverse Effect. All of the Governmental Licenses are valid and
in full force and effect, except when the invalidity of such
Governmental Licenses or the failure of such Governmental
Licenses to be in full force and effect would not result in a
Material Adverse
9
Effect. Neither the Company nor any of its Material
Subsidiaries has received any notice of proceedings relating
to the revocation or modification of any such Governmental
Licenses which, singly or in the aggregate, if the subject of
an unfavorable decision, ruling or finding, would result in a
Material Adverse Effect.
(xx) TITLE TO PROPERTY. The Company and its subsidiaries have good
and marketable title to all real property owned by the Company
and its subsidiaries and good title to all other properties
owned by them, in each case, free and clear of all mortgages,
pledges, liens, security interests, claims, restrictions or
encumbrances of any kind, except (A) as otherwise stated in
the Registration Statement and the Prospectus or (B) those
which do not materially affect the value of the property of
the Company or of its subsidiaries in the aggregate and do not
interfere with the use made and proposed to be made of the
property of the Company or of its subsidiaries in the
aggregate, by the Company or any of its subsidiaries. All of
the leases and subleases of the Company and its subsidiaries
considered as one enterprise, and under which the Company or
any of its subsidiaries holds properties described in the
Prospectus, are in full force and effect, and neither the
Company nor any of its subsidiaries has received any notice of
any claim of any sort that has been asserted by anyone adverse
to the rights of the Company or any of its subsidiaries under
any of the leases or subleases mentioned above, or affecting
or questioning the rights of the Company or such subsidiary to
the continued possession of the leased or subleased premises
under any such lease or sublease except where the failure of
such leases and subleases to be in full force and effect or
such claim, if the subject of an unfavorable decision, ruling
or finding, would not, singly or in the aggregate, result in a
Material Adverse Effect.
(xxi) ENVIRONMENTAL LAWS. Except as otherwise stated in the
Registration Statement and the Prospectus and except as would
not, singly or in the aggregate, result in a Material Adverse
Effect, (A) neither the Company nor any of its Material
Subsidiaries is in violation of any federal, state, local or
foreign statute, law, rule, regulation, ordinance, code,
policy or rule of common law or any judicial or administrative
interpretation thereof including any judicial or
administrative order, consent, decree or judgment, relating to
pollution or protection of human health, the environment
(including, without limitation, ambient air, surface water,
groundwater, land surface or subsurface strata) or wildlife,
including, without limitation, laws and regulations relating
to the release or threatened release of chemicals, pollutants,
contaminants, wastes, toxic substances, hazardous substances,
petroleum or petroleum products (collectively, "Hazardous
Materials") or to the manufacture, processing, distribution,
use, treatment, storage, disposal, transport or handling of
Hazardous Materials (collectively, "Environmental Laws"), (B)
the Company and its Material Subsidiaries have all permits,
authorizations and approvals required under any applicable
Environmental Laws and are each in compliance with their
requirements, (C) there are no pending or, to the Company's
knowledge, threatened administrative, regulatory or judicial
actions, suits, demands, demand
10
letters, claims, liens, notices of noncompliance or violation,
investigation or proceedings relating to any Environmental Law
against the Company or any of its Material Subsidiaries and
(D) to the Company's knowledge, there are no events or
circumstances that might reasonably be expected to form the
basis of an order for clean-up or remediation, or an action,
suit or proceeding by any private party or governmental body
or agency, against or affecting the Company or any of its
Material Subsidiaries relating to Hazardous Materials or any
Environmental Laws.
(xxii) REGISTRATION RIGHTS. There are no holders of securities (debt
or equity) of the Company or holders of rights (including,
without limitation, preemptive rights), warrants or options to
obtain securities of the Company, who have the right to
request the Company to register securities held by them under
the 1933 Act, other than holders who have waived or will not
have such rights for a specified period to be agreed upon
among the Company and the Agents, and have waived their rights
with respect to the inclusion of their securities in the
Registration Statement.
(xxiii) ACCOUNTING CONTROLS. The Company maintains a system of
internal accounting controls sufficient to provide reasonable
assurances, in all material respects, that (A) transactions
are executed in accordance with management's general or
specific authorization; (B) transactions are recorded as
necessary to permit preparation of financial statements in
conformity with generally accepted accounting principles and
to maintain accountability for assets; (C) access to assets is
permitted only in accordance with management's general or
specific authorization; and (D) the recorded accountability
for assets is compared with the existing assets at reasonable
intervals and appropriate action is taken with respect to any
differences.
(xxiv) COMPLIANCE WITH APPLICABLE LAW. The Company has complied in
all respects with all federal, state, local, foreign and
similar statutes, laws, ordinances, rules, regulations,
orders, writs, injunctions, judgements, and decrees applicable
to the Company or any of its Material Subsidiaries or to any
of the Company's or its Material Subsidiary's properties or
assets, or with respect to any of the Company's or its
Material Subsidiary's officers, directors, employees or agents
in their capacity as such ("Applicable Laws"), except where
the failure to comply would not, individually or in the
aggregate, result in a Material Adverse Effect. None of the
Company or any of its Material Subsidiaries has received any
written notice or other written communication from any
Governmental Authority or arbitrator regarding any violation
by the Company of, or a failure on the part of the Company to
comply with any Applicable Laws, other than any such violation
or failure to comply which would not, individually or in the
aggregate, be reasonably likely to have a Material Adverse
Effect.
(xxv) TAX RETURNS. The Company has filed all material Tax Returns
required to be filed by it in any jurisdiction, and all
material Taxes for which the Company is
11
directly or indirectly liable, or to which any of its
properties or assets are subject, have been filed other than
Taxes being contested in good faith by appropriate proceedings
and for which adequate reserves have been established in
accordance with GAAP. All such Tax Returns are complete and
accurate in all material respects. There is no material
proposed Tax assessment against the Company and, to the best
knowledge of the Company, there is no basis for any such
assessment, except for contested claims. All references in
this subsection 1(a)(xxv) to the Company shall include any
Affiliated Group (within the meaning of Section 1504 of the
Internal Revenue Code of 1986, as amended, or any similar
provision of any law), and any partnership or limited
liability company in which the Company is a member or partner.
"Taxes" means all taxes of any kind or nature, assessments and
governmental charges, including interest and penalties
(whether or not actually shown on any Tax Return) imposed by
any government authority. "Tax Returns" means all reports,
returns or other information required to be supplied to a
government authority with respect to Taxes.
(xxvi) INSURANCE. Each of the Company and its Material Subsidiaries
is insured (including in each case self-insurance and
reinsurance) by insurers of recognized financial
responsibility against such losses and risks and in such
amounts and covering such risks as management reasonably
believes are prudent and customary in the businesses in which
it is engaged and all such insurance is in full force and
effect; neither the Company nor any of its Subsidiaries has
within the last 3 years been refused any insurance coverage
sought or applied for; and neither the Company nor any of its
Material Subsidiaries has reason to believe that it will not
be able to renew its existing insurance coverage as and when
such coverage expires or to obtain similar coverage from
similar insurers as may be necessary to continue its business;
except in the case of each of the foregoing as would not have
a Material Adverse Effect.
(b) OFFICER'S CERTIFICATES. Any certificate signed by any officer of
the Company or any of its subsidiaries and delivered to any Agent or to counsel
for the Agents in connection with the offering and the purchase of the Notes
shall be deemed a representation and warranty by the Company to each Agent as to
the matters covered thereby on the date of such certificate.
SECTION 2. APPOINTMENT OF AGENTS; PURCHASES AS PRINCIPAL.
(a) SOLICITATIONS AS AGENT. Subject to the terms and conditions set
forth herein, the Company hereby authorizes each of the Agents to act as its
agent to solicit offers for the purchase of all or part of the Notes from the
Company.
On the basis of the representations and warranties herein contained,
and subject to the terms and conditions herein set forth, each Agent agrees, as
agent of the Company, to use its reasonable efforts to solicit offers to
purchase the Notes upon the terms and conditions set forth in the Prospectus, as
it may be amended or supplemented, and in the Procedures.
12
Each Agent shall communicate to the Company, orally or in writing, each
reasonable offer to purchase Notes received by such Agent. The Company shall
have the sole right to accept offers to purchase the Notes and may reject any
such offer in whole or in part.
The Company agrees to pay each Agent a commission, in the form of a
discount, equal to the percentage of the principal amount of each Note sold by
the Company as a result of a solicitation made by such Agent as set forth in
Annex II hereto. Such commission shall be payable as specified in the
Procedures.
Each Agent shall have the right, in its discretion reasonably
exercised, to reject any offer for the purchase of Notes, in whole or in part,
and any such rejection shall not be deemed a breach of its agreements contained
herein. The Company reserves the right, in its sole discretion, to suspend, at
any time, the solicitation of purchases of the Notes. Upon receipt of
instructions from the Company, each Agent will forthwith suspend solicitation of
purchases from the Company until such time as the Company advises it that such
solicitation may be resumed.
Each Agent shall make reasonable efforts to assist the Company in
obtaining performance by each purchaser whose offer to purchase Notes has been
solicited by such Agent and accepted by the Company, but such Agent shall not,
except as otherwise provided in this Distribution Agreement, be obligated to
disclose the identity of any purchaser or have any liability to the Company in
the event any such purchase is not consummated for any reason. Except as
provided in Section 2(b), under no circumstances will any Agent be obligated to
purchase any Notes for its own account. It is understood and agreed, however,
that any Agent may purchase Notes as principal pursuant to Section 2(b).
Subject to the provisions of this Section, the Prospectus and the
Procedures, offers for the purchase of Notes may be solicited by an Agent as
agent for the Company at such time and in such amounts as such Agent deems
advisable. The Company may from time to time offer Notes for sale otherwise than
through an Agent; PROVIDED, HOWEVER, that, subject to Section 12 hereof, so long
as this Distribution Agreement is in effect the Company shall not solicit or
accept offers to purchase Notes through any agent other than an Agent. It is
understood, however, that if from time to time the Company is approached by a
prospective agent offering to solicit a specific purchase of Notes, the Company
may engage such agent with respect to such specific purchase, provided that (i)
such agent is engaged on terms substantially similar (including the same
commission schedule) to the terms of this Distribution Agreement and (ii) the
Agents are given notice of such purchase promptly.
If the Company shall default in its obligations to deliver Notes to a
purchaser whose offer it has accepted, the Company shall indemnify and hold each
Agent harmless against any loss, claim or damage arising from or as a result of
such default by the Company.
(b) PURCHASES AS PRINCIPAL. Each sale of Notes to any Agent as
principal shall be made in accordance with the terms of this Agreement and
pursuant to a Terms Agreement which will provide for the sale of such Notes to,
and the purchase and re-offering thereof by, such Agent.
13
Each Terms Agreement shall describe the Notes to be purchased by any
Agent or Agents acting solely as principals pursuant to Section 2(b) and not as
agent (a "Purchaser") pursuant thereto and shall specify the aggregate issue
amount of such Notes, the price to be paid to the Company for such Notes, the
maturity date of such Notes, the rate at which interest will be paid on such
Notes, the dates on which interest will be paid on such Notes and the record
date with respect to each such payment of interest, the Settlement Date for the
purchase of such Notes, the place of delivery of the Notes and payment therefor,
the method of payment, any other material terms and any requirements for the
delivery of opinions of counsel, certificates from the Company or its officers
or a letter from the Company's independent public accountants as described in
Section 5(e). Any such Terms Agreement may also specify the period of time
referred to in Section 3(n).
Delivery of the certificates for Notes sold to a Purchaser pursuant to
a Terms Agreement shall be made no later than the Settlement Date agreed to in
such Terms Agreement, against payment of funds to the Company in the net amount
due to the Company for such Notes by the method and in the form set forth in the
Procedures unless otherwise agreed to between the Company and the Purchaser in
such Terms Agreement.
Unless otherwise agreed to between the Company and a Purchaser in a
Terms Agreement, any Note sold to a Purchaser (i) shall be purchased by such
Purchaser at a price equal to 100% of the principal amount thereof less a
percentage equal to the commission applicable to an agency sale of a Note of
identical maturity and (ii) may be resold by such Purchaser at varying prices
form time to time or, if set forth in the applicable Terms Agreement and Pricing
Supplement, at a fixed public offering price. In connection with any resale of
Notes purchased, a Purchaser may use a selling or dealer group and may reallow
to any broker or dealer any portion of the discount or commission payable
pursuant hereto.
A Purchaser's commitment to purchase Notes pursuant to any Terms
Agreement shall be deemed to have been made on the basis of the representations
and warranties of the Company herein contained and shall be subject to the terms
and conditions herein set forth.
SECTION 3. COVENANTS OF THE COMPANY.
The Company covenants with each Agent, as follows:
(a) COMPLIANCE WITH SECURITIES REGULATIONS AND COMMISSION REQUESTS. The
Company, subject to Section 3(b), will comply with the requirements of Rule 430A
of the 1933 Act Regulations and/or Rule 434 of the 1933 Act Regulations, if and
as applicable, and will notify the Agents promptly, and confirm the notice in
writing, of (i) the effectiveness of any post-effective amendment to the
Registration Statement or the filing of any supplement or amendment to the
Prospectus, (ii) the receipt of any comments from the Commission, (iii) any
request by the Commission for any amendment to the Registration Statement or any
amendment or supplement to the Prospectus or for additional information, and
(iv) of the issuance by the Commission of any stop order suspending the
effectiveness of the Registration Statement or of any order preventing or
suspending the use of any preliminary prospectus, or of the suspension of the
qualification of the Notes for offering or sale in any
14
jurisdiction, or of the initiation or threatening of any proceedings for any of
such purposes. The Company will timely effect the filings necessary pursuant to
Rule 424 and will take such steps as it deems necessary to ascertain promptly
whether any Prospectus transmitted for filing under Rule 424 was received for
filing by the Commission and, in the event that it was not, it will promptly
file the Prospectus. The Company will use reasonable efforts to prevent the
issuance of any stop order and, if any stop order is issued, use promptly its
best efforts to obtain the lifting thereof.
(b) FILING OF AMENDMENTS. The Company will give each Agent notice of
its intention to file or prepare any amendment to the Registration Statement
(including any filing under Rule 462(b) of the 1933 Act Regulations), any Term
Sheet or any amendment, supplement or revision to either the prospectus included
in the Registration Statement at the time it became effective or to the
Prospectus, whether pursuant to the 1933 Act, the 1934 Act or otherwise, will
furnish each Agent with copies of any such documents a reasonable amount of time
prior to such proposed filing or use, as the case may be, and will not file or
use any such document to which any Agent or counsel for the Agents shall
reasonably object.
(c) DELIVERY OF REGISTRATION STATEMENTS. The Company has furnished or
will deliver to each Agent and counsel for the Agents, without charge, signed or
conformed copies of the Registration Statement as originally filed and of each
amendment thereto (including exhibits filed therewith or incorporated by
reference therein and documents incorporated or deemed to be incorporated by
reference therein) and signed or conformed copies of all consents and
certificates of experts. Copies of the Registration Statement and each amendment
thereto furnished to the Agents will be identical to the electronically
transmitted copies thereof filed with the Commission pursuant to XXXXX, except
for format and other variations permitted or required by Regulation S-T.
(d) DELIVERY OF PROSPECTUSES. The Company will deliver to each Agent,
without charge, as many copies of each preliminary prospectus as such Agent may
reasonably request, and the Company hereby consents to the use of such copies
for purposes permitted by the 1933 Act. The Company will furnish to each Agent,
without charge, during the period when the Prospectus is required to be
delivered under the 1933 Act or the 1934 Act, such number of copies of the
Prospectus as such Agent may reasonably request. The Prospectus and any
amendments or supplements thereto furnished to the Agents will be identical to
the electronically transmitted copies thereof filed with the Commission pursuant
to XXXXX, except for format and other variations permitted or required by
Regulation S-T.
(e) CONTINUED COMPLIANCE WITH SECURITIES LAWS. The Company will comply
with the 1933 Act and the 1933 Act Regulations and the 1934 Act and the 1934 Act
Regulations so as to permit the completion of the distribution of the Notes as
contemplated in this Distribution Agreement and any applicable Terms Agreement
and in the Registration Statement and the Prospectus. If at any time when the
Prospectus is required by the 1933 Act or the 1934 Act to be delivered in
connection with sales of the Notes, any event shall occur or condition shall
exist as a result of which it is necessary, in the opinion of counsel for the
Agents or for the Company, to amend the Registration Statement in order that the
Registration Statement will not contain an untrue statement of a material fact
or omit to state a material fact required
15
to be stated therein or necessary to make the statements therein not misleading
or to amend or supplement the Prospectus in order that the Prospectus will not
include an untrue statement of a material fact or omit to state a material fact
necessary in order to make the statements therein not misleading in the light of
the circumstances existing at the time it is delivered to a purchaser, or if it
shall be necessary, in the opinion of such counsel, at any such time to amend
the Registration Statement or amend or supplement the Prospectus in order to
comply with the requirements of the 1933 Act or the 1933 Act Regulations, the
Company will promptly prepare and file with the Commission, subject to Section
3(b), such amendment or supplement as may be necessary to correct such statement
or omission or to make the Registration Statement or the Prospectus comply with
such requirements, and the Company will furnish to the Agents, without charge,
such number of copies of such amendment or supplement as the Agents may
reasonably request; PROVIDED, HOWEVER, that if on such date the Agents shall
have suspended solicitation of purchases of the Notes in each Agent's capacity
as Agent pursuant to a request from the Company, and shall not then hold any
Notes as principal, the Company shall not be obligated so to amend or supplement
the Prospectus until such time as the Company shall determine that solicitation
of purchases of the Notes should be resumed or shall subsequently enter into a
new Terms Agreement with the Agents.
(f) BLUE SKY QUALIFICATIONS. The Company will use its reasonable best
efforts, in cooperation with the Agents, to qualify the Notes for offering and
sale under the applicable securities laws of such states and other jurisdictions
(domestic or foreign) as the Agents may designate and to maintain such
qualifications in effect for as long as may be necessary to complete the
distribution of the Notes; PROVIDED, HOWEVER, that the Company shall not be
obligated to file any general consent to service of process or to qualify as a
foreign corporation or as a broker or dealer in securities in any jurisdiction
in which it is not so qualified or to subject itself to taxation in respect of
doing business in any jurisdiction in which it is not otherwise so subject.
(g) EARNINGS STATEMENT. The Company will timely file such reports
pursuant to the 1934 Act as are necessary in order to make generally available
to its securityholders as soon as practicable an earnings statement for the
purposes of, and to provide the benefits contemplated by, the last paragraph of
Section 11(a) of the 1933 Act.
(h) REPORTS TO SECURITYHOLDERS. Subsequent to the date hereof and for
so long as the delivery of a prospectus is required in connection with the
offering or sale of the Notes, the Company will deliver to the Agents copies of
all reports or other communications (financial or otherwise) made generally to
securityholders of the Company.
(i) USE OF PROCEEDS. The Company will use the net proceeds received by
it from the sale of the Notes in the manner specified in the Prospectus under
"Use of Proceeds."
(j) LISTING. The Company will use reasonable efforts to effect the
listing of the Notes, prior to the Settlement Date, on any national securities
exchange or quotation system if and as specified in any applicable Terms
Agreement or Pricing Supplement.
16
(k) REPORTING REQUIREMENTS. The Company, during the period when the
Prospectus is required to be delivered under the 1933 Act or the 1934 Act, will
file all documents required to be filed with the Commission pursuant to the 1934
Act within the time periods required by the 1934 Act and the 1934 Act
Regulations and will furnish the Agents promptly with copies of all reports and
any definitive proxy or information statements required to be filed by the
Company with the Commission pursuant to Section 13, 14 or 15(d) of the 1934 Act.
(l) ADDITIONAL DOCUMENTS. The Company shall furnish to each Agent such
information, documents, certificates of officers of the Company and opinions of
counsel for the Company relating to the business, operations and affairs of the
Company, the Registration Statement, the Prospectus, and any amendments thereof
or supplements thereto, the Indenture, the Notes, this Distribution Agreement,
the Procedures and the performance by the Company and the Agents of their
respective obligations hereunder and thereunder as any Agent may from time to
time and at any time prior to the termination of this Distribution Agreement
reasonably request.
(m) AFFIRMATION UPON OFFER. Each acceptance by the Company of an offer
to purchase Notes will be deemed to be an affirmation that the representations
and warranties of the Company contained in this Distribution Agreement are true
and correct at the time of such acceptance, as though made at and as of such
time, and a covenant that such representations and warranties will be true and
correct at the time of delivery to the purchaser of the Notes relating to such
acceptance, as though made at and as of such time (it being understood that for
the purposes of the foregoing affirmation and covenant such representations and
warranties shall relate to the Registration Statement and Prospectus as amended
or supplemented at each such time). Each such acceptance by the Company of any
offer for the purchase of Notes shall be deemed to constitute an additional
representation, warranty and agreement by the Company that, as of the Settlement
Date for the sale of such Notes, after giving effect to the issuance of such
Notes, of any other Notes to be issued on or prior to such Settlement Date and
of any other securities to be issued and sold by the Company on or prior to such
Settlement Date, the aggregate amount of securities (including any Notes) which
have been issued and sold by the Company will not exceed the amount of
securities registered pursuant to the Registration Statement. The Company will
inform each Agent promptly upon its request of the aggregate amount of
securities registered under the Registration Statement which remains unsold.
(n) RESTRICTION ON DISPOSITION OF SECURITIES. During the period, if
any, specified in any Terms Agreement, the Company shall not, without the prior
written consent of the Purchaser, offer, sell, contract to sell, pledge, or
otherwise dispose of (or enter into any transaction which is designed to, or
might reasonably be expected to, result in the disposition (whether by actual
disposition or effective economic disposition due to cash settlement or
otherwise) by the Company or any affiliate of the Company or any person in
privity with the Company or any affiliate of the Company), directly or
indirectly, including the filing (or participation in the filing) of a
registration statement with the Commission in respect of, or establish or
increase a put equivalent position or liquidate or decrease a call equivalent
position within the meaning of Section 16 of the 1934 Act, any debt securities
(other than the Notes sold pursuant to the Terms Agreement) issued or guaranteed
by the Company which mature more
17
than one year after the Closing Time and which are substantially similar to the
Notes sold pursuant to such Terms Agreement, or publicly announce an intention
to effect any such transaction.
SECTION 4. PAYMENT OF EXPENSES. The Company will pay, whether or not
any sale of the Notes is consummated, all expenses incident to the performance
of its obligations under this Distribution Agreement or any applicable Terms
Agreement or Pricing Supplement, including (i) the preparation, printing and
filing of the Registration Statement (including financial statements and
exhibits) as originally filed and of each amendment thereto, (ii) the
preparation, printing and delivery to the Agents of this Distribution Agreement,
any Terms Agreement, the Pricing Supplement, the Indenture and such other
documents as may be required in connection with the offering, purchase, sale,
issuance or delivery of the Notes, (iii) the preparation, issuance and delivery
of the Notes to the Agents, including any transfer taxes and any stamp or other
duties payable upon the sale, issuance or delivery of the Notes to the
purchasers, (iv) the fees and disbursements of the Company's counsel,
accountants and other advisors or agents (including transfer agents and
registrars), as well as the reasonable fees and disbursements of any Trustees
and their respective counsel, (v) the qualification of the Notes under state
securities laws in accordance with the provisions of Section 3(f) hereof,
including filing fees and the reasonable fees and disbursements of counsel for
the Agents in connection therewith and in connection with the preparation,
printing and delivery of the Blue Sky Survey and any Legal Investment Survey,
and any amendment thereto, (vi) the printing and delivery to the Agents of
copies of each preliminary prospectus, any Term Sheet, and the Prospectus and
any amendments or supplements thereto, (vii) the fees charged by nationally
recognized statistical rating organizations for the rating of the Notes, if
applicable, (viii) the fees and expenses incurred with respect to the listing of
the Notes, if applicable, (ix) the filing fees incident to, and the reasonable
fees and disbursements of counsel to the Agents in connection with, the review,
if any, by the National Association of Securities Dealers, Inc. (the "NASD") of
the terms of the sale of the Notes, (x) the fees and expenses of any Agent
acting in the capacity of a "qualified independent underwriter" (as defined in
the bylaws of the NASD), if applicable, (xi) the reasonable fees and
disbursements of counsel to the Agents incurred in an offering of Notes, and
(xii) any reasonable advertising and other reasonable out-of-pocket expenses of
the Agents.
SECTION 5. CONDITIONS OF AGENTS' OBLIGATIONS. The obligations of the
Agents to solicit offers to purchase the Notes as Agent of the Company or to
purchase Notes pursuant to any Terms Agreement or Pricing Supplement, and the
obligation of any person who has agreed to purchase Notes, to make payment for
and take delivery of Notes, are subject to the accuracy of the representations
and warranties of the Company contained herein or in certificates of any officer
of the Company or any of its subsidiaries delivered pursuant to the provisions
hereof, to the performance by the Company of its covenants and other obligations
hereunder, and to the following further conditions:
(a) EFFECTIVENESS OF REGISTRATION STATEMENT. The Registration
Statement, including any Rule 462(b) Registration Statement, has become
effective under the 1933 Act and no stop order suspending the effectiveness of
the Registration Statement shall have
18
been issued under the 1933 Act and no proceedings for that purpose shall have
been initiated or be pending or threatened by the Commission, and any request on
the part of the Commission for additional information shall have been complied
with to the reasonable satisfaction of counsel to the Agents. A prospectus or
any applicable supplement thereto containing information relating to the
description of the Notes, the specific method of distribution and similar
matters shall have been filed with the Commission in accordance with Rule
424(b)(1), (2), (3), (4) or (5), as applicable (or any required post-effective
amendment providing such information shall have been filed and declared
effective in accordance with the requirements of Rule 430A), or, if the Company
has elected to rely upon Rule 434 of the 1933 Act Regulations, a Term Sheet
including the Rule 434 Information shall have been filed with the Commission in
accordance with Rule 424(b)(7).
(b) OPINION OF COUNSEL FOR COMPANY. At Closing Time and at each
Settlement Date with respect to any applicable Terms Agreement or Pricing
Supplement, the Agents shall have received the favorable opinion, dated as of
Closing Time and such Settlement Date, of Xxxxxx & Xxxxxxx LLP, counsel for the
Company, in form and substance satisfactory to counsel for the Agents, to the
effect set forth in EXHIBIT C hereto. In rendering such opinion Xxxxxx & Whitney
LLP may rely as to matters involving the application of the laws of the State of
Florida, to the extent it deems it proper and to the extent specified in such
opinion, upon the opinion of McGuireWoods LLP. In addition, at Closing Time and
at each Settlement Date with respect to any Terms Agreement or Pricing
Supplement, the Agents shall have received the favorable opinion, dated as of
Closing Time, of Xxxxx X. XxXxxxxx, Associate General Counsel of the Company or
other counsel of the Company acceptable to the Agents in form and substance
satisfactory to counsel for the Agents, to the effect set forth in EXHIBIT D
hereto.
(c) OPINION OF COUNSEL FOR AGENTS. At Closing Time and at each
Settlement Date with respect to any applicable Terms Agreement or Pricing
Supplement, the Agents shall have received the favorable opinion, dated as of
Closing Time and such Settlement Date, of McGuireWoods LLP, counsel for the
Agents, together with signed or reproduced copies of such letter for each of the
other Agents, with respect to the matters set forth in clauses (1), (3), (4),
(5), (6), (7) (other than the information in the Prospectus under "United States
Taxation"), (12), (13) and the penultimate paragraph of EXHIBIT C hereto. In
giving such opinion, such counsel may rely, as to all matters governed by the
laws of jurisdictions other than the laws of the State of New York, the State of
Florida and the federal laws of the United States, upon the opinions of counsel
satisfactory to the Agents. Such counsel may also state that, insofar as such
opinion involves factual matters, they have relied, to the extent they deem
proper, upon certificates of officers of the Company and its subsidiaries and
certificates of public officials.
(d) OFFICERS' CERTIFICATE. At Closing Time and at the Settlement Date,
there shall not have been, since the date of any applicable Pricing Supplement
or Terms Agreement or since the respective dates as of which information is
given in the Prospectus, any material adverse change in the condition, financial
or otherwise, or in the earnings or business, or to the knowledge of the Company
in the business prospects, of the Company and its subsidiaries considered as one
enterprise, whether or not arising in the ordinary course of business, and the
Agents shall have received a certificate of the President or a Vice President of
the Company and of the chief financial or chief accounting officer of the
Company, dated as of Closing Time and
19
such Settlement Date, to the effect that (i) there has been no such material
adverse change, (ii) the representations and warranties in Section 1 are true
and correct with the same force and effect as though expressly made at and as of
the Closing Time and such Settlement Date, (iii) the Company has complied with
all agreements and satisfied all conditions on its part to be performed or
satisfied at or prior to the Closing Time or such Settlement Date, and (iv) no
stop order suspending the effectiveness of the Registration Statement has been
issued and no proceedings for that purpose have been instituted or, to such
officer's knowledge, threatened by the Commission.
(e) ACCOUNTANT'S COMFORT LETTER. At the Closing Time and at each
Settlement Date with respect to any applicable Terms Agreement or Pricing
Supplement, the Agents shall have received from KPMG LLP (and, if necessary, any
other independent certified public accountants of any subsidiary of the Company
or of any business acquired by the Company for which financial statements are,
or are required to be, included in the Registration Statement) a letter or
letters dated such date, in form and substance satisfactory to the Agents,
together with signed or reproduced copies of such letter for each of the other
Agents, including matters such as those set forth in EXHIBIT E hereto and
containing statements and information of the type ordinarily included in
accountants' "comfort letters" to agents with respect to the financial
statements and certain financial information contained in the Registration
Statement and the Prospectus and to such further effect as the Representative
may reasonably request.
(f) RATINGS. At Closing Time and at each Settlement Date, the Notes
shall have the ratings accorded by any "nationally recognized statistical rating
organization," as defined by the Commission for purposes of Rule 436(g)(2) of
the 1933 Act Regulations, if and as specified in any applicable Terms Agreement
or Pricing Supplement, and the Company shall have delivered to the Agents a
letter, dated as of such date, from each such rating organization, or other
evidence satisfactory to the Agents, confirming that the Notes have such rating,
and there shall not have occurred a downgrading in the rating assigned any of
the Company's other securities by any such rating organization, and no such
rating organization shall have publicly announced that it has under surveillance
or review its rating of the Notes or any of the Company's other securities.
(g) APPROVAL OF LISTING. At Closing Time, the Notes shall have been
approved for listing, subject only to official notice of issuance, if any, as
specified in any applicable Terms Agreement or in the Prospectus.
(h) NO OBJECTION. If the Registration Statement or an offering of Notes
has been filed with the NASD for review, the NASD shall not have raised any
objection with respect to the fairness and reasonableness of the underwriting
terms and arrangements.
(i) LOCK-UP ARRANGEMENTS. At the Closing Time or each Settlement Date,
the Agents shall have received, in form and substance satisfactory to the
Agents, each lock-up agreement, if any, specified in any Terms Agreement,
Pricing Supplement or Terms Sheet as being required to be delivered by the
persons listed therein.
20
(j) ADDITIONAL DOCUMENTS. At Closing Time and at each Settlement Date,
counsel for the Agents shall have been furnished with such documents and
opinions as they may reasonably require for the purpose of enabling them to pass
upon the issuance and sale of the Notes, or in order to evidence the accuracy of
any of the representations or warranties, or the fulfillment of any of the
conditions, herein contained; and all proceedings taken by the Company in
connection with the issuance and sale of the Notes shall be satisfactory in form
and substance to the Agents and counsel for the Agents.
(k) TERMINATION. If any condition specified in this Section 5 shall not
have been fulfilled when and as required to be fulfilled, this Distribution
Agreement and any Terms Agreement may be terminated by the Agent by notice to
the Company at any time, and such termination shall be without liability of any
party to any other party except as provided in Section 4 and except that
Sections 1, 6, 7 and 8 shall survive any such termination and remain in full
force and effect.
SECTION 6. INDEMNIFICATION.
(a) INDEMNIFICATION OF AGENTS. The Company agrees to indemnify and hold
harmless each Agent and each person, if any, who controls any Agent within the
meaning of Section 15 of the 1933 Act or Section 20 of the 1934 Act as follows:
(i) against any and all loss, liability, claim, damage and expense
whatsoever, as incurred, arising out of any untrue statement
or alleged untrue statement of a material fact contained in
the Registration Statement (or any amendment thereto),
including the Rule 430A Information and the Rule 434
Information deemed to be a part thereof, if applicable, or the
omission or alleged omission therefrom of a material fact
required to be stated therein or necessary to make the
statements therein not misleading or arising out of any untrue
statement or alleged untrue statement of a material fact
included in any preliminary prospectus or the Prospectus (or
any amendment or supplement thereto), or the omission or
alleged omission therefrom of a material fact necessary in
order to make the statements therein, in the light of the
circumstances under which they were made, not misleading;
(ii) against any and all loss, liability, claim, damage and expense
whatsoever, as incurred, to the extent of the aggregate amount
paid in settlement of any litigation, or any investigation or
proceeding by any governmental agency or body, commenced or
threatened, or of any claim whatsoever based upon any such
untrue statement or omission, or any such alleged untrue
statement or omission; PROVIDED that (subject to Section 6(d)
below) any such settlement is effected with the written
consent of the Company; and
(iii) against any and all expense whatsoever, as incurred (including
the fees and disbursements of counsel chosen by the Agents),
reasonably incurred in investigating, preparing or defending
against any litigation, or any investigation or proceeding by
any governmental agency or body, commenced or threatened, or
21
any claim whatsoever based upon any such untrue statement or
omission, or any such alleged untrue statement or omission, to
the extent that any such expense is not paid under (i) or (ii)
above;
PROVIDED, HOWEVER, that this indemnity agreement shall not apply to any loss,
liability, claim, damage or expense to the extent arising out of any untrue
statement or omission or alleged untrue statement or omission made in reliance
upon and in conformity with written information furnished to the Company by any
Agent expressly for use in the Registration Statement (or any amendment
thereto), including the Rule 430A Information and the Rule 434 Information
deemed to be a part thereof, if applicable, or any preliminary prospectus or the
Prospectus (or any amendment or supplement thereto).
(b) INDEMNIFICATION OF COMPANY, DIRECTORS AND OFFICERS. Each Agent
severally agrees to indemnify and hold harmless the Company, its directors, each
of its officers, and each person, if any, who controls the Company within the
meaning of Section 15 of the 1933 Act or Section 20 of the 1934 Act against any
and all loss, liability, claim, damage and expense described in the indemnity
contained in subsection (a) of this Section, as incurred, but only with respect
to untrue statements or omissions, or alleged untrue statements or omissions,
made in the Registration Statement (or any amendment thereto), including the
Rule 430A Information and the Rule 434 Information deemed to be a part thereof,
if applicable, or any preliminary prospectus or the Prospectus (or any amendment
or supplement thereto) in reliance upon and in conformity with written
information furnished to the Company by an Agent expressly for use in the
Registration Statement (or any amendment thereto) or such preliminary prospectus
or the Prospectus (or any amendment or supplement thereto).
(c) ACTIONS AGAINST PARTIES; NOTIFICATION. Each indemnified party shall
give notice as promptly as reasonably practicable to each indemnifying party of
any action commenced against it in respect of which indemnity may be sought
hereunder, but failure to so notify an indemnifying party shall not relieve such
indemnifying party from any liability hereunder to the extent it is not
materially prejudiced as a result thereof and in any event shall not relieve it
from any liability which it may have otherwise than on account of this indemnity
agreement. An indemnifying party may participate at its own expense in the
defense of any such action; PROVIDED, HOWEVER, that counsel to the indemnifying
party shall not (except with the consent of the indemnified party) also be
counsel to the indemnified party. The indemnifying party shall be entitled to
appoint counsel of the indemnifying party's choice at the indemnifying party's
expense to represent the indemnified party in any action for which
indemnification is sought (in which case the indemnifying party shall not
thereafter be responsible for the fees and expenses of any separate counsel
retained by the indemnified party or parties except as set forth below);
provided, however, that such counsel shall be reasonably satisfactory to the
indemnified party. Notwithstanding the indemnifying party's election to appoint
counsel to represent the indemnified party in an action, the indemnified party
shall have the right to employ separate counsel (including local counsel), and
the indemnifying party shall bear the reasonable fees, costs and expenses of
such separate counsel (and local counsel) if (i) the use of counsel chosen by
the indemnifying party to represent the indemnified party would present such
counsel with a conflict of interest in the reasonable judgment of the
indemnified party, (ii) the defendants in any such action include both the
indemnified party and the indemnifying
22
party and the indemnified party shall have reasonably concluded that there may
be legal defenses available to it and/or other indemnified parties which are
different from or additional to those available to the indemnifying party, (iii)
the indemnifying party shall not have employed counsel reasonably satisfactory
to the indemnified party to represent the indemnified party within a reasonable
time after notice of the institution of such action or (iv) the indemnifying
party shall have authorized the indemnified party to employ separate counsel at
the expense of the indemnifying party. In no event shall the indemnifying
parties be liable for fees and expenses of more than one counsel (in addition to
any local counsel) separate from their own counsel for all indemnified parties
in connection with any one action or separate but similar or related actions in
the same jurisdiction arising out of the same general allegations or
circumstances. No indemnifying party shall, without the prior written consent of
the indemnified parties, settle or compromise or consent to the entry of any
judgment with respect to any litigation, or any investigation or proceeding by
any governmental agency or body, commenced or threatened, or any claim
whatsoever in respect of which indemnification or contribution could be sought
under this Section 6 or Section 7 hereof (whether or not the indemnified parties
are actual or potential parties thereto), unless such settlement, compromise or
consent (i) includes an unconditional release of each indemnified party from all
liability arising out of such litigation, investigation, proceeding or claim and
(ii) does not include a statement as to or an admission of fault, culpability or
a failure to act by or on behalf of any indemnified party.
(d) SETTLEMENT WITHOUT CONSENT IF FAILURE TO REIMBURSE. If at any time
an indemnified party shall have requested an indemnifying party to reimburse the
indemnified party for fees and expenses of counsel, such indemnifying party
agrees that it shall be liable for any settlement of the nature contemplated by
Section 6(a)(ii) effected without its written consent if (i) such settlement is
entered into more than 45 days after receipt by such indemnifying party of the
aforesaid request, (ii) such indemnifying party shall have received notice of
the terms of such settlement at least 30 days prior to such settlement being
entered into and (iii) such indemnifying party shall not have reimbursed such
indemnified party in accordance with such request prior to the date of such
settlement. Notwithstanding the immediately preceding sentence, if at any time
an indemnified party shall have requested an indemnifying party to reimburse the
indemnified party for fees and expenses of counsel, an indemnifying party shall
not be liable for any settlement of the nature contemplated by Section 6(a)(ii)
effected without its consent if such indemnifying party (i) reimburses such
indemnified party in accordance with such request to the extent it considers
such request to be reasonable and (ii) provides written notice to the
indemnified party substantiating the unpaid balance as unreasonable, in each
case prior to the date of such settlement.
SECTION 7. CONTRIBUTION. If the indemnification provided for in Section
6 hereof is for any reason unavailable to or insufficient to hold harmless an
indemnified party in respect of any losses, liabilities, claims, damages or
expenses referred to therein, then each indemnifying party shall contribute to
the aggregate amount of such losses, liabilities, claims, damages and expenses
incurred by such indemnified party, as incurred, (i) in such proportion as is
appropriate to reflect the relative benefits received by the Company, on the one
hand, and the applicable Agents, on the other hand, from the offering of the
Notes or (ii) if the allocation provided by clause (i) is not permitted by
applicable law, in such proportion as is appropriate to reflect not only the
relative benefits referred to in clause (i) above but also the relative fault of
23
the Company, on the one hand, and of the applicable Agents, on the other hand,
in connection with the statements or omissions which resulted in such losses,
liabilities, claims, damages or expenses, as well as any other relevant
equitable considerations.
The relative benefits received by the Company, on the one hand, and the
applicable Agents, on the other hand, in connection with the offering of the
Notes shall be deemed to be in the same respective proportions as the total net
proceeds from the offering of such Notes (before deducting expenses) received by
the Company and the total discounts or commissions received by each applicable
Agent in connection with the sale of such Notes, as the case may be, bears to
the aggregate total sale prices of such Notes.
The relative fault of the Company, on the one hand, and the applicable
Agents, on the other hand, shall be determined by reference to, among other
things, whether any such untrue or alleged untrue statement of a material fact
or omission or alleged omission to state a material fact relates to information
supplied by the Company or by the Agents and the parties' relative intent,
knowledge, access to information and opportunity to correct or prevent such
statement or omission.
The Company and the Agents agree that it would not be just and
equitable if contribution pursuant to this Section 7 were determined by pro rata
allocation (even if the Agents were treated as one entity for such purpose) or
by any other method of allocation which does not take account of the equitable
considerations referred to above in this Section 7. The aggregate amount of
losses, liabilities, claims, damages and expenses incurred by an indemnified
party and referred to above in this Section 7 shall be deemed to include any
legal or other expenses reasonably incurred by such indemnified party in
investigating, preparing or defending against any litigation, or any
investigation or proceeding by any governmental agency or body, commenced or
threatened, or any claim whatsoever based upon any such untrue or alleged untrue
statement or omission or alleged omission.
Notwithstanding the provisions of this Section 7, no Agent shall be
required to contribute any amount in excess of the amount by which the total
price at which the Notes sold through such Agent were offered to the public in
the offering of the Notes that were the subject of the claim for indemnification
exceeds the amount of any damages which such Agent has otherwise been required
to pay by reason of any 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 0000 Xxx) shall be entitled to contribution from any person
who was not guilty of such fraudulent misrepresentation.
In connection with an offering of Notes purchased from the Company by
two or more Agents as principal, the respective obligations of such Agents to
contribute pursuant to this Section 7 are several in proportion to the aggregate
principal amount of Notes that each such Agent has purchased from the Company
and not joint.
24
For purposes of this Section 7, each person, if any, who controls an
Agent within the meaning of Section 15 of the 1933 Act or Section 20 of the 1934
Act shall have the same rights to contribution as such Agent, and each director
of the Company, each officer of the Company, and each person, if any, who
controls the Company within the meaning of Section 15 of the 1933 Act or Section
20 of the 1934 Act shall have the same rights to contribution as the Company.
The Agents' respective obligations to contribute pursuant to this Section 7 are
several in proportion to the number or aggregate principal amount, as the case
may be, of Notes sold or offered on behalf of the Company by that respective
Agent.
SECTION 8. AGENT AS AGENT, NOT PRINCIPAL. In soliciting purchases of
the Notes from the Company, each Agent is acting solely as agent for the Company
and not as principal. Each Agent will make reasonable efforts to assist the
Company in obtaining performance by each purchaser whose offer to purchase Notes
from the Company has been solicited by such Agent and accepted by the Company
but such Agent shall not have any liability to the Company in the event any such
purchase is not consummated for any reason. If the Company shall default in its
obligation to deliver Notes to a purchaser whose offer it has accepted, the
Company (i) shall hold the Agent harmless against any loss, claim or damage
arising from or as a result of such default by the Company and (ii) shall pay to
the Agent any commission to which it would have been entitled in connection with
such sale.
SECTION 9. REPRESENTATIONS, WARRANTIES AND AGREEMENTS TO SURVIVE
DELIVERY. All representations, warranties and agreements contained in this
Distribution Agreement or any applicable Terms Agreement or in certificates of
officers of the Company submitted pursuant hereto or thereto, shall remain
operative and in full force and effect, regardless of any investigation made by
or on behalf of any Agent or controlling person, or by or on behalf of the
Company, and shall survive delivery of and payment for the Notes.
SECTION 10. TERMINATION.
(a) DISTRIBUTION AGREEMENT. The provisions of this Distribution
Agreement relating to the solicitation of offers to purchase Notes from the
Company may be suspended or terminated by the Company as to any Agent or by any
Agent as to such Agent upon the giving of 15 days prior written notice of such
suspension or termination of 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 and (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 Notes which are
already issued, agreed to be issued or the subject of a pending offer at the
time of such suspension or termination.
(b) TERMS AGREEMENT. Each Agent may terminate any applicable Terms
Agreement to which it is a party, by notice to the Company, at any time at or
prior to the Settlement Date relating thereto, and any person who has agreed to
purchase and pay for any Note, shall have the right to refuse to purchase such
Note, if (i) there has been, since the respective dates as of which information
is given in the Prospectus, any material adverse change in the condition
(financial or otherwise), earnings or business, or to the knowledge of the
25
Company in the business prospects, of the Company and its subsidiaries
considered as one enterprise, whether or not arising in the ordinary course of
business which change was not reported by the Company in a filing made under the
1934 Act and disclosed to such Agent by the Company, or (ii) there has occurred
any material adverse change in the financial markets in the United States or in
the international financial markets, any outbreak of hostilities or escalation
thereof or other calamity or crisis or there has occurred any change or
development involving a prospective change in national or international
political, financial or economic conditions, in each case the effect of which is
such as to make it, in the judgment of such Agent, impracticable to market the
Notes or to enforce contracts for the sale of the Notes, or (iii) trading in any
securities of the Company has been suspended or materially limited by the
Commission or any national securities exchange or quotation system on which the
Company's common stock is listed or quoted, or if trading generally on the New
York Stock Exchange or the American Stock Exchange or in the Nasdaq National
Market has been suspended or materially limited, or minimum or maximum prices
for trading have been fixed, or maximum ranges for prices have been required, by
any of said exchanges or by such system or by order of the Commission, the NASD
or any other governmental authority, or (iv) a banking moratorium has been
declared by Federal, New York, or North Carolina authorities or, if the Notes
are denominated or payable in, or indexed to, one or more foreign or composite
currencies, by the relevant authorities in the related foreign country or
countries, or (v) there is any downgrading in the rating accorded the Notes by
any "nationally recognized statistical rating organization" as that term is
defined by the Commission for purposes of Rule 436(g)(2) under the 1933 Act or
if any such rating organization shall have publicly announced that it has placed
any of such Notes on what is commonly termed a "watch list" for possible
downgrading.
(c) LIABILITIES. If this Distribution Agreement or the applicable Terms
Agreement is terminated pursuant to this Section 10, such termination shall be
without liability of any party to any other party except as provided in Section
4 hereof, and provided further that Sections 1, 6, 7, 8 and 9 shall survive such
termination and remain in full force and effect.
SECTION 11. NOTICES. All notices and other communications hereunder
shall be in writing and shall be deemed to have been duly given if mailed or
transmitted by any standard form of telecommunication. Notices to the Agent
shall be directed to the address of the Agent as set forth herein; notices to
the Company shall be directed to the Company at 0000 Xxxx Xxxxxxx Xxxxx,
Xxxxxxx, Xxxxxxx 00000, attention of Senior Vice President and General Counsel.
SECTION 12. PARTIES. This Distribution Agreement and any applicable
Terms Agreement shall each inure to the benefit of and be binding upon the
Company, the Agents and their respective successors. Nothing expressed or
mentioned in this Distribution Agreement or any such Terms Agreement is intended
or shall be construed to give any person, firm or corporation, other than the
Agents and the Company and their respective successors and the controlling
persons and officers and directors referred to in Sections 6 and 7 and their
heirs and legal representatives, any legal or equitable right, remedy or claim
under or in respect of this Distribution Agreement or any Terms Agreement or any
provision herein or therein contained. This Distribution Agreement and any Terms
Agreement and all conditions and provisions hereof and thereof are intended to
be for the sole and exclusive benefit of the parties hereto and thereto and
their respective successors, and said controlling persons and officers and
directors and their
26
heirs and legal representatives, and for the benefit of no other person, firm or
corporation. No purchaser of Notes from any Agent shall be deemed to be a
successor by reason merely of such purchase.
SECTION 13. GOVERNING LAW AND TIME. THIS DISTRIBUTION AGREEMENT AND ANY
APPLICABLE TERMS AGREEMENT SHALL BE GOVERNED BY AND CONSTRUED IN ACCORDANCE WITH
THE LAWS OF THE STATE OF NEW YORK APPLICABLE TO CONTRACTS TO BE PERFORMED WHOLLY
WITHIN THE STATE OF NEW YORK. SPECIFIED TIMES OF DAY REFER TO NEW YORK CITY
TIME.
SECTION 14. EFFECT OF HEADINGS. The Article and Section headings herein
and the Table of Contents are for convenience only and shall not affect the
construction hereof.
If the foregoing is in accordance with your understanding of our
agreement, please sign and return to the Company a counterpart hereof, whereupon
this Distribution Agreement, along with all counterparts, will become a binding
agreement between each Agent and the Company in accordance with its terms.
Very truly yours,
XXXXXX RESTAURANTS, INC.
By:
---------------------------------
Name:
Title:
CONFIRMED AND ACCEPTED,
as of the date first above written:
By: BANC OF AMERICA SECURITIES LLC
By:
------------------------------------
Authorized Signatory
27
By: FIRST UNION SECURITIES, INC.
By:
------------------------------------
Authorized Signatory
By: SUNTRUST EQUITABLE SECURITIES CORPORATION
By:
------------------------------------
Authorized Signatory
By: WACHOVIA SECURITIES, INC.
By:
------------------------------------
Authorized Signatory
By: THE XXXXXXXX CAPITAL GROUP, L.P.
By:
------------------------------------
Authorized Signatory
28
EXHIBIT A
---------
XXXXXX RESTAURANTS, INC.
Medium-Term Notes
Administrative Procedures
Medium-Term Notes with maturities of nine months or more from
date of issue (the "Medium-Term Notes") are to be offered on a continuing basis
by Xxxxxx Restaurant, Inc., a Florida corporation (the "Company"). Banc of
America Securities LLC, First Union Securities, Inc., SunTrust Equitable
Securities Corporation, Wachovia Securities, Inc., and The Xxxxxxxx Capital
Group, L.P., as agents (each an "Agent" and, collectively, the "Agents"), have
agreed to use their best efforts to solicit offers to purchase the Medium-Term
Notes. The Medium-Term Notes are being sold pursuant to a Distribution Agreement
between the Company and the Agents dated November 10, 2000 (as it may be
supplemented or amended from time to time, the "Distribution Agreement"), to
which these administrative procedures are attached as an exhibit. The
Medium-Term Notes will be issued pursuant to an Indenture, dated as of January
1, 1996 (as supplemented or amended from time to time, the "Indenture"), between
the Company and Xxxxx Fargo Minnesota, National Association (formerly known as
Norwest Bank Minnesota, National Association), as trustee (the "Trustee"). The
Medium-Term Notes will rank equally with all other senior unsecured and
unsubordinated indebtedness of the Company and will have been registered with
the Securities and Exchange Commission (the "SEC"). Unless otherwise defined
herein, terms defined in the Distribution Agreement or Indenture shall have the
same meaning when used in this exhibit.
The Distribution Agreement provides that Medium-Term Notes may
also be purchased by an Agent acting solely as principal and not as agent. In
the event of any such purchase, the functions of both the Agent and the
beneficial owner under the administrative procedures set forth below shall be
performed by such Agent acting solely as principal, unless otherwise agreed to
between the Company and such Agent acting as principal.
Each Medium-Term Note will be represented by either a Global
Security (as defined hereinafter) delivered to the Trustee as agent for The
Depository Trust Company ("DTC"), and recorded in the book-entry system
maintained by DTC (a "Book-Entry Note") or a certificate delivered to the Holder
thereof or a Person designated by such Holder (a "Certificated Note"). Only
Medium-Term Notes denominated and payable in U.S. dollars may be issued as
Book-Entry Notes. Owners of beneficial interests in Book-Entry Notes will be
entitled to delivery of Certificated Notes only under the limited circumstances
described in the Indenture.
Administrative responsibilities, document control and
record-keeping functions to be performed by the Company will be performed by its
Treasurer, its Chief Financial Officer or any Assistant Treasurer.
Administrative procedures for the offering are explained below.
Book-Entry Notes will be issued in accordance with the
administrative procedures set forth in Part II and Part III hereof and the
Letter of Representations of the Company and the Trustee to DTC dated November
10, 2000, as amended or supplemented from time to time (the
A-1
"Letter of Representations"), and Certificated Notes will be issued in
accordance with the administrative procedures set forth in Part I and Part III
hereof. Medium-Term Notes for which interest is calculated on the basis of a
fixed interest rate, which may be zero, are referred to herein as "Fixed Rate
Notes." Medium-Term Notes for which interest is calculated on the basis of a
floating interest rate are referred to herein as "Floating Rate Notes." To the
extent the procedures set forth below conflict with the provisions of the
Medium-Term Notes, the Indenture, the Letter of Representations or the
Distribution Agreement, the relevant provisions of the Medium-Term Notes, the
Indenture, the Letter of Representations and the Distribution Agreement shall
control.
PART I
Administrative Procedures for Certificated Notes
------------------------------------------------
Price to Public
---------------
Each Certificated Note will be issued at 100% of principal
amount, unless otherwise determined by the Company and the Agents.
Date of Issuance
----------------
Each Certificated Note will be dated and issued as of the date
of its authentication by the Trustee.
Maturities
----------
Each Certificated Note will mature on a Business Day (as
defined in Part III below) selected by the purchaser and agreed upon by the
Company, with maturities of nine months or more from the date of issuance. Each
Floating Rate Certificated Note will mature only on an Interest Payment Date for
such Medium-Term Note.
Registration
------------
The Certificated Notes will be issued only in fully registered
form without coupons. Xxxxx Fargo Bank Minnesota, National Association, or any
other duly selected paying agent, (the "Paying Agent") will serve as registrar
and transfer agent in connection with the Certificated Notes.
Transfers and Exchanges
-----------------------
The Certificated Notes may be presented for transfer or
exchange at the principal corporate trust office in the City of New York of the
Trustee. The Certificated Notes will be exchangeable for other Certificated
Notes having identical terms but different authorized denominations without
service charge. The Certificated Notes will not be exchangeable for Book-Entry
Notes.
A-2
Denominations
-------------
The Certificated Notes will be issued and payable in U.S.
dollars in the denomination of $1,000 or any integral multiple thereof unless
otherwise determined by the Company.
The Company may determine, upon agreement with a purchaser of
Certificated Notes, that such Certificated Notes will be denominated and payable
in a foreign currency or currency unit to be specified in a pricing supplement
to the Prospectus ("Specified Currency"). In such case, unless otherwise
specified in such pricing supplement, the authorized denominations of such
Certificated Notes will be the equivalent, as determined by the 11:00 a.m. (New
York City time) buying rate for such Specified Currency for cable transfers
quoted in New York City as certified for customs purposes by the Federal Reserve
Bank of New York (the "Market Exchange Rate") on the Business Day immediately
preceding the Settlement Date (as defined below) for such Certificated Notes, of
U.S. $1,000 (rounded down to an integral multiple of units of specified
denominations of such Specified Currency). If such rates are not available for
any reason, the Market Exchange Rate will be determined in accordance with the
alternative provision for determining the Market Exchange Rate pursuant to the
description therefor set forth under the caption "Description of the Notes -
Interest and Principal Payments; Unavailablity of Foreign Currency" in the
Company's Prospectus Supplement, dated November 10, 2000.
Interest
--------
Each Fixed Rate Certificated Note will bear interest from its
issue date (the "Original Issue Date") at the annual rate stated on the face
thereof, payable on January 15 and July 15 of each year (the "Interest Payment
Dates"), commencing (unless otherwise specified in the applicable supplement to
the Prospectus) on the first Interest Payment Date after issuance, and at Stated
Maturity or upon redemption, if applicable. Interest on each Fixed-Rate
Certificated Note will be calculated and paid on the basis of a 360-day year of
twelve 30-day months (unless otherwise specified in the applicable pricing
supplement). Interest will be payable to the Person in whose name such
Fixed-Rate Certificated Note is registered at the close of business on the
January 1 or July 1 (the "Regular Record Dates") next preceding the respective
Interest Payment Date; provided, however, that (i) if an Original Issue Date
falls between a Regular Record Date and an Interest Payment Date, the first
payment of interest will occur on the Interest Payment Date following the next
Regular Record Date and (ii) interest payable at Maturity will be payable to the
Person to whom principal shall be payable (whether or not such Maturity is an
Interest Payment Date).
Any payment of principal and interest on a Certificated Note
required to be paid on an Interest Payment Date or at Stated Maturity or upon
redemption, if applicable, which is not a Business Day shall be postponed to the
next day which is a Business Day, and no interest on such payment will accrue
for the period from and after such Interest Payment Date or Stated Maturity or
redemption date, as the case may be, to the date of the payment on the next
succeeding Business Day. All interest payments (excluding interest payments made
at Stated Maturity or upon redemption, if applicable) will be made by check
mailed, first class, postage
A-3
prepaid, to the Person entitled thereto as provided above or otherwise in
accordance with the Indenture, or by wire transfer of immediately available
funds to an account designated by such Person if appropriate wire transfer
instructions have been received in writing by the Paying Agent not less than 10
days before such Interest Payment Date.
On the fifth Business Day immediately preceding each Interest
Payment Date, the Paying Agent will notify the Company of the total amount (to
the extent known to the Paying Agent on such date) of the interest payments to
be made on such Interest Payment Date. The Paying Agent will provide monthly to
the Company's finance department a list of the principal and interest (to the
extent known to the Paying Agent) to be paid on Certificated Notes maturing in
the next succeeding month. To the extent provided in the Indenture, the Company
will provide to the Paying Agent not later than the payment date sufficient
moneys to pay in full all principal and interest payments due on such payment
date. The Paying Agent will assume responsibility for withholding taxes on
interest paid as required by law.
For special provisions relating to the Floating Rate Notes,
see Appendix A hereto. Special provisions relating to Certificated Notes
denominated in a Specified Currency may be agreed upon by the Company and the
Agents at a later time (the "Specified Currency Provisions"). All interest
payments will be calculated and paid in the manner describe in such Medium-Term
Note and the Distribution Agreement and in the Prospectus and the applicable
Pricing Supplement.
Payment at Maturity
-------------------
Upon presentation of each Certificated Note at Stated Maturity
(unless the Company has exercised its option to extend the Stated Maturity of a
Certificated Note) or upon redemption the Trustee (or any duly appointed Paying
Agent) will pay the principal amount or redemption price thereof, together with
accrued interest due at Stated Maturity or the date of redemption. Such payment
shall be made in immediately available funds in U.S. dollars (except as provided
in any Specified Currency Provisions), provided that the Certificated Note is
presented to the Trustee (or any such Paying Agent) in time for the Trustee (or
such Paying Agent) to make payments in such funds in accordance with its normal
procedures. To the extent provided in the Indenture, the Company will provide
the Trustee (and any such Paying Agent) with funds available for immediate use
for such purpose. Certificated Notes presented at Stated Maturity or upon
redemption will be canceled by the Trustee as provided in the Indenture.
Settlement
----------
The receipt of immediately available funds in U.S. dollars by
the Company in payment for a Certificated Note (less the applicable commission)
and the authentication and issuance of such Certificated Note shall, with
respect to such Certificated Note, constitute "Settlement" and the date thereof
shall be referred to as the "Settlement Date." All offers to purchase
Certificated Notes accepted by the Company will be settled from one to three
Business Days from the date of acceptance by the Company pursuant to the
timetable for Settlement set
A-4
forth below unless the Company and the purchaser agree to Settlement on a
different date; provided, however, that the Company will so notify the Trustee
(which notice with respect to a Certificated Note denominated in a Specified
Currency will not be less than five Business Days prior to the Settlement Date)
of any such different date on or before the Business Day immediately prior to
the Settlement Date.
Settlement Procedures
---------------------
In the event of a purchase of Certificated Notes by an Agent,
as principal, appropriate Settlement details will be set forth in the applicable
Terms Agreement to be entered into between such Agent and the Company pursuant
to the Distribution Agreement.
Settlement procedures with regard to each Certificated Note
sold through an Agent, as agent (the "Presenting Agent"), shall be as follows:
A. The Presenting Agent will advise the Company by telephone
and, after the Company has accepted the offer, the Trustee, in writing
by facsimile or other electronic transmission, of the following
Settlement information:
1. Exact name in which such Certificated Note
is to be registered ("Registered Owner").
2. Exact address of the Registered Owner and
address for payment of principal and
interest, if any.
3. Taxpayer identification number of the
Registered Owner.
4. Principal amount of the Certificated Note
(and, if multiple Certificated Notes are to
be issued, denominations thereof).
5. If the Certificated Notes are to be
denominated in a Specified Currency, whether
principal and interest is to be paid in U.S.
dollars or the Specified Currency.
6. Settlement Date.
7. Date of Maturity.
8. Interest rate:
(a) Fixed Rate Notes:
o Interest Rate
o Interest Reset Dates
(b) Floating Rate Notes:
A-5
o Interest Rate Basis (or so
called Base Rate)
o Initial Interest Rate
o Spread or Spread
Multiplier, if any
o Interest Reset Periods and
Interest Reset Dates
o Index Maturity
o Maximum and Minimum
Interest Rates, if any
o Calculation Agent
o Calculation Date
o Interest Determination
Dates
(c) Interest Periods and Interest
Payment Dates
(d) Regular Record Date
9. If applicable, the redemption or repayment
provisions.
10. Wire transfer information (including
overseas bank account of the country of the
Specified Currency, if any).
11. Presenting Agent's commission (to be paid in
the form of a discount from the proceeds
remitted to the Company upon Settlement).
12. Trade date.
13. Net proceeds to the Company.
14. If applicable, extension of maturity option
provisions (including the basis or formula,
if any, for the setting of the Interest Rate
or Spread and/or Spread Multiplier, as
applicable).
15. If applicable, the renewal provisions.
16. If the Certificated Notes are to be issued
at an original issue discount, the total
amount of the original issue discount, the
yield to maturity and the initial accrual
period.
17. Any other information pertinent to the
Certificated Note.
B. The Company will confirm to the Trustee (i) by facsimile or
other electronic transmission, the above Settlement information and
(ii) by facsimile, that the terms of the Medium-Term Notes have been
approved by the President, the Chief Financial Officer or the Treasurer
of the Company, and the Trustee will assign a Certificated Note number
to the transaction. If the Company rejects an offer, the Company will
promptly notify the Presenting Agent by telephone, facsimile or other
electronic transmission.
A-6
C. The exchange rate agent, if any, appointed by the Company
will notify the Company, the Trustee and the Presenting Agent of the
Market Exchange Rate and the denominations of Certificated Notes which
are to be denominated and payable in a Specified Currency.
D. The Trustee will complete the Certificated Note in the form
previously approved by the Company, the Agents and the Trustee.
E. The Trustee will authenticate and deliver the Certificated
Note (with the attached white confirmation) and the yellow and blue
stubs to the Presenting Agent. The Presenting Agent will acknowledge
receipt of the Certificated Note by completing the yellow stub and
returning it to the Trustee.
F. The Presenting Agent will cause to be wire transferred to a
bank account designated by the Company immediately available funds in
U.S. dollars in the amount of the principal amount of the Certificated
Note, less the applicable commission.
G. The Presenting Agent will deliver the Certificated Note
(with the attached white confirmation) to the purchaser against payment
in immediately available funds in the amount of the principal amount of
the Certificated Note. The Presenting Agent will deliver to the
purchaser a copy of the most recent Prospectus with the appropriate
pricing supplement applicable to the Certificated Note with or prior to
delivery of the Certificated Note and the confirmation and payment by
the purchaser for the Certificated Note. If instructed by the purchaser
to deliver the Certificated Note and confirmation to different
locations, the Certificated Note and the confirmation will each be
accompanied or preceded by the Prospectus applicable to the
Certificated Note being delivered.
H. The Presenting Agent will obtain the acknowledgment of
receipt for the Certificated Note and Prospectus by the purchaser
through the purchaser's completion of the blue stub.
I. The Trustee will mail the pink stub to the Company's Chief
Financial Officer, Treasurer or other appropriate official.
Settlement Procedure Timetable
------------------------------
For offers accepted by the Company, Settlement procedures "A"
through "I" set forth above shall be completed on or before the respective times
set forth below:
Settlement
Procedure Time
--------- ----
(New York)
A 4:00 p.m. on date of order (2:00 p.m. on
date of order in
A-7
the case of Certificated Notes
with a Settlement Date on the
Business Day after the date of
order)
B 5:00 p.m. on date of order (3:00 p.m. on
date of order in the case of
Certificated Notes with a
Settlement Date on the Business
Day after the date of order)
C 10:00 a.m. on the Settlement Date
D-E 12:30 p.m. on the Settlement Date (1:00
p.m. on the Settlement Date in
the case of Certificated Notes
denominated in a Specified
Currency)
F 2:00 p.m. on the Settlement Date
G-H 3:00 p.m. on the Settlement Date
I 5:00 p.m. on the Business Day after the
Settlement Date
Failure to Settle
-----------------
If a purchaser of a Certificated Note shall either fail to
accept delivery of or make payment for Certificated Note on the date fixed by
the Company for Settlement, the Presenting Agent will immediately notify the
Trustee and the Company's Chief Financial Officer, Treasurer or other
appropriate official by telephone, confirmed in writing, of such failure and
return the Certificated Note to the Trustee. Upon the Trustee's receipt of the
Certificated Note from the Presenting Agent, the Company will promptly return to
the Presenting Agent an amount of immediately available funds in U.S. dollars
equal to any amount previously transferred to the Company in respect of the
Certificated Note pursuant to advances made by such Agent. Such returns will be
made on the Settlement Date, if possible, and in any event not later than 12
noon (New York City time) on the Business Day following the Settlement Date. The
Company will reimburse the Presenting Agent on an equitable basis for its loss
of the use of the funds during the period when the funds were credited to the
account of the Company. Upon receipt of the Certificated Note in respect of
which the default occurred, the Trustee will xxxx the Certificated Note
"cancelled," make appropriate entries in its records and deliver the
Certificated Note to the Company with an appropriate debit advice. The
Presenting Agent will not be entitled to any commission with respect to any
Certificated Note which the purchaser does not accept or make payment for.
Optional Extension of Maturity
------------------------------
If the Company elects to exercise an option, as set forth in a
Certificated Note, to extend the Maturity Date of such Medium-Term Note, it will
so notify the Trustee not less than 45 or more than 60 days before the Maturity
Date of such Certificated Note, and will further indicate (i) the new Maturity
Date; (ii) the Interest Rate or Spread or Spread Multiplier, as the
A-8
case may be, and (iii) the provisions, if any, for redemption of such
Certificated Note during such period, including the date or dates on which or
the period or periods during which such redemption may occur during such
extension period.
Upon receipt of notice from the Company regarding the
Company's exercise of an optional extension of maturity, the Trustee will mail a
notice, first class, postage prepaid, to the Holder not less than 40 days before
the Maturity Date an "Extension Notice", which Extension Notice shall contain
the information required by the terms of the Certificated Note. If after receipt
of an Extension Notice, any Holder of a Certificated Note exercises the option
for repayment by tendering the Certificated Note to be repaid as set forth in
the Certificated Note, the Trustee shall give notice to the Company not less
than 22 days before the old Maturity Date of the principal amount of
Certificated Notes to be repaid on such old Maturity Date.
If the Company elects to revoke the Interest Rate or Spread or
Spread Multiplier and establish a higher interest rate or Spread or Spread
Multiplier for an extension period, it shall, not less than 20 days before such
old Maturity Date, so notify the Trustee. The Trustee will immediately
thereafter notify the Holder of such Certificated Note, by first class mail,
postage prepaid of the new Interest Rate or Spread or Spread Multiplier
applicable to such Certificated Note.
If, after the Holder has tendered any Certificated Notes for
repayment pursuant to an Extension Notice, such Holder then revokes such tender
for repayment, the Trustee shall give notice to the Company not less than five
days prior to the Maturity Date, of such revocation and of the principal amount
of Certificated Notes for which tender for repayment has been revoked.
On or before any old Maturity Date where the Maturity has been
extended, the Company shall deposit with the Trustee an amount of money
sufficient to pay the principal amount, plus interest accrued to such old
Maturity Date for all the Certificated Notes or portions thereof which are to be
repaid on such old Maturity Date. Such Trustee will use such money to repay such
Certificated Notes pursuant to the terms set forth in such Notes.
Optional Redemption
-------------------
If so specified in the applicable pricing supplement and on
the Certificated Note, such Certificated Note will be subject to redemption by
the Company, at one or more redemption prices (expressed as a percentage of the
principal amount of such Certificated Note) applicable during one or more
redemption periods, together with interest accrued thereon on the date fixed for
redemption.
At least 45 days prior to the date on which it intends to
redeem a Certificated Note, the Company will notify the Trustee that it is
exercising such option with respect to such Certificated Note on such date.
After receipt of notice that the Company is exercising its
option to redeem a Certificated Note, the Trustee will, not less than 30 days or
more than 60 days before the redemption date for such Certificated Note, mail a
notice, first class, postage prepaid, to the
A-9
Holder of such Certificated Note informing such Holder of the Company's exercise
of such option with respect to such Certificated Note.
On or before any redemption date, the Company shall deposit
with such Trustee an amount of money sufficient to pay the redemption price,
plus interest accrued to such redemption date, for all the Certificated Notes or
portions thereof and which are to be repaid on such redemption date. Such
Trustee will use such money to repay such Certificated Notes pursuant to the
terms set forth in such Medium-Term Notes. If redemption of any Certificated
Note is made in part, a new Certificated Note for the amount of the unredeemed
portion shall be issued in the name of the Holder upon cancellation of the
redeemed Certificated Note.
Repayment
---------
If so specified in the applicable pricing supplement and on
the Certificated Note, such Certificated Note will be subject to repayment at
the option of the Holder at a repayment price equal to 100% of the Certificated
Note, together with accrued interest to the date of repayment.
Upon receipt of notice of exercise of the option for
repayment, the Trustee shall (unless such notice was received pursuant to the
Company's exercise of an optional extension of maturity, in which case the
relevant procedures set forth above are to be followed) give notice to the
Company not less than 15 days prior to each Optional Repayment Date of such
Optional Repayment Date and of the principal amount of Certificated Notes to be
repaid on such Optional Repayment Date.
On or prior to any Optional Repayment Date, the Company shall
deposit with such Trustee an amount of money sufficient to pay the optional
repayment price, and accrued interest thereon to such date, of all the
Certificated Notes or portions thereof which are to be repaid on such date. The
Trustee will use such money to repay such Certificated Notes pursuant to the
terms set forth in such Medium-Term Notes.
PART II
Administrative Procedures for
-----------------------------
Book-Entry Notes
----------------
In connection with the qualification of the Book-Entry Notes
for eligibility in the book-entry system maintained by DTC, the Trustee will
perform the custodial, document control and administrative functions described
below, in accordance with its obligations under the Letter of Representations
and a Medium-Term Note Certificate Agreement between the Trustee and DTC dated
as of May 14, 1991 (the "Medium-Term Note Certificate Agreement"), and its
obligations as a participant in DTC, including DTC's Same-Day Funds Settlement
System ("SDFS").
Price to Public
---------------
A-10
Each Book-Entry Note will be issued at 100% of principal
amount, unless otherwise determined by the Company and the Agents.
Date of Issuance
----------------
On any Settlement Date (as defined under "Settlement" below)
for one or more Book-Entry Notes, the Company will issue a single global
security in fully registered form without coupons (a "Global Security")
representing up to $400,000,000 principal amount of all such Book-Entry Notes
that have the same terms. Each Global Security will be dated and issued as of
the date of its authentication by the Trustee. Each Global Security will bear an
original issue date, which will be (i) with respect to an original Global
Security (or any portion thereof), the original issue date specified in such
Global Security and (ii) following a consolidation of Global Securities, with
respect to the Global Security resulting from such consolidation, the most
recent Interest Payment Date (as defined in the Indenture) to which interest has
been paid or duly provided for on the predecessor Global Securities regardless
of the date of authentication of such resulting Global Security. No Global
Security will represent (i) both Fixed Rate Book-Entry Notes and Floating Rate
Book-Entry Notes or (ii) any Certificated Note.
Identification Numbers
----------------------
The Company has arranged with the CUSIP Service Bureau of
Standard & Poor's Corporation (the "CUSIP Service Bureau") for the reservation
of a series of CUSIP numbers, which series consists of approximately 900 CUSIP
numbers and relates to Global Securities representing Book-Entry Notes and
book-entry Medium-Term Notes issued by the Company with other series
designations. The Company has obtained from the CUSIP Service Bureau a written
list of such reserved CUSIP numbers and has provided a copy of such list to DTC
and the Trustee. The Company will assign CUSIP numbers to Global Securities as
described below under Settlement Procedure "B." DTC will notify the CUSIP
Service Bureau periodically of the CUSIP numbers that the Company has assigned
to Global Securities. The Trustee will notify the Company at any time when fewer
than 100 of the reserved CUSIP numbers remain unassigned to Global Securities,
and, if it deems necessary, the Company will reserve additional CUSIP numbers
for assignment to Global Securities. Upon obtaining such additional CUSIP
numbers, the Company shall deliver a list of such additional CUSIP numbers to
the Trustee and DTC.
Registration
------------
Global Securities will be issued only in fully registered form
without coupons. Each Global Security will be registered in the name of CEDE &
CO., as nominee for DTC, on the securities register for the Medium-Term Notes
maintained under the Indenture. The beneficial owner of a Book-Entry Note (or
one or more indirect participants in DTC designated by such owner) will
designate one or more participants in DTC (with respect to such Book-Entry Note,
the "Participants") to act as agent or agents for such owner in connection with
the book-entry system maintained by DTC, and DTC will record in book-entry form,
in accordance with instructions provided by such Participants, a credit balance
with respect to such beneficial owner in such Book-Entry Note in the account of
such Participants. The ownership interest of such beneficial owner (or such
indirect participant in DTC) in such Book-Entry Note will be recorded
A-11
through the records of such Participants or through the separate records of such
Participants and one or more indirect participants in DTC.
Transfers
---------
Transfers of a Book-Entry Note will be accomplished by book
entries made by DTC and, in turn, by Participants (and in certain cases, one or
more indirect participants in DTC) acting on behalf of beneficial transferors
and transferees of such Book-Entry Note.
Exchanges
---------
The Trustee may deliver to DTC and the CUSIP Service Bureau at
any time a written notice of consolidation specifying (i) the CUSIP numbers of
two or more outstanding Global Securities that represent (A) Fixed Rate
Book-Entry Notes having the same terms and for which interest has been paid to
the same date or (B) Floating Rate Book-Entry Notes having the same terms and
for which interest has been paid to the same date, (ii) a date, occurring at
least 30 days after such written notice is delivered and at least 30 days before
the next Interest Payment Date for such Book-Entry Notes, on which such Global
Securities shall be exchanged for a single replacement Global Security and (iii)
a new CUSIP number, obtained from the Company, to be assigned to such
replacement Global Security. Upon receipt of such a notice, DTC will send to its
participants (including the Trustee) a written reorganization notice to the
effect that such exchange will occur on such date. Prior to the specified
exchange date, the Trustee will deliver to the CUSIP Service Bureau a written
notice setting forth such exchange date and such new CUSIP number and stating
that, as of such exchange date, the CUSIP numbers of the Global Securities to be
exchanged will no longer be valid. On the specified exchange date, the Trustee
will exchange such Global Securities for a single Global Security bearing the
new CUSIP number and the CUSIP Numbers of the exchanged Global Securities will,
in accordance with CUSIP Service Bureau procedures, be canceled and not
immediately reassigned. Notwithstanding the foregoing, if the Global Securities
to be exchanged exceed $400,000,000 in aggregate principal amount, one Global
Security will be authenticated and issued to represent each $400,000,000 of
principal amount of the exchanged Global Securities and an additional Global
Security will be authenticated and issued to represent any remaining principal
amount of such Global Securities (see "Denominations" below).
Maturity
--------
Each Book-Entry Note will mature on a date nine months or more
after the Settlement Date for such Book-Entry Note. Each Floating Rate Book
Entry Note will mature only on an Interest Payment Date for such Medium-Term
Note.
Denominations
-------------
Book-Entry Notes will be issued in principal amounts of $1,000
or any integral multiple thereof. Global Securities will be denominated in
principal amounts not in excess of $400,000,000. If one or more Book-Entry Notes
having an aggregate principal amount in excess of $400,000,000 would, but for
the preceding sentence, be represented by a single Global
A-12
Security, then one Global Security will be authenticated and issued to represent
each $400,000,000 principal amount of such Book-Entry Note or Notes and an
additional Global Security will be authenticated and issued to represent any
remaining principal amount of such Book-Entry Note or Notes. In such a case,
each of the Global Securities representing such Book-Entry Note or Notes shall
be assigned the same CUSIP number.
Interest
--------
Interest, if any, on each Book-Entry Note will accrue from the
original issue date for the first interest period or the last date to which
interest has been paid, if any, for each subsequent interest period, on the
Global Security representing such Book-Entry Note, and will be calculated and
paid in the manner described in such Book-Entry Note. Unless otherwise specified
therein, each payment of interest on a Book-Entry Note will include interest
accrued to but excluding the Interest Payment Date or to but excluding the date
of Maturity. Unless otherwise specified pursuant to Settlement Procedure "A"
below, interest payments on Fixed Rate Book-Entry Notes will be made
semiannually on January 15 and July 15 of each year. Interest will be payable to
the Person in whose name such Book-Entry Note is registered at the close of
business on the January 1 or July 1 (the "Regular Record Dates") next preceding
the respective Interest Payment Date. Interest on Book-Entry Notes (including
interest for partial periods) will be calculated on the basis of a 360-day year
of twelve 30-day months.
Interest payable at the date of Maturity of a Book-Entry Note
will be payable to the Person to whom the principal of such Book-Entry Note is
payable. Standard & Poor's Ratings Group may use the information received in the
pending deposit message described under Settlement Procedure "C" below in order
to include the amount of any interest payable and certain other information
regarding the related Global Security in the appropriate (daily or weekly) bond
report published by Standard & Poor's Ratings Group.
For special provisions relating to the Floating Rate Notes,
see Appendix A hereto.
Payments of Interest
--------------------
Promptly after each Regular Record Date, the Paying Agent will
deliver to the Company and DTC a written notice setting forth, by CUSIP number,
the amount of interest (to the extent then ascertainable) to be paid on each
Global Security on such Interest Payment Date (other than an Interest Payment
Date coinciding with Maturity) and the total of such amounts. DTC will confirm
the amount payable on each Global Security on such Interest Payment Date by
reference to the appropriate (daily or weekly) bond reports published by
Standard & Poor's Corporation. The Company will pay to the Paying Agent the
total amount of interest due on such Interest Payment Date (other than at
Maturity), and the Paying Agent will pay such amount to DTC, at the times and in
the manner set forth below under "Manner of Payment." If any Interest Payment
Date for a Fixed Rate Book-Entry Note is not a Business Day, the payment due on
such day shall be made on the next succeeding Business Day and no interest shall
accrue on such payment for the period from and after such Interest Payment Date.
Payment at Maturity
-------------------
A-13
On or about the first Business Day of each month, the Paying
Agent will deliver to the Company and DTC a written list of principal and
interest (to the extent then ascertainable) to be paid on each Global Security
maturing in the following month (excluding principal on a Book-Entry Note where
the Company has exercised its option to extend the Stated Maturity). The Company
and DTC will confirm the amounts of such principal and interest payments with
respect to each such Global Security on or about the fifth Business Day
preceding the Maturity of such Global Security. On or before Maturity, the
Company will pay to the Paying Agent the principal amount of such Global
Security, together with interest due at such Maturity. The Paying Agent will pay
such amount to DTC at the times and in the manner set forth below under "Manner
of Payment." If any Maturity of a Global Security representing Book-Entry Notes
is not a Business Day, the payment due on such day shall be made on the next
succeeding Business Day and no interest shall accrue on such payment for the
period from and after such Maturity. Promptly after payment to DTC of the
principal and interest due at Maturity of such Global Security, the Trustee will
cancel such Global Security in accordance with the Indenture and so advise the
Company.
Manner of Payment
-----------------
The total amount of any principal and interest due on Global
Securities on any Interest Payment Date or at Maturity shall be paid by the
Company to the Paying Agent in immediately available funds no later than 9:30
a.m. (New York City time) on such date. The Company will make such payment on
such Global Securities by instructing the Paying Agent to withdraw funds from an
account maintained by the Company at the Paying Agent or by wire transfer to the
Paying Agent. The Company will confirm any such instructions in writing to the
Paying Agent. Prior to 10:00 a.m. (New York City time) on the date of Maturity
or as soon as possible thereafter, the Paying Agent will pay by separate wire
transfer (using Fedwire message entry instructions in a form previously
specified by DTC) to an account at the Federal Reserve Bank of New York
previously specified by DTC, in funds available for immediate use by DTC, each
payment of principal (together with interest thereon) due on a Global Security
on such date. On each Interest Payment Date (other than at Maturity), interest
payments shall be made to DTC, in funds available for immediate use by DTC, in
accordance with existing arrangements between the Paying Agent and DTC. On each
such date, DTC will pay, in accordance with its SDFS operating procedures then
in effect, such amounts in funds available for immediate use to the respective
Participants in whose names the Book-Entry Notes represented by such Global
Securities are recorded in the book-entry system maintained by DTC. Neither the
Company (as issuer) nor the Paying Agent (as trustee, security registrar or
paying agent) shall have any direct responsibility or liability for the payment
by DTC to such Participants of the principal of and interest on the Book- Entry
Notes.
Withholding Taxes
-----------------
The amount of any taxes required under applicable law to be
withheld from any interest payment on a Book-Entry Note will be determined and
withheld by the Participant, indirect participant in DTC or other Person
responsible for forwarding payments and materials directly to the beneficial
owner of such Book-Entry Note.
A-14
Settlement
----------
The receipt by the Company of immediately available funds in
payment for a Book-Entry Note and the authentication and issuance of the Global
Security representing such Book-Entry Note shall constitute "Settlement" with
respect to such Book-Entry Note and the date thereof shall be referred to as the
"Settlement Date." All orders for Book-Entry Notes accepted by the Company will
be settled on the third Business Day following the date of acceptance by the
Company pursuant to the timetable for Settlement set forth below unless the
Company and the purchaser agree to Settlement on another day which shall be no
earlier than the next Business Day following the date of acceptance.
Settlement Procedures
---------------------
In the event of a purchase of Book-Entry Notes by an Agent, as
principal, appropriate Settlement details will be set forth in the applicable
Terms Agreement to be entered into between such Agent and the Company pursuant
to the Distribution Agreement.
Settlement Procedures with regard to each Book-Entry Note sold
by the Company through an Agent, as agent (the "Presenting Agent"), shall be as
follows:
A. The Presenting Agent will advise the Company by telephone
of the following Settlement information:
1. Principal amount.
2. Settlement Date.
3. Date of Maturity.
4. Interest rate:
(a) Fixed Rate Notes:
o Interest Rate
o Interest Reset Dates
(b) Floating Rate Notes:
o Interest Rate Basis (or so
called Base Rate)
o Initial Interest Rate
o Spread or Spread
Multiplier, if any
o Interest Reset Periods and
Interest Reset Dates
o Index Maturity
o Maximum and Minimum
Interest Rates, if any
o Calculation Agent
o Calculation Date
o Interest Determination
Dates
A-15
(c) Interest Periods and Interest
Payment Dates
(d) Regular Record Date
5. If applicable, the redemption or repayment
provisions.
6. Presenting Agent's commission (to be paid in
the form of a discount from the proceeds
remitted to the Company upon Settlement).
7. Trade date.
8. Net proceeds to Company.
9. If applicable, extension of maturity option
provisions (including the basis or formula,
if any, for the setting of the Interest
Rate, or the Spread and/or Spread
Multiplier, as applicable).
10. If applicable, renewal provisions.
11. If the Book-Entry Notes are to be issued at
an original issue discount, the total amount
of the original issue discount, the yield to
maturity and the initial accrual period.
12. Any other information pertinent to the
Book-Entry Note.
B. The Company will assign a CUSIP number to the Global
Security representing such Book-Entry Note and then advise the Trustee
by facsimile or electronic transmission of the information set forth in
Settlement Procedure "A" above, such CUSIP number and the name of the
Presenting Agent. The Company will confirm to the Trustee, by
facsimile, that the terms of the Book-Entry Notes have been approved by
the President, the Chief Financial Officer or the Treasurer of the
Company. The Company will also notify the Presenting Agent by telephone
of such CUSIP number as soon as practicable.
C. The Trustee will enter a pending deposit message through
DTC's Participant Terminal System providing the following Settlement
information to DTC (which shall route such information to Standard &
Poor's Ratings Group and Interactive Data Corporation) and the
Presenting Agent:
1. The information set forth in Settlement
Procedure "A."
2. Identification as a Fixed Rate Book-Entry
Note or a Floating Rate Book-Entry Note.
3. Initial Interest Payment Date for such
Book-Entry Note, number of days by which
such date succeeds the related Regular
Record Date
A-16
(which, in the case of Floating Rate
Book-Entry Notes that reset weekly, shall be
the DTC Record Date, which is the date five
calendar days immediately preceding the
applicable Interest Payment Date and, in the
case of all other Book-Entry Notes, shall be
the Regular Record Date as defined in the
Indenture) and amount of interest payable on
such Interest Payment Date.
4. The interest payment period.
5. CUSIP number of the Global Security
representing such Book-Entry Note.
6. Whether such Global Security will represent
any other Book-Entry Note (to the extent
known at such time).
7. Numbers of the participant accounts
maintained by DTC on behalf of the Trustee
and the Presenting Agent.
D. To the extent the Company has not already done so, the
Company will deliver to the Trustee a Global Security in a form that
has been approved by the Company, the Agents and the Trustee.
E. The Trustee will complete such Book-Entry Note, stamp the
appropriate legend, as instructed by DTC, if not already set forth
thereon, and authenticate the Global Security representing such
Book-Entry Note.
F. DTC will credit such Book-Entry Note to the Trustee's
participant account at DTC.
G. The Trustee will enter an SDFS deliver order through DTC's
Participant Terminal System instructing DTC to (i) debit such
Book-Entry Note to the Trustee's participant account and credit such
Book-Entry Note to the Presenting Agent's participant account and (ii)
debit the Presenting Agent's settlement account and credit the
Trustee's settlement account for an amount equal to the principal
amount of such Book-Entry Note less the Presenting Agent's commission.
The entry of such a deliver order shall constitute a representation and
warranty by the Trustee to DTC that (i) the Global Security
representing such Book-Entry Note has been issued and authenticated and
(ii) the Trustee is holding such Global Security pursuant to the
Medium-Term Note Certificate Agreement.
H. The Presenting Agent will enter an SDFS deliver order
through DTC's Participant Terminal System instructing DTC (i) to debit
such Book-Entry Note to the Presenting Agent's participant account and
credit such Book-Entry Note to the participant accounts of the
Participants with respect to such Book-Entry Note and (ii) to debit the
settlement accounts of such Participants and credit the settlement
account of the Presenting Agent for an amount equal to the principal
amount of such Book-Entry Note.
A-17
I. Transfers of funds in accordance with SDFS deliver orders
described in Settlement Procedures "G" and "H" will be settled in
accordance with SDFS operating procedures in effect on the Settlement
Date.
J. The Trustee will, upon receipt of funds from the Agent in
accordance with Settlement Procedure "G," credit to an account of the
Company maintained at the Trustee funds available for immediate use in
the amount transferred to the Trustee in accordance with Settlement
Procedure "G."
K. The Trustee will send a copy of the Book-Entry Note by
first-class mail to the Company.
L. The Presenting Agent will confirm the purchase of such
Book-Entry Note to the purchaser either by transmitting to the
Participants with respect to such Book-Entry Note a confirmation order
or orders through DTC's institutional delivery system or by mailing a
written confirmation to such purchaser.
Settlement Procedures Timetable
-------------------------------
For orders of Book-Entry Notes solicited by any Agent and
accepted by the Company for Settlement on the first Business Day after such
acceptance, Settlement Procedures "A" through "K"set forth above shall be
completed as soon as possible but not later than the respective times set forth
below:
Settlement Time (New York)
Procedure ----
---------
A 11:00 a.m. on date of order
B 12:00 p.m. on date of order
C 2:00 p.m. on date of order
D 3:00 p.m. on date of order
E 9:00 a.m. on Settlement Date
F 10:00 a.m. on Settlement Date
G-H 2:00 p.m. on Settlement Date
I 4:45 p.m. on Settlement Date
J-K 5:00 p.m. on Settlement Date
If an order is to be settled more than one Business Day after
acceptance by the Company, Settlement Procedures "X," "X" and "C" may be
completed not later than 11:00a.m., 12:00 Noon and 2:00 p.m., respectively, on
the Business Day after the date of acceptance. If the initial interest rate for
a Floating Rate Book-Entry Note 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 not later than 12:00
Noon and 2:00 p.m., respectively, on the Business Day after the date of
acceptance. Settlement Procedure "I" is
A-18
subject to extension in accordance with any extension of Fedwire closing
deadlines and in the other events specified in SDFS operating procedures in
effect on the Settlement Date.
If Settlement of a Book-Entry Note is rescheduled or canceled,
the Company will advise the Trustee and the Trustee will deliver to DTC, through
DTC's Participant Terminal System, a cancellation message to such effect by no
later than 2:00 p.m. on the Business Day immediately preceding the scheduled
Settlement Date.
Failure to Settle
-----------------
If the Trustee fails to enter an SDFS deliver order with
respect to a Book-Entry Note pursuant to Settlement Procedure "G," the Trustee
may deliver to DTC, through DTC's Participant Terminal System, as soon as
practicable, a withdrawal message instructing DTC to debit such Book-Entry Note
to the Trustee's participant account. DTC will process the withdrawal message,
provided that the Trustee's participant account contains a principal amount of
the Global Security representing such Book-Entry Note 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 Notes represented by a Global Security, the
Trustee will cancel such Global Security in accordance with the Indenture and so
advise 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 Notes represented by a Global Security, the
Trustee will exchange such Book-Entry Note for two Global Securities, one of
which shall represent such Book-Entry Notes and shall be canceled immediately
after issuance and the other of which shall represent the other Book-Entry Notes
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 Note is not timely
paid to the Participants with respect to such Book-Entry Note by the beneficial
purchaser thereof (or a Person, including an indirect participant in DTC, acting
on behalf of such purchaser), such Participants and, in turn, the Presenting
Agent may enter SDFS deliver orders through DTC's Participant Terminal System
reversing the orders entered pursuant to Settlement Procedures "H" and "G,"
respectively. Thereafter, the Trustee will deliver the withdrawal message and
take the related actions described in the preceding paragraph. The Company will
reimburse the Presenting Agent and the Trustee, as applicable, on an equitable
basis for their loss of the use of the funds during the period when the funds
were credited to the account of the Company (except that the Company shall not
be required to reimburse a party if such party's default hereunder or under the
Agency Agreement shall have caused such failure by the beneficial purchaser to
make timely payment of the purchase price).
Notwithstanding the foregoing, upon any failure to settle with
respect to a Book-Entry Note, DTC may take any actions in accordance with its
SDFS operating procedures then in effect. In the event of a failure to settle
with respect to one or more, but not all, of the Book-Entry Notes to have been
represented by a Global Security, the Trustee will provide, in accordance with
Settlement Procedure "E," for the authentication and issuance of a Global
A-19
Security representing the other Book-Entry Notes to have been represented by
such Global Security and will make appropriate entries in its records.
Optional Extension of Maturity
------------------------------
If the Company elects to exercise an option, as set forth in a
Book-Entry Note, to extend the Stated Maturity of such Medium-Term Note, it will
so notify the Trustee not less than 45 or more than 60 days before the Stated
Maturity of such Book-Entry Note, and will further indicate (i) the new Maturity
Date; (ii) the Interest Rate or Spread or Spread Multiplier, as the case may be;
and (iii) the provisions, if any, for redemption of such Book-Entry Note during
such extension period, including the date or dates on which or the period or
periods during which such redemption may occur during such extension period.
Upon receipt of notice from the Company regarding the
Company's exercise of an optional extension of maturity, the Trustee will hand
deliver a notice to DTC not less than 40 days before the Stated maturity (an
"Extension Notice"), which Extension Notice shall identify such Book-Entry Note
by CUSIP number and shall contain the information required by the terms of the
Book-entry Note.
If, after receipt of an Extension Notice, DTC exercises the
option for repayment by tendering the Global Security representing the
Book-Entry Note to be repaid as set forth in such Medium-Term Note, the Trustee
shall give notice to the Company not less than 22 days before the old Stated
Maturity.
If the Company elects to revoke the Interest Rate or Spread or
Spread Multiplier and establish a higher interest rate or Spread or Spread
Multiplier for an extension period, as the case may be, it shall, not less than
20 days before such old Stated Maturity, so notify the Trustee. The Trustee will
immediately thereafter notify DTC of the new Interest Rate or Spread or Spread
Multiplier applicable to such Book-Entry Note.
If, after DTC has tendered any Book-Entry Notes for repayment
pursuant to an Extension Notice, DTC then revokes such tender for repayment, the
Trustee shall give notice to the Company not less than five days prior to the
old Stated Maturity of such revocation and of the principal amount of Book-Entry
Notes for which tender for repayment has been revoked.
On or before any old Stated Maturity where the Maturity has
been extended, the Company shall deposit with the Trustee an amount of money
sufficient to pay the principal amount, plus interest accrued to such old Stated
Maturity for all the Book-Entry Notes or portions thereof which are to be repaid
on such old Stated Maturity. Such Trustee will use such money to repay such
Book-Entry Notes pursuant to the terms set forth in such Medium-Term Notes.
Optional Redemption
-------------------
If so specified in the applicable pricing supplement and on
the Book-Entry Note, such Book-Entry Note will be subject to redemption by the
Company, at one or more redemption prices (expressed as a percentage of the
principal amount of such Book-Entry Note) applicable
A-20
during one or more redemption periods, together with interest accrued thereon on
the date fixed for redemption.
At least 45 days prior to the date on which it intends to
redeem a Book-Entry Note, the Company will notify the Trustee that it is
exercising such option with respect to such Book-Entry Note on such date.
After receipt of notice that the Company is exercising its
option to redeem a Book-Entry Note, the Trustee will, not less than 30 days or
more than 60 days before the redemption date for such Book-Entry Note, hand
deliver to DTC a notice identifying such Book-Entry Note by CUSIP number and
informing DTC of the Company's exercise of such option with respect to such
Book-Entry Note.
On or before any redemption date, the Company shall deposit
with such Trustee an amount of money sufficient to pay the redemption price,
plus interest accrued to such redemption date, for all the Book-Entry Notes or
portions thereof which are to be repaid on such redemption date. Such Trustee
will use such money to repay such Book-Entry Notes pursuant to the terms set
forth in such Medium-Term Notes.
Repayment
---------
If so specified in the applicable pricing supplement and set
forth in the Book-Entry Note, such Book-Entry Note will be subject to repayment
at the option of the Holder at a repayment price equal to 100% of such
Book-Entry Note, together with accrued interest to the date of repayment.
Upon receipt of notice of exercise of the option for repayment
and the Global Securities representing the Book-Entry Notes so to be repaid as
set forth in such Medium-Term Notes, the Trustee shall (unless such notice was
received pursuant to the Company's exercise of an optional extension of
maturity, in which case the relevant procedures set forth above are to be
followed) give notice to the Company not less than 20 days prior to each
Optional Repayment Date of such Optional Repayment Date and of the principal
amount of Book-Entry Notes to be repaid on such Optional Repayment Date.
On or prior to any Optional Repayment Date, the Company shall
deposit with such Trustee an amount of money sufficient to pay the optional
repayment price, and accrued interest thereon to such date, of all the
Book-Entry Notes or portions thereof which are to be repaid on such date. Such
Trustee will use such money to repay such Book-Entry Notes pursuant to the terms
set forth in such Medium-Term Notes.
PART III
Administrative Procedures for Book-Entry Notes
----------------------------------------------
and Certificated Notes
----------------------
Procedures for Establishing the Terms of the Medium-Term Notes
--------------------------------------------------------------
A-21
The Company and the Agents will discuss from time to time the
rates to be borne by the Medium-Term Notes that may be sold as a result of the
solicitation of offers by the Agents. Once an Agent has recorded any indication
of interest in Medium-Term Notes upon certain terms, and communicated with the
Company, if the Company plans to accept an offer to purchase Medium-Term Notes
upon such terms, it will prepare a pricing supplement reflecting the terms of
such Medium-Term Notes (if the interest rate, Stated Maturity or other terms
have changed) and, after approval from such Agent, will arrange to have such
pricing supplement (together with the Prospectus if amended or supplemented),
electronically filed or transmitted by a means reasonably calculated to result
in filing with the SEC by the second Business Day after the Company has accepted
such offer (or by the Business Day prior to the Settlement Date in the event the
Settlement Date is the first or second Business Day after such acceptance) and
pursuant to Rule 424(b) of the Rules and Regulations, and will supply an
appropriate number of copies of the Prospectus, as then amended or supplemented,
and including such pricing supplement, to the Agent that presented such offer.
No Settlements with respect to Medium-Term Notes upon such terms may occur prior
to such filing or such transmission and the Agents will not, prior to such
filing or such transmission, mail confirmations to customers who have offered to
purchase Medium-Term Notes upon such terms. After such filing or such
transmission, sales, mailing of confirmations and Settlements may occur with
respect to Medium-Term Notes upon such terms, subject to the provisions of
"Delivery of Prospectus" below.
If the Company decides to post rates and a decision has been
reached to change interest rates, the Company will promptly so notify each
Agent. Each Agent will forthwith suspend solicitation of purchases. At that
time, the Agents will recommend and the Company will establish rates to be so
posted. Following establishment of posted rates and prior to the filing or
transmission described in the following sentence, the Agents may record
indications of interest in purchasing Medium-Term Notes only at the posted
rates. Once an Agent has recorded any indication of interest in Medium-Term
Notes at the posted rates and communicated with the Company, if the Company
plans to accept an offer at the posted rate, it will prepare a pricing
supplement reflecting such posted rates and, after approval from such Agent,
will arrange to have such pricing supplement (together with the Prospectus if
amended or supplemented), electronically filed or transmitted by a means
reasonably calculated to result in filing with the SEC by the second Business
Day after the Company has accepted such offer (or by the Business Day prior to
the Settlement Date in the event the Settlement Date is the first or second
Business Day after such acceptance) and pursuant to Rule 424(b) of the Rules and
Regulations, and will supply an appropriate number of copies of the Prospectus,
as then amended or supplemented, and including such pricing supplement to the
Agent who presented such offer. No Settlements at the posted rates may occur
prior to such filing or such transmission and the Agents will not, prior to such
filing or such transmission, mail confirmations to customers who have offered to
purchase Medium-Term Notes at the posted rates. After such filing or such
transmission, sales, mailing of confirmations and Settlements may resume,
subject to the provisions of "Delivery of Prospectus" below.
Acceptance and Rejection of Offers
----------------------------------
The Company shall have the sole right to accept offers to
purchase Medium-Term Notes from the Company and may reject any such offer in
whole or in part. Each Agent shall
A-22
promptly communicate to the appropriate official of the Company, orally or in
writing, each reasonable offer to purchase Medium-Term Notes from the Company
received by it other than those rejected by such Agent. Each Agent shall have
the right, in its discretion reasonably exercised without advising the Company,
to reject any offers in whole or in part.
Suspension of Solicitation; Amendment or Supplement
---------------------------------------------------
If, during any period in which, in the opinion of counsel for
the Agents (provided, if the Agents are no longer soliciting (or have been
instructed not to solicit) purchases of Securities from the Company such opinion
is known to the Company), a prospectus relating to the Medium-Term Notes is
required to be delivered under the Act, any event known to the Company occurs as
a result of which the Prospectus would include an untrue statement of a material
fact or omit to state any material fact necessary to make the statements
therein, in the light of the circumstances under which they were made, not
misleading, or if it is necessary at any time to amend the Prospectus to comply
with the Act or the Rules and Regulations, the Company will notify the Agents
promptly to suspend solicitation of purchases of the Medium-Term Notes and the
Agents shall suspend their solicitations of purchases of Medium-Term Notes; and
if the Company shall decide to amend or supplement the Registration Statement or
the Prospectus for purposes of offering the Securities, it will promptly advise
the Agents by telephone (with confirmation in writing) and, except as otherwise
provided in any relevant Purchase Agreement, will promptly prepare and file with
the SEC an amendment or supplement which will correct such statement or omission
or an amendment, whether by filing such documents pursuant to the Act or the
Exchange Act, as may be necessary to correct such untrue statement or omission
or to make the Registration Statement or the Prospectus comply with such
requirements and to prepare and furnish to the Agents at its own expense such
amendment or supplement to the Registration Statement or the Prospectus as will
correct such Registration Statement or Prospectus; provided, however, that the
Company shall in any event promptly prepare, file and furnish an Agent with such
an amendment or supplement if such Agent shall then hold any Securities acquired
from the Company as principal (other than such Securities as such Agent shall
have held for a period of six months or more). Upon the Agents' receipt of such
amendment or supplement and advice from the Company that solicitations may be
resumed, the Agents will resume solicitations of purchases of the Medium-Term
Notes.
In addition, the Company may instruct the Agents to suspend
solicitation of offers to purchase at any time. Upon receipt of such
instructions the Agents will forthwith (but in any event within one Business
Day) suspend solicitation of offers to purchase from the Company until such time
as the Company has advised it that solicitation of offers to purchase may be
resumed and the Company has complied with Section 6 of the Distribution
Agreement to the extent then required. If the Company decides to amend or
supplement the Registration Statement or the Prospectus relating to the
Medium-Term Notes (other than to change interest rates or maturities or similar
changes and except in all cases by filing a report on Form 8-K, pursuant to the
Exchange Act, solely to add exhibits to documents previously filed), it will
promptly advise the Agents and the Trustee and will furnish the Agents and the
Trustee with copies of the proposed amendment or supplement.
A-23
In the event that at the time the Agents, at the direction of
the Company, suspend solicitation of offers to purchase from the Company there
shall be any orders outstanding which have not been settled, the Company will
promptly advise the Agents and the Trustee whether such orders may be settled
and whether copies of the Prospectus as theretofore amended or supplemented as
in effect at the time of the suspension may be delivered in connection with the
Settlement of such orders. The Company will have the sole responsibility for
such decision and for any arrangements which may be made in the event that the
Company determines that such orders may not be settled or that copies of such
Prospectus may not be so delivered.
Delivery of Prospectus
----------------------
A copy of the Prospectus as most recently amended or
supplemented on the date of delivery thereof must be delivered to a purchaser
prior to or together with the earliest of (i) any written offer of such
Medium-Term Note, (ii) confirmation of the purchase of such Medium-Term Note and
(iii) payment for such Medium-Term Note by its purchaser. The Company shall
ensure that an Agent receives copies of the Prospectus and each amendment or
supplement thereto (including appropriate pricing supplements as described in
the section entitled "Procedures for Establishing the Terms of the Medium-Term
Notes" above) in such quantities and within such time limits as will enable such
Agent to deliver such confirmation or Medium-Term Note to a purchaser as
contemplated by these procedures and in compliance with the preceding sentence.
If, since the date of acceptance of a purchaser's offer, the Prospectus shall
have been supplemented solely to reflect any sale of Medium-Term Notes on terms
different from those agreed to between the Company and such purchaser or a
change in posted rates not applicable to such purchaser, such purchaser shall
not receive the Prospectus as supplemented by such new supplement, but shall
receive the Prospectus as supplemented to reflect the terms of the Medium-Term
Notes being purchased by such purchaser and otherwise as most recently amended
or supplemented on the date of delivery of the Prospectus. The Trustee will make
all such deliveries with respect to all Medium-Term Notes sold directly by the
Company.
Confirmation
------------
For each order to purchase a Medium-Term Note solicited by any
Agent and accepted by the Company, the Presenting Agent will issue a
confirmation to the purchaser (with a copy to the Company), including delivery
and payment instructions.
Payment of Expenses
-------------------
Each Agent shall forward to the Company, on a monthly basis, a
statement of the out-of-pocket expenses incurred by such Agent during that month
that are reimbursable to it pursuant to the terms of the Distribution Agreement.
The Company will remit payment to the Agents currently on a monthly basis.
Advertising Costs
-----------------
A-24
The Company will determine with the Agents the amount and
nature of advertising that may be appropriate in offering the Medium-Term Notes.
The "tombstone" advertisement and such other expenses agreed to by the Company
and Agents in connection with solicitation of offers to purchase Medium-Term
Notes from the Company will be paid by the Company.
Periodic Statements From the Trustee
------------------------------------
Periodically, the Trustee will send to the Company a statement
setting forth the principal amount of Certificated Notes Outstanding as of that
date and setting forth a brief description of any sales of Certificated Notes
which the Company has advised the Trustee but which have not yet been settled.
Trustee Not to Risk Funds
-------------------------
Nothing herein shall be deemed to require the Trustee to risk
or expend its own funds in connection with any payment to the Company, DTC, the
Agents or the purchaser, it being understood by all parties that payments made
by the Trustee to the Company, DTC, the Agents or the purchaser shall be made
only to the extent that funds are provided to the Trustee for such purpose.
Business Day
------------
"Business Day" shall mean, for all purposes of these
Administrative Procedures, any day which is not a Saturday or Sunday and which
is not a day on which banking institutions are generally authorized or obligated
by law or executive order to close (i) in New York City or in any other place
where the principal and interest on the Medium-Term Notes is payable, (ii) in
the case of Medium-Term Notes denominated in a Specified Currency, including
LIBOR Notes (as defined in Appendix A), in the city designated in an applicable
supplement to the Prospectus as the principal financial center of the country of
such Specified Currency and (iii) in the case of LIBOR Notes, any such date on
which dealings in deposits in U.S. dollars are transacted in the London
interbank market.
A-25
APPENDIX A to EXHIBIT A
APPENDIX A to ADMINISTRATIVE PROCEDURES
Special Provisions Relating
to Floating Rate Notes
----------------------
Interest Rate: Interest on Floating Rate Notes will be determined by
reference to an "Interest Rate Basis", which shall be
the "Commercial Paper Rate" ("Commercial Paper Rate
Notes"), "LIBOR" ("LIBOR Notes"), "EURIBOR" ("EURIBOR
Notes")the "CD Rate" ("CD Rate Notes"), the "Treasury
Rate" ("Treasury Rate Notes"), the "Federal Funds
Effective Rate" ("Federal Funds Notes"), the "Prime
Rate" ("Prime Rate Notes") or such other interest
rate formula as may be designated by the Company,
based upon the Index Maturity and adjusted by a
Spread or Spread Multiplier, if any, as specified in
the applicable pricing supplement to the Prospectus
setting forth the terms of each issuance of Floating
Rate Notes (the "Pricing Supplement"). The "Index
Maturity" is the particular maturity of the type of
instrument or obligation from which the Interest Rate
Basis is calculated (e.g., in the case of ----
commercial paper, 30-day rather than 90-day
commercial paper). The "Spread" is the number of
basis points (100 basis points equals one percent)
above or below the Interest Rate Basis applicable to
the particular Floating Rate Note, and the "Spread
Multiplier" is the percentage of the Interest Rate
Basis applicable to the interest rate for the
particular Floating Rate Note. The Spread, Spread
Multiplier, Index Maturity and other variable terms
as described below are subject to change by the
Company from time to time, but no such change will
affect any Floating Rate Note previously issued or as
to which an offer has been accepted by the Company. A
Floating Rate Note may also have either or both of
the following: (i) a maximum limit, or ceiling
("Maximum Interest Rate"), on the rate of interest
which may accrue during any Interest Period (as
defined below); and (ii) a minimum limit, or floor
("Minimum Interest Rate"), on the rate of interest
which may accrue during any Interest Period. In
addition to any Maximum Interest Rate which may be
applicable to any Floating Rate Note pursuant to the
above provisions, the interest rate on the Floating
Rate Notes will in no event be higher than the
maximum rate permitted by New York law, as the same
may be modified by United States law of general
application. Under present New York law, the maximum
rate of interest is 25% per annum on a simple
interest basis. The limit may not apply to Floating
Rate Notes in which $2,500,000 or more has been
invested.
A-26
The Calculation Agent appointed by the Company (the
"Calculation Agent") (initially Xxxxx Fargo Bank
Minnesota, National Association) will, upon request
of a holder of Floating Rate Notes, provide the
interest rate then in effect and, if determined, the
interest rate which will become effective as a result
of a determination made with respect to the most
recent Interest Determination Date (as defined below)
with respect to such Floating Rate Notes. The
applicable Pricing Supplement will specify for each
Floating Rate Note the following terms: Interest Rate
Basis, rate of interest for the initial Interest
Period (the "Initial Interest Rate"), date of
original issue, Interest Determination Dates,
Interest Reset Dates (as defined below), Interest
Payment Dates (as defined below), Regular Record Date
(as defined below), Index Maturity, maturity date,
redemption date, if any, repayment date, if any,
Maximum Interest Rate and Minimum Interest Rate, if
any, and the Spread or Spread Multiplier, if any.
Interest Payment Except as set forth in the applicable Pricing
Dates: Supplement and except as provided below, interest
will be payable in the case of Floating Rate Notes
with a daily, weekly or monthly Interest Reset Date,
on the third Wednesday of each month or on the third
Wednesday of March, June, September and December of
each year, as specified in the applicable Pricing
Supplement; in the case of Floating Rate Notes with a
quarterly Interest Reset Date, on the third Wednesday
of March, June, September and December of each year;
in the case of Floating Rate Notes with a semi-annual
Interest Reset Date, on the third Wednesday of two
months of each year specified in the applicable
Pricing Supplement; in the case of Floating Rate
Notes with an annual Interest Reset Date, on the
third Wednesday of the month of each year specified
in the applicable Pricing Supplement; and, in each
case at the stated maturity (or on the redemption
date or repayment date, if applicable) of the
Floating Rate Note. If any Interest Payment Date for
any Floating Rate Note would otherwise be a day that
is not a Business Day (as defined below) for such
Floating Rate Note, the Interest Payment Date for
such Floating Rate Note shall be postponed to the
next succeeding day that is a Business Day for such
Floating Rate Note, except that in the case of a
LIBOR Note or EURIBOR Note, if such day falls in the
next calendar month, such Interest Payment Date will
be the immediately preceding day that is a London
Business Day or Brussels Business Day, respectively
(as defined below) with respect to such Note. Each
date on which interest is payable on a Floating Rate
Note is referred to herein as an "Interest Payment
Date."
A-27
Interest Reset The rate of interest on each Floating Rate Note will
Dates: be reset daily, weekly, monthly, quarterly,
semi-annually or annually (each an "Interest Reset
Date"), as specified in the applicable Pricing
Supplement. Except as set forth in the applicable
Pricing Supplement, the Interest Reset Date will be,
in the case of Floating Rate Notes which reset:
daily, each Business Day; weekly (other than Treasury
Rate Notes), the Wednesday of each week (in the case
of weekly reset Treasury Rate Notes, the Tuesday of
each week); monthly, the third Wednesday of each
month; quarterly, the third Wednesday of March, June,
September and December of each year; semiannually,
the third Wednesday of two months of each year
specified in the applicable Pricing Supplement; and
annually, the third Wednesday of the month of each
year specified in the applicable Pricing Supplement.
Notwithstanding the preceding sentence, (i) the
interest rate in effect from the date of original
issue to the first Interest Reset Date with respect
to a Floating Rate Note will be the Initial Interest
Rate set forth in the applicable Pricing Supplement
and (ii) unless otherwise specified in the applicable
Pricing Supplement, the interest rate in effect for
the 10 calendar days immediately prior to maturity,
redemption or repayment, if applicable, will be that
in effect on the tenth calendar day preceding such
maturity, redemption or repayment. If any Interest
Reset Date for any Floating Rate Note would otherwise
be a day that is not a Business Day for such Floating
Rate Note, the Interest Reset Date will be postponed
to the next day that is a Business Day for such
Floating Rate Note, except that in the case of either
a LIBOR Note or a EURIBOR Note, if such next
succeeding Business Day is in the next succeeding
calendar month, such Interest Reset Date will be the
immediately preceding Business Day.
Interest Determination The interest rate applicable to an Interest Reset
Dates: Period that commences on the related Interest Reset
Date will be the rate determined as of the applicable
interest determination date ("Interest Determination
Date") on or prior to the Calculation Date. Except as
set forth in the applicable Pricing Supplement, the
Interest Determination Date pertaining to an Interest
Reset Date for a Commercial Paper Rate Note (the
"Commercial Paper Interest Determination Date"), a
Federal Funds Note (the "Federal Funds Interest
Determination Date"), a CD Rate Note (the "CD
Interest Determination Date") or a Prime Rate Note
(the "Prime Interest Determination Date") will be the
second Business Day preceding the applicable Interest
Reset Date. The Interest Determination Date
pertaining to an Interest Reset Date for a LIBOR Note
(the "LIBOR Interest Determination Date") will be the
second London Business Day immediately preceding such
Interest Reset Date. The Interest
A-28
Determination Date pertaining to an Interest Reset
Date for a EURIBOR Note (the "EURIBOR Interest
Determination Date") will be the second day on which
the Trans-European Automated Real-time Gross
Settlement Transfer System is Open immediately
preceding such Interest Reset Date. The Interest
Determination Date pertaining to an Interest Reset
Date for a Treasury Rate Note (the "Treasury Interest
Determination Date") will be the day in the week in
which the applicable Interest Reset Date falls on
which Treasury bills would normally be auctioned.
Treasury bills are normally sold at auction on Monday
of each week, unless that day is a legal holiday, in
which case the auction is usually held on the
following Tuesday, except that such auction may be
held on the preceding Friday. If, as the result of a
legal holiday, an auction is so held on the preceding
Friday, such Friday will be the Treasury Interest
Determination Date pertaining to the Interest Reset
Date occurring in the next succeeding week. If an
auction date for Treasury bills falls on any Interest
Reset Date for a Treasury Rate Note, then such
Interest Reset Date shall instead be the first
Business Day immediately following such auction date.
The Interest Determination Date pertaining to a
Floating Rate Note the interest rate of which is
determined by reference to more than one Interest
Rate Basis will be the second Business Day prior to
the applicable Interest Reset Date for such Floating
Rate Note on which each such Interest Rate Basis is
determinable.
Calculation Dates: The Calculation Date, where applicable, pertaining to
any Interest Determination Date will be the earlier
of (i) the tenth calendar day after such Interest
Determination Date or if any such day is not a
Business Day, the next succeeding Business Day and
(ii) the Business Day preceding the applicable
Interest Payment Date, the stated maturity, the
redemption date (if any) or the optional repayment
date (if any), as the case may be.
All percentages resulting from any calculation on
Floating Rate Notes will be rounded to the nearest
one hundred-thousandth of a percentage point, with
five one millionths of a percentage point rounded
upwards (e.g., 9.876545% (or .09876545), would be
rounded to 9.87655% (or .0987655), and all dollar
amounts used in or resulting from such calculation on
Floating Rate Notes will be rounded to the nearest
cent or, in the case of Notes denominated other than
in United States dollars, the nearest unit (with
one-half cent or unit being rounded upward).
Commercial Paper Rate Each Commercial Paper Rate will bear interest at the
Notes: interest rate (calculated with reference to the
Commercial Paper Rate and, if any,
A-29
the Spread and/or Spread Multiplier) specified in
such Commercial Paper Rate Note in the applicable
Pricing Supplement.
Unless otherwise indicated in the applicable Pricing
Supplement, the "Commercial Paper Rate" for each such
Interest Reset Date will be determined as of the
Commercial Paper Interest Determination Date and will
be the Money Market Yield (as defined below) on such
date of the rate for commercial paper having the
Index Maturity specified in the applicable Pricing
Supplement as published by the Board of Governors of
the Federal Reserve System in "Statistical Release
H.15(519), Selected Interest Rates" or any successor
publication selected by the Calculation Agent
("H.15(519)") under the heading "Commercial
Paper--Nonfinancial." If such rate is not published
prior to 3:00 p.m., New York City time, on the
Calculation Date pertaining to such Commercial Paper
Interest Determination Date, then the Commercial
Paper Rate shall be the Money Market Yield on such
Commercial Paper Interest Determination Date of the
rate for commercial paper of the specified Index
Maturity as published in the daily update of
H.15(519) available through the world wide web site
of the Board of Governors of the Federal Reserve
System at
xxxx://xxx.xxx.xxx.xxx.xx/xxxxxxxx/x00/xxxxxx (the
"H.15 Daily Update") under the heading "Commercial
Paper--Nonfinancial" (with an Index Maturity of one
month or three months being deemed to be equivalent
to an Index Maturity of 30 days or 90 days
respectively), or any other recognized electronic
source used for the purpose of displaying the
applicable rate selected by the Calculation Agent
under the heading "Commercial Paper." If by 3:00
p.m., New York City time, on such Calculation Date
such rate is not published in either H.15(519) or
H.15 Daily Update, the Commercial Paper Rate for that
Commercial Paper Interest Determination Date shall be
calculated by the Calculation Agent and shall be the
Money Market Yield of the arithmetic mean of the
offered rates as of 11:00 a.m., New York City time,
on that Commercial Paper Interest Determination Date,
of three leading dealers of commercial paper in The
City of New York selected by the Calculation Agent
(after consultation with the Company) for commercial
paper of the specified Index Maturity placed for an
industrial issuer whose bond rating is "AA," or the
equivalent, from a nationally recognized securities
rating agency; provided, however, that if the dealers
selected as described above by the Calculation Agent
are not quoting as mentioned in this sentence, the
Commercial Paper Rate with respect to such Commercial
Paper Interest Determination Date will be the
Commercial Paper Rate in effect on such Commercial
Paper Interest Determination Date or, if no such rate
is in effect, the interest rate on the Commercial
Paper Rate Notes will be the Initial
A-30
Interest Rate.
The term "Money Market Yield" means a yield
(expressed as a percentage rounded upwards, if
necessary, to the next higher one hundred-thousandth
of a percentage point) calculated in accordance with
the following formula:
Money Market Yield = D x 360 x 100
--------------
360 - (DxM)
where "D" means the applicable per annum rate for
commercial paper quoted on a bank discount basis and
expressed as a decimal; and "M" refers to the actual
number of days in the interest period for which
interest is being calculated.
LIBOR Notes: Each LIBOR Note will bear interest at the interest
rate (calculated with reference to LIBOR and, if any,
the Spread and/or Spread Multiplier) specified in
such LIBOR Note and in the applicable Pricing
Supplement.
Unless otherwise indicated in the applicable Pricing
Supplement, "LIBOR" will be determined by the
Calculation Agent in accordance with the following
provisions:
(i) With respect to a LIBOR Interest Determination
Date, LIBOR will be, as specified in the applicable
Pricing Supplement, either:
(a) the arithmetic mean of the offered
rates for deposits in the Index
Currency having the Index Maturity
designated in the applicable
Pricing Supplement, commencing on
the second London banking day
("London Business Day") immediately
following that LIBOR Interest
Determination Date, that appear on
the Reuters Screen LIBOR Page as of
11:00 a.m., London time, on that
LIBOR Interest Determination Date,
if at least two such offered rates
appear on the Reuters Screen LIBOR
Page ("LIBOR Reuters"), except that
if the specified Reuters Screen
LIBOR Page, by its terms provides
for only a single rate, that single
rate will be used, or
(b) the rate for deposits in U.S.
dollars having the Index Maturity
designated in the applicable
Pricing Supplement, commencing on
the second London Business Day
immediately following such LIBOR
A-31
Interest Determination Date, that
appears on Telerate Page 3750 as of
11:00 a.m., London Time, on that
LIBOR Interest Determination Date
("LIBOR Telerate") . "Reuters
Screen LIBOR Page" means the
display designated as page "LIBOR"
on the Reuters Monitor Money Rates
Service (or such other page as may
replace the LIBOR page on that
service for the purpose of
displaying London interbank offered
rates of major banks). "Telerate
Page 3750" means the display
designated as page "3750" on the
Bridge Telerate Inc. (or such other
page as may replace the 3750 page
on that service or such other
service or services as may be
nominated by the British Bankers'
Association for the purpose of
displaying London interbank offered
rates for U.S. dollar deposits). If
neither LIBOR Reuters nor LIBOR
Telerate is specified in the
applicable Pricing Supplement,
LIBOR will be determined as if
LIBOR Telerate had been specified.
If fewer than two offered rates
appear on the Reuters Screen LIBOR
Page, or if no rate appears on
Telerate Page 3750, as applicable,
LIBOR in respect of that LIBOR
Interest Determination Date will be
determined as if the parties had
specified the rate described in
(ii) below.
(ii) With respect to a LIBOR Interest Determination
Date on which fewer than two offered rates appear on
the Reuters Screen LIBO Page as specified in (i) (a)
above, or on which no rate appears on Telerate Page
3750 as specified in (i) (b) above, as applicable,
LIBOR will be determined on the basis of the rates at
which deposits in U.S. dollars having the Index
Maturity designated in the applicable Pricing
Supplement are offered at approximately 11:00 a.m.,
London time, on such LIBOR Interest Determination
Date by four major banks in the London interbank
market selected by the Calculation Agent (after
consultation with the Company, collectively, the
"Reference Banks") to prime banks in the London
interbank market, commencing on the second London
Business Day immediately following such LIBOR
Interest Determination Date and in a principal amount
of not less than $1,000,000 that is representative
for a single transaction in such market at such time.
The Calculation Agent will request the principal
London office of each of the Reference Banks to
provide a quotation of its rate. If at least two such
quotations are provided, LIBOR for
A-32
such LIBOR Interest Determination Date will be the
arithmetic mean of such quotations. If fewer than two
quotations are provided, LIBOR for such LIBOR
Interest Determination Date will be the arithmetic
mean of the rates quoted at approximately 11:00 a.m.,
New York City time, on such LIBOR Interest
Determination Date by three major banks in The City
of New York selected by the Calculation Agent (after
consultation with the Company) for loans in U.S.
dollars to leading European banks having the Index
Maturity designated in the applicable Pricing
Supplement, commencing on the second London Business
Day immediately following such LIBOR Interest
Determination Date and in a principal amount equal to
an amount of not less than $1,000,000 that is
representative for a single transaction in such
market at such time; provided, however, that if the
banks selected as aforesaid by the Calculation Agent
are not quoting as mentioned in this sentence, LIBOR
with respect to such LIBOR Interest Determination
Date will be the interest rate otherwise in effect on
such LIBOR Interest Determination Date or, if no such
rate is in effect, the interest rate on LIBOR Rate
Notes will be the Initial Interest Rate.
EURIBOR Notes: Each EURIBOR Note will bear interest at the interest
rate (calculated with reference to EURIBOR and, if
any, the Spread and/or Spread Multiplier) specified
in such EURIBOR Note and in the applicable Pricing
Supplement.
Unless otherwise indicated in the applicable Pricing
Supplement, "EURIBOR" with respect to a EURIBOR
Interest Determination Date, EURIBOR will be the rate
for deposits in Euros as sponsored, calculated and
published jointly by the European Banking Federation
and ACI -- The Financial Market Association, or any
company established by the joint sponsors for
purposes of compiling and publishing those rates,
having the Index Maturity specified in the applicable
Pricing Supplement as that rate appears on the
display on Telerate Page 248 at 11:00 a.m. (Brussels
time). "Telerate Page 248" means the display
designated as page "248" on the Bridge Telerate Inc.
(or such other page as may replace the 248 page on
that service).
If such rate is not published on Telerater Page 248
by 11:00 a.m., Brussells time, the Calculation Agent
will request the principal Euro-zone office of each
of four major banks in the Euro-zone interbank
market, as selected by the Calculation Agent, after
consultation with the Company, to provide the
Calculation with its offered rate for deposits in
Euros, at approximately 11:00 a.m. (Brussels time) on
the Interest Determination Date, to prime banks in
the Euro-zone interbank market for the Index Maturity
specified in the applicable Pricing Supplement
commencing on the applicable
A-33
interest reset date, and in a principal amount not
less than the equivalent of U.S. $1 million in Euro
that is representative of a single transaction in
Euro, in that market at that time. If at least two
quotations are provided, EURIBOR will be the average
of those quotations. If fewer than two quotations are
provided, EURIBOR will be the average of the rates
quoted by four major banks in the Euro-zone, as
selected by the Calculation Agent, after consultation
with the Company, at approximately 11:00 a.m.
(Brussels time), on the applicable Interest Reset
Date for loans in Euro to leading European banks for
a period of time equivalent to the Index Maturity
specified in the applicable Pricing Supplement
commencing on that Interest Reset Date in a principal
amount not less than the equivalent of U.S. $1
million in Euro. If the banks so selected by the
Calculation Agent are not quoting as described above,
the EURIBOR rate in effect on such EURIBOR
Determination Date will be the EURIBOR Rate in effect
on such EURIBOR Determination Date or, if no such
rate is in effect, the interest rate on EURIBOR Notes
will be the Initial Interest Rate.
CD Rate Notes: Each CD Rate Note will bear interest at the interest
rate (calculated with reference to the CD Rate and,
if any, the Spread and/or Spread Multiplier)
specified in such CD Rate Note and in the applicable
Pricing Supplement.
Unless otherwise indicated in the applicable Pricing
Supplement, the "CD Rate" for each such Interest
Reset Date will be determined as of the CD Rate
Interest Determination Date and will be the rate on
such date for negotiable certificates of deposit
having the Index Maturity designated in the
applicable Pricing Supplement as published in
H.15(519) under the heading "CDs (Secondary Market)"
or any successor publication or, if not so published
by 3:00 p.m., New York City time, on the Calculation
Date pertaining to such CD Rate Interest
Determination Date, the CD Rate will be the rate on
such CD Rate Interest Determination Date for
negotiable certificates of deposit of the Index
Maturity designated in the applicable Pricing
Supplement as published in H.15 Daily Update under
the heading "CDs (Secondary Market)." If such rate is
not published in H.15 (519) or the H.15 Daily Update
by 3:00 p.m., New York City time, on such Calculation
Date, then the CD Rate on such CD Rate Interest
Determination Date will be calculated by the
Calculation Agent and will be the arithmetic mean of
the secondary market offered rates as of 10:00 a.m.,
New York City time, on such CD Rate Interest
Determination Date, of three leading nonbank dealers
in negotiable U.S. dollar certificates of deposit in
The City of New York (which may include one or more
Agents or their
A-34
affiliates) selected by the Calculation Agent for
negotiable certificates of deposit of major United
States money market banks (in the market for
negotiable certificates of deposit) with a remaining
maturity closest to the Index Maturity designated in
the Pricing Supplement in an amount that is
representative for a single transaction in the
relevant market at the time; provided, however, that
if the dealers selected an aforesaid by the
Calculation Agent are not quoting an mentioned in
this sentence, the CD Rate with respect to such CD
Rate Interest Determination Date will be the CD Rate
in effect on such CD Rate Interest Determination Date
or, if no such rate is in effect, the interest rate
on CD Rate Notes will be the Initial Interest Rate.
Treasury Rate Notes: Each Treasury Rate Note will bear interest at the
interest rate (calculated with reference to the
Treasury Rate and, if any, the Spread and/or Spread
Multiplier) specified in such Treasury Rate Note and
in the applicable Pricing Supplement.
Unless otherwise indicated in the applicable Pricing
Supplement, the "Treasury Rate" for each such
Interest Reset Date will be determined as of the
Treasury Interest Determination Date and will be the
rate applicable to the most recent auction of direct
obligations of the United States ("Treasury bills")
having the Index Maturity specified in the applicable
Pricing Supplement, as that rate appears on either
Telerate Page 56 or 57 under the heading "INVESTMENT
RATE" or, if not so published by 3:00 p.m., New York
City time, on the Calculation Date pertaining to such
Treasury Interest Determination Date, the auction
average rate (expressed as a bond equivalent on the
basis of a year of 365 or 366 days, as applicable,
and applied on a daily basis) for those Treasury
Bills as otherwise announced by the United States
Department of the Treasury. If the results of the
auction of Treasury bills having the specified index
Maturity are not published or reported as provided by
3:00 p.m., New York City time, on such Calculation
Date, or if no such auction is held in a particular
week, then the Treasury Rate will be calculated by
the Calculation Agent and will be a yield to maturity
(expressed as a bond equivalent on the basis of a
year of 365 or 366 days, as applicable, and applied
on a daily basis) of the rate set forth for Treasury
Bills in the H.15 (519) for that Treasury Interest
Determination Date opposite the Index Maturity under
the caption "U.S. Government Securities/Treasury
Bills/Secondary Market." If on such date, such rate
for such period is not published by 3:00 p.m., New
York City time, then the rate will be a yield to
maturity (expressed as a bond equivalent on the basis
of a year of 365 or 366 days, as applicable, and
applied on a daily basis) of the arithmetic
A-35
mean of the secondary market bid rates, as of
approximately 3:30 p.m., New York City time, on such
Treasury Interest Determination Date, of three
leading primary United States government securities
dealers, selected by the Calculation Agent (after
consultation with the Company), for the issue of
Treasury bills with a remaining maturity closest to
the applicable Index Maturity; provided, however,
that if the dealers selected as aforesaid by the
Calculation Agent are not quoting as mentioned in
this sentence, the Treasury Rate with respect to such
Treasury Interest Determination Date will be the
Treasury Rate in effect on such Treasury Rate
Determination Date or, if no such rate is in effect,
the interest rate on Treasury Rate Notes will be the
Initial Interest Rate.
Federal Funds Rate Each Federal Funds Rate Note will bear interest at
Notes: the interest rate (calculated with reference to the
Federal Funds Rate and, if any, the Spread and/or
Spread Multiplier) specified in such Federal Funds
Rate Note and in the applicable Pricing Supplement.
Unless otherwise indicated in the applicable Pricing
Supplement, "Federal Funds Rate" means, for any
Federal Funds Interest Determination Date, the rate
of interest on such date for Federal Funds as such
rate shall be published in H.15(519) under the
caption "Federal Funds (Effective)" or, if not so
published by 3:00 p.m., New York City time, on the
Calculation Date pertaining to such Federal Funds
Interest Determination Date, the Federal Funds Rate
will be the rate on such Federal Funds Interest
Determination Date as published in H.15 Daily Update,
or other electronic source used to display the
applicable rate, under the caption "Federal
Funds/Effective Rate." If such rate is not published
in either H.15(519) or H.15 Daily Update (or other
electronic source) by 3:00 p.m., New York City time,
on such Calculation Date, then the Federal Funds Rate
on such Federal Funds Interest Determination Date
will be calculated by the Calculation Agent (after
consultation with the Company) and will be the
arithmetic mean of the rates as of 9:00 a.m., New
York City time, on such Federal Funds Interest
Determination Date for the last transaction in
overnight Federal Funds arranged by three leading
brokers of Federal Funds transactions in The City of
New York selected by the Calculation Agent (after
consultation with the Company); provided, however,
that if the brokers selected as described above by
the Calculation Agent are not quoting as mentioned in
this sentence, the Federal Funds Rate with respect to
such Federal Funds Interest Determination Date will
be the Federal Funds Rate in effect on such Federal
Funds Interest Determination Date or, if no such rate
is in effect, the interest rate on Federal Funds
Notes will be the Initial
A-36
Interest Rate.
Prime Rate Notes: Each Prime Rate Note will bear interest at the
interest rate (calculated with reference to the Prime
Rate and, if any, the Spread and/or Spread
Multiplier) specified in such Prime Rate Note and in
the applicable Pricing Supplement.
Unless otherwise indicated in the applicable Pricing
Supplement, "Prime Rate" means, for any Prime
Interest Determination Date, the base lending rate
published in H.15(519) for such date opposite the
caption "Bank Prime Loan", or, if not so published by
3:00 p.m., New York City time, on the Calculation
Date pertaining to such Prime Interest Determination
Date, the Prime Rate will be the rate on such Prime
Interest Determination Date as published in H.15
Daily Update, or other electronic source used to
display the applicable rate under the caption "Bank
Prime Loan." If such rate is not published in either
H.15(519) or H.15 Daily Update (or other electronic
source) by 3:00 p.m., New York City time on such
Calculation Date, then the Prime Rate will be
calculated by the Calculation Agent and will be the
arithmetic mean of the rates of interest publicly
announced by each bank that appears on the Reuters
Screen US Prime 1 as such bank's prime rate or base
lending rate as in effect for such Prime Interest
Determination Date as quoted on the Reuters Screen US
Prime 1 on such Prime Interest Determination Date,
or, if fewer than four such rates appear on the
Reuters Screen US Prime 1 for such Prime Interest
Determination Date, the rate shall be the arithmetic
mean of the prime rates quoted on the basis of the
actual number of days in the year divided by 360 as
of the close of business on such Prime Interest
Determination Date by three major money center banks
in The City of New York selected by the Calculation
Agent (after consultation with the Company) from
which quotations are requested; provided, however,
that if the Prime Rate is not published in H.15(519)
or H.15 Daily Update and the banks selected as
aforesaid are not quoting as mentioned in this
sentence, the Prime Rate with respect to such Prime
Interest Determination Date will be the interest rate
otherwise in effect on such Prime Interest
Determination Date or, if no such rate is in effect,
the interest rate on Prime Rate Notes will be the
Initial Interest Rate.
The term "Reuters Screen US Prime 1" means the
display designated as page "US Prime" on the Reuters
Monitor Money Rates Service (or such other page as
may replace page US Prime on that service for the
purpose of displaying prime rates or base lending
rates of major United States banks).
A-37
Record Dates: Interest payments on Floating Rate Notes will be made
on each Interest Payment Date to the registered
owners at the close of business on the date 15
calendar days (whether or not a Business Day) prior
to such Interest Payment Date (the "Regular Record
Date"). Unless otherwise specified in the applicable
Pricing Supplement, if a Note is issued between a
Regular Record Date and an Interest Payment Date, the
first payment of Interest will be made on the
Interest Payment Date following the next succeeding
Regular Record Date to the registered holder on such
next succeeding Regular Record Date. Interest payable
at Maturity or upon redemption or repayment (whether
or not such maturity, redemption or repayment date is
an Interest Payment Date) will be paid to the same
person to whom principal is payable. Interest will
begin to accrue on the original issue date of a Note
for the first interest period and from and including
the most recent Interest Payment Date to which
interest has been paid for all subsequent interest
periods. Each payment of interest shall include
interest accrued from and including the most recent
date in respect of which interest has been paid or
duly provided for, or from and including the date of
original issue, through the day before, but
excluding, the Interest Payment Date (the maturity
date, the redemption date or the repayment date, as
applicable) (an "Interest Period"). In the case of
Floating Rate Notes on which the interest rate is
reset daily or weekly, the interest payments shall
include interest accrued from but excluding the most
recent Regular Record Date in respect of which
interest has been paid or duly provided for, or from
and including the date of issue, to and including the
Regular Record Date next preceding the applicable
Interest Payment Date, except that the interest
payment at the maturity date, redemption date or
repayment date will include interest accrued to, but
excluding, such date.
Accrued Interest: Unless otherwise indicated in the applicable Pricing
Supplement, interest payments for Floating Rate Notes
will include interest accrued from and including the
most recent date in respect of which interest has
been paid or duly provided for, or from and including
the date of issuance to but excluding the next
Interest Payment Date (or maturity date, redemption
date or repayment date); provided, however, that if
the Interest Reset Dates with respect to such Note
are daily or weekly, interest payable on any Interest
Payment Date, other than interest payable on any date
on which principal for such Note is payable, will
include interest accrued from but excluding the most
recent Regular Record Date in respect of which
interest has been paid or duly provided for, or from
and including the date of issue, to and including the
next preceding Regular Record Date.
A-38
Interest payments on Floating Rate Notes made at
maturity or upon redemption or repayment will include
interest accrued to but excluding the date of
maturity, redemption or repayment, as applicable.
Accrued interest from the date of original issue or
from the last date to which interest has been paid is
calculated by multiplying the face amount of a Note
by an accrued interest factor. This accrued interest
factor is computed by adding the interest factors
calculated for each day in the period for which
accrued interest is being calculated. The interest
factor for each such day is computed by dividing the
interest rate applicable to such date by 360, in the
case of Commercial Paper Rate Notes, LIBOR Notes,
Federal Funds Notes, CD Rate Notes and Prime Rate
Notes, by 365, in the case of LIBOR notes denominated
in pounds sterling, or by the actual number of days
in the year, in the case Treasury Rate Notes.
A-39
EXHIBIT B
---------
XXXXXX RESTAURANTS, INC.
Medium-Term Notes, Series A
Due Nine Months or More From Date Issued
FORM OF TERMS AGREEMENT
--------------, -------
Bank of America Securities LLC
000 Xxxxx Xxxxx Xxxxxx, 0xx Xxxxx
Xxxxxxxxx, XX 00000
First Union Securities, Inc.
One First Union Center
000 X. Xxxxxxx Xxxxxx, 0xx Xxxxx
Xxxxxxxxx, XX 00000
SunTrust Equitable Securities Corporation
Mail Code 3943
X.X. Xxx 0000
Xxxxxxx, XX 00000-0000
Wachovia Securities, Inc.
000 Xxxxxxxxx Xxxxxx, XX
Xxxxxxx, XX 00000
The Xxxxxxxx Capital Group, L.P.
000 Xxxxx Xxxxxx, 00xx Xxxxx
Xxx Xxxx, XX 00000
Ladies and Gentlemen:
Xxxxxx Restaurants, Inc., a Florida corporation ("the Company"),
proposes, subject to the terms and conditions stated herein and in the
Distribution Agreement, dated November 10, 2000 (the "Distribution Agreement"),
between the Company on the one hand and Banc of America Securities LLC, First
Union Securities, Inc., SunTrust Equitable Securities Corporation, Wachovia
Securities, Inc. and The Xxxxxxxx Capital Group, L.P. (together, the "Agents")
on the other, to issue and sell to the Agents the Notes specified in the
Schedule attached hereto (the "Purchased Notes").
B-1
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 the Notes is incorporated herein by reference in its entirety, and
shall be deemed to be part of this Terms Agreement to the same extent as if such
provision 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 in this Terms Agreement. Each of the representatives 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 shall be deemed to be a representation and
warranty as of the date of the Distribution Agreement, and also a representation
and warranty as of the date of this Terms Agreement.
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 the Agents, and the Agents agree to purchase from the Company,
the Purchased Notes, at the time and place, in the principal amount and at the
purchase price set forth in the Schedule attached hereto.
If the foregoing is in accordance with your understanding, please sign
and return to us a counterpart 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.
XXXXXX RESTAURANTS, INC.
By:
--------------------------------
Name:
Title:
Accepted:
BANC OF AMERICA SECURITIES LLC
-----------------------------------
-----------------------------------
By:
--------------------------------
Authorized Signatory
B-2
FIRST UNION SECURITIES, INC.
-----------------------------------
-----------------------------------
By:
--------------------------------
Authorized Signatory
SUNTRUST EQUITABLE SECURITIES CORPORATION
-----------------------------------
-----------------------------------
By:
--------------------------------
Authorized Signatory
WACHOVIA SECURITIES, INC.
-----------------------------------
-----------------------------------
By:
--------------------------------
Authorized Signatory
THE XXXXXXXX CAPITAL GROUP, L.P.
-----------------------------------
-----------------------------------
By:
--------------------------------
Authorized Signatory
B-3
Schedule to Exhibit B
---------------------
Title of Purchased Securities:
___% Medium-Term Senior Notes
[Add additional terms as may be needed to identify Notes.]
[Specified Currency]:
Aggregate Principal Amount:
$
----------------
Interest Rate Base(s):
Interest Rate:
------%
Date of Maturity:
Interest Payment Dates:
Price to the Public:
$
----------------
Purchase Price by Agents:
___% of the principal amount of the Purchased Notes, plus accrued
interest from ____________ to ____________ and accrued amortization, if any,
from ___________ to __________.
Method of Payment:
Time of Delivery:
Closing Location for Delivery of Securities:
Documents to be Delivered:
The following documents referred to in the Distribution Agreement shall
be delivered as a condition to the Closing:
B-4
(1) The opinion of counsel to the Company referred to in Section
5(b).
(2) The opinion of counsel to the Agents referred to in Section
5(c).
(3) The officers' certificate referred to in Section 5(d).
(4) The accountants' letter referred to in Section 5(e).
Other Material Terms:
B-5
EXHIBIT C
FORM OF OPINION OF XXXXXX & WHITNEY LLP, COUNSEL
FOR THE COMPANY, TO BE DELIVERED PURSUANT TO
SECTION 5(b)
(1) The Company has been duly incorporated and is validly existing as a
corporation in good standing under the laws of the state of Florida.
(2) The Company has corporate power and authority to own, lease and
operate its properties and to conduct its business as described in the
Prospectus and to enter into and perform its obligations under, or as
contemplated under, the Distribution Agreement, the Prospectus and any
applicable Terms Agreement or Pricing Supplement.
(3) The Distribution Agreement and any applicable Terms Agreement have
been duly authorized, executed and delivered by the Company.
(4) The Notes have been duly authorized by the Company for issuance and
sale pursuant to the Distribution Agreement and any applicable Terms Agreement
or Pricing Supplement. The Notes, when issued and authenticated in the manner
provided for in the Indenture and delivered against payment of the consideration
therefor specified in any Terms Agreement or the Prospectus, will constitute
valid and legally binding obligations of the Company, enforceable against the
Company in accordance with their terms, except as the enforcement thereof may be
limited by bankruptcy, insolvency, reorganization, moratorium or other similar
laws relating to or affecting creditors' rights generally or by general
equitable principles. Such Notes will be in the form contemplated by, and each
registered holder thereof is entitled to the benefits of, the Indenture.
(5) The Indenture has been duly authorized, executed and delivered by
the Company and (assuming due authorization, execution and delivery thereof by
the Trustee) constitutes a valid and legally binding agreement of the Company,
enforceable against the Company in accordance with its terms, except as the
enforcement thereof may be limited by bankruptcy, insolvency, reorganization,
moratorium or other similar laws relating to or affecting creditors' rights
generally or by general equitable principles.
(6) The Notes offered conform in all material respects to the
statements relating thereto contained in the Prospectus and are in substantially
the form filed or incorporated by reference, as the case may be, as an exhibit
to the Registration Statement.
(7) The information in the Prospectus under "Description of Debt
Securities," "Description of the Notes," "United States Taxation" and in the
Registration Statement under Item 15, to the extent that it constitutes matters
of law, summaries of legal matters, the Company's charter and bylaws or legal
proceedings, or legal conclusions, has been reviewed by us and is correct in all
material respects.
C-1
(8) The execution, delivery and performance of the Distribution
Agreement, any applicable Terms Agreement and the Indenture and any other
agreement or instrument entered into or issued or to be entered into or issued
by the Company in connection with the transactions contemplated in the
Registration Statement and the Prospectus and the consummation of the
transactions contemplated in the Distribution Agreement and any such Terms
Agreement and in the Registration Statement and the Prospectus (including the
issuance and sale of the Notes and the use of the proceeds from the sale of the
Notes as described under the caption "Use of Proceeds") and compliance by the
Company with its obligations thereunder do not and will not, whether with or
without the giving of notice or passage of time or both, conflict with or
constitute a breach of, or default or Repayment Event under, or result in the
creation or imposition of any lien, charge or encumbrance upon any property or
assets of the Company or any of its Material Subsidiaries pursuant to, any
contract, indenture, mortgage, deed of trust, loan or credit agreement, note,
lease or any other agreement or instrument, known to us, to which the Company or
any of its Material Subsidiaries is a party or by which it or any of them may be
bound, or to which any of the assets, properties or operations of the Company or
any of its Material Subsidiaries is subject, except for such conflicts,
breaches, defaults, events or liens, charges or encumbrances that would not
result in a Material Adverse Effect, nor will such action result in any
violation of the provisions of the charter or by-laws of the Company or the
charter or by-laws or, in the case of GMRI Texas, the certificate of limited
partnership, of any of its Material Subsidiaries or any applicable law, statute,
rule, regulation, judgment, order, writ or decree, known to us, of any
government, government instrumentality or court, domestic or foreign, having
jurisdiction over the Company or any of its Material Subsidiaries or any of
their assets, properties or operations.
(9) To the best of our knowledge, there is not pending or threatened
any action, suit, proceeding, inquiry or investigation to which the Company or
any of its Material Subsidiaries is a party to which the assets, properties or
operations of the Company or any of its Material Subsidiaries is subject, before
or by any court or governmental agency or body, domestic or foreign, which might
reasonably be expected to result in a Material Adverse Effect or which might
reasonably be expected to materially and adversely affect the consummation of
the transactions contemplated under the Underwriting Agreement, the applicable
Terms Agreement or the Indenture or the performance by the Company of its
obligations thereunder.
(10) To the best of our knowledge, there are no franchises, contracts,
indentures, mortgages, loan agreements, notes, leases or other instruments
required to be described or referred to in the Registration Statement or to be
filed as exhibits thereto other than those described or referred to therein or
filed or incorporated by reference as exhibits thereto, and the descriptions
thereof or references thereto are correct in all material respects.
(11) To the best of our knowledge, there are no statutes or regulations
that are required to be described in the Prospectus that are not described as
required.
(12) The Registration Statement has been declared effective under the
1933 Act. Any required filing of the Prospectus pursuant to Rule 424(b) has been
made in the manner and within the time period required by Rule 424(b). To the
best of our knowledge, no stop order suspending the effectiveness of the
Registration Statement has been issued under the 1933 Act
C-2
and, to the best of our knowledge, no proceedings for that purpose have been
instituted or are pending or threatened by the Commission.
(13) The Registration Statement and the Prospectus, excluding the
documents incorporated by reference therein, and each amendment or supplement to
the Registration Statement and Prospectus, excluding the documents incorporated
by reference therein, as of the Closing Time or the Settlement Date at which
this opinion is delivered (other than the financial statements and supporting
schedules included therein or omitted therefrom, and each Trustee's Statement of
Eligibility on Form T-1 (the "Form T-1s"), as to which we express no opinion)
complied as to form in all material respects with the requirements of the 1933
Act and the 1933 Act Regulations.
(14) Each document filed pursuant to the 1934 Act and incorporated by
reference in the Registration Statement or the Prospectus and the other
documents incorporated by reference in the Prospectus (other than the financial
statements and supporting schedules therein or omitted therefrom, as to which we
express no opinion), when they were filed with the Commission complied as to
form in all material respects with the requirements of the 1934 Act and the
rules and regulations of the Commission thereunder.
(15) No filing with, or authorization, approval, consent, license,
order, registration, qualification or decree of, any court or governmental
authority or agency, domestic or foreign, is necessary or required for the
performance by the Company of its obligations under the Distribution Agreement,
the Prospectus or any applicable Terms Agreement or in connection with the
transactions contemplated under the Distribution Agreement, the Prospectus or
any such Terms Agreement or the Indenture other than under the 1933 Act, the
1933 Act Regulations, the 1939 Act and the 1939 Act Regulations, which have been
obtained, or as may be required under state securities or blue sky laws.
As counsel to the Company, we have examined various documents and
records and have participated in the preparation of and reviewed the
Registration Statement and the Prospectus, participated in discussions with
representatives of the Company and its counsel and accountants, and
representatives of the Agents and their counsel.
Nothing has come to our attention that would lead us to believe that
the Registration Statement or any post-effective amendment thereto, including
the Rule 430A Information and Rule 434 Information (if applicable) (including
documents filed with the Commission pursuant to the 1934 Act and incorporated by
reference in the Registration Statement or the Prospectus) (except for financial
statements and schedules and other financial data included therein or omitted
therefrom and for the Form T-1s, as to which we make no statement), at the
Closing Time or the Settlement Date at which this opinion is delivered,
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 the Prospectus or any amendment or supplement thereto
(except for financial statements and schedules and other financial data included
therein or omitted therefrom, as to which we make no statement), at the time the
Prospectus was issued, at the time any such amended or supplemented prospectus
was issued, at the Closing Time or at the Settlement Date, included or includes
an untrue statement of a
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material fact or omitted or omits to state a material fact necessary in order to
make the statements therein, in the light of the circumstances under which they
were made, not misleading.
In rendering such opinion, such counsel may rely as to matters of fact
(but not as to legal conclusions), to the extent they deem proper, on
certificates of responsible officers of the Company and public officials. Such
opinion shall not state that it is to be governed or qualified by, or that it is
otherwise subject to, any treatise, written policy or other document relating to
legal opinions, including, without limitation, the Legal Opinion Accord of the
ABA Section of Business Law (1991).
C-4
EXHIBIT D
FORM OF OPINION OF XXXXX X. XxXXXXXX, ASSOCIATE
GENERAL COUNSEL
OF THE COMPANY
TO BE DELIVERED PURSUANT TO
SECTION 5(b)
(1) The Company has been duly incorporated and is validly existing as a
corporation in good standing under the laws of the state of Florida.
(2) The Company has corporate power and authority to own, lease and
operate its properties and to conduct its business as described in the
Prospectus and to enter into and perform its obligations under, or as
contemplated under, the Distribution Agreement, the Prospectus and any
applicable Terms Agreement.
(3) The Company is duly qualified as a foreign corporation to transact
business and is in good standing in each jurisdiction in which such
qualification is required, except where the failure to so qualify or be in good
standing in such other jurisdiction would not result in a Material Adverse
Effect.
(4) GMRI Texas L.P. ("GMRI Texas") has been duly formed and is validly
existing as a limited partnership in good standing under the laws of the State
of Texas, has power and authority to own, lease, and operate its properties and
conduct its business as described in the Prospectus and is duly qualified as a
foreign limited partnership to transact business and is in good standing in each
jurisdiction in which such qualification is required, except where the failure
to so qualify or be in good standing would not result in a Material Adverse
Effect, and GMRI, Inc. is the sole general partner of GMRI Texas. Each other
Material Subsidiary has been duly incorporated and is validly existing as a
corporation in good standing under the laws of the jurisdiction of its
incorporation, has corporate power and authority to own, lease and operate its
properties and to conduct its business as described in the Prospectus and is
duly qualified as a foreign corporation to transact business and is in good
standing in each jurisdiction in which such qualification is required, except
where the failure to so qualify or be in good standing would not result in a
Material Adverse Effect; except as otherwise stated in the Registration
Statement and the Prospectus, all of the issued and outstanding capital stock of
each other Material Subsidiary has been duly authorized and is validly issued,
fully paid and non-assessable and, to the best of our knowledge, is owned by the
Company, directly or through subsidiaries, free and clear of any security
interest, mortgage, pledge, lien, encumbrance, claim or equity; and to the best
of my knowledge, none of the outstanding shares of capital stock of any other
Material Subsidiary was issued in violation of the preemptive or similar rights
of any securityholder of such Material Subsidiary.
(5) The authorized, issued and outstanding shares of capital stock of
the Company as of ___________ are as set forth in the Company's audited
financial statements for the fiscal
D-1
[year] [quarter] ended __________ incorporated by reference in the Prospectus.
The shares of capital stock of the Company have been duly authorized and validly
issued by the Company and are fully paid and non-assessable, and none of such
shares of capital stock was issued in violation of preemptive or other similar
rights of any securityholder of the Company.
(6) The Distribution Agreement and any applicable Terms Agreement have
been duly authorized, executed and delivered by the Company.
(7) The Notes have been duly authorized by the Company for issuance and
sale pursuant to the Distribution Agreement and any applicable Terms Agreement
or Pricing Supplement. The Notes, when issued and authenticated in the manner
provided for in the Indenture and delivered against payment of the consideration
therefor specified in any Terms Agreement or the Prospectus, will constitute
valid and legally binding obligations of the Company, enforceable against the
Company in accordance with their terms, except as the enforcement thereof may be
limited by bankruptcy, insolvency, reorganization, moratorium or other similar
laws relating to or affecting creditors' rights generally or by general
equitable principles. Such Notes will be in the form contemplated by, and each
registered holder thereof is entitled to the benefits of, the Indenture.
(8) The Indenture has been duly authorized, executed and delivered by
the Company and (assuming due authorization, execution and delivery thereof by
the Trustee) constitutes a valid and legally binding agreement of the Company,
enforceable against the Company in accordance with its terms, except as the
enforcement thereof may be limited by bankruptcy, insolvency, reorganization,
moratorium or other similar laws relating to or affecting creditors' rights
generally or by general equitable principles.
(9) To the best of my knowledge, (i) neither the Company nor any of its
Material Subsidiaries is in violation of its charter or by-laws or, in the case
of GMRI Texas, its certificate of limited partnership and (ii) no default by the
Company or any of its Material Subsidiaries exists in the due performance or
observance of any material obligation, agreement, covenant or condition
contained in any contract, indenture, mortgage, loan agreement, note, lease or
other agreement or instrument that is described or referred to in the
Registration Statement or the Prospectus or filed or incorporated by reference
as an exhibit to the Registration Statement.
(10) The execution, delivery and performance of the Distribution
Agreement, any applicable Terms Agreement and the Indenture and any other
agreement or instrument entered into or issued or to be entered into or issued
by the Company in connection with the transactions contemplate in the
Registration Statement and the Prospectus and the consummation of the
transactions contemplated in the Distribution Agreement and any such Terms
Agreement and in the Registration Statement and the Prospectus (including the
issuance and sale of the Notes and the use of the proceeds from the sale of the
Notes as described under the caption "Use of Proceeds") and compliance by the
Company with its obligations thereunder do not and will not, whether with or
without the giving of notice or passage of time or both, conflict with or
constitute a breach of, or default or Repayment Event under, or result in the
creation or imposition of any lien, charge or encumbrance upon any property or
assets of the Company or any of its Material Subsidiaries pursuant to, any
contract, indenture, mortgage, deed of trust, loan
D-2
or credit agreement, note, lease or any other agreement or instrument, known to
me, to which the Company or any of its Material Subsidiaries is a party or by
which it or any of them may be bound, or to which any of the assets, properties
or operations of the Company or any of its Material Subsidiaries is subject,
except for such conflicts, breaches, defaults, events or liens, charges or
encumbrances that would not result in a Material Adverse Effect, nor will such
action result in any violation of the provisions of the charter or by-laws of
the Company or the charter or by-laws or, in the case of GMRI Texas, the
certificate of limited partnership of any of its Material Subsidiaries or any
applicable law, statute, rule, regulation, judgment, order, writ or decree,
known to me, of any government, government instrumentality or court, domestic or
foreign, having jurisdiction over the Company or any of its Material
Subsidiaries or any of their assets, properties or operations.
(11) To the best of my knowledge, there is no pending or threatened any
action, suit, proceeding, inquiry or investigation to which the Company or any
of its Material Subsidiaries is a party to or which the assets, properties or
operations of the Company or any of its Material Subsidiaries is subject, before
or by any court or governmental agency or body, domestic or foreign, which might
reasonably be expected to result in a Material Adverse Effect or which might
reasonably be expected to materially and adversely affect the consummation of
the transactions contemplated under the Distribution Agreement, the Prospectus
or any applicable Terms Agreement or the Indenture or the performance by the
Company of its obligations thereunder.
(12) To the best of my knowledge, no stop order suspending the
effectiveness of the Registration Statement has been issued under the 1933 Act
and, to the best of my knowledge, no proceedings for that purpose have been
instituted or are pending or threatened by the Commission.
(13) Each document filed pursuant to the 1934 Act incorporated by
reference in the Registration Statement or the Prospectus and the other
documents incorporated by reference in the Prospectus (other than the financial
statements and supporting schedules therein or omitted therefrom, as to which we
express no opinion), when they were filed with the Commission complied as to
form in all material respects with the requirements of the 1934 Act and the
rules and regulations of the Commission thereunder; to the best of my knowledge,
there are no franchises, contracts, indentures, mortgages, loan agreements,
notes, leases or other instruments required to be described or referred to
therein or to be filed as exhibits thereto other than those described or
referred to therein or filed or incorporated by reference as exhibits thereto,
and the descriptions thereof or references thereto are correct in all material
respects; and to the best of my knowledge, there are no statutes or regulations
that are required to be described in the Prospectus that are not described as
required.
As counsel to the Company, I have examined various documents and
records and have participated in the preparation of and reviewed the
Registration Statement and the Prospectus and participated in discussions with
representatives of the Company and its counsel and accountants, and
representatives of the Agents and their counsel.
D-3
Nothing has come to my attention that would lead me to believe that the
Registration Statement or any post-effective amendment thereto, including the
Rule 430A Information and Rule 434 Information (if applicable) (including
documents filed with the Commission pursuant to the 1934 Act and incorporated by
reference in the Registration Statement or the Prospectus) (except for financial
statements and schedules and other financial data included therein or omitted
therefrom and for the Form T-1, as to which I make no statement), at the Closing
Time or the Settlement Date at which the opinion is delivered, 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 the Prospectus or any amendment or supplement thereto (except for
financial statements and schedules and other financial data included therein or
omitted therefrom, as to which I make no statement), at the time the Prospectus
was issued, at the time any such amended or supplemented prospectus was issued,
at the Closing Time or at the Settlement Date, included or includes an untrue
statement of a material fact or omitted or omits to state a material fact
necessary in order to make the statements therein, in the light of the
circumstances under which they were made, not misleading.
In rendering such opinion, such counsel may rely as to matters of fact
(but not as to legal conclusions), to the extent they deem proper, on
certificates of responsible officers of the Company and public officials. Such
opinion shall not state that it is to be governed or qualified by, or that it is
otherwise subject to, any treatise, written policy or other document relating to
legal opinions, including, without limitation, the Legal Opinion Accord of the
ABA Section of Business Law (1991).
D-4
EXHIBIT E
FORM OF ACCOUNTANTS' COMFORT LETTER PURSUANT TO SECTION 5(e)
(i) We are independent public accountants with respect to the Company
within the meaning of the 1933 Act and the applicable published 1933 Act
Regulations.
(ii) In our opinion, the audited financial statements and the related
financial statement schedules included or incorporated by reference in the
Registration Statement and the Prospectus comply as to form in all material
respects with the applicable accounting requirements of the 1933 Act and the
published rules and regulations thereunder.
(iii) On the basis of procedures (but not an examination in accordance
with generally accepted auditing standards) consisting of a reading of the
unaudited interim consolidated financial statements of the Company for the
_____-month periods ended _________, 20___ and _________, 20___, included in the
Registration Statement and the Prospectus (the "____-month financials"), [a
reading of the latest available unaudited interim consolidated financial
statements of the Company], a reading of the minutes of all meetings of the
stockholders and directors of the Company and its subsidiaries and the and
Committees of the Company's Board of Directors and any subsidiary committees
since _________________, inquiries of certain officials of the Company and its
subsidiaries responsible for financial and accounting matters, a review of
interim financial information in accordance with standards established by the
American Institute of Certified Public Accountants in Statement on Auditing
Standards No. 71, Interim Financial Information ("SAS 71"), with respect to the
_____-month financials, and such other inquiries and procedures as may be
specified in such letter, nothing came to our attention that caused us to
believe that:
(A) the _____-month financials included in the Registration Statement
and the Prospectus do not comply as to form in all material respects with the
applicable accounting requirements of the 1933 Act and the 1933 Act Regulations
applicable to unaudited interim financial statements included in registration
statements or any material modifications should be made to the _____-month
financials included in the Registration Statement and the Prospectus for them to
be in conformity with generally accepted accounting principles;
(B) at _________, 20___ and at a specified date not more than five days
prior to the Settlement Date, there was any change in the capital stock of the
Company and its subsidiaries or any decrease in the total assets or stockholders
investment of the Company and its subsidiaries or any increase in the notes and
bonds payable and total liabilities of the Company and its subsidiaries, in each
case as compared with amounts shown in the latest balance sheet included in the
Registration Statement and the Prospectus, except in each case for changes,
decreases or increases that the Registration Statement and the Prospectus
disclose have occurred or may occur; or
(C) for the period from _________, 20___ to _________, 20___ and for
the period from _________, 20___ to a specified date not more than five days
prior to the Settlement Date, there was any decrease in consolidated total
revenues, operating income, or net income, in each
E-1
case as compared with the comparable period in the preceding year, except in
each case for any decreases that the Registration Statement and the Prospectus
discloses have occurred or may occur.
(iv) Based upon the procedures set forth in clause (iii) above and a
reading of the Selected Financial Data included in the Registration Statement
and the Prospectus and a reading of the financial statements from which such
data were derived, nothing came to our attention that caused us to believe that
the Selected Financial Data included in the Registration Statement and the
Prospectus do not comply as to form in all material respects with the disclosure
requirements of Item 301 of Regulation S-K of the 1933 Act, that the amounts
included in the Selected Financial Data are not in agreement with the
corresponding amounts in the audited consolidated financial statements for the
respective periods or that the financial statements not included in the
Registration Statement and the Prospectus from which certain of such data were
derived are not in conformity with generally accepted accounting principles.
(v) We have compared the information in the Registration Statement and
the Prospectus under selected captions with the disclosure requirements of
Regulation S-K of the 1933 Act and on the basis of limited procedures specified
herein, nothing came to our attention that caused us to believe that this
information does not comply as to form in all material respects with the
disclosure requirements of Items 302, 402 and 503(d), respectively, of
Regulation S-K.
(vi) We are unable to and do not express any opinion on the Pro Forma
Financial Information (the "Pro Forma Statement") included in the Registration
Statement and the Prospectus or on the pro forma adjustments applied to the
historical amounts included in the Pro Forma Statement; however, for purposes of
this letter we have:
(A) read the Pro Forma Statement;
(B) performed an audit of the financial statements to which the pro
forma adjustments were applied;
(C) made inquiries of certain officials of the Company who have
responsibility for financial and accounting matters about the basis for their
determination of the pro forma adjustments and whether the Pro Forma Statement
complies as to form in all material respects with the applicable accounting
requirements of Rule 11-02 of Regulation S-X; and
(D) proved the arithmetic accuracy of the application of the pro forma
adjustments to the historical amounts in the Pro Forma Statement; and on the
basis of such procedures and such other inquiries and procedures as specified
herein, nothing came to our attention that caused us to believe that the Pro
Forma Statement included in the Registration Statement does not comply as to
form in all material respects with the applicable requirements of Rule 11-02 of
Regulation S-X or that the pro forma adjustments have not been properly applied
to the historical amounts in the compilation of those statements.
(vii) In addition to the procedures referred to in clause (ii) above,
we have performed other procedures, not constituting an audit, with respect to
certain amounts, percentages,
E-2
numerical data and financial information appearing in the Registration Statement
and the Prospectus, which are specified herein, and have compared certain of
such items with, and have found such items to be in agreement with, the
accounting and financial records of the Company.
E-3
ANNEX I
Schedule of Material Subsidiaries
1. GMRI, Inc.
2. GMR Restaurants of Pennsylvania, Inc.
3. GMRI Canada, Inc.
4. GMRI Texas L.P.
5. Any subsidiary that represents 10% or more of the Company's total
consolidated assets at the end of the most recent fiscal quarter for
which financial information is available or 10% or more of the
Company's consolidated net revenues or consolidated operating income
for the most recent four quarters for which financial information is
available.
ANNEX II
The Company agrees to pay each Agent a commission equal to the following
percentage of the principal amount of each Note sold on an agency basis by such
Agent:
Term Commission Rates
From 9 months to less than 1 year 0.125%
From 1 year to less than 18 months 0.150%
From 18 months to less than 2 years 0.200%
From 2 years to less than 3 years 0.250%
From 3 years to less than 4 years 0.350%
From 4 years to less than 5 years 0.450%
From 5 years to less than 6 years 0.500%
From 6 years to less than 7 years 0.550%
From 7 years to less than 8 years 0.600%
From 8 years to less than 9 years 0.600%
From 9 years to less than 10 years 0.600%
From 10 years to less than 15 years 0.625%
From 15 years to less than 20 years 0.675%
From 20 years to less than 30 years 0.750%
From 30 years and over *
* As Agreed to by the Company and the applicable Agent at the time of
sale.
Unless otherwise specified in any applicable Terms Agreement or Pricing
Supplement, the discount or commission payable to an Agent shall be determined
on the basis of the commission schedule set forth above.
