WILLAMETTE INDUSTRIES, INC.
$300,000,000
MEDIUM-TERM NOTES
DISTRIBUTION AGREEMENT
May 13, 1998
Xxxxxxx, Xxxxx & Co.,
00 Xxxxx Xxxxxx,
Xxx Xxxx, Xxx Xxxx 00000.
X.X. Xxxxxx Securities Inc.,
00 Xxxx Xxxxxx,
Xxx Xxxx, Xxx Xxxx 00000.
Salomon Brothers Inc,
0 Xxxxx Xxxxx Xxxxxx, 00xx Xxxxx,
Xxx Xxxx, Xxx Xxxx 00000.
Ladies and Gentlemen:
Willamette Industries, Inc., an Oregon corporation (the "Company"),
proposes to issue and sell from time to time its Medium-Term Notes (the
"Securities") in an aggregate amount up to $300,000,000 and agrees with each of
you (individually, an "Agent", and collectively, the "Agents") as set forth in
this Agreement.
Subject to the terms and conditions stated herein and to the reservation
by the Company of the right to sell Securities directly on its own behalf, the
Company hereby (i) appoints each Agent as an agent of the Company for the
purpose of soliciting and receiving offers to purchase Securities from the
Company pursuant to Section 2(a) hereof and (ii) agrees that, except as
otherwise contemplated herein, whenever it determines to sell Securities
directly to any Agent as principal, it will enter into a separate agreement
(each a "Terms Agreement"), substantially in the form of Annex I hereto,
relating to such sale in accordance with Section 2(b) hereof. This Distribution
Agreement shall not be construed to create either an obligation on the part of
the Company to sell any Securities or an obligation of any of the Agents to
purchase Securities as principal.
The Securities will be issued under an indenture, dated as of January 30,
1993 (the "Indenture"), between the Company and The Chase Manhattan Bank, as
Trustee (the "Trustee"). The Securities shall have the maturity ranges, interest
rates, if any, redemption provisions and other terms set forth in the Prospectus
referred to below as it may be amended or supplemented from time to time. The
Securities will be issued, and the terms and rights thereof established, from
time to time by the Company in accordance with the Indenture.
1. The Company represents and warrants to, and agrees with, each Agent
that:
(a) The Company meets the requirements for use of Form S-3 under
the Securities Act of 1933 (the "Act") and the rules and regulations
under the Act of the Securities and Exchange Commission (the
"Commission") and has filed with the Commission a registration statement
on such Form (File No. 333-32647), which has become effective, for the
registration under the Act of the Securities. Such registration
statement, as it may be amended or supplemented, meets the requirements
set forth in Rule 415(a) under the Act and complies in all other material
respects with said rule. In connection with the offering and sale of the
Securities, the Company proposes to file with the Commission pursuant to
Rule 424 under the Act a supplement to the form of prospectus included in
such registration statement relating to the Securities and the plan of
distribution thereof and has previously advised you of all further
information (financial and other) with respect to the Company to be set
forth therein. Such registration statement, including the exhibits
thereto, as amended to the date of this Agreement, is hereinafter called
the "Registration Statement"; any preliminary prospectus included in such
registration statement or filed with the Commission pursuant to Rule
424(a) of the rules and regulations of the Commission under the Act, is
hereinafter called a "Preliminary Prospectus"; the prospectus (including,
if applicable, any prospectus supplement) relating to the Securities, in
the form in which it has most recently been filed, or transmitted for
filing, with the Commission on or prior to the date of this Agreement, is
hereinafter called the "Prospectus"; and any supplement to the Prospectus
that sets forth only the terms of a particular issue of the Securities is
hereinafter called a "Pricing Supplement". Any reference herein to the
Registration Statement, any Preliminary Prospectus or the Prospectus
shall be deemed to refer to and include the documents incorporated by
reference therein pursuant to Item 12 of Form S-3 that were filed under
the Securities Exchange Act of 1934 (the "Exchange Act") on or before the
date of this Agreement, the date of any Preliminary Prospectus or the
date of the Prospectus, as the case may be; and any reference herein to
the terms "amend", "amendment" or "supplement" with respect to the
Registration Statement, any Preliminary Prospectus or the Prospectus
shall be deemed to refer to and include the filing of any document under
the Exchange Act after the date of this Agreement, the date of any
Preliminary Prospectus or the date of the Prospectus, as the case may be,
which is incorporated therein by reference;
(b) At the effective date of the Registration Statement, at any
date when any amendment to the Registration Statement becomes effective
(including the date of the filing of any document incorporated by
reference in the Registration Statement),
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at the date the Prospectus is first filed pursuant to Rule 424 under the
Act and at the date any supplement to the Prospectus is filed with the
Commission, (i) the Registration Statement, as amended as of any such
time, and the Prospectus, as amended or supplemented as of any such time,
and the Indenture complied and will comply in all material respects with
the applicable requirements of the Act, the Trust Indenture Act of 1939
(the "Trust Indenture Act") and the Exchange Act and the respective rules
and regulations thereunder and (ii) neither the Registration Statement,
as amended as of any such time, nor the Prospectus, as amended or
supplemented as of any such time, contained or will contain any untrue
statement of a material fact or omitted or will omit to state any
material fact required to be stated therein or necessary in order to make
the statements therein not misleading; provided, however, that the
Company makes no representations or warranties as to (i) that part of the
Registration Statement, if any, that shall constitute the Statement of
Eligibility (Form T-1) under the Trust Indenture Act of the Trustee or
(ii) the information contained in or omitted from the Registration
Statement or the Prospectus or any amendment thereof or supplement
thereto in reliance upon and in conformity with information furnished in
writing to the Company by any Agent specifically for use in connection
with the preparation of the Registration Statement and the Prospectus or
any amendment thereof or supplement thereto;
(c) The Company has furnished to the Agents a copy of the
Registration Statement as originally filed and of each amendment thereto,
each document incorporated therein by reference, each consent and exhibit
filed therewith and each supplement to the Prospectus heretofore filed
with the Commission; and
(d) As of the time any Securities are issued and sold hereunder,
the Indenture will constitute a legal, valid and binding instrument
enforceable against the Company in accordance with its terms and such
Securities will have been duly authorized, executed, authenticated and,
when paid for by the purchasers thereof, will constitute legal, valid and
binding obligations of the Company entitled to the benefits of the
Indenture.
2. (a) On the basis of the representations and warranties herein
contained, and subject to the terms and conditions herein set forth, each of the
Agents hereby severally and not jointly agrees, as agent of the Company, to use
its reasonable efforts to solicit and receive offers to purchase the Securities
from the Company upon the terms and conditions set forth in the Prospectus as
amended or supplemented from time to time. So long as this Agreement shall
remain in effect with respect to any Agent, the Company shall not, without the
consent of such Agent, solicit or accept offers to purchase, or sell, any debt
securities with a maturity at the time of original issuance of 9 months to 30
years except pursuant to this Agreement, any Terms Agreement, or except pursuant
to a private placement not constituting a public offering under the Act or
except in connection with a firm commitment underwriting pursuant to an
underwriting agreement that does not provide for a continuous offering of
medium-term debt securities. However, the Company reserves the right to sell,
and may solicit and accept offers to purchase, Securities directly on its own
behalf in transactions with persons other than broker-dealers, and, in the case
of any such sale not resulting from a solicitation made by any
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Agent, no commission will be payable with respect to such sale. These provisions
shall not limit Section 4(f) hereof or any similar provision included in any
Terms Agreement.
Procedural details relating to the issue and delivery of Securities, the
solicitation of offers to purchase Securities and the payment in each case
therefor shall be as set forth in the Administrative Procedure attached hereto
as Annex II as it may be amended from time to time by written agreement between
the Agents and the Company (the "Administrative Procedure"). The provisions of
the Administrative Procedure shall apply to all transactions contemplated
hereunder other than those made pursuant to a Terms Agreement. Each Agent and
the Company agree to perform the respective duties and obligations specifically
provided to be performed by each of them in the Administrative Procedure. The
Company will furnish to the Trustee a copy of the Administrative Procedure as
from time to time in effect.
The Company reserves the right, in its sole discretion, to instruct the
Agents to suspend at any time, for any period of time or permanently, the
solicitation of offers to purchase the Securities. As soon as practicable, but
in any event not later than one business day (in New York City) after receipt of
notice from the Company, the Agents will suspend solicitation of offers to
purchase Securities from the Company until such time as the Company has advised
the Agents that such solicitation may be resumed. During such period, the
Company shall not be required to comply with the provisions of Sections 4(h),
4(i), 4(j) and 4(k). Upon advising the Agents that such solicitation may be
resumed, however, the Company shall simultaneously provide the documents
required to be delivered by Sections 4(h), 4(i), 4(j) and 4(k), and the Agents
shall have no obligation to solicit offers to purchase the Securities until such
documents have been received by the Agents. In addition, any failure by the
Company to comply with its obligations hereunder, including without limitation
its obligations to deliver the documents required by Sections 4(h), 4(i), 4(j)
and 4(k), shall automatically terminate the Agents' obligations hereunder,
including without limitation their obligations to solicit offers to purchase the
Securities hereunder as agent or to purchase Securities hereunder as principal.
The Company agrees to pay each Agent a commission, at the time of
settlement of any sale of a Security by the Company as a result of a
solicitation made by such Agent, in an amount equal to the following applicable
percentage of the principal amount of such Security sold:
Commission (percentage
Range of Maturities of aggregate principal
amount of Securities sold)
From 9 months to less than 1 year .125%
From 1 year to less than 18 months .150%
From 18 months to less than 2 years .200%
From 2 years to less than 3 years .250%
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From 3 years to less than 4 years .350%
From 4 years to less than 5 years .450%
From 5 years to less than 6 years .500%
From 6 years to less than 7 years .550%
From 7 years to less than 10 years .600%
From 10 years to less than 15 years .625%
From 15 years to less than 20 years .675%
From 20 years to 30 years .750%
(b) Each sale of Securities to any Agent as principal shall be made in
accordance with the terms of this Agreement and (unless the Company and such
Agent shall otherwise agree) a Terms Agreement which will provide for the sale
of such Securities to, and the purchase thereof by, such Agent; a Terms
Agreement may also specify certain provisions relating to the reoffering of such
Securities by such Agent; the commitment of any Agent to purchase Securities as
principal, whether pursuant to any Terms Agreement or otherwise, shall be deemed
to have been made on the basis of the representations and warranties of the
Company herein contained and shall be subject to the terms and conditions herein
set forth; each Terms Agreement shall specify the principal amount of Securities
to be purchased by any Agent pursuant thereto, the price to be paid to the
Company for such Securities, any provisions relating to rights of, and default
by, underwriters acting together with such Agent in the reoffering of the
Securities and the time and date and place of delivery of and payment for such
Securities; and such Terms Agreement shall also specify any requirements for
opinions of counsel, accountants' letters and officers' certificates pursuant to
Section 4 hereof. Each Agent proposes to offer Securities purchased by it as
principal for sale at prevailing market prices or prices related thereto at the
time of sale, which may be equal to, greater than or less than the price at
which such Securities are purchased by such Agent from the Company.
For each sale of Securities to an Agent as principal that is not made
pursuant to a Terms Agreement, the procedural details relating to the issue and
delivery of such Securities and payment therefor shall be as set forth in the
Administrative Procedure. For each such sale of Securities to an Agent as
principal that is not made pursuant to a Terms Agreement, the Company agrees to
pay such Agent a commission (or grant an equivalent discount) as provided in
Section 2(a) hereof and in accordance with the schedule set forth therein.
Each time and date of delivery of and payment for Securities to be
purchased by an Agent as principal, whether set forth in a Terms Agreement or in
accordance with the Administrative Procedure, is referred to herein as a "Time
of Delivery".
(c) Each Agent agrees, with respect to any Security denominated in a
currency other than U.S. dollars, as agent, directly or indirectly, not to
solicit offers to purchase, and
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as principal under any Terms Agreement or otherwise, directly or indirectly, not
to offer, sell or deliver, such Security in, or to residents of, the country
issuing such currency, except as permitted by applicable law.
3. The documents required to be delivered pursuant to Section 6 hereof on
the Commencement Date (as defined below) shall be delivered to the Agents at the
offices of Xxxxxxxx & Xxxxxxxx, 000 X. Xxxxxx Xxxxxx, Xxx Xxxxxxx, Xxxxxxxxxx,
at 11:00 a.m., New York City time, on the date of this Agreement, which date and
time of such delivery may be postponed by agreement between the Agents and the
Company but in no event shall be later than the day prior to the date on which
solicitation of offers to purchase Securities is commenced or on which any Terms
Agreement is executed (such time and date being referred to herein as the
"Commencement Date").
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4. The Company covenants and agrees with each Agent:
(a) (i) To make no amendment or supplement to the Registration
Statement or the Prospectus (A) prior to the Commencement Date which
shall be disapproved by any Agent promptly after reasonable notice
thereof or (B) after the date of any Terms Agreement or other agreement
by an Agent to purchase Securities as principal and prior to the related
Time of Delivery which shall be disapproved by any Agent party to such
Terms Agreement or so purchasing as principal promptly after reasonable
notice thereof; (ii) to prepare, with respect to any Securities to be
sold through or to such Agent pursuant to this Agreement, a Pricing
Supplement with respect to such Securities in a form previously approved
by such Agent and to file such Pricing Supplement pursuant to Rule
424(b)(2) under the Act not later than the close of business of the
Commission on the second business day after the date on which such
Pricing Supplement is first used; (iii) to make no amendment or
supplement to the Registration Statement or Prospectus, other than any
Pricing Supplement, at any time prior to having afforded each Agent a
reasonable opportunity to review and comment thereon; (iv) to file
promptly all reports and any definitive proxy or information statements
required to be filed by the Company with the Commission pursuant to
Section 13(a), 13(c), 14 or 15(d) of the Exchange Act for so long as the
delivery of a prospectus is required in connection with the offering or
sale of the Securities, and during such same period to advise such Agent,
promptly after the Company receives notice thereof, of the time when any
amendment to the Registration Statement has been filed or has become
effective or any supplement to the Prospectus or any amended Prospectus
(other than any Pricing Supplement that relates to Securities not
purchased through or by such Agent) has been filed with the Commission,
of the issuance by the Commission of any stop order or of any order
preventing or suspending the use of any prospectus relating to the
Securities, of the suspension of the qualification of the Securities for
offering or sale in any jurisdiction, of the initiation or threatening of
any proceeding for any such purpose, or of any request by the Commission
for the amendment or supplement of the Registration Statement or
Prospectus or for additional information; and (v) in the event of the
issuance of any such stop order or of any such order preventing or
suspending the use of any such prospectus or suspending any such
qualification, to use promptly its best efforts to obtain its withdrawal;
(b) Promptly from time to time to take such action as such Agent
may reasonably request to qualify the Securities for offering and sale
under the securities laws of such domestic jurisdictions as such Agent
may request and to comply with such laws so as to permit the continuance
of sales and dealings therein for as long as may be necessary to complete
the distribution or sale of the Securities; provided, however, that in
connection therewith the Company shall not be required to qualify as a
foreign corporation or to file a general consent to service of process in
any jurisdiction;
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(c) To furnish such Agent with copies of the Registration
Statement and each amendment thereto, with copies of the Prospectus as
each time amended or supplemented, other than any Pricing Supplement
(except as provided in the Administrative Procedure), in the form in
which it is filed with the Commission pursuant to Rule 424 under the Act,
and with copies of the documents incorporated by reference therein, all
in such quantities as such Agent may reasonably request from time to
time; and, if the delivery of a prospectus is required at any time in
connection with the offering or sale of the Securities (including
Securities purchased from the Company by such Agent as principal) and if
at such time any event shall have occurred as a result of which the
Prospectus as then amended or supplemented would include an untrue
statement of a material fact or omit to state any material fact necessary
in order to make the statements therein, in the light of the
circumstances under which they were made when such Prospectus is
delivered, not misleading, or, if for any other reason it shall be
necessary during such same period to amend or supplement the Prospectus
or to file under the Exchange Act any document incorporated by reference
in the Prospectus in order to comply with the Act, the Exchange Act or
the Trust Indenture Act, to notify such Agent and request such Agent, in
its capacity as agent of the Company, to suspend solicitation of offers
to purchase Securities from the Company (and, if so notified, such Agent
shall cease such solicitations as soon as practicable, but in any event
not later than one business day later); and if the Company shall decide
to amend or supplement the Registration Statement or the Prospectus as
then amended or supplemented, to so advise such Agent promptly by
telephone (with confirmation in writing) and to prepare and cause to be
filed promptly with the Commission an amendment or supplement to the
Registration Statement or the Prospectus as then amended or supplemented
that will correct such statement or omission or effect such compliance;
provided, however, that if during such same period such Agent continues
to own Securities purchased from the Company by such Agent as principal
or such Agent is otherwise required to deliver a prospectus in respect of
transactions in the Securities, the Company shall promptly prepare and
file with the Commission such an amendment or supplement;
(d) To make generally available to its securityholders as soon as
practicable, but in any event not later than eighteen months after the
effective date of the Registration Statement (as defined in Rule 158(c)
under the Act), an earnings statement of the Company and its subsidiaries
(which need not be audited) complying with Section 11(a) of the Act and
the rules and regulations of the Commission thereunder (including, at the
option of the Company, Rule 158);
(e) So long as any Securities are outstanding, to furnish to such
Agent copies of all reports or other communications (financial or other)
furnished to stockholders, and deliver to such Agent (i) as soon as they
are available, copies of any reports and financial statements furnished
to or filed with the Commission or any national securities exchange on
which any class of securities of the Company is listed; and (ii) such
additional information concerning the business and financial condition of
the Company as such Agent may from time to time reasonably request (such
financial
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statements to be on a consolidated basis to the extent the accounts of the
Company and its subsidiaries are consolidated in reports furnished to its
stockholders generally or to the Commission);
(f) That, from the date of any Terms Agreement with such Agent or
other agreement by such Agent to purchase Securities as principal and
continuing to and including the later of (i) the termination of the
trading restrictions for the Securities purchased thereunder, as notified
to the Company by such Agent and (ii) the related Time of Delivery, not
to offer, sell, contract to sell or otherwise dispose of any debt
securities of the Company which both mature more than 9 months after such
Time of Delivery and are substantially similar to the Securities, without
the prior written consent of such Agent;
(g) That each acceptance by the Company of an offer to purchase
Securities hereunder (including any purchase by such Agent as principal
not pursuant to a Terms Agreement), and each execution and delivery by
the Company of a Terms Agreement with such Agent, shall be deemed to be
an affirmation to such Agent that the representations and warranties of
the Company contained in or made pursuant to this Agreement are true and
correct as of the date of such acceptance or of such Terms Agreement, as
the case may be, as though made at and as of such date, and an
undertaking that such representations and warranties will be true and
correct as of the settlement date for the Securities relating to such
acceptance or as of the Time of Delivery relating to such sale, as the
case may be, as though made at and as of such date (except that such
representations and warranties shall be deemed to relate to the
Registration Statement and the Prospectus as amended and supplemented
relating to such Securities);
(h) That reasonably in advance of each time the Registration
Statement or the Prospectus shall be amended or supplemented (other than
by a Pricing Supplement), each time a document filed under the Act or the
Exchange Act is incorporated by reference into the Prospectus, and each
time the Company sells Securities to such Agent as principal pursuant to
a Terms Agreement and such Terms Agreement specifies the delivery of an
opinion or opinions by Xxxxxxxx & Xxxxxxxx, counsel to the Agents, as a
condition to the purchase of Securities pursuant to such Terms Agreement,
the Company shall furnish to such counsel such papers and information as
they may reasonably request to enable them to furnish to such Agent the
opinion or opinions referred to in Section 6(b) hereof;
(i) That each time the Registration Statement or the Prospectus
shall be amended or supplemented (other than (i) by a Pricing Supplement,
(ii) by a supplement to the Prospectus relating to any offering of
Securities by the Company directly to investors or to one or more
underwriters other than such Agent or (iii) by a supplement to the
Prospectus relating to an offering of securities other than the
Securities), each time a document filed under the Act or the Exchange Act
is incorporated by reference into the Prospectus (other than, unless
requested by such Agent, in connection with
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the filing of a document under Section 14 of the Exchange Act) and each
time the Company sells Securities to such Agent as principal pursuant to
a Terms Agreement and such Terms Agreement specifies the delivery of an
opinion under this Section 4(i) as a condition to the purchase of
Securities pursuant to such Terms Agreement, the Company shall furnish or
cause to be furnished forthwith to such Agent a written opinion of
Miller, Nash, Wiener, Hager & Xxxxxxx LLP, counsel for the Company, or
other counsel for the Company satisfactory to such Agent, dated the date
of such amendment, supplement, incorporation or Time of Delivery relating
to such sale, as the case may be, in form satisfactory to such Agent, to
the effect that such Agent may rely on the opinion of such counsel
referred to in Section 6(c) hereof which was last furnished to such Agent
to the same extent as though it were dated the date of such letter
authorizing reliance (except that the statements in such last opinion
shall be deemed to relate to the Registration Statement and the
Prospectus as amended and supplemented to such date) or, in lieu of such
opinion, an opinion of the same tenor as the opinion of such counsel
referred to in Section 6(c) hereof but modified to relate to the
Registration Statement and the Prospectus as amended and supplemented to
such date;
(j) That each time the Registration Statement or the Prospectus
shall be amended or supplemented and each time that a document filed
under the Act or the Exchange Act is incorporated by reference into the
Prospectus, in either case to set forth financial information included in
or derived from the Company's consolidated financial statements or
accounting records, and each time the Company sells Securities to such
Agent as principal pursuant to a Terms Agreement and such Terms Agreement
specifies the delivery of a letter under this Section 4(j) as a condition
to the purchase of Securities pursuant to such Terms Agreement, the
Company shall cause the independent certified public accountants who have
certified the financial statements of the Company and its subsidiaries
included or incorporated by reference in the Registration Statement
forthwith to furnish to such Agent a letter, dated the date of such
amendment, supplement, incorporation or Time of Delivery relating to such
sale, as the case may be, in form satisfactory to such Agent, of the same
tenor as the letter referred to in Section 6(d) hereof but modified to
relate to the Registration Statement and the Prospectus as amended or
supplemented to the date of such letter, with such changes as may be
necessary to reflect changes in the financial statements and other
information derived from the accounting records of the Company, to the
extent such financial statements and other information are available as
of a date not more than five business days prior to the date of such
letter; provided, however, that, with respect to any financial
information or other matter, such letter may reconfirm as true and
correct at such date as though made at and as of such date, rather than
repeat, statements with respect to such financial information or other
matter made in the letter referred to in Section 6(d) hereof which was
last furnished to such Agent;
(k) That each time the Registration Statement or the Prospectus
shall be amended or supplemented (other than (i) by a Pricing Supplement,
(ii) by a supplement to the Prospectus relating to any offering of
Securities by the Company directly to
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investors or to one or more underwriters other than such Agent or (iii)
by a supplement to the Prospectus relating to an offering of securities
other than the Securities), each time a document filed under the Act or
the Exchange Act is incorporated by reference into the Prospectus (other
than, unless requested by such Agent, in connection with the filing of a
document under Section 14 of the Exchange Act) and each time the Company
sells Securities to such Agent as principal and the applicable Terms
Agreement specifies the delivery of a certificate under this Section 4(k)
as a condition to the purchase of Securities pursuant to such Terms
Agreement, the Company shall furnish or cause to be furnished forthwith
to such Agent a certificate, dated the date of such supplement,
amendment, incorporation or Time of Delivery relating to such sale, as
the case may be, in such form and executed by such officers of the
Company as shall be satisfactory to such Agent, to the effect that the
statements contained in the certificates referred to in Section 6(i)
hereof which was last furnished to such Agent are true and correct at
such date as though made at and as of such date (except that such
statements shall be deemed to relate to the Registration Statement and
the Prospectus as amended and supplemented to such date) or, in lieu of
such certificate, certificates of the same tenor as the certificates
referred to in said Section 6(i) but modified to relate to the
Registration Statement and the Prospectus as amended and supplemented to
such date; and
(l) To offer to any person who has agreed to purchase Securities
from the Company as the result of an offer to purchase solicited by such
Agent the right to refuse to purchase and pay for such Securities if, on
the related settlement date fixed pursuant to the Administrative
Procedure, any condition set forth in Section 6(a), 6(e), 6(f) or 6(g)
hereof shall not have been satisfied (it being understood that the
judgment of such person with respect to the impracticability or
inadvisability of such purchase of Securities shall be substituted, for
purposes of this Section 4(l), for the respective judgments of an Agent
with respect to certain matters referred to in such Sections 6(e) and
6(g), and that such Agent shall have no duty or obligation whatsoever to
exercise the judgment permitted under such Sections 6(e) and 6(g) on
behalf of any such person).
5. The Company covenants and agrees with each Agent that the Company will
pay or cause to be paid the following: (i) the fees, disbursements and expenses
of the Company's counsel and accountants in connection with the registration of
the Securities under the Act and all other expenses in connection with the
preparation, printing and filing of the Registration Statement, any Preliminary
Prospectus, the Prospectus and any Pricing Supplements and all other amendments
and supplements thereto and the mailing and delivering of copies thereof to such
Agent; (ii) the reasonable fees, disbursements and expenses of counsel for the
Agents in connection with the establishment of the program contemplated hereby,
any opinions to be rendered by such counsel hereunder and under any Terms
Agreement and the transactions contemplated hereunder and under any Terms
Agreement; (iii) the cost of printing, producing or reproducing this Agreement,
any Terms Agreement, any Indenture, any Blue Sky and Legal Investment Memoranda,
closing documents (including any compilations thereof) and any other documents
in connection with the offering, purchase, sale and delivery of the Securities;
(iv)
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all expenses in connection with the qualification of the Securities for offering
and sale under state securities laws as provided in Section 4(b) hereof,
including the fees and disbursements of counsel for the Agents in connection
with such qualification and in connection with the Blue Sky and legal investment
surveys; (v) any fees charged by securities rating services for rating the
Securities; (vi) any filing fees incident to, and the fees and disbursements of
counsel for the Agents in connection with, any required review by the National
Association of Securities Dealers, Inc. of the terms of the sale of the
Securities; (vii) the cost of preparing the Securities; (viii) the fees and
expenses of any Trustee and any agent of any Trustee and any transfer or paying
agent of the Company and the fees and disbursements of counsel for any Trustee
or such agent in connection with any Indenture and the Securities; (ix) any
advertising expenses connected with the solicitation of offers to purchase and
the sale of Securities so long as such advertising expenses have been approved
by the Company; and (x) all other costs and expenses incident to the performance
of its obligations hereunder which are not otherwise specifically provided for
in this Section. Except as provided in Sections 7 and 8 hereof, each Agent shall
pay all other expenses it incurs.
6. The obligation of any Agent, as agent of the Company, at any time
("Solicitation Time") to solicit offers to purchase the Securities and the
obligation of any Agent to purchase Securities as principal, pursuant to any
Terms Agreement or otherwise, shall in each case be subject, in such Agent's
discretion, to the condition that all representations and warranties and other
statements of the Company herein (and, in the case of an obligation of an Agent
under a Terms Agreement, in or incorporated by reference in such Terms
Agreement) are true and correct at and as of the Commencement Date and any
applicable date referred to in Section 4(k) hereof that is prior to such
Solicitation Time or Time of Delivery, as the case may be, and at and as of such
Solicitation Time or Time of Delivery, as the case may be, the condition that
prior to such Solicitation Time or Time of Delivery, as the case may be, the
Company shall have performed all of its obligations hereunder theretofore to be
performed, and the following additional conditions:
(a) (i) With respect to any Securities sold at or prior to such
Solicitation Time or Time of Delivery, as the case may be, the Prospectus
as amended or supplemented (including the Pricing Supplement) with
respect to such Securities shall have been filed with the Commission
pursuant to Rule 424(b) under the Act within the applicable time period
prescribed for such filing by the rules and regulations under the Act and
in accordance with Section 4(a) hereof; (ii) no stop order suspending the
effectiveness of the Registration Statement shall have been issued and no
proceeding for that purpose shall have been initiated or threatened by
the Commission; and (iii) all requests for additional information on the
part of the Commission shall have been complied with to the reasonable
satisfaction of such Agent;
(b) Xxxxxxxx & Xxxxxxxx, counsel to the Agents, shall have
furnished to such Agent (i) such opinion or opinions, dated the
Commencement Date, with respect to the matters covered in paragraphs (i),
(iv) and (v) of subsection (c) below, as well as such other related
matters as such Agent may reasonably request, and (ii) if and to the
extent requested by such Agent, with respect to each applicable date
referred to in
- 12 -
Section 4(h) hereof that is on or prior to such Solicitation Time or Time
of Delivery, as the case may be, an opinion or opinions, dated such
applicable date, to the effect that such Agent may rely on the opinion or
opinions which were last furnished to such Agent pursuant to this Section
6(b) to the same extent as though it or they were dated the date of such
letter authorizing reliance (except that the statements in such last
opinion or opinions shall be deemed to relate to the Registration
Statement and the Prospectus as amended and supplemented to such date)
or, in any case, in lieu of such an opinion or opinions, an opinion or
opinions of the same tenor as the opinion or opinions referred to in
clause (i) but modified to relate to the Registration Statement and the
Prospectus as amended and supplemented to such date; and in each case
such counsel shall have received such papers and information as they may
reasonably request to enable them to pass upon such matters;
(c) Miller, Nash, Wiener, Hager & Xxxxxxx LLP, counsel for the
Company, or other counsel for the Company satisfactory to such Agent,
shall have furnished to such Agent their written opinions, dated the
Commencement Date and each applicable date referred to in Section 4(i)
hereof that is on or prior to such Solicitation Time or Time of Delivery,
as the case may be, in form and substance satisfactory to such Agent, to
the effect that:
(i) the Company has been duly incorporated and is validly
existing as a corporation under the laws of the state of Oregon,
with full corporate power and authority to own its properties and
conduct its business as described in the Prospectus;
(ii) the establishment of the series constituting the
Securities has been duly authorized and, when the terms of
particular Securities have been duly established in conformity
with the Indenture and such Securities have been executed and
authenticated in accordance with the provisions of the Indenture
and delivered to and paid for by the purchasers thereof in
accordance with this Agreement, such Securities will constitute
legal, valid and binding obligations of the Company entitled to
the benefits provided by the Indenture;
(iii) the Registration Statement and any amendments thereto
have become effective under the Act; to the knowledge of such
counsel, no stop order suspending the effectiveness of the
Registration Statement or any part thereof has been issued and no
proceedings for that purpose have been instituted or threatened or
are contemplated by the Commission under the Act; and the
Registration Statement and the Prospectus and any amendment or
supplement thereto (as of their respective effective or issue
dates) complied as to form in all material respects with the
applicable requirements of the Act, the Exchange Act, the Trust
Indenture Act, and the respective rules and regulations
thereunder; the descriptions in the Registration Statement and the
Prospectus of the Securities, of the Indenture, and of statutes,
legal and governmental proceedings and contracts fairly present
the information required to be shown; and to the knowledge of such
counsel, there are no legal or governmental
- 13 -
proceedings required to be described in the Prospectus that are
not described as required, nor are there any contracts or
documents of a character required to be described in the
Registration Statement or the Prospectus or to be filed as
exhibits to the Registration Statement that are not described or
filed as required; it being understood that such counsel need
express no opinion as to the financial statements, financial
schedules or other financial and statistical data contained in the
Registration Statement, the Prospectus or any amendment or
supplement thereto;
(iv) the Indenture has been duly authorized, executed and
delivered by the Company, has been duly qualified under the Trust
Indenture Act and constitutes a legal, valid and binding
instrument enforceable against the Company in accordance with its
terms (subject to applicable bankruptcy, insolvency, fraudulent
transfer, reorganization, moratorium or other laws affecting
creditors' rights generally and to general equitable principles);
(v) this Agreement and the Terms Agreement (if applicable)
have been duly authorized, executed and delivered by the Company;
and
(vi) no consent, approval, authorization or order of any
United States or Oregon court or governmental agency or body is
required for the consummation of the transactions contemplated
herein except such as have been obtained under the Act and such as
may be required under the blue sky laws of any jurisdiction in
connection with the sale of the Securities as contemplated by this
Agreement and such other approvals (specified in such opinion) as
have been obtained.
In addition, such counsel shall state that such counsel has
participated in conferences with officers and other representatives of
the Company, representatives of the independent public accountants for
the Company, representatives of the Agents, and counsel for the Agents,
as applicable, at which the contents of the Registration Statement and
Prospectus and related matters were discussed and, although such counsel
is not passing upon and does not assume any responsibility for the
accuracy, completeness or fairness of the statements contained in the
Registration Statement and Prospectus (except for those made under the
captions "Description of the Debt Securities" in the Registration
Statement and "Description of the Notes" and "Supplemental Plan of
Distribution" in any prospectus supplement, insofar as they relate to the
provisions of documents therein described) and on the basis of the
foregoing (relying as to materiality to a large extent upon the opinions
of officers and other representatives of the Company), no facts have come
to the attention of such counsel in the course of their representation of
the Company that have led them to believe that either the Registration
Statement or any amendment thereto at the time such Registration
Statement or amendment became effective and at the date of this Agreement
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
- 14 -
not misleading or that the Prospectus, as of the date of this Agreement
and as of the date of the opinion, contained an untrue statement of a
material fact or omitted to state a material fact necessary in order to
make the statements therein, in light of the circumstances under which
they were made, not misleading (it being understood that such counsel
need express no opinion or belief with respect to the financial
statements, financial schedules and other financial and statistical data
included in the Registration Statement, Prospectus or any amendment or
supplement thereto).
In rendering such opinion, such counsel may rely (i) as to matters
involving the application of laws of any jurisdiction other than the
state of Oregon or the United States, to the extent deemed proper and
specified in such opinion, upon the opinion of other counsel of good
standing believed to be reliable and who are satisfactory to such Agent,
and (ii) as to matters of fact, to the extent deemed proper, on
certificates of responsible officers of the Company and public officials,
and may assume the due authorization, execution and delivery of the
Indenture by the Trustee.
(d) Not later than 10:00 a.m., New York City time, on the
Commencement Date and on each applicable date referred to in Section 4(j)
hereof that is on or prior to such Solicitation Time or Time of Delivery,
as the case may be, the independent certified public accountants who have
certified the financial statements of the Company and its subsidiaries
included or incorporated by reference in the Registration Statement shall
have furnished to such Agent a letter, dated the Commencement Date or
such applicable date, as the case may be, in form and substance
satisfactory to such Agent, to the effect set forth in Annex III hereto;
(e) Subsequent to the respective dates as of which information is
given in the Registration Statement and the Prospectus as amended or
supplemented there shall not have occurred any change, or any development
involving a prospective change, in or affecting particularly the business
or properties of the Company and its subsidiaries taken as a whole which
is, in the judgment of such Agent, after discussions with the Company, so
material and adverse as to make it impractical or inadvisable to proceed
with the soliciting of offers to purchase or delivery of the Securities
as contemplated by the Registration Statement and the Prospectus (or, in
the case of a Terms Agreement, to proceed with the offering or the
delivery of the Securities to be purchased as contemplated by the Terms
Agreement);
(f) Subsequent to the execution of this Agreement there shall not
have occurred any downgrading in the rating of the Company's debt
securities by any "nationally recognized statistical rating
organization", as defined for the purposes of Rule 436(g) under the Act,
or any notice given by any such organization that it has under
surveillance or review, with possible negative implications, its rating
of any of the Company's debt securities;
(g) Subsequent to the execution of this Agreement, there shall not
have occurred any outbreak or material escalation of hostilities
involving the United States or the declaration by the United States of a
national emergency or war or the
- 15 -
occurrence of any other calamity or crisis if the effect on the financial
markets is such as to make it, in the judgment of such Agent,
impracticable or inadvisable to proceed with the solicitation of offers
to purchase or delivery of Securities as contemplated by the Registration
Statement and the Prospectus (or, in the case of a Terms Agreement, to
proceed with the offering and delivery of the Securities to be purchased
as contemplated by the Terms Agreement);
(h) Subsequent to the execution of this Agreement (i) trading in
securities generally, or in the securities of the Company, on the New
York Stock Exchange shall not have been suspended or limited nor shall
minimum prices have been established on such exchange, (ii) trading in
any securities of the Company in the over-the-counter market shall not
have been suspended, (iii) a banking moratorium shall not have been
declared by federal, New York State, or Oregon State authorities; and
(i) The Company shall have furnished or caused to be furnished to
such Agent certificates of officers of the Company dated the Commencement
Date and each applicable date referred to in Section 4(k) hereof that is
on or prior to such Solicitation Time or Time of Delivery, as the case
may be, in such form and executed by such officers of the Company as
shall be satisfactory to such Agent, as to the accuracy of the
representations and warranties of the Company herein at and as of the
Commencement Date or such applicable date, as the case may be, as to the
performance by the Company of all of its obligations hereunder to be
performed at or prior to the Commencement Date or such applicable date,
as the case may be, as to the matters set forth in subsections (a) and
(e) of this Section 6, and as to such other matters as such Agent may
reasonably request.
7. (a) The Company agrees to indemnify and hold harmless each Agent, the
directors, officers, employees and agents of each Agent, and each person who
controls each Agent within the meaning of the Act, if any, against any and all
losses, claims, damages or liabilities, joint or several, to which any such
Agent, director, officer, employee, agent, or controlling person may become
subject under the Act, the Exchange Act or other federal or state statutory law
or regulation, at common law or otherwise, insofar as such losses, claims,
damages or liabilities (or actions in respect thereof) arise out of or are based
upon any untrue statement or alleged untrue statement of a material fact
contained in the Registration Statement for the registration of the Securities
as originally filed or in any amendment thereof, or in the Prospectus or any
Preliminary Prospectus, or in any amendment thereof or supplement thereto, or
arise out of or are based upon the omission or alleged omission to state therein
a material fact required to be stated therein or necessary to make the
statements therein not misleading, and agrees to reimburse each such indemnified
party, as incurred, for any legal or other expenses reasonably incurred by them
in connection with investigating or defending any such loss, claim, damage,
liability or action; provided, however, that (i) the Company will not be liable
in any such case to the extent that any such loss, claim, damage or liability
arises out of or is based upon any such untrue statement or alleged untrue
statement or omission or alleged omission made therein in reliance upon and in
conformity with written information furnished to the Company by or on behalf of
any of you specifically for inclusion therein, and (ii) such indemnity with
respect to any Preliminary Prospectus or the
- 16 -
Prospectus shall not inure to the benefit of any Agent (or any director,
officer, employee, agent of or person controlling such Agent) from whom the
person asserting any such loss, claim, damage or liability purchased the
Securities that are the subject thereof if it shall be established that such
person did not receive a copy of the Prospectus (in the case of such indemnity
with respect to any Preliminary Prospectus) or the Prospectus as amended or
supplemented (in the case of such indemnity with respect to the Prospectus),
excluding documents incorporated therein by reference, at or prior to the
confirmation of the sale of such Securities to such person in any case where
such delivery is required by the Act and the untrue statement or omission or the
alleged untrue statement or omission in any Preliminary Prospectus was corrected
in the Prospectus or in the Prospectus was corrected in the Prospectus as
amended or supplemented. This indemnity agreement will be in addition to any
liability that the Company may otherwise have.
(b) Each Agent severally agrees to indemnify and hold harmless the
Company, each of its directors, each of its officers who sign the Registration
Statement, and each person, if any, who controls the Company within the meaning
of the Act, to the same extent as the foregoing indemnity from the Company to
you, but only with reference to written information relating to you furnished to
the Company by or on your behalf specifically for inclusion in the documents
referred to in the foregoing indemnity. This indemnity agreement will be in
addition to any liability that you may otherwise have.
(c) Promptly after receipt by an indemnified party under this Section 7
of notice of the commencement of any action, such indemnified party will, if a
claim in respect thereof is to be made against the indemnifying party under
Section 7, notify the indemnifying party in writing of the commencement thereof;
but the omission so to notify the indemnifying party will not relieve the
indemnifying party from any liability which it may have to any indemnified party
otherwise than under this Section 7. In case any such action is brought against
any indemnified party, and it notifies the indemnifying party of the
commencement thereof, the indemnifying party will be entitled to participate
therein, and to the extent that it may elect by written notice delivered to the
indemnified party promptly after receiving the aforesaid notice from such
indemnified party, jointly with any other indemnifying party, to assume the
defense thereof, with counsel reasonably satisfactory to such indemnified party;
provided, however, that if the defendants in any such action include both the
indemnified party and the indemnifying party, and the indemnified party shall
have reasonably concluded that there may be legal defenses available to it
and/or other indemnified parties that are different from or additional to those
available to the indemnifying party, the indemnified party or parties shall have
the right to select separate counsel to assert such legal defenses and to
otherwise participate in the defense of such action on behalf of such
indemnified party or parties. Upon receipt of notice from the indemnifying party
to such indemnified party of its election so to assume the defense of such
action and approval by the indemnified party of counsel, the indemnifying party
will not be liable to such indemnified party under this Section 7 for any legal
or other expenses subsequently incurred by such indemnified party in connection
with the defense thereof, unless (i) the indemnified party shall have employed
separate counsel in connection with the assertion of legal defenses in
accordance with the proviso to the next preceding sentence (it being understood,
however, that the indemnifying party shall not be
- 17 -
liable for the expenses of more than one separate counsel, approved by the
Agents in the case of paragraph (a) of this Section 7, representing the
indemnified parties under such paragraph (a) who are parties to such action),
(ii) 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 commencement of the action or (iii) the
indemnifying party has authorized the employment of counsel for the indemnified
party at the expense of the indemnifying party; and except that, if clause (i)
or (iii) is applicable, such liability shall be only in respect of the counsel
referred to in such clause (i) or (iii). An indemnifying party shall not be
liable for any claim or action settled without its consent.
(d) If the indemnification provided for in this Section 7 shall for any
reason (other than as specified herein) be unavailable to or insufficient to
hold harmless an indemnified party under Section 7(a) or 7(b) above in respect
of any loss, claim, damage or liability (or action in respect thereof) referred
to therein, then each indemnifying party shall contribute to the amount paid or
payable ("Losses") to such indemnified party as a result of such loss, claim,
damage, or liability (or action in respect thereof) in such proportion as is
appropriate to reflect the relative benefits received by the Company and each of
you from the offering of the Securities from which such Losses arise and the
relative fault of the parties with respect to the statements or omissions which
resulted in such Losses, as well as any other relevant equitable considerations.
The relative benefits received by the Company on the one hand and each Agent on
the other with respect to such offering shall be determined in light of the
relation of the total net proceeds received by the Company from the sale (before
deducting expenses) of the Securities from which such Losses arise to the total
commissions or discounts received by each Agent with respect to the sale of the
Securities from which such Losses arise. The Company and each Agent agree that
it would not be just and equitable if contributions pursuant to this Section
7(d) 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 into account the equitable considerations referred to herein. The amount
paid or payable by an indemnified party as a result of the loss, claim, damage,
or liability (or action in respect thereof) referred to above in this Section
7(d) shall be deemed to include any legal or other expenses reasonably incurred
by such indemnified party in connection with investigating or defending any such
action or claim. Notwithstanding the provisions of this Section 7(d), no Agent
shall be required to contribute any amount in excess of the amount by which the
total commission or discount it received on Securities sold by it exceeds the
amount of any damages which such Agent has otherwise paid or become liable to
pay by reason of such untrue or alleged untrue statement or omission or alleged
omission. No person guilty of fraudulent misrepresentation (within the meaning
of Section 11(f) of the Act) shall be entitled to contribution from any person
who was not guilty of such fraudulent misrepresentation. The obligations of the
Agents in this Section 7(d) to contribute are several and not joint. For
purposes of this Section 7, each person who controls any of you within the
meaning of the Act or the Exchange Act and each director, officer, employee and
agent of any of you shall have the same rights to contribution as you and each
person who controls the Company within the meaning of either the Act or the
Exchange Act, each officer of the Company who shall have signed the Registration
Statement and each director of the Company shall have the same
- 18 -
rights to contribution as the Company, subject in each case to the applicable
terms and conditions of this Section 7(d).
8. Each Agent, in soliciting offers to purchase Securities from the
Company and in performing the other obligations of such Agent hereunder (other
than in respect of any purchase by an Agent as principal, pursuant to a Terms
Agreement or otherwise), is acting solely as agent for the Company and not as
principal. Each Agent will make reasonable efforts to assist the Company in
obtaining performance by each purchaser whose offer to purchase Securities from
the Company was solicited by such Agent and has been accepted by the Company,
but such Agent shall not have any liability to the Company in the event such
purchase is not consummated for any reason. If the Company shall default on its
obligation to deliver Securities to a purchaser whose offer it has accepted, the
Company shall (i) hold each Agent harmless against any loss, claim or damage
arising from or as a result of such default by the Company and (ii)
notwithstanding such default, pay to the Agent that solicited such offer any
commission to which it would be entitled in connection with such sale.
9. The respective indemnities, agreements, representations, warranties
and other statements by any Agent and the Company set forth in or made pursuant
to this Agreement shall remain in full force and effect regardless of any
investigation (or any statement as to the results thereof) made by or on behalf
of any Agent or any controlling person of any Agent, or the Company, or any
officer or director or any controlling person of the Company, and shall survive
each delivery of and payment for any of the Securities.
10. The provisions of this Agreement relating to the solicitation of
offers to purchase Securities from the Company may be suspended or terminated at
any time by the Company as to any Agent or by any Agent as to such Agent upon
the giving of written notice of such suspension or termination to such Agent or
the Company, as the case may be. In the event of such suspension or termination
with respect to any Agent, (x) this Agreement shall remain in full force and
effect with respect to any Agent as to which such suspension or termination has
not occurred, (y) this Agreement shall remain in full force and effect with
respect to the rights and obligations of any party which have previously accrued
or which relate to Securities which are already issued, agreed to be issued or
the subject of a pending offer at the time of such suspension or termination and
(z) in any event, this Agreement shall remain in full force and effect insofar
as the fourth paragraph of Section 2(a), and Sections 4(d), 4(e), 5, 7, 8 and 9
hereof are concerned.
11. Except as otherwise specifically provided herein or in the
Administrative Procedure, all statements, requests, notices and advices
hereunder shall be in writing, or by telephone if promptly confirmed in writing,
and if to Xxxxxxx, Xxxxx & Co. shall be sufficient in all respects when
delivered or sent by facsimile transmission or registered mail to 00 Xxxxx
Xxxxxx, Xxx Xxxx, Xxx Xxxx 00000, Facsimile Transmission No. (000) 000-0000,
Attention: Credit Department, if to X. X. Xxxxxx Securities Inc. shall be
sufficient in all respects when delivered or sent
- 19 -
by facsimile transmission or registered mail to 00 Xxxx Xxxxxx, Xxx Xxxx, Xxx
Xxxx 00000, Facsimile Transmission No. (000) 000-0000, Attention: Medium-Term
Notes Desk, and if to Salomon Brothers Inc shall be sufficient in all respects
when delivered or sent by facsimile transmission or registered mail to 0 Xxxxx
Xxxxx Xxxxxx, 00xx Xxxxx, Xxx Xxxx, Xxx Xxxx 00000, Facsimile Transmission No.
(000) 000-0000, Attention: Legal, 32nd Floor, Salomon Brothers Inc (Xxxxxxxx
Xxxxxxxx), and if to the Company shall be sufficient in all respects when
delivered or sent by facsimile transmission or registered mail to 0000 X.X.
Xxxxx Xxxxxx, Xxxxx 0000, Xxxxxxxx, Xxxxxx 00000, Attention: Controller,
Facsimile Transmission No. (000) 000-0000.
12. This Agreement and any Terms Agreement shall be binding upon, and
inure solely to the benefit of, each Agent and the Company, and to the extent
provided in Sections 7, 8 and 9 hereof, the officers and directors of the
Company and any person who controls any Agent or the Company, and their
respective personal representatives, successors and assigns, and no other person
shall acquire or have any right under or by virtue of this Agreement or any
Terms Agreement. No purchaser of any of the Securities through or from any Agent
hereunder shall be deemed a successor or assign by reason merely of such
purchase.
13. Time shall be of the essence in this Agreement and any Terms
Agreement. As used herein, the term "business day" shall mean any day when the
Commission's office in Washington, D.C. is open for business.
14. THIS AGREEMENT AND ANY TERMS AGREEMENT SHALL BE GOVERNED BY, AND
CONSTRUED IN ACCORDANCE WITH, THE LAWS OF THE STATE OF NEW YORK.
15. This Agreement and any Terms Agreement may be executed by any one or
more of the parties hereto and thereto in any number of counterparts, each of
which shall be an original, but all of such respective counterparts shall
together constitute one and the same instrument.
- 20 -
If the foregoing is in accordance with your understanding, please sign
and return to us six counterparts hereof, whereupon this letter and the
acceptance by each of you thereof shall constitute a binding agreement between
the Company and each of you in accordance with its terms.
Very truly yours,
Willamette Industries, Inc.
By:
...........................................
Name:
Title:
Accepted in New York, New York, as of the date hereof:
.............................................
(Xxxxxxx, Sachs & Co.)
X.X. Xxxxxx Securities Inc.
By: .........................................
Name:
Title:
Salomon Brothers Inc
By: .........................................
Name:
Title:
- 21 -
ANNEX I
WILLAMETTE INDUSTRIES, INC.
[TITLE OF SECURITY]
TERMS AGREEMENT
---------------
..........................., 19..
[Xxxxxxx, Xxxxx & Co.,
00 Xxxxx Xxxxxx,
Xxx Xxxx, Xxx Xxxx 00000.]
[X.X. Xxxxxx Securities Inc.
00 Xxxx Xxxxxx
Xxx Xxxx, Xxx Xxxx 00000]
[Salomon Brothers Inc
7 World Trade Center, 00xx Xxxxx
Xxx Xxxx, Xxx Xxxx 00000]
Ladies and Gentlemen:
Willamette Industries, Inc. (the "Company") proposes, subject to the
terms and conditions stated herein and in the Distribution Agreement, dated May
13, 1998 (the "Distribution Agreement"), between the Company on the one hand and
Xxxxxxx, Xxxxx & Co., X.X. Xxxxxx Securities Inc. and Salomon Brothers Inc (the
"Agents") on the other, to issue and sell to [Xxxxxxx, Xxxxx & Co.] [X.X. Xxxxxx
Securities Inc.] [Salomon Brothers Inc] the securities specified in the Schedule
hereto (the "Purchased Securities"). Each of the provisions of the Distribution
Agreement not specifically related to the solicitation by the Agents, as agents
of the Company, of offers to purchase Securities is incorporated herein by
reference in its entirety, and shall be deemed to be part of this Terms
Agreement to the same extent as if such provisions had been set forth in full
herein. Nothing contained herein or in the Distribution Agreement shall make any
party hereto an agent of the Company or make such party subject to the
provisions therein relating to the solicitation of offers to purchase Securities
from the Company, solely by virtue of its execution of this Terms Agreement.
Each of the representations and warranties set forth therein shall be deemed to
have been made at and as of the date of this Terms Agreement, except that each
representation and warranty in Section 1 of the Distribution Agreement which
makes reference to the Prospectus shall be deemed to be a representation and
warranty as of the date of the Distribution Agreement in relation to the
Prospectus (as therein defined), and also a representation and warranty as of
I-1
the date of this Terms Agreement in relation to the Prospectus as amended and
supplemented to relate to the Purchased Securities.
An amendment to the Registration Statement, or a supplement to the
Prospectus, as the case may be, relating to the Purchased Securities, in the
form heretofore delivered to you is now proposed to be filed with the
Commission.
Subject to the terms and conditions set forth herein and in the
Distribution Agreement incorporated herein by reference, the Company agrees to
issue and sell to [Xxxxxxx, Xxxxx & Co.] [X.X. Xxxxxx Securities Inc.] [Salomon
Brothers Inc] and [Xxxxxxx, Xxxxx & Co.] [X.X. Xxxxxx Securities Inc.] [Salomon
Brothers Inc] agree[s] to purchase from the Company the Purchased Securities, at
the time and place, in the principal amount and at the purchase price set forth
in the Schedule hereto. If the foregoing is in accordance with your
understanding, please sign and return to us ...... counterparts hereof, and upon
acceptance hereof by you this letter and such acceptance hereof, including those
provisions of the Distribution Agreement incorporated herein by reference, shall
constitute a binding agreement between you and the Company.
Willamette Industries, Inc.
By:
Name:
Title:
Accepted:
[.........................................
(Xxxxxxx, Xxxxx & Co.)]
[X.X. Xxxxxx Securities Inc.
By: ......................................
Name:
Title:]
[Salomon Brothers Inc
By: ......................................
Name:
Title:]
I-2
SCHEDULE TO ANNEX I
Title of Purchased Securities:
[ %] Medium-Term Notes[, SERIES ....]
Aggregate Principal Amount:
[$.................... or units of other Specified Currency]
[PRICE TO PUBLIC:]
Purchase Price by [XXXXXXX, XXXXX & CO.] [X.X. XXXXXX SECURITIES INC.] [SALOMON
BROTHERS INC]:
% of the principal amount of the Purchased Securities[, PLUS ACCRUED
INTEREST FROM ............... TO ...............] [AND ACCRUED
AMORTIZATION, IF ANY, FROM ................. TO ................]
Method of and Specified Funds for Payment of Purchase Price:
By wire transfer to a bank account specified by the Company in
immediately available funds
Indenture:
Indenture, dated as of January 30, 1993, between the Company and The Chase
Manhattan Bank, as Trustee
Time of Delivery:
Closing Location for Delivery of Securities:
Maturity:
Interest Rate: [ %]
Interest Payment Dates: [MONTHS AND DATES]
Documents to be Delivered:
The following documents referred to in the Distribution Agreement shall be
delivered as a condition to the Closing:
[(1) THE OPINION OR OPINIONS OF COUNSEL TO THE AGENTS REFERRED TO IN SECTION
4(H).]
[(2) THE OPINION OF COUNSEL TO THE COMPANY REFERRED TO IN SECTION 4(I).]
[(3) THE ACCOUNTANTS' LETTER REFERRED TO IN SECTION 4(J).]
[(4) THE OFFICERS' CERTIFICATE REFERRED TO IN SECTION 4(K).]
I-3
Other Provisions (including Syndicate Provisions, if applicable):
I-4
ANNEX II
WILLAMETTE INDUSTRIES, INC.
ADMINISTRATIVE PROCEDURE
------------------------
This Administrative Procedure relates to the Securities defined in the
Distribution Agreement, dated May 13, 1998 (the "Distribution Agreement"),
between Willamette Industries, Inc. (the "Company") and Xxxxxxx, Xxxxx & Co., X.
X. Xxxxxx Securities Inc. and Salomon Brothers Inc (together, the "Agents"), to
which this Administrative Procedure is attached as Annex II. Defined terms used
herein and not defined herein shall have the meanings given such terms in the
Distribution Agreement, the Prospectus as amended or supplemented or the
Indenture.
The procedures to be followed with respect to the settlement of sales of
Securities directly by the Company to purchasers solicited by an Agent, as
agent, are set forth below. The terms and settlement details related to a
purchase of Securities by an Agent, as principal, from the Company will be set
forth in a Terms Agreement pursuant to the Distribution Agreement, unless the
Company and such Agent otherwise agree as provided in Section 2(b) of the
Distribution Agreement, in which case the procedures to be followed in respect
of the settlement of such sale will be as set forth below. An Agent, in relation
to a purchase of a Security by a purchaser solicited by such Agent, is referred
to herein as the "Selling Agent" and, in relation to a purchase of a Security by
such Agent as principal other than pursuant to a Terms Agreement, as the
"Purchasing Agent".
The Company will advise each Agent in writing of those persons with whom such
Agent is to communicate regarding offers to purchase Securities and the related
settlement details.
Each Security will be issued only in fully registered form and will be
represented by either a global security (a "Global Security") delivered to the
Trustee, as agent for The Depository Trust Company (the "Depositary") and
recorded in the book-entry system maintained by the Depositary (a "Book-Entry
Security") or a certificate issued in definitive form (a "Certificated
Security") delivered to a person designated by an Agent, as set forth in the
applicable Pricing Supplement. An owner of a Book-Entry Security will not be
entitled to receive a certificate representing such a Security, except as
provided in the Indenture.
Book-Entry Securities will be issued in accordance with the Administrative
Procedure set forth in Part I hereof, and Certificated Securities will be issued
in accordance with the Administrative Procedure set forth in Part II hereof.
PART I: ADMINISTRATIVE PROCEDURE FOR BOOK-ENTRY SECURITIES
-----------------------------------------------------------
II-1
In connection with the qualification of the Book-Entry Securities for
eligibility in the book-entry system maintained by the Depositary, the Trustee
will perform the custodial, document control and administrative functions
described below, in accordance with its respective obligations under a Letter of
Representation from the Company and the Trustee to the Depositary, dated the
date hereof, and a Medium-Term Note Certificate Agreement between the Trustee
and the Depositary, dated as of December 2, 1988, (the "Certificate Agreement"),
and its obligations as a participant in the Depositary, including the
Depositary's Same-Day Funds Settlement System ("SDFS").
Posting Rates by the Company:
The Company and the Agents will discuss from time to time the rates of
interest per annum to be borne by and the maturity of Book-Entry Securities that
may be sold as a result of the solicitation of offers by an Agent. The Company
may establish a fixed set of interest rates and maturities for an offering
period ("posting"). If the Company decides to change already posted rates, it
will promptly advise the Agents to suspend solicitation of offers until the new
posted rates have been established with the Agents.
Acceptance of Offers by the Company:
Each Agent will promptly advise the Company by telephone or other
appropriate means of all reasonable offers to purchase Book-Entry Securities,
other than those rejected by such Agent. Each Agent may, in its discretion
reasonably exercised, reject any offer received by it in whole or in part. Each
Agent also may make offers to the Company to purchase Book-Entry Securities as a
Purchasing Agent. The Company will have the sole right to accept offers to
purchase Book-Entry Securities and may reject any such offer in whole or in
part.
The Company will promptly notify the Agent or Purchasing Agent, as the
case may be, of its acceptance or rejection of an offer to purchase Book-Entry
Securities. If the Company accepts an offer to purchase Book-Entry Securities,
it will confirm such acceptance in writing to the Selling Agent or Purchasing
Agent, as the case may be, and the Trustee.
Communication of Sale Information to the Company by Agent and Settlement
Procedures:
A. After the acceptance of an offer by the Company, the Selling Agent or
Purchasing Agent, as the case may be, will communicate promptly, but in no event
later than the time set forth under "Settlement Procedure Timetable" below, the
following details of the terms of such offer (the "Sale Information") to the
Company by telephone (confirmed in writing) or by facsimile transmission or
other acceptable written means:
(1) Principal Amount of Book-Entry Securities to be purchased;
II-2
(2) If a Fixed Rate Book-Entry Security, the interest rate and initial
interest payment date;
(3) Trade Date;
(4) Settlement Date;
(5) Maturity Date;
(6) Specified Currency and, if the Specified Currency is other than
U.S. dollars, the applicable Exchange Rate for such Specified
Currency (it being understood that currently the Depositary
accepts deposits of Global Securities denominated in U.S. dollars
only);
(7) Indexed Currency, the Base Rate and the Exchange Rate
Determination Date, if applicable;
(8) Issue Price;
(9) Selling Agent's commission or Purchasing Agent's discount, as the
case may be;
(10) Net Proceeds to the Company;
(11) If a redeemable Book-Entry Security, such of the following as are
applicable:
(i) Redemption Commencement Date,
(ii) Initial Redemption Price (% of par), and
(iii) Amount (% of par) that the Redemption Price shall
decline (but not below par) on each anniversary of the
Redemption Commencement Date;
(12) If a Floating Rate Book-Entry Security, such of the following as
are applicable:
(i) Interest Rate Basis,
(ii) Index Maturity,
(iii) Spread or Spread Multiplier,
(iv) Maximum Rate,
II-3
(v) Minimum Rate,
(vi) Initial Interest Rate,
(vii) Interest Reset Dates,
(viii) Calculation Dates,
(ix) Interest Determination Dates,
(x) Interest Payment Dates,
(xi) Regular Record Dates, and
(xii) Calculation Agent;
(13) Name, address and taxpayer identification number of the registered
owner(s);
(14) Denomination of certificates to be delivered at settlement;
(15) Book-Entry Security or Certificated Security; and
(16) Selling Agent or Purchasing Agent.
B. After receiving the Sale Information from the Selling Agent or
Purchasing Agent, as the case may be, the Company will communicate such Sale
Information to the Trustee by facsimile transmission or other acceptable written
means. The Trustee will assign a CUSIP number to the Global Security from a list
of CUSIP numbers previously delivered to the Trustee by the Company representing
such Book-Entry Security and then advise the Company and the Selling Agent or
Purchasing Agent, as the case may be, of such CUSIP number.
C. The Trustee will enter a pending deposit message through the
Depositary's Participant Terminal System, providing the following settlement
information to the Depositary, and the Depositary shall forward such information
to such Agent and Standard & Poor's Corporation:
(1) The applicable Sale Information;
(2) CUSIP number of the Global Security representing such Book-Entry
Security;
(3) Whether such Global Security will represent any other Book-Entry
Security (to the extent known at such time);
II-4
(4) Number of the participant account maintained by the Depositary on
behalf of the Selling Agent or Purchasing Agent, as the case may be;
(5) The interest payment period; and
(6) Initial Interest Payment Date for such Book-Entry Security, number of
days by which such date succeeds the record date for the Depositary's purposes
(which in the case of Floating Rate Securities which reset weekly shall be the
date five calendar days immediately preceding the applicable Interest Payment
Date and in the case of all other Book-Entry Securities shall be the Regular
Record Date, as defined in the Security) and, if calculable at that time, the
amount of interest payable on such Interest Payment Date.
D. The Trustee will complete and authenticate the Global Security
previously delivered by the Company representing such Book-Entry Security.
E. The Depositary will credit such Book-Entry Security to the Trustee's
participant account at the Depositary.
F. The Trustee will enter an SDFS deliver order through the Depositary's
Participant Terminal System instructing the Depositary to (i) debit such
Book-Entry Security to the Trustee's participant account and credit such
Book-Entry Security to such Agent's participant account and (ii) debit such
Agent's settlement account and credit the Trustee's settlement account for an
amount equal to the price of such Book-Entry Security less such Agent's
commission. The entry of such a deliver order shall constitute a representation
and warranty by the Trustee to the Depositary that (a) the Global Security
representing such Book-Entry Security has been issued and authenticated and (b)
the Trustee is holding such Global Security pursuant to the Certificate
Agreement.
G. Such Agent will enter an SDFS deliver order through the Depositary's
Participant Terminal System instructing the Depositary (i) to debit such
Book-Entry Security to such Agent's participant account and credit such
Book-Entry Security to the participant accounts of the Participants with respect
to such Book-Entry Security and (ii) to debit the settlement accounts of such
Participants and credit the settlement account of such Agent for an amount equal
to the price of such Book-Entry Security.
H. Transfers of funds in accordance with SDFS deliver orders described in
Settlement Procedures "F" and "G" will be settled in accordance with SDFS
operating procedures in effect on the settlement date.
I. Upon confirmation of receipt of funds, the Trustee will transfer to
the account of the Company maintained at [NAME OF BANK], New York, New York, or
such other account as the Company may have previously specified to the Trustee,
in funds available for immediate use in the amount transferred to the Trustee in
accordance with Settlement Procedure "F".
II-5
J. Upon request, the Trustee will send to the Company a statement setting
forth the principal amount of Book-Entry Securities outstanding as of that date
under the Indenture.
K. Such Agent will confirm the purchase of such Book-Entry Security to
the purchaser either by transmitting to the Participants with respect to such
Book-Entry Security a confirmation order or orders through the Depositary's
institutional delivery system or by mailing a written confirmation to such
purchaser.
L. The Depositary will, at any time, upon request of the Company or the
Trustee, promptly furnish to the Company or the Trustee a list of the names and
addresses of the participants for whom the Depositary has credited Book-Entry
Securities.
Preparation of Pricing Supplement:
If the Company accepts an offer to purchase a Book-Entry Security, it
will prepare a Pricing Supplement reflecting the terms of such Book-Entry
Security and arrange to have delivered to the Selling Agent or Purchasing Agent,
as the case may be, at least ten copies of such Pricing Supplement, not later
than 5:00 p.m., New York City time, on the Business Day following the Trade Date
(as defined below), or if the Company and the purchaser agree to settlement on
the Business Day following the date of acceptance of such offer, not later than
noon, New York City time, on such date. The Company will arrange to have the
Pricing Supplement filed with the Commission not later than the close of
business of the Commission on the second Business Day following the date on
which such Pricing Supplement is first used.
Delivery of Confirmation and Prospectus to Purchaser by Selling Agent:
The Selling Agent will deliver to the purchaser of a Book-Entry Security
a written confirmation of the sale and delivery and payment instructions. In
addition, the Selling Agent will deliver to such purchaser or its agent the
Prospectus as amended or supplemented (including the Pricing Supplement) in
relation to such Book-Entry Security prior to or together with the earlier of
the delivery to such purchaser or its agent of (a) the confirmation of sale or
(b) the Book-Entry Security.
II-6
Date of Settlement:
The receipt by the Company of immediately available funds in payment for
a Book-Entry Security and the authentication and issuance of the Global Security
representing such Book-Entry Security shall constitute "settlement" with respect
to such Book-Entry Security. All orders of Book-Entry Securities solicited by a
Selling Agent or made by a Purchasing Agent and accepted by the Company on a
particular date (the "Trade Date") will be settled on a date (the "Settlement
Date") which is the fifth Business Day after the Trade Date pursuant to the
"Settlement Procedure Timetable" set forth below, unless the Company and the
purchaser agree to settlement on another Business Day which shall be no earlier
than the next Business Day after the Trade Date.
Settlement Procedure Timetable:
For orders of Book-Entry Securities solicited by a Selling Agent and
accepted by the Company for settlement on the fifth Business Day after the Trade
Date, Settlement Procedures "A" through "I" set forth above shall be completed
as soon as possible but not later than the respective times (New York City time)
set forth below:
SETTLEMENT
PROCEDURE TIME
--------- ----
A 5:00 p.m. on the Business Day following the Trade
Date or 10:00 a.m. on the Business Day
prior to the Settlement Date, whichever is
earlier
B 12:00 noon on the second Business Day immediately
preceding the Settlement Date
C 2:00 p.m. on the second Business Day immediately
preceding the Settlement Date
D 9:00 a.m. on the Settlement Date
E 10:00 a.m. on the Settlement Date
F-G 2:00 p.m. on the Settlement Date
H 4:45 p.m. on the Settlement Date
I 5:00 p.m. on the Settlement Date
II-7
If the initial interest rate for a Floating Rate Book-Entry Security has
not been determined at the time that Settlement Procedure "A" is completed,
Settlement Procedures "B" and "C" shall be completed as soon as such rate has
been determined but no later than 2:00 p.m. on the second Business Day
immediately preceding the Settlement Date. Settlement Procedure "H" is subject
to extension in accordance with any extension of Fedwire closing deadlines and
in the other events specified in the SDFS operating procedures in effect on the
Settlement Date.
If settlement of a Book-Entry Security is rescheduled or canceled, the
Trustee, upon obtaining knowledge thereof, will deliver to the Depositary,
through the Depositary's Participation Terminal System, a cancellation message
to such effect by no later than 2:00 p.m. on the Business Day immediately
preceding the scheduled Settlement Date.
Failure to Settle:
If the Trustee fails to enter an SDFS deliver order with respect to a
Book-Entry Security pursuant to Settlement Procedure "F", the Trustee may
deliver to the Depositary, through the Depositary's Participant Terminal System,
as soon as practicable a withdrawal message instructing the Depositary to debit
such Book-Entry Security to the Trustee's participant account, provided that the
Trustee's participant account contains a principal amount of the Global Security
representing such Book-Entry Security that is at least equal to the principal
amount to be debited. If a withdrawal message is processed with respect to all
the Book-Entry Securities represented by a Global Security, the Trustee will
xxxx such Global Security "canceled", make appropriate entries in the Trustee's
records and send such canceled Global Security to the Company. The CUSIP number
assigned to such Global Security shall, in accordance with CUSIP Service Bureau
procedures, be canceled and not immediately reassigned. If a withdrawal message
is processed with respect to one or more, but not all, of the Book-Entry
Securities represented by a Global Security, the Trustee will exchange such
Global Security for two Global Securities, one of which shall represent such
Book-Entry Security or Securities and shall be canceled immediately after
issuance and the other of which shall represent the remaining Book-Entry
Securities previously represented by the surrendered Global Security and shall
bear the CUSIP number of the surrendered Global Security.
If the purchase price for any Book-Entry Security is not timely paid to
the participants with respect to such Book-Entry Security by the beneficial
purchaser thereof (or a person, including an indirect participant in the
Depositary, acting on behalf of such purchaser), such participants and, in turn,
the Agent for such Book-Entry Security may enter deliver orders through the
Depositary's Participant Terminal System debiting such Book-Entry Security to
such participant's account and crediting such Book-Entry Security to such
Agent's account and then debiting such Book-Entry Security to such Agent's
participant account and crediting such Book-Entry Security to the Trustee's
participant account and shall notify the Company and the
II-8
Trustee thereof. Thereafter, the Trustee will (i) immediately notify the Company
of such order and the Company shall transfer to such Agent funds available for
immediate use in an amount equal to the price of such Book-Entry Security which
was credited to the account of the Company maintained at the Trustee in
accordance with Settlement Procedure I, and (ii) deliver the withdrawal message
and take the related actions described in the preceding paragraph. If such
failure shall have occurred for any reason other than default by the applicable
Agent to perform its obligations hereunder or under the Distribution Agreement,
the Company will reimburse such Agent on an equitable basis for the loss of its
use of funds during the period when the funds were credited to the account of
the Company.
Notwithstanding the foregoing, upon any failure to settle with respect to
a Book-Entry Security, the Depositary may take any actions in accordance with
its SDFS operating procedures then in effect. In the event of a failure to
settle with respect to one or more, but not all, of the Book-Entry Securities to
have been represented by a Global Security, the Trustee will provide, in
accordance with Settlement Procedure "D", for the authentication and issuance of
a Global Security representing the other Book-Entry Securities to have been
represented by such Global Security and will make appropriate entries in its
records. The Company will, from time to time, furnish the Trustee with a
sufficient quantity of Securities.
PART II: ADMINISTRATIVE PROCEDURE FOR CERTIFICATED SECURITIES
--------------------------------------------------------------
Posting Rates by Company:
The Company and the Agents will discuss from time to time the rates of
interest per annum to be borne by and the maturity of Certificated Securities
that may be sold as a result of the solicitation of offers by an Agent. The
Company may establish a fixed set of interest rates and maturities for an
offering period ("posting"). If the Company decides to change already posted
rates, it will promptly advise the Agents to suspend solicitation of offers
until the new posted rates have been established with the Agents.
Acceptance of Offers by Company:
Each Agent will promptly advise the Company by telephone or other
appropriate means of all reasonable offers to purchase Certificated Securities,
other than those rejected by such Agent. Each Agent may, in its discretion
reasonably exercised, reject any offer received by it in whole or in part. Each
Agent also may make offers to the Company to purchase Certificated Securities as
a Purchasing Agent. The Company will have the sole right to accept offers to
purchase Certificated Securities and may reject any such offer in whole or in
part.
The Company will promptly notify the Selling Agent or Purchasing Agent,
as the case may be, of its acceptance or rejection of an offer to purchase
Certificated Securities. If the
II-9
Company accepts an offer to purchase Certificated Securities, it will confirm
such acceptance in writing to the Selling Agent or Purchasing Agent, as the case
may be, and the Trustee.
Communication of Sale Information to Company by Agent:
After the acceptance of an offer by the Company, the Selling Agent or
Purchasing Agent, as the case may be, will communicate the following details of
the terms of such offer (the "Sale Information") to the Company by telephone
(confirmed in writing) or by facsimile transmission or other acceptable written
means:
(1) Principal Amount of Certificated Securities to be purchased;
(2) If a Fixed Rate Certificated Security, the interest rate and
initial interest payment date;
(3) Trade Date;
(4) Settlement Date;
(5) Maturity Date;
(6) Specified Currency and, if the Specified Currency is other than
U.S. dollars, the applicable Exchange Rate for such Specified
Currency;
(7) Indexed Currency, the Base Rate and the Exchange Rate
Determination Date, if applicable;
(8) Issue Price;
(9) Selling Agent's commission or Purchasing Agent's discount, as the
case may be;
(10) Net Proceeds to the Company;
(11) If a redeemable Certificated Security, such of the following as
are applicable:
(i) Redemption Commencement Date,
(ii) Initial Redemption Price (% of par), and
(iii) Amount (% of par) that the Redemption Price shall decline
(but not below par) on each anniversary of the Redemption
Commencement Date;
(12) If a Floating Rate Certificated Security, such of the following as
are applicable:
II-10
(i) Interest Rate Basis,
(ii) Index Maturity,
(iii) Spread or Spread Multiplier,
(iv) Maximum Rate,
(v) Minimum Rate,
(vi) Initial Interest Rate,
(vii) Interest Reset Dates,
(viii) Calculation Dates,
(ix) Interest Determination Dates,
(x) Interest Payment Dates,
(xi) Regular Record Dates, and
(xii) Calculation Agent;
(13) Name, address and taxpayer identification number of the registered
owner(s);
(14) Denomination of certificates to be delivered at settlement;
(15) Book-Entry Security or Certificated Security; and
(16) Selling Agent or Purchasing Agent.
Preparation of Pricing Supplement by Company:
If the Company accepts an offer to purchase a Certificated Security, it
will prepare a Pricing Supplement reflecting the terms of such Certificated
Security and arrange to have delivered to the Selling Agent or Purchasing Agent,
as the case may be, at least ten copies of such Pricing Supplement, not later
than 5:00 p.m., New York City time, on the Business Day following the Trade
Date, or if the Company and the purchaser agree to settlement on the date of
acceptance of such offer, not later than noon, New York City time, on such date.
The Company will arrange to have the Pricing Supplement filed with the
Commission not later than the close of business of the Commission on the second
Business Day following the date on which such Pricing Supplement is first used.
Delivery of Confirmation and Prospectus to Purchaser by Selling Agent:
The Selling Agent will deliver to the purchaser of a Certificated
Security a written confirmation of the sale and delivery and payment
instructions. In addition, the Selling Agent will deliver to such purchaser or
its agent the Prospectus as amended or supplemented (including the Pricing
Supplement) in relation to such Certificated Security prior to or together with
the earlier of the delivery to such purchaser or its agent of (a) the
confirmation of sale or (b) the Certificated Security.
Date of Settlement:
II-11
All offers of Certificated Securities solicited by a Selling Agent or
made by a Purchasing Agent and accepted by the Company will be settled on a date
(the "Settlement Date") which is the fifth Business Day after the date of
acceptance of such offer, unless the Company and the purchaser agree to
settlement (a) on another Business Day after the acceptance of such offer or (b)
with respect to an offer accepted by the Company prior to 10:00 a.m., New York
City time, on the date of such acceptance.
Instruction from Company to Trustee for Preparation of Certificated Securities:
After receiving the Sale Information from the Selling Agent or Purchasing
Agent, as the case may be, the Company will communicate such Sale Information to
the Trustee by telephone (confirmed in writing) or by facsimile transmission or
other acceptable written means.
The Company will instruct the Trustee by facsimile transmission or other
acceptable written means to authenticate and deliver the Certificated Securities
no later than 2:15 p.m., New York City time, on the Settlement Date. Such
instruction will be given by the Company prior to 3:00 p.m., New York City time,
on the Business Day immediately preceding the Settlement Date unless the
Settlement Date is the date of acceptance by the Company of the offer to
purchase Certificated Securities in which case such instruction will be given by
the Company by 11:00 a.m., New York City time.
Preparation and Delivery of Certificated Securities by Trustee and Receipt of
Payment Therefor:
The Trustee will prepare each Certificated Security and appropriate
receipts that will serve as the documentary control of the transaction.
In the case of a sale of Certificated Securities to a purchaser solicited
by a Selling Agent, the Trustee will, by 2:15 p.m., New York City time, on the
Settlement Date, deliver the Certificated Securities to the Selling Agent for
the benefit of the purchaser of such Certificated Securities against delivery by
the Selling Agent of a receipt therefor. On the Settlement Date the Selling
Agent will deliver payment for such Certificated Securities in immediately
available funds to the Company in an amount equal to the issue price of the
Certificated Securities less the Selling Agent's commission; provided that the
Selling Agent reserves the right to withhold payment for which it has not
received funds from the purchaser. The Company shall not use any proceeds
advanced by a Selling Agent to acquire securities.
In the case of a sale of Certificated Securities to a Purchasing Agent,
the Trustee will, by 2:15 p.m., New York City time, on the Settlement Date,
deliver the Certificated Securities to the Purchasing Agent against delivery of
payment for such Certificated Securities in immediately available funds to the
Company in an amount equal to the issue price of the Certificated Securities
less the Purchasing Agent's discount.
II-12
Failure of Purchaser to Pay Selling Agent:
If a purchaser (other than a Purchasing Agent) fails to make payment to
the Selling Agent for a Certificated Security, the Selling Agent will promptly
notify the Trustee and the Company thereof by telephone (confirmed in writing)
or by facsimile transmission or other acceptable written means. The Selling
Agent will immediately return the Certificated Security to the Trustee.
Immediately upon receipt of such Certificated Security by the Trustee, the
Company will return to the Selling Agent an amount equal to the amount
previously paid to the Company in respect of such Certificated Security. The
Company will reimburse the Selling Agent on an equitable basis for its loss of
the use of funds during the period when they were credited to the account of the
Company.
The Trustee will cancel the Certificated Security in respect of which the
failure occurred, make appropriate entries in its records and, unless otherwise
instructed by the Company, destroy the Certificated Security.
II-13
ANNEX III
ACCOUNTANTS' LETTER
-------------------
Pursuant to Sections 4(j) and 6(d), as the case may be, of the
Distribution Agreement, the Company's independent certified public accountants
shall furnish letters to the effect that:
(i) They are independent certified public accountants with respect to
the Company and its subsidiaries within the meaning of the Act and the
applicable published rules and regulations thereunder;
(ii) in their opinion the audited financial statements and financial
statement schedules included or incorporated in the Registration
Statement and the Prospectus and reported on by them comply as to form in
all material respects with the applicable accounting requirements of the
Act and the Exchange Act and the related published rules and regulations
thereunder with respect to financial statements and financial statement
schedules;
(iii) on the basis of a reading of the latest unaudited consolidated
financial statements made available by the Company and its subsidiaries;
carrying out certain specified procedures (but not an examination in
accordance with generally accepted auditing standards) that would not
necessarily reveal matters of significance with respect to the comments
set forth in such letter; a reading of the minutes of the meetings of the
shareholders, directors, and executive committee of the Company; and
inquiries of certain officials of the Company and its subsidiaries who
have responsibility for financial and accounting matters of the Company
and its subsidiaries as to transactions and events subsequent to the date
of the most recent audited financial statements included or incorporated
in the Registration Statement and Prospectus, nothing came to their
attention which caused them to believe that:
(1) the unaudited financial statements included in the
Company's quarterly reports on Form 10-Q incorporated by reference
in the Registration Statement and the Prospectus, if any, do not
comply as to form in all material respects with the accounting
requirements of the Exchange Act and the published rules and
regulations thereunder applicable to Form 10-Q or are not fairly
presented in conformity with generally accepted accounting
principles applied on a basis substantially consistent with that
of the audited financial statements incorporated in the
Registration Statement and the Prospectus (except as to matters of
presentation and disclosure as permitted by Form 10-Q); or
(2) the amounts in the "Selected Consolidated Financial
Data" included or incorporated in the Registration Statement and
the Prospectus do not agree with the corresponding amounts in the
financial statements from which
III-1
such amounts were derived or were not determined on a basis
substantially consistent with that of the audited financial
statements included or incorporated in the Registration Statement
and the Prospectus or do not agree with the accounting records of
the Company and its subsidiaries; or
(3) with respect to the period subsequent to the date of
the most recent financial statements incorporated in the
Registration Statement and the Prospectus, at a specified date not
more than five business days prior to the date of the letter there
were any changes in the capital stock (other than as a result of
awards or amortization of restricted stock and the exercise of
options granted under employee stock option plans of the Company),
or increases in long-term debt or short-term debt of the Company
and its consolidated subsidiaries (other than increases which in
the aggregate do not exceed 5% of the sum of the long-term debt
and short-term debt of the Company and its consolidated
subsidiaries as shown on the most recent balance sheet included or
incorporated in the Registration Statement and the Prospectus), or
there were any decreases in net current assets or net assets of
the Company and its consolidated subsidiaries, in each case as
compared with the corresponding amounts shown on the most recent
consolidated balance sheet included or incorporated in the
Registration Statement and the Prospectus, or for the period from
the date of the most recent financial statements incorporated in
the Registration Statement and the Prospectus to such specified
date there were any decreases, as compared with the corresponding
period in the preceding year, in consolidated net sales, net
operating income, or the total or per share amounts of income
before extraordinary items or of net income, except in all
instances for changes or decreases set forth in such letter, in
which case the letter shall be accompanied by an explanation by
the Company as to the significance thereof unless said explanation
is not deemed necessary by such Agent; and
(iv) they have performed certain other specified procedures as a
result of which they determined that certain information of an
accounting, financial or statistical nature (which is limited to
accounting, financial or statistical information derived from the general
accounting records of the Company) included or incorporated in the
Registration Statement and the Prospectus as amended or supplemented,
agrees with the accounting records of the Company and its subsidiaries,
excluding any questions of legal interpretation; and
III-2
(v) if unaudited pro forma financial statements are included or
incorporated in the Registration Statement and the Prospectus, on the
basis of a reading of the unaudited pro forma financial statements,
carrying out certain specified procedures, inquiries of certain officials
of the Company and the acquired company who have responsibility for
financial and accounting matters, and proving the arithmetic accuracy of
the application of the pro forma adjustments to the historical amounts in
the pro forma financial statements, nothing came to their attention which
caused them to believe that the pro forma financial statements do not
comply in form in all material respects with the applicable accounting
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 such statements.
References to the Registration Statement and the Prospectus in this Annex
III are to such documents as amended and supplemented at the date of the letter.
III-3
