EXHIBIT 1.6
Xxx Xxxxxxxx Xxxxxxx
Floating Rate Notes due 2043
TERMS AGREEMENT
September 9, 2004
Xxx Xxxxxxxx Xxxxxxx
Prudential Xxxxx Xxxxxxxx
Xxxxxx, Xxxxxxxxxxxxx 00000
Attention: Xxxx X. Xxxxxxxx, Treasurer
Ladies and Gentlemen:
Citigroup Global Markets Inc., Xxxxxxx Lynch, Pierce, Xxxxxx & Xxxxx
Incorporated and UBS Securities LLC (collectively, the "Underwriters") severally
agree to purchase from Xxx Xxxxxxxx Xxxxxxx (the "Company"), and the Company
agrees to sell to the each such Underwriter, the respective principal amount of
the Floating Rate Notes due 2043 (the "Notes") of Xxx Xxxxxxxx Xxxxxxx (the
"Company") set forth opposite each such Underwriter's name in Annex A of this
Terms Agreement.
1. Such purchase and sale shall be on the terms and conditions of the
Distribution Agreement, dated August 23, 2002, between Xxxxxxx Lynch, Pierce,
Xxxxxx & Xxxxx Incorporated and you (the "Agreement"), which Agreement is
incorporated herein by reference, with the changes set forth below:
a. The Underwriters severally, and not jointly, are appointed as the
Agent in connection with their respective purchases, as principals, of the Notes
in the amounts set forth opposite their names in Annex A of this Terms
Agreement. All references to the Agent in the Agreement shall mean the
Underwriters. The Underwriters shall be entitled to all rights and interests of
the Agent, including the benefit of the representations and warranties,
agreements, indemnities and contribution obligations by and of the Company, and
shall be responsible for all obligations and liabilities of the Agent, including
indemnities and contribution obligations by and of the Agent, provided for in
the Agreement, as herein modified.
b. The appointment of the Underwriters hereunder to serve as the
Agent is limited to acting as underwriters with respect to the purchase and sale
of the Notes.
c. With respect to indemnification as provided in Section 8 of the
Agreement, (i) the Underwriters' respective obligations to indemnify shall be
several, and not joint, and shall apply only with reference to information, if
any, relating to each such Underwriter furnished to the Company in writing by
such Underwriter; and (ii) the Company shall not be liable for the fees and
expenses of more than one separate firm (in addition to any local counsel) for
all Underwriters and all persons, if any, who control any of the Agents within
the meaning of either
Section 15 of the Securities Act (as defined in the Agreement) or Section 20 of
the Exchange Act (as defined in the Agreement).
d. The Underwriters' respective contribution obligations as provided
in Section 9 of the Agreement shall be several in proportion to the respective
total discount on the Notes purchased by each such Underwriter hereunder, and
not joint.
e. If any Underwriter defaults or Underwriters default in their
respective obligations to purchase Notes agreed to be purchased by such
Underwriter or Underwriters hereunder and the aggregate principal amount of
Notes which such defaulting Underwriter or Underwriters agreed but failed to
purchase does not exceed 10% of the total principal amount of Notes, the
Underwriters may make arrangements satisfactory to the Company for the purchase
of such Notes by other persons, including any of the Underwriters, but if no
such arrangements are made by the Closing Date, the nondefaulting Underwriters
shall be obligated severally, in proportion to their respective commitments
hereunder (or in such other proportions as the non-defaulting Underwriters may
agree), to purchase the Notes which such defaulting Underwriters agreed but
failed to purchase. If any Underwriter or Underwriters so default and the
aggregate principal amount of Notes with respect to which such default or
defaults occur exceeds 10% of the total principal amount of Notes and
arrangements satisfactory to the Underwriters and the Company for the purchase
of such Notes by other persons are not made within 36 hours after such default,
this Terms Agreement will terminate without liability on the part of any
nondefaulting Underwriters or the Company. As used herein, the term
"Underwriter" includes any person substituted for a Underwriter under the terms
of this paragraph. Nothing herein will relieve a defaulting Underwriter from
liability for its default.
f. For purposes of Section 13 of the Agreement, all notices sent to
the respective Underwriters shall be sent to the following addresses in addition
to the addresses provided therein:
Citigroup Global Markets Inc.
000 Xxxxxxxxx Xxxxxx
Xxx Xxxx, XX 00000
UBS Securities LLC
000 Xxxxxxxxxx Xxxxxxxxx
Xxxxxxxx, XX 00000
2. Solely with respect to the purchase and sale of the Notes,
Xxxxxxx Lynch, Pierce, Xxxxxx & Xxxxx Incorporated hereby waives its rights
under Section 1(a) of the Agreement to be the sole exclusive underwriter for the
purchase and sale of the Notes.
3. The terms of the Notes shall be as follow:
[Remainder of page intentionally left blank]
2
THE NOTES
Aggregate Principal Amount: $46,407,000
Issue Price: 100% of Principal Amount plus accrued interest
from July 2, 2004
Purchase Price: 99% of Principal Amount
Method of Determining Three-Month LIBOR, reset quarterly, minus 0.30%,
Interest Rate: accruing from July 2, 2004
Interest Payment Dates: January 2, April 2, July 2 and October 2 of each
year, commencing October 2, 2004
Date of Maturity: April 2, 2043
Redemption Provisions: In whole or in part, at the option of the
Company, on or after April 2, 2033 at the
redemption prices specified in the form of
Pricing Supplement attached hereto as Annex B
plus accrued interest thereon
Repayment Provisions: In whole or in part, at the option of holders of
the Notes, on April 2 of every year through 2014
and every third year thereafter at the repayment
prices specified in the form of Pricing
Supplement attached hereto as Annex B plus
accrued interest thereon
Survivor's Option: The Notes are not subject to the Survivor's
Option.
Closing Date: September 16, 2004
Method of Payment: Immediately available funds
Trustee, Paying Agent
and Authenticating Agent: X.X. Xxxxxx Trust Company, National Association
Calculation Agent: X.X. Xxxxxx Trust Company, National Association
Documentation Requirements: Each of the documents specified
in Sections 5(b)(1), (c) and (d)
3
of the Agreement shall be dated
as of, and delivered to the
undersigned on, the Closing
Date
Other terms: The Notes shall have such
additional terms as are
specified in the form of
Pricing Supplement attached
hereto as Annex B
This Agreement may be executed in one or more counterparts and, if
executed in more than one counterpart, the executed counterparts hereof shall
constitute a single instrument.
4
CITIGROUP GLOBAL MARKETS INC.
By: /s/ Authorized Signatory
---------------------------------
Title: Authorized Signatory
XXXXXXX LYNCH, PIERCE, XXXXXX & XXXXX
INCORPORATED
By: /s/ Authorized Signatory
---------------------------------
Title: Authorized Signatory
UBS SECURITIES LLC
By: /s/ Authorized Signatory
---------------------------------
Title: Authorized Signatory
Confirmed and Accepted,
as of the date first above written:
XXX XXXXXXXX XXXXXXX
By: /s/ Xxxx X. Xxxxxxxx
-----------------------------------
Name: Xxxx X. Xxxxxxxx
Title: Vice President and Treasurer
5
ANNEX A
UNDERWRITER PRINCIPAL AMOUNT
----------- ----------------
Citigroup Global Markets Inc. .......... $ 19,175,000
Xxxxxxx Lynch, Pierce, Xxxxxx & Xxxxx
Incorporated ...... 2,232,000
UBS Securities LLC ..................... 25,000,000
--------------
Total ......................... $ 46,407,000
==============
A-1
ANNEX B
PRICING SUPPLEMENT No. 017-dated September 9, 2004
--------------------------------------------------
(TO PROSPECTUS DATED JULY 10, 2002 AND RULE 424(b)(2)
PROSPECTUS SUPPLEMENT DATED AUGUST 23, 2002) FILE NO. 333-86336
FILED SEPTEMBER 13, 2004
C-1
