EXHIBIT 1-f
XXXXXX XXXXXXX
Xxxxxx Xxxxxxx DirectSecurities(SM)
DISTRIBUTION AGREEMENT
January 25, 2006
Xxxxxx Xxxxxxx XX Inc.
0000 Xxxxxxxx
Xxx Xxxx, Xxx Xxxx 00000
Xxxxxx Xxxxxxx & Co. Incorporated
0000 Xxxxxxxx
Xxx Xxxx, Xxx Xxxx 00000
Dear Sirs:
Xxxxxx Xxxxxxx, a Delaware corporation (the "Company"), confirms its
agreement with you with respect to the issue and sale from time to time by the
Company of up to U.S.$2,000,000,000 aggregate initial public offering price, as
such amount may be increased from time to time upon due authorization by the
Company, of its Xxxxxx Xxxxxxx DirectSecurities(SM) due more than nine months
from the date of issue (the "Notes") or such larger aggregate initial public
offering price as the Company may determine to offer (the "Program Capacity"),
subject to reduction as a result of the sale of the Company's (i) Global Medium
Term Notes, Series F (issued other than as part of a Unit), (ii) Global Units,
Series F, (iii) Global Medium Term Notes, Series G and Series H (issued other
than as part of a Unit), to be sold primarily outside of the United States, and
(iv) Global Units, Series G and Series H, to be sold primarily outside of the
United States, and the sale of certain of the Company's other debt securities,
warrants, preferred stock, common stock, purchase contracts and units and of
capital securities of certain Xxxxxx Xxxxxxx Capital Trusts (together with the
Notes, the "Program Securities") in excess of an aggregate initial public
offering price equal to U.S. $55,452,274,876, as such amount may be
increased from time to time upon due authorization by the Company, minus the
Program Capacity.
The Notes will be issued as senior indebtedness pursuant to the provisions
of a senior indenture dated as of November 1, 2004, between the Company and
JPMorgan Chase Bank, N.A. (formerly known as JPMorgan Chase Bank), as trustee
(the "Trustee") (as may be supplemented or amended from time to time, the
"Indenture").
The Notes will have the maturities, interest rates, redemption provisions,
if any, and other terms as set forth the Prospectus referred to below and any
Term Sheets (as defined in Section 3(n) below) referred to below.
The Company hereby appoints you as its exclusive agents for the purpose of
soliciting and receiving offers to purchase Notes from the Company by others
and, on the basis of the representations and warranties herein contained, but
subject to the terms and conditions herein set forth, you agree to use
reasonable efforts to solicit and receive offers to purchase Notes upon terms
acceptable to the Company at such times and in such amounts as the Company shall
from time to time specify. In addition, you may also purchase Notes as principal
pursuant to the terms of a terms agreement relating to such sale (a "Notes Terms
Agreement") in accordance with the provisions of Section 2(b) hereof.
The Company has filed with the Securities and Exchange Commission (the
"Commission") a registration statement, including a prospectus, relating to the
Notes. Such registration statement, as amended at the Commencement Date (as
hereinafter defined), including the documents incorporated therein by reference
and the information (if any) deemed to be part of the registration statement at
the time of effectiveness pursuant to Rule 430B of the Securities Act, as
amended (the "Securities Act"), is hereinafter referred to as the "Registration
Statement." The Company proposes to file with the Commission from time to time,
pursuant to Rule 424 under the Securities Act, supplements to the prospectus
relating to the Notes included in the Registration Statement that will describe
certain terms of the Notes. The prospectus covering the Notes in the form first
used to confirm each sale of Notes (or in the form first made available to the
agents by the Company to meet requests of purchasers pursuant to Rule 173 under
the Securities Act) is hereinafter referred to as the "Basic Prospectus." The
Basic Prospectus, as supplemented by a prospectus supplement and/or one or more
product supplements and/or pricing supplements setting forth the terms of the
Notes, in the form first used to confirm each sale of Notes (or in the form
first made available to the agents by the Company to meet requests of
purchasers pursuant to Rule 173 under the Securities Act), is hereinafter
referred to as the "Prospectus." The term "preliminary prospectus" means any
preliminary form of the Prospectus. The term "free writing prospectus" has the
meaning set forth in Rule 405 under the Securities Act. The term "Time of Sale"
in respect of Notes means any time at or prior to the confirmation of any sales
of any such Program Security. The term "Time of Sale Prospectus" means the
Basic Prospectus, each preliminary prospectus and/or Term Sheet, if any, and
each free writing prospectus, if any, that has been prepared by or on behalf of
the Company relating to such Notes as of such Time of Sale. The term "broadly
available road show" means a "bona fide electronic road show" as defined in
Rule 433(h)(5) under the Securities Act that has been made available without
restriction to any person. As used herein, the terms "Registration Statement,"
"Basic Prospectus," "Prospectus," "preliminary prospectus," and "Time of Sale
Prospectus" shall include the documents, if any, incorporated by reference
therein. The terms "supplement," "amendment" and "amend" as used herein with
respect to the Registration Statement, the Basic Prospectus, any preliminary
prospectus, the Time of Sale Prospectus or free writing prospectus shall
include all documents subsequently filed by the Company with the Commission
pursuant to the Securities Exchange Act of 1934, as amended (the "Exchange
Act"), that are deemed to be incorporated by reference therein.
2
1. Representations and Warranties. The Company represents and warrants to
and agrees with you as of the Commencement Date, as of each date on which you
solicit offers to purchase Notes, as of each date on which the Company accepts
an offer to purchase Notes (including any purchase by you as principal pursuant
to a Notes Terms Agreement), as of each date the Company issues and delivers
Notes and as of each date the Registration Statement or the Basic Prospectus is
amended or supplemented, as follows (it being understood that such
representations, warranties and agreements shall be deemed to relate to the
Registration Statement, the Basic Prospectus and the Prospectus, each as
amended or supplemented to each such date):
(a) The Registration Statement has become effective, no stop order
suspending the effectiveness of the Registration Statement is in effect, and no
proceedings for such purpose are pending before or threatened by the Commission.
If the Registration Statement is an automatic shelf registration statement as
defined in Rule 405 under the Securities Act, the Company is a well-known
seasoned issuer (as defined in Rule 405 under the Securities Act) eligible to
use the Registration Statement as an automatic shelf registration statement and
the Company has not received notice that the Commission objects to the use of
the Registration Statement as an automatic shelf registration statement.
(b) (i) Each document, if any, filed or to be filed pursuant to the
Exchange Act and incorporated by reference in the Time of Sale Prospectus or the
Prospectus complied or will comply when so filed in all material respects with
the Exchange Act and the applicable rules and regulations of the Commission
thereunder, (ii) each part of the Registration Statement, when such part became
effective, did not contain and each such part, as amended or supplemented, if
applicable, will not contain any untrue statement of a material fact or omit to
state a material fact required to be stated therein or necessary to make the
statements therein not misleading, (iii) the Registration Statement does not
contain and, as amended or supplemented, if applicable, will not contain any
untrue statement of a material fact or omit to state a material fact required to
be stated therein or necessary to make the statements therein not misleading,
(iv) the Registration Statement and the Prospectus comply and, as amended or
supplemented, if applicable, will comply in all material respects with the
Securities Act and the applicable rules and regulations of the Commission
thereunder , (v) the Time of Sale Prospectus, as then amended or supplemented by
the Company, if applicable, at each Time of Sale of Notes in connection with the
offering thereof when the Prospectus is not yet available to prospective
purchasers and at each date on which the Company issues and delivers Notes, will
not contain any untrue statement of a material fact or omit to state a material
fact necessary to make the statements therein, in the light of the circumstances
under which they were made, not misleading, (vi) each broadly available road
show, if any, when considered together with the applicable Time of Sale
Prospectus, does not contain any untrue statement of a material fact or omit to
state a material fact necessary to make the statements therein, in the light of
the circumstances under which they were made, not misleading, and (vii) the
Prospectus does not contain and, as amended or supplemented, if applicable, will
not contain any untrue statement of a material fact or omit to state a material
fact necessary to make the statements therein, in the light of the circumstances
under which they were made, not misleading, except that (1) the representations
and warranties set forth in this paragraph do not apply to (A) statements or
omissions in the Registration Statement, the Time of Sale Prospectus or the
Prospectus based upon information relating to you furnished to the Company in
writing by you expressly for use therein or (B) those parts of the Registration
Statement that constitute the Statements of Eligibility (Forms T 1) under the
Trust Indenture Act
3
of 1939, as amended (the "Trust Indenture Act"), of the Trustees and (2) the
representations and warranties set forth in clauses (iv) and (vii) above, when
made as of the Commencement Date or as of any date on which you solicit offers
to purchase Notes or on which the Company accepts an offer to purchase Notes,
shall be deemed not to cover information concerning an offering of particular
Notes to the extent such information will be set forth in a supplement to the
Basic Prospectus.
(c) The Company is not an "ineligible issuer" in connection with the
offering pursuant to Rules 164, 405 and 433 under the Securities Act. Any free
writing prospectus that the Company is required to file pursuant to Rule 433(d)
under the Securities Act has been, or will be, filed with the Commission in
accordance with the requirements of the Securities Act and the applicable rules
and regulations of the Commission thereunder. Each free writing prospectus that
the Company has filed, or is required to file, pursuant to Rule 433(d) under the
Securities Act or that was prepared by or behalf of or used or referred to by
the Company complies or will comply in all material respects with the
requirements of the Securities Act and the applicable rules and regulations of
the Commission thereunder. Except for any free writing prospectuses and
electronic road shows each furnished to you before first use, the Company has
not prepared, used or referred to, and will not, without your prior consent,
prepare, use or refer to, any free writing prospectus.
(d) The Company has been duly incorporated, is validly existing as a
corporation in good standing under the laws of the State of Delaware, has the
corporate power and authority to own its property and to conduct its business as
described in the Prospectus and the Time of Sale Prospectus, as applicable, and
is duly qualified to transact business and is in good standing in each
jurisdiction in which the conduct of its business or its ownership or leasing of
property requires such qualification, except to the extent that the failure to
be so qualified or be in good standing would not have a material adverse effect
on the Company and its consolidated subsidiaries, taken as a whole.
(e) Each subsidiary of the Company has been duly incorporated, is validly
existing as a corporation in good standing under the laws of the jurisdiction of
its incorporation, has the corporate power and authority to own its property and
to conduct its business as described in the Prospectus and the Time of Sale
Prospectus, as applicable, and is duly qualified to transact business and is in
good standing in each jurisdiction in which the conduct of its business or its
ownership or leasing of property requires such qualification, except to the
extent that the failure to be so qualified or be in good standing would not have
a material adverse effect on the Company and its consolidated subsidiaries,
taken as a whole; all of the issued shares of capital stock of each consolidated
subsidiary of the Company have been duly and validly authorized and issued, are
fully paid and non-assessable and are owned directly or indirectly by the
Company, free and clear of all liens, encumbrances, equities or claims.
(f) Each of this Agreement and any applicable Written Notes Terms Agreement
(as hereinafter defined) has been duly authorized, executed and delivered by the
Company.
(g) The Indenture has been duly qualified under the Trust Indenture Act and
has been duly authorized, executed and delivered by the Company and is a valid
and binding agreement of the Company, enforceable in accordance with its terms
subject to applicable bankruptcy,
4
insolvency and similar laws affecting creditors' rights generally and equitable
principles of general applicability.
(h) The form of the Notes has been duly authorized and established in
conformity with the provisions of the Indenture and, when the Notes have been
executed and authenticated in accordance with the provisions of the Indenture
and delivered to and duly paid for by the purchasers thereof, the Notes will be
entitled to the benefits of such Indenture and will be valid and binding
obligations of the Company, enforceable in accordance with their respective
terms subject to applicable bankruptcy, insolvency and similar laws affecting
creditors' rights generally and equitable principles of general applicability.
(i) The execution and delivery by the Company of this Agreement, the Notes,
the Indenture and any applicable Written Notes Terms Agreement and the
performance by the Company of its obligations under this Agreement, the Notes,
the Indenture and any applicable Notes Terms Agreement will not contravene any
provision of applicable law or the certificate of incorporation or by laws of
the Company or any agreement or other instrument binding upon the Company or any
of its subsidiaries that is material to the Company and its consolidated
subsidiaries, taken as a whole, or any judgment, order or decree of any
governmental body, agency or court having jurisdiction over the Company or any
of its consolidated subsidiaries, and no consent, approval, authorization or
order of, or qualification with, any governmental body or agency is required for
the performance by the Company of its obligations under this Agreement, the
Notes, the Indenture and any applicable Notes Terms Agreement, except such as
may be required by the securities or Blue Sky laws of the various states in
connection with the offer and sale of the Notes; provided, however, that no
representation is made or warranty given as to whether the purchase of the Notes
constitutes a "prohibited transaction" under Section 406 of the Employee
Retirement Income Security Act of 1974, as amended, or Section 4975 of the
Internal Revenue Code of 1986, as amended.
(j) There has not occurred any material adverse change, or any development
involving a prospective material adverse change, in the condition, financial or
otherwise, or in the earnings, business or operations of the Company and its
subsidiaries, taken as a whole, from that set forth in the Prospectus and the
Time of Sale Prospectus, if applicable.
(k) There are no legal or governmental proceedings pending or threatened to
which the Company or any of its consolidated subsidiaries is a party or to which
any of the properties of the Company or any of its consolidated subsidiaries is
subject (i) other than proceedings accurately described in all material respects
in the Prospectus and the Time of Sale Prospectus, if applicable, and
proceedings that would not have a material adverse effect on the Company and its
consolidated subsidiaries, taken as a whole, or on the power or ability of the
Company to perform its obligations under this Agreement, the Indenture or the
Notes or to consummate the transactions contemplated by the Prospectus or (ii)
that are required to be described in the Registration Statement or the
Prospectus and are not so described and there are no statutes, regulations,
contracts or other documents that are required to be described in the
Registration Statement or the Prospectus or to be filed or incorporated by
reference as exhibits to the Registration Statement that are not described,
filed or incorporated as required.
5
(l) The Company is not, and after giving effect to the offering and sale of
the Notes and the application of the proceeds thereof as described in the
Prospectus, will not be required to register as, an "investment company" as such
term is defined in the Investment Company Act of 1940, as amended.
(m) Each of the Company and its consolidated subsidiaries has all necessary
consents, authorizations, approvals, orders, certificates and permits of and
from, and has made all declarations and filings with, all federal, state, local
and other governmental authorities, all self regulatory organizations and all
courts and other tribunals, to own, lease, license and use its properties and
assets and to conduct its business in the manner described in the Prospectus,
and the Time of Sale Prospectus, if applicable, except to the extent that the
failure to obtain or file would not have a material adverse effect on the
Company and its consolidated subsidiaries, taken as a whole.
(n) Xxxxxx Xxxxxxx XX Inc. is registered as a broker dealer and investment
adviser with the Commission, is registered with the Commodity Futures Trading
Commission as a futures commission merchant and is a member of the New York
Stock Exchange, Inc. and the National Association of Securities Dealers, Inc.
(o) Xxxxxx Xxxxxxx & Co. Incorporated is registered as a broker dealer and
investment adviser with the Commission, is registered with the Commodity Futures
Trading Commission as a futures commission merchant and is a member of the New
York Stock Exchange, Inc. and the National Association of Securities Dealers,
Inc.
2. Solicitations as Agents; Purchases as Principals.
(a) Solicitations as Agents. In connection with your actions as agents
hereunder, you agree to use reasonable efforts to solicit offers to purchase
Notes upon the terms and conditions set forth in the Prospectus as then amended
or supplemented.
The Company reserves the right, in its sole discretion, to instruct you to
suspend at any time, for any period of time or permanently, the solicitation of
offers to purchase Notes. Upon receipt of at least one business day's prior
notice from the Company, you will forthwith suspend solicitations of offers to
purchase Notes from the Company until such time as the Company has advised you
that such solicitation may be resumed. While such solicitation is suspended, the
Company shall not be required to deliver any certificates, opinions or letters
in accordance with Sections 5(a), 5(b) and 5(c); provided, however, that if the
Registration Statement or Prospectus is amended or supplemented during the
period of suspension (other than by an amendment or supplement providing solely
for (i) a change in the interest rates, repayment provisions, redemption
provisions or maturities offered on the Notes or (ii) for a change you deem to
be immaterial), you shall not be required to resume soliciting offers to
purchase Notes until the Company has delivered such certificates, opinions and
letters as you may request.
The Company agrees to pay to you, as consideration for the sale of each
Note resulting from a solicitation made or an offer to purchase received by you,
a commission in the form of a discount from the purchase price of such Note
equal to between 0.2% and 3.0% (depending upon
6
such Note's maturity) of the principal amount of such Note or such other
discount as may be specified in the Prospectus Supplement relating to such Note.
You shall communicate to the Company, orally or in writing, each offer to
purchase Notes received by you as agent that in your judgment should be
considered by the Company. The Company shall have the sole right to accept
offers to purchase Notes and may reject any offer in whole or in part. You shall
have the right to reject any offer to purchase Notes that you consider to be
unacceptable, and any such rejection shall not be deemed a breach of your
agreements contained herein. The procedural details relating to the issue and
delivery of Notes sold by you as agent and the payment therefor shall be as set
forth in the Administrative Procedures (as hereinafter defined).
(b) Purchases as Principals. Each sale of Notes to you as principals shall
be made in accordance with the terms of this Agreement. In connection with each
such sale, the Company will enter into a Notes Terms Agreement that will provide
for the sale of such Notes to and the purchase thereof by you. Each Notes Terms
Agreement will take the form of either (i) a written agreement between you and
the Company, which may be substantially in the form of Exhibit A hereto (a
"Written Notes Terms Agreement"), or (ii) an oral agreement between you and the
Company confirmed in writing by you to the Company.
Your commitment to purchase Notes as principal pursuant to a Notes Terms
Agreement shall be deemed to have been made on the basis of the representations
and warranties of the Company herein contained and shall be subject to the terms
and conditions herein set forth. Each Notes Terms Agreement shall specify the
principal amount of Notes to be purchased by you pursuant thereto, the maturity
date of such Notes, the price to be paid to the Company for such Notes, the
interest rate and interest rate formula, if any, applicable to such Notes and
any other terms of such Notes. Each such Notes Terms Agreement may also specify
any requirements for officers' certificates, opinions of counsel and letters
from the independent auditors of the Company pursuant to Section 4 hereof. A
Notes Terms Agreement may also specify certain provisions relating to the
reoffering of such Notes by you.
Each Notes Terms Agreement shall specify the time and place of delivery of
and payment for such Notes. Unless otherwise specified in a Notes Terms
Agreement, the procedural details relating to the issue and delivery of Notes
purchased by you as principal and the payment therefor shall be as set forth in
the Administrative Procedures. Each date of delivery of and payment for Notes to
be purchased by you as principal pursuant to a Notes Terms Agreement is referred
to herein as a "Settlement Date."
Unless otherwise specified in a Notes Terms Agreement, if you are
purchasing Notes as principal you may resell such Notes to other dealers. Any
such sales may be at a discount, which shall not exceed the amount set forth in
the Time of Sale Prospectus and Prospectus relating to such Notes.
(c) Administrative Procedures. You and the Company agree to perform the
respective duties and obligations specifically provided to be performed in the
DirectSecurities, Administrative Procedures (attached hereto as Exhibit B) (the
"Administrative Procedures"), as amended from time to time. The Administrative
Procedures may be amended only by written agreement of the Company and you.
7
(d) Delivery. The documents required to be delivered by Section 4 of this
Agreement as a condition precedent to your obligation to begin soliciting offers
to purchase Notes as agents of the Company shall be delivered at the office of
Sidley Austin LLP, your counsel, not later than 4:00 p.m., New York City time,
on the date hereof, or at such other time and/or place as you and the Company
may agree upon in writing, but in no event later than the day prior to the
earlier of (i) the date on which you begin soliciting offers to purchase Notes
and (ii) the first date on which the Company accepts any offer by you to
purchase Notes as principal. The date of delivery of such documents is referred
to herein as the "Commencement Date."
(e) Free Writing Prospectuses. In connection with your actions hereunder,
you represent and agree that, unless you obtain the prior consent of the
Company, you will not make any offer relating to the Notes that would constitute
an "issuer free writing prospectus," as defined in Rule 433(h) under the
Securities Act, or that would otherwise constitute a free writing prospectus
required to be filed with the Commission.
3. Agreements. The Company agrees with you that:
(a) The Company will furnish to you a copy of each proposed free writing
prospectus to be prepared by or on behalf of, used by, or referred to by the
Company relating to the offering of the Notes and the Company will not use or
refer to any proposed free writing prospectus to which you reasonably object.
(b) The Company will not take any action that would result in you or the
Company being required to file with the Commission pursuant to Rule 433(d) under
the Securities Act a free writing prospectus prepared by you or on your behalf
that you otherwise would not have been required to file thereunder.
(c) If the Time of Sale Prospectus is being used to solicit offers to buy
Notes at a time when the Prospectus is not yet available to prospective
purchasers and any event shall occur or condition exist as a result of which it
is necessary to amend or supplement the Time of Sale Prospectus in order to make
the statements therein, in the light of the circumstances, not misleading, or if
any event shall occur or condition exist as a result of which the Time of Sale
Prospectus conflicts with the information contained in the Registration
Statement then on file, or if, in the opinion of your counsel, it is necessary
to amend or supplement the Time of Sale Prospectus to comply with applicable
law, the Company will forthwith prepare, file with the Commission and furnish,
at the Company's own expense, to you and to any dealer upon request, either
amendments or supplements to the Time of Sale Prospectus so that the statements
in the Time of Sale Prospectus as so amended or supplemented will not, in the
light of the circumstances when delivered to a prospective purchaser, be
misleading or so that the Time of Sale Prospectus, as amended or supplemented,
will no longer conflict with the Registration Statement, or so that the Time of
Sale Prospectus, as amended or supplemented, will comply with applicable law.
(d) Prior to the termination of the offering of the Notes pursuant to this
Agreement or pursuant to any Notes Terms Agreement, the Company will not file
any Time of Sale Prospectus or prospectus supplement (including any product
supplement or pricing supplement) relating to the
8
Notes or any amendment to the Registration Statement relating to the Notes
unless the Company has previously furnished to you a copy thereof for your
review and will not file any such proposed supplement or amendment to which you
reasonably object; provided, however, that the foregoing requirement shall not
apply to any of the Company's periodic filings with the Commission required to
be filed pursuant to Section 13(a), 13(c), 13(f), 14 or 15(d) of the Exchange
Act, copies of which filings the Company will cause to be delivered to you
promptly after being transmitted for filing with the Commission. Subject to the
foregoing sentence, the Company will promptly cause each supplement to the Basic
Prospectus (including any product supplement or pricing supplement) to be filed
with or transmitted for filing to the Commission in accordance with Rule 424(b)
under the Securities Act. The Company will promptly advise you (i) of the filing
of any amendment or supplement to the Basic Prospectus, (ii) of the filing and
effectiveness of any amendment to the Registration Statement, (iii) of any
request by the Commission for any amendment to the Registration Statement or any
amendment or supplement to the Basic Prospectus or for any additional
information, (iv) of the issuance by the Commission of any stop order suspending
the effectiveness of the Registration Statement or the institution or
threatening of any proceeding for that purpose and (v) of the receipt by the
Company of any notification with respect to the suspension of the qualification
of the Notes for sale in any jurisdiction or the initiation or threatening of
any proceeding for such purpose. The Company will use its best efforts to
prevent the issuance of any such stop order or notice of suspension of
qualification and, if issued, to obtain as soon as possible the withdrawal
thereof. If the Basic Prospectus is amended or supplemented as a result of the
filing under the Exchange Act of any document incorporated by reference in the
Prospectus, you shall not be obligated to solicit offers to purchase Notes so
long as you are not reasonably satisfied with such document.
(e) If, at any time when the Prospectus (or in lieu thereof the notice
referred to in Rule 173(a) under the Securities Act) relating to the Notes is
required to be delivered under the Securities Act, any event occurs or
condition exists 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 to make the statements therein, in the light
of the circumstances when the Prospectus (or in lieu thereof the notice
referred to in Rule 173(a) under the Securities Act), as then amended or
supplemented, is delivered to a purchaser, not misleading, or if, in your
opinion or in the opinion of the Company, it is necessary at any time to amend
or supplement the Prospectus, as then amended or supplemented, to comply with
applicable law, the Company will immediately notify you by telephone (with
confirmation in writing) to suspend solicitation of offers to purchase Notes
and, if so notified by the Company, you shall forthwith suspend such
solicitation and cease using the Prospectus, as then amended or supplemented.
If the Company shall decide to amend or supplement the Registration Statement
or Prospectus, as then amended or supplemented, it shall so advise you promptly
by telephone (with confirmation in writing) and, at its expense, shall prepare
and cause to be filed promptly with the Commission an amendment or supplement
to the Registration Statement or Prospectus, as then amended or supplemented,
that will correct such statement or omission or effect such compliance and will
supply such amended or supplemented Prospectus to you in such quantities as you
may reasonably request. If any documents, certificates, opinions and letters
furnished to you pursuant to Section 3(i) below and Sections 5(a), 5(b) and
5(c) in connection with the preparation and filing of such amendment or
supplement are satisfactory in all respects to you, upon the filing with the
Commission of such amendment or supplement to the Prospectus or upon the
effectiveness of an amendment to the Registration Statement, you will resume
the
9
solicitation of offers to purchase Notes hereunder. Notwithstanding any other
provision of this Section 3(e), until the distribution of any Notes you may own
as principal has been completed, if any event described above in this Section
3(e) occurs, the Company will, at its own expense, forthwith prepare and cause
to be filed promptly with the Commission an amendment or supplement to the
Registration Statement or Prospectus, as then amended or supplemented,
satisfactory in all respects to you, will supply such amended or supplemented
Prospectus to you in such quantities as you may reasonably request and shall
furnish to you pursuant to Section 3(i) below and Sections 5(a), 5(b) and 5(c)
such documents, certificates, opinions and letters as you may request in
connection with the preparation and filing of such amendment or supplement.
(f) The Company will make generally available to its security holders and
to you as soon as practicable earning statements that satisfy the provisions of
Section 11(a) of the Securities Act and the rules and regulations of the
Commission thereunder covering a period of at least twelve months beginning, in
each case, not later than the first day of the Company's fiscal quarter next
following the "effective date" (as defined in Rule 158 under the Securities Act)
of the Registration Statement with respect to each sale of Notes.
(g) The Company will furnish in New York City, without charge, (i) to each
Agent, a signed copy of the Registration Statement, including exhibits and all
amendments thereto, and as many copies of the Prospectus, any documents
incorporated by reference therein and any supplements and amendments thereto as
you may reasonably request and (ii) to each Agent that purchases Notes pursuant
to a Notes Terms Agreement or solicits an offer to purchase Notes that is
accepted by the Company, prior to 10:00 a.m. New York City time on the business
day next succeeding the date of such Notes Terms Agreement or the acceptance of
such offer, as many copies of the Prospectus, as then amended or supplemented
(including the Time of Sale Prospectus and the Prospectus Supplement relating to
the Notes to be purchased pursuant to such Notes Terms Agreement or accepted
offer), as such Agent may reasonably request.
(h) The Company will endeavor to qualify the Notes for offer and sale under
the securities or Blue Sky laws of such jurisdictions as you shall reasonably
request.
(i) During the term of this Agreement, the Company shall furnish to you
such relevant documents and certificates of officers of the Company relating to
the business, operations and affairs of the Company, the Registration Statement,
the Basic Prospectus, any amendments or supplements thereto, any Time of Sale
Prospectus, the Indenture, the Notes, this Agreement, the Administrative
Procedures, any Notes Terms Agreement and the performance by the Company of its
obligations hereunder or thereunder as you may from time to time reasonably
request.
(j) The Company shall notify you promptly in writing of any downgrading, or
of its receipt of any notice of any intended or potential downgrading or of any
review for possible change that does not indicate the direction of the possible
change, in the rating accorded the Company or any of the securities of the
Company or in the rating outlook for the Company by any "nationally recognized
statistical rating organization," as such term is defined for purposes of Rule
436(g)(2) under the Securities Act.
10
(k) Whether or not any sale of Notes is consummated or this Agreement or
any Notes Terms Agreement is terminated, the Company will pay or cause to be
paid all expenses incident to the performance of its obligations under this
Agreement and any Notes Terms Agreement including: (i) the fees, disbursements
and expenses of the Company's counsel and the Company's accountants, of the
Trustee and its counsel, in connection with the registration and delivery of the
Notes under the Securities Act and all other fees or expenses in connection with
the preparation and filing of the Registration Statement, the Prospectus, any
preliminary prospectus, the Time of Sale Prospectus, any free writing prospectus
prepared by or on behalf of, used by, or referred to by the Company and
amendments and supplements to any of the foregoing, including the filing fees
payable to the Commission relating to the Notes (within the time required by
Rule 456(b)(1), if applicable), all printing costs associated therewith, and the
mailing and delivering of copies thereof to you and the dealers, in the
quantities hereinabove specified, (ii) all costs and expenses related to the
transfer and delivery of the Notes to you, including any transfer or other taxes
payable thereon, (iii) the cost of printing or producing any Blue Sky or legal
investment memorandum in connection with the offer and sale of the Notes under
state securities laws and all expenses in connection with the qualification of
the Notes for offer and sale under state securities laws as provided in Section
3(h) hereof, including filing fees and the reasonable fees and disbursements of
your counsel in connection with such qualification and in connection with the
Blue Sky or legal investment memorandum, (iv) all filing fees and the reasonable
fees and disbursements of your counsel incurred in connection with the review
and qualification of the offering of the Notes by the National Association of
Securities Dealers, Inc., (v) any fees charged by the rating agencies for the
rating of the Notes, (vi) all fees and expenses in connection with the
preparation and filing of any registration statement on Form 8-A relating to any
Notes and all costs and expenses incident to listing the Notes on any national
securities exchanges and foreign stock exchanges, (vii) the cost of the
preparation, issuance and delivery of the Notes, (viii) the costs and charges of
any trustee, transfer agent, registrar or depositary, (ix) the costs and
expenses of the Company relating to investor presentations on any "road show"
undertaken in connection with the marketing of the offering of the Notes,
including, without limitation, expenses associated with the preparation or
dissemination of any electronic road show, expenses associated with the
production of road show slides and graphics, fees and expenses of any
consultants engaged in connection with the road show presentations with the
prior approval of the Company, travel and lodging expenses of the
representatives and officers of the Company and any such consultants, and the
cost of any aircraft chartered in connection with the road show, (x) the
document production charges and expenses associated with printing this
Agreement, the Indenture and any Notes Terms Agreement, (xi) the fees and
disbursements of your counsel incurred in connection with the offering and sale
of the Notes, including any opinions to be rendered by such counsel hereunder,
(xii) any out of pocket expenses incurred by you (provided that any advertising
expenses incurred by you shall have been approved by the Company) and (xiii) all
other costs and expenses incident to the performance of the obligations of the
Company hereunder for which provision is not otherwise made in this Section. It
is understood, however, that except as provided in this Section and Section 6
entitled "Indemnification and Contribution," you will pay all of your costs and
expenses, including fees and disbursements of your counsel, transfer taxes
payable on resale of any of the Notes by you and any advertising expenses
connected with any offers you may make.
(l) If the third anniversary of the initial effective date of the
Registration Statement occurs during an offering of Notes before all of the
Notes then being offered have been sold by
11
you, prior to the third anniversary the Company will file a new shelf
registration statement and take any other action necessary to permit the public
offering of the Notes to continue without interruption; references herein to the
Registration Statement shall include the new registration statement declared
effective by the Commission.
(m) During the period beginning on the date of any Notes Terms Agreement
and continuing to and including the Settlement Date with respect to such Notes
Terms Agreement, the Company will not, without your prior consent, offer, sell,
contract to sell or otherwise dispose of any debt securities of the Company
substantially similar to the Notes set forth in such Notes Terms Agreement
(other than (A) the Notes that are to be sold pursuant to such Notes Terms
Agreement, (B) Notes previously agreed to be sold by the Company and (C)
commercial paper issued in the ordinary course of business), except as may
otherwise be provided in the applicable Notes Terms Agreement.
(n) Unless otherwise notified by you, the Company will prepare a final
term sheet (a "Term Sheet") relating to each offering of the Notes, containing
only information that describes the final terms of the Notes or the offering, in
a form consented to by you, and will file such Term Sheet within the period
required by Rule 433(d)(5)(ii) under the Securities Act following the date the
final terms have been established for the offering of the Notes.
4. Conditions of the Obligations of the Agents. Your obligation to solicit
offers to purchase Notes as agents of the Company, your obligation to purchase
Notes as principals pursuant to any Notes Terms Agreement and the obligation of
any other purchaser to purchase Notes will be subject to the accuracy of the
representations and warranties on the part of the Company herein, to the
accuracy of the statements of the Company's officers made in each certificate
furnished pursuant to the provisions hereof and to the performance and
observance by the Company of all covenants and agreements herein contained on
its part to be performed and observed (in the case of your obligation to solicit
offers to purchase Notes, at the time of such solicitation, and, in the case of
your or any other purchaser's obligation to purchase Notes, at the time the
Company accepts the offer to purchase such Notes and at the time of issuance and
delivery) and (in each case) to the following additional conditions precedent
when and as specified:
(a) Prior to such solicitation or purchase, as the case may be:
(i) there shall not have occurred any change, or any development
involving a prospective change, in the condition, financial or otherwise,
or in the earnings, business or operations of the Company and its
consolidated subsidiaries, taken as a whole, from that set forth in the
Time of Sale Prospectus that, in your judgment, is material and adverse and
that makes it, in your judgment, impracticable to market the Notes on the
terms and in the manner contemplated by the Time of Sale Prospectus;
(ii) there shall not have occurred any (A) suspension or material
limitation of trading generally on or by, as the case may be, any of the
New York Stock Exchange, the American Stock Exchange, the Nasdaq National
Market, the Chicago Board of Options Exchange, the Chicago Mercantile
Exchange or the Chicago Board of Trade, (B) suspension of trading of any
securities of the Company on any exchange or in any
12
over the counter market, (C) material disruption in securities settlement,
payment or clearance services in the United States or, in the event of a
global offering, in any relevant foreign jurisdiction, (D) declaration of
any moratorium on commercial banking activities by Federal or New York
State authorities or (E) any outbreak or escalation of hostilities or any
change in financial markets or any calamity or crisis that, in your
judgment, is material and adverse and which, singly or together with any
other event specified in this clause (E), makes it, in your judgment,
impracticable or inadvisable to proceed with the offer, sale or delivery of
the Notes on the terms and in the manner contemplated in the Prospectus or
the Time of Sale Prospectus; and
(iii) there shall not have occurred any downgrading, nor shall any
notice have been given of any intended or potential downgrading or of any
review for a possible change that does not indicate the direction of the
possible change, in the rating accorded the Company or any of the
securities of the Company by any "nationally recognized statistical rating
organization," as such term is defined for purposes of Rule 436(g)(2)
under the Securities Act;
(A) except, in each case described in paragraph (i), (ii) or (iii) above, as
disclosed to you in writing by the Company prior to such solicitation or, in the
case of a purchase of Notes, before the offer to purchase such Notes was made or
(B) unless in each case described in (ii) above, the relevant event shall have
occurred and been known to you prior to such solicitation or, in the case of a
purchase of Notes, before the offer to purchase such Notes was made.
(b) On the Commencement Date and, if called for by any Notes Terms
Agreement, on the corresponding Settlement Date, you shall have received:
(i) The opinion, dated as of such date, of Xxxxx Xxxx & Xxxxxxxx,
special counsel to the Company, or of other counsel satisfactory to you and
who may be an officer of the Company, to the following effect that:
(A) the Company has been duly incorporated, is validly existing
as a corporation in good standing under the laws of the State of
Delaware, has the corporate power and authority to own its property
and to conduct its business as described in the Prospectus, as amended
or supplemented, and the Time of Sale Prospectus, if applicable, and
is duly qualified to transact business and is in good standing in each
jurisdiction in which the conduct of its business or its ownership or
leasing of property requires such qualification, except to the extent
that the failure to be so qualified or be in good standing would not
have a material adverse effect on the Company and its consolidated
subsidiaries, taken as a whole;
(B) each of Xxxxxx Xxxxxxx XX Inc., Discover Bank, Xxxxxx Xxxxxxx
& Co. Incorporated and Xxxxxx Xxxxxxx International Holdings Inc.
(each a "Material Subsidiary") has been duly incorporated, is validly
existing as a corporation in good standing under the laws of the
jurisdiction of its incorporation, has the corporate power and
authority to own its property and to conduct its business as described
in the Prospectus, as amended or supplemented, and the Time of Sale
Prospectus, if applicable, and is duly qualified to transact
13
business and is in good standing in each jurisdiction in which the
conduct of its business or its ownership or leasing of property
requires such qualification, except to the extent that the failure to
be so qualified or be in good standing would not have a material
adverse effect on the Company and its consolidated subsidiaries, taken
as a whole;
(C) each of the Company and its Material Subsidiaries has all
necessary consents, authorizations, approvals, orders, certificates
and permits of and from, and has made all declarations and filings
with, all federal, state, local and other governmental authorities,
all self regulatory organizations and all courts and other tribunals,
to own, lease, license and use its properties and assets and to
conduct its business in the manner described in the Prospectus, as
amended or supplemented, and the Time of Sale Prospectus, if
applicable, except to the extent that the failure to obtain or file
would not have a material adverse effect on the Company and its
consolidated subsidiaries, taken as a whole;
(D) each of this Agreement and any applicable Written Notes Terms
Agreement has been duly authorized, executed and delivered by the
Company;
(E) the Indenture has been duly qualified under the Trust
Indenture Act and has been duly authorized, executed and delivered by
the Company and is a valid and binding agreement of the Company,
enforceable in accordance with its terms, subject to applicable
bankruptcy, insolvency and similar laws affecting creditors' rights
generally and equitable principles of general applicability;
(F) the form of the Notes has been duly authorized and
established in conformity with the provisions of the Indenture and, if
the Notes had been executed by the Company and authenticated by the
Trustee or its duly appointed agent in accordance with the provisions
of the Indenture and delivered to and duly paid for by the purchasers
thereof on the date of such opinion, such Notes would be entitled to
the benefits of such Indenture and would be valid and binding
obligations of the Company, enforceable in accordance with their
respective terms, subject to applicable bankruptcy, insolvency and
similar laws affecting creditors' rights generally and equitable
principles of general applicability;
(G) the execution and delivery by the Company of the Notes, the
Indenture and any applicable Written Notes Terms Agreement and the
performance by the Company of its obligations under this Agreement,
the Notes, the Indenture and any applicable Notes Terms Agreement will
not contravene any provision of applicable law or the certificate of
incorporation or by laws of the Company or, to the best of such
counsel's knowledge, any agreement or other instrument binding upon
the Company or any of its subsidiaries that is material to the Company
and its consolidated subsidiaries, taken as a whole, or, to the best
of such counsel's knowledge, any judgment, order or decree of any U.S.
governmental body, agency or court having jurisdiction over the
Company or any of its consolidated subsidiaries, and no consent,
approval, authorization or order of or qualification with any U.S.
governmental body or agency is required for the
14
performance by the Company of its obligations under this Agreement,
the Notes, the Indenture and any applicable Notes Terms Agreement,
except such as may be required by the securities or Blue Sky laws of
the various states in connection with the offer and sale of the Notes;
provided, however, that no opinion is expressed on whether the
purchase of the Notes constitutes a "prohibited transaction" under
Section 406 of the Employee Retirement Income Security Act of 1974, as
amended, or Section 4975 of the Internal Revenue Code of 1986, as
amended;
(H) the statements relating to legal matters, documents or
proceedings included in (1) the Prospectus, as then amended or
supplemented, and the Time of Sale Prospectus, if applicable, under
the captions "Description of Notes" (in the Prospectus Supplement),
"Description of Debt Securities" (in the Basic Prospectus) and "Plan
of Distribution" (in the Prospectus Supplement and in the Basic
Prospectus), (2) the Registration Statement, as then amended or
supplemented, under Item 15, (3) "Item 3. Legal Proceedings" of the
most recent annual report on Form 10 K incorporated by reference in
the Prospectus and the Time of Sale Prospectus, if applicable, and (4)
"Item 1. Legal Proceedings" of Part II of the quarterly reports on
Form 10 Q, if any, filed since such annual report and incorporated by
reference in the Prospectus and the Time of Sale Prospectus, if
applicable, in each case fairly summarize in all material respects
such matters, documents or proceedings;
(I) after due inquiry, such counsel does not know of any legal or
governmental proceedings pending or threatened to which the Company or
any of its consolidated subsidiaries is a party or to which any of the
properties of the Company or any of its consolidated subsidiaries is
subject that are required to be described in the Registration
Statement or the Prospectus, as then amended or supplemented, and are
not so described or of any U.S. federal or state statutes,
regulations, contracts or other documents governed by U.S. federal or
state law that are required to be described in the Registration
Statement or the Prospectus, as then amended or supplemented, or to be
filed or incorporated by reference as exhibits to such Registration
Statement that are not described, filed or incorporated by reference
as required;
(J) the Company is not, and after giving effect to the offering
and sale of the Notes and the application of the proceeds thereof as
described in the Prospectus, will not be required to register as, an
"investment company" as such term is defined in the Investment Company
Act of 1940, as amended; and
(K) (1) in the opinion of such counsel (A) each document filed
pursuant to the Exchange Act and incorporated by reference in the
Registration Statement and the Prospectus, as then amended or
supplemented, and the Time of Sale Prospectus, if applicable (except
for the financial statements and financial schedules and other
financial and statistical data included therein, as to which such
counsel need not express any opinion), appeared on its face to be
appropriately responsive as of its filing date in all material
respects to the
15
requirements of the Exchange Act and the applicable rules and
regulations of the Commission thereunder and (B) the Registration
Statement and the Prospectus, as then amended or supplemented, if
applicable (except for the financial statements and financial
schedules and other financial and statistical data included therein
and except for those parts of the Registration Statement that
constitute the Forms T-1, as to which such counsel need not express
any opinion), appear on their face to be appropriately responsive in
all material respects to the requirements of the Securities Act and
the applicable rules and regulations of the Commission thereunder, and
(2) nothing has come to the attention of such counsel that causes such
counsel to believe that (A) any part of the Registration Statement, as
then amended, if applicable, when such part became effective (except
for the financial statements and financial schedules and other
financial and statistical data included therein and except for those
parts of the Registration Statement that constitute Forms T-1, as to
which such counsel need not express any belief) contained any untrue
statement of a material fact or omitted to state a material fact
required to be stated therein or necessary to make the statements
therein not misleading, (B) the Registration Statement or the
Prospectus (except for the financial statements and financial
schedules and other financial and statistical data included therein
and except for those parts of the Registration Statement that
constitute Forms T-1, as to which such counsel need not express any
belief) as of the date the opinion is delivered, contained any untrue
statement of a material fact or omitted to state a material fact
required to be stated therein or necessary to make the statements
therein not misleading, (C) the Time of Sale Prospectus (except for
the financial statements and financial schedules and other financial
and statistical data included therein, as to which such counsel need
not express any belief), if any, as amended or supplemented, if
applicable, as of the date the opinion is delivered contains any
untrue statement of a material fact or omits to state a material fact
necessary in order to make the statements therein, in the light of the
circumstances under which they were made not misleading or (D) the
Prospectus (except for the financial statements and financial
schedules and other financial and statistical data included therein,
as to which such counsel need not express any belief), as amended or
supplemented, if applicable, as of the date the opinion is delivered
contains any untrue statement of a material fact or omits 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;
provided that in the case of an opinion delivered on the Commencement
Date or pursuant to Section 5(b), the opinion and belief set forth in
clauses 1(B), 2(B) (with respect to the Prospectus only) and 2(C)
above shall be deemed not to cover information concerning an offering
of Notes to the extent such information will be set forth in a
supplement to the Basic Prospectus.
(ii) The opinion, dated as of such date, of Sidley Austin LLP, your
special counsel, covering the matters in subparagraphs (D), (E), (F) and
(H) (with respect to statements in the Prospectus and the Time of Sale
Prospectus, if applicable, as then amended or supplemented, under the
captions "Description of Notes" (in the Prospectus Supplement),
"Description of Debt Securities" (in the Basic Prospectus), "Plan of
16
Distribution" (in the Prospectus Supplement and in the Basic Prospectus)
and clauses 4(b)(i)(K)(2)(A), 4(b)(i)(K)(2)(B), 4(b)(i)(K)(2)(C) and
4(b)(i)(K)(2)(D) above.
With respect to Section 4(b)(i)(K) above, if such opinion is given by
counsel who is also an officer of the Company, such counsel may state that his
or her opinions and beliefs are based upon his or her participation, or the
participation of someone under his or her supervision, in the preparation of the
Registration Statement, the Time of Sale Prospectus and the Prospectus and any
amendments or supplements thereto and review and discussion of the contents
thereof, but are without independent check or verification, except as specified.
With respect to Section 4(b)(i)(K) above, Sidley Austin LLP and, if Xxxxx Xxxx &
Xxxxxxxx is giving such opinion, Xxxxx Xxxx & Xxxxxxxx may state that their
opinions and beliefs are based upon their participation in the preparation of
the Registration Statement, the Time of Sale Prospectus, the Prospectus, the
preliminary prospectus supplement, if any, any identified free writing
prospectuses (but not including documents incorporated therein by reference) and
upon review and discussion of the contents of the Registration Statement, the
Time of Sale Prospectus and the Prospectus (including documents incorporated
therein by reference), but are without independent check or verification, except
as specified, and (ii) need express no opinion or belief as to the conveyance of
the Time of Sale Prospectus or the information contained therein to investors.
(iii) The opinion, dated as of such date, of Xxxxx Xxxx & Xxxxxxxx,
special counsel to the Company, to the effect that the statements set forth
under the caption "United States Federal Income Taxation" in the Basic
Prospectus and the Prospectus Supplement and under the caption "Forms of
Securities -- Limitations on Issuance of Bearer Securities and Bearer Debt
Warrants" in the Basic Prospectus, insofar as such statements relate to
statements of law or legal conclusions under the laws of the United States
or matters of United States law, fairly present the information called for
and fairly summarize the matters referred to therein.
The opinion of Xxxxx Xxxx & Xxxxxxxx described in Section 4(b)(iii) above
and in Section 4(b)(i) above, if such opinion is given by Xxxxx Xxxx & Xxxxxxxx,
shall be rendered to you at the request of the Company and shall so state
therein.
(c) On the Commencement Date and, if called for by any Notes Terms
Agreement, on the corresponding Settlement Date, you shall have received a
certificate, dated the Commencement Date or such Settlement Date, as the case
may be, and signed by an executive officer of the Company to the effect set
forth in Section 4(a)(iii) above and to the effect that the representations and
warranties of the Company contained in this Agreement are true and correct as of
such date and that the Company has complied with all of the agreements and
satisfied all of the conditions on its part to be performed or satisfied on or
before such date.
The officer signing and delivering such certificate may rely upon the best
of his knowledge as to proceedings threatened.
(d) On the Commencement Date and, if called for by any Notes Terms
Agreement, on the corresponding Settlement Date, the Company's public
accountants shall have furnished to you a letter or letters, dated as of the
Commencement Date or such Settlement Date, as the case may be, in form and
substance satisfactory to you containing statements and information of the
17
type ordinarily included in accountants' "comfort letters" to underwriters with
respect to the financial statements and certain financial information contained
in or incorporated by reference into the Registration Statement, the Time of
Sale Prospectus and the Prospectus, as then amended or supplemented; provided
that each letter so furnished shall use a "cut-off date" no more than three
business days prior to the date of such letter.
(e) On the Commencement Date and on each Settlement Date, the Company shall
have furnished to you such appropriate further information, certificates and
documents as you may reasonably request
5. Additional Agreements of the Company. (a) Each time the Registration
Statement or Prospectus is amended or supplemented (other than by an amendment
or supplement providing solely for (i) a change in the interest rates, repayment
provisions, redemption provisions or maturities offered on the Notes or (ii) a
change you deem to be immaterial), the Company will deliver or cause to be
delivered forthwith to you a certificate signed by an executive officer of the
Company, dated the date of such amendment or supplement, as the case may be, in
form reasonably satisfactory to you, of the same tenor as the certificate
referred to in Section 4(c) relating to the Registration Statement or the
Prospectus as amended or supplemented to the time of delivery of such
certificate.
(b) Each time the Company furnishes a certificate pursuant to Section 5(a)
(other than any amendment or supplement to the Registration Statement or
Prospectus caused by the filing of a Current Report on Form 8-K unless you shall
reasonably request based on disclosure included or omitted from such Report),
the Company will furnish or cause to be furnished forthwith to you a written
opinion of counsel for the Company. Any such opinion shall be dated the date of
such amendment or supplement, as the case may be, shall be in a form
satisfactory to you and shall be of the same tenor as the opinions referred to
in Section 4(b), but modified to relate to the Registration Statement and the
Prospectus as amended and supplemented to the time of delivery of such opinion.
In lieu of such opinion, counsel last furnishing such an opinion to you may
furnish to you a letter to the effect that you may rely on such last opinion to
the same extent as though it were dated the date of such letter (except that
statements in such last opinion will be deemed to relate to the Registration
Statement and the Prospectus as amended or supplemented to the time of delivery
of such letter).
(c) Each time the Registration Statement or the Prospectus is amended or
supplemented to set forth amended or supplemental financial information or such
amended or supplemental information is incorporated by reference in the
Prospectus, the Company shall cause its independent auditors forthwith to
furnish you with a letter, dated the date of such amendment or supplement, as
the case may be, in form satisfactory to you, of the same tenor as the letter
referred to in Section 4(d), with regard to the amended or supplemental
financial information included or incorporated by reference in the Registration
Statement or the Prospectus as amended or supplemented to the date of such
letter; provided that each letter so furnished shall use a "cut-off date" no
more than three business days prior to the date of such letter.
6. Indemnification and Contribution. (a) The Company agrees to indemnify
and hold harmless you and each person, if any, who controls you within the
meaning of either
18
Section 15 of the Securities Act or Section 20 of the Exchange Act and each of
your affiliates within the meaning of Rule 405 under the Securities Act from and
against any and all losses, claims, damages and liabilities (including, without
limitation, any legal or other expenses reasonably incurred in connection with
defending or investigating any such action or claim) caused by any untrue
statement or alleged untrue statement of a material fact contained in the
Registration Statement or any amendment thereof, any preliminary prospectus, the
Time of Sale Prospectus, any issuer free writing prospectus as defined in Rule
433(h) under the Securities Act, any Company information that the Company has
filed, or is required to file, pursuant to Rule 433(d) under the Securities Act,
or the Prospectus (as amended or supplemented if the Company shall have
furnished any amendments or supplements thereto), or caused by any omission or
alleged omission to state therein a material fact required to be stated therein
or necessary to make the statements therein not misleading, except insofar as
such losses, claims, damages or liabilities are caused by any such untrue
statement or omission or alleged untrue statement or omission based upon
information relating to you furnished to the Company in writing by you expressly
for use therein.
(b) You agree, severally and not jointly, to indemnify and hold harmless
the Company, its directors, its officers who sign the Registration Statement and
each person, if any, who controls the Company within the meaning of either
Section 15 of the Securities Act or Section 20 of the Exchange Act to the same
extent as the foregoing indemnity from the Company to you, but only with
reference to information relating to you furnished to the Company in writing by
you expressly for use in the Registration Statement, any preliminary prospectus,
the Time of Sale Prospectus, any issuer free writing prospectus or the
Prospectus or any amendments or supplements thereto.
(c) In case any proceeding (including any governmental investigation) shall
be instituted involving any person in respect of which indemnity may be sought
pursuant to Section 6(a) or 6(b), such person (the "indemnified party") shall
promptly notify the person against whom such indemnity may be sought (the
"indemnifying party") in writing and the indemnifying party, upon request of the
indemnified party, shall retain counsel reasonably satisfactory to the
indemnified party to represent the indemnified party and any others the
indemnifying party may designate in such proceeding and shall pay the fees and
disbursements of such counsel related to such proceeding. In any such
proceeding, any indemnified party shall have the right to retain its own
counsel, but the fees and expenses of such counsel shall be at the expense of
such indemnified party unless (i) the indemnifying party and the indemnified
party shall have mutually agreed to the retention of such counsel or (ii) the
named parties to any such proceeding (including any impleaded parties) include
both the indemnifying party and the indemnified party and representation of both
parties by the same counsel would be inappropriate due to actual or potential
differing interests between them. It is understood that the indemnifying party
shall not, in respect of the legal expenses of any indemnified party in
connection with any proceeding or related proceedings in the same jurisdiction,
be liable for the fees and expenses of more than one separate firm (in addition
to any local counsel) for all such indemnified parties and that all such fees
and expenses shall be reimbursed as they are incurred. Such firm shall be
designated in writing by you, in the case of parties indemnified pursuant to
Section 6(a), and by the Company, in the case of parties indemnified pursuant to
Section 6(b). The indemnifying party shall not be liable for any settlement of
any proceeding effected without its written consent, but if settled with such
consent or if there be a final judgment for the plaintiff, the indemnifying
19
party agrees to indemnify the indemnified party from and against any loss or
liability by reason of such settlement or judgment. Notwithstanding the
foregoing sentence, if at any time an indemnified party shall have requested an
indemnifying party to reimburse the indemnified party for fees and expenses of
counsel as contemplated by the second and third sentences of this paragraph, the
indemnifying party agrees that it shall be liable for any settlement of any
proceeding effected without its written consent if (i) such settlement is
entered into more than 30 days after receipt by such indemnifying party of the
aforesaid request and (ii) such indemnifying party shall not have reimbursed the
indemnified party in accordance with such request prior to the date of such
settlement. No indemnifying party shall, without the prior written consent of
the indemnified party, effect any settlement of any pending or threatened
proceeding in respect of which any indemnified party is or could have been a
party and indemnity could have been sought hereunder by such indemnified party,
unless such settlement includes an unconditional release of such indemnified
party from all liability on claims that are the subject matter of such
proceeding.
(d) To the extent the indemnification provided for in Section 6(a) or 6(b)
is unavailable to an indemnified party or insufficient in respect of any losses,
claims, damages or liabilities referred to therein in connection with any
offering of Notes, then each indemnifying party under such paragraph, in lieu of
indemnifying such indemnified party thereunder, shall contribute to the amount
paid or payable by such indemnified party as a result of such losses, claims,
damages or liabilities (i) in such proportion as is appropriate to reflect the
relative benefits received by the Company on the one hand and you on the other
hand from the offering of such Notes or (ii) if the allocation provided by
clause 6(d)(i) above is not permitted by applicable law, in such proportion as
is appropriate to reflect not only the relative benefits referred to in clause
6(d)(i) above but also the relative fault of the Company on the one hand and you
on the other hand in connection with the statements or omissions that resulted
in such losses, claims, damages or liabilities, as well as any other relevant
equitable considerations. The relative benefits received by the Company on the
one hand and you on the other hand in connection with the offering of such Notes
shall be deemed to be in the same respective proportions as the total net
proceeds from the offering of such Notes (before deducting expenses) received by
the Company bear to the total discounts and commissions received by you in
respect thereof as set forth in the Prospectus. The relative fault of the
Company on the one hand and of you on the other hand shall be determined by
reference to, among other things, whether the untrue or alleged untrue statement
of a material fact or the omission or alleged omission to state a material fact
relates to information supplied by the Company or by you and the parties'
relative intent, knowledge, access to information and opportunity to correct or
prevent such statement or omission. Your obligations to contribute pursuant to
this Section 6 are several in proportion to the respective principal amounts of
the Notes you have purchased in any offering of Notes hereunder, and not joint.
(e) The Company and you agree that it would not be just or equitable if
contribution pursuant to this Section 6 were determined by pro rata allocation
or by any other method of allocation that does not take account of the equitable
considerations referred to in Section 6(d). The amount paid or payable by an
indemnified party as a result of the losses, claims, damages and liabilities
referred to in Section 6(d) shall be deemed to include, subject to the
limitations set forth above, 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 6, you shall not
be required to contribute any amount in excess of the
20
amount by which the total price at which the Notes referred to in Section 6(d)
that were offered and sold to the public through you exceeds the amount of any
damages that you have otherwise been required to pay by reason of such untrue or
alleged untrue statement or omission or alleged omission. No person guilty of
fraudulent misrepresentation (within the meaning of Section 11(f) of the
Securities Act) shall be entitled to contribution from any person who was not
guilty of such fraudulent misrepresentation. The remedies provided for in this
Section 6 are not exclusive and shall not limit any rights or remedies which may
otherwise be available to any indemnified party at law or in equity.
(f) The indemnity and contribution provisions contained in this Section 6
and the representations, warranties and other statements of the Company
contained in or made pursuant to this Agreement or any Notes Terms Agreement
will remain operative and in full force and effect regardless of (i) any
termination of this Agreement or any such Notes Terms Agreement, (ii) any
investigation made by or on behalf of you, any person controlling you or any of
your affiliates or by or on behalf of the Company, its officers or directors or
any person controlling the Company and (iii) acceptance of and payment for any
of the Notes.
7. Position of the Agent. In acting under this Agreement and in connection
with the sale of any Notes by the Company (other than Notes sold to you pursuant
to a Notes Terms Agreement), you are acting solely as agent of the Company and
do not assume any obligation towards or relationship of agency or trust with any
purchaser of Notes. You shall make reasonable efforts to assist the Company in
obtaining performance by each purchaser whose offer to purchase Notes has been
solicited by you and accepted by the Company, but you shall not have any
liability to the Company in the event any such purchase is not consummated for
any reason. If the Company shall default in its obligations to deliver Notes to
a purchaser whose offer it has accepted, the Company shall hold you harmless
against any loss, claim, damage or liability arising from or as a result of such
default and shall, in particular, pay to you the commission you would have
received had such sale been consummated.
8. Offering Restrictions. If any Notes are to be offered outside the United
States, you will not offer or sell any such Notes in any jurisdiction if such
offer or sale would not be in compliance with any applicable law or regulation
or if any consent, approval or permission is needed for such offer or sale by
you or for or on behalf of the Company unless such consent, approval or
permission has been previously obtained. Subject to the obligations of the
Company set forth in Section 3 of this Agreement, the Company shall have no
responsibility for, and you will obtain, any consent, approval or permission
required by you for the subscription, offer, sale or delivery by you of Notes,
or the distribution of any offering materials, under the laws and regulations in
force in any jurisdiction to which you are subject or in or from which you make
any subscription, offer, sale or delivery.
9. Termination. This Agreement may be terminated at any time either by the
Company or by you upon the giving of written notice of such termination to the
other parties hereto, but without prejudice to any rights, obligations or
liabilities of the other parties hereto accrued or incurred prior to such
termination. The termination of this Agreement shall not require termination of
any Notes Terms Agreement, and the termination of any such Notes Terms Agreement
shall not require termination of this Agreement. If this Agreement is
terminated, the provisions of the third paragraph of Section 2(a), the last
sentence of Section 3(e)
21
and Sections 3(f), 3(k), 6, 7, 10, 11 and 13 shall survive; provided that if at
the time of termination an offer to purchase Notes has been accepted by the
Company but the time of delivery to the purchaser or its agent of such Notes has
not occurred, the provisions of Sections 1, 2(b), 2(c), 3(d), 3(g), 3(h), 3(i),
3(j), 3(m), 4 and 5 shall also survive until such delivery has been made.
10. Notices. All communications hereunder will be in writing and effective
only on receipt, and, if sent to you, will be mailed, delivered or telefaxed and
confirmed to you at 0000 Xxxxxxxx, Xxx Xxxx, Xxx Xxxx 00000, Attention: Manager,
Continuously Offered Products (telefax number: 212-761-0781) or, if sent to the
Company, will be mailed, delivered or telefaxed and confirmed to the Company at
0000 Xxxxxx xx xxx Xxxxxxxx, Xxx Xxxx, Xxx Xxxx 00000, Attention: Treasurer;
Facsimile No.: 000-000-0000.
11. Successors. This Agreement and any Notes Terms Agreement will inure to
the benefit of and be binding upon the parties hereto and their respective
successors and the officers, directors and controlling persons referred to in
Section 6 and the purchasers of Notes (to the extent expressly provided in
Section 4), and no other person will have any right or obligation hereunder.
12. Counterparts. This Agreement may be signed in any number of
counterparts, each of which shall be an original, with the same effect as if the
signatures thereto and hereto were upon the same instrument.
13. Applicable Law. This Agreement will be governed by and construed in
accordance with the internal laws of the State of New York.
14. Headings. The headings of the sections of this Agreement have been
inserted for convenience of reference only and shall not be deemed a part of
this Agreement.
22
If the foregoing is in accordance with your understanding of our agreement,
please sign and return to us the enclosed duplicate hereof, whereupon this
letter and your acceptance shall represent a binding agreement between the
Company and you.
Very truly yours,
XXXXXX XXXXXXX
By:
------------------------------
Name: Xxx Xxxxxxx
Title: Assistant Treasurer
The foregoing Agreement is hereby
confirmed and accepted as of the date first
above written.
XXXXXX XXXXXXX XX INC.
By:
------------------------------------
Name:
Title:
XXXXXX XXXXXXX & CO. INCORPORATED
By:
------------------------------------
Name: Xxxxxxx Xxxxx
Title: Executive Director
23
EXHIBIT A
XXXXXX XXXXXXX
DIRECTSECURITIES(SM)
NOTES TERMS AGREEMENT
___________________, 200_
Xxxxxx Xxxxxxx
0000 Xxxxxxxx
Xxx Xxxx, Xxx Xxxx 00000
Attention:
Re: DirectSecurities Distribution Agreement dated January 25, 2006
(the "DirectSecurities Distribution Agreement")
-----------------------------------------------
The undersigned agrees to purchase your Xxxxxx Xxxxxxx DirectSecurities(SM)
having the terms set forth below. The offering of the Notes will be made
pursuant to a Prospectus dated January 25, 2006, as amended by a Prospectus
Supplement dated January 25, 2006[,] [and] [Pricing Supplement No. [ ] which
we expect to be dated on or about [ ]][,] [and] [a free writing prospectus
which we expect to be dated on or about [ ]][,] [and] [a Term Sheet which we
expect to be dated on or about [ ]] (collectively, the "Time of Sale
Prospectus"). The Notes are expected to have the terms set forth below, but the
final terms of the Notes will be those set forth in the Time of Sale Prospectus.
Principal Amount: Interest Rate:
Purchase Price: Applicability of Modified Payment upon Acceleration:
Price to Public: If yes, state issue price:
Settlement Date and Time: Applicability of Survivor's Option:
Place of Delivery: Optional Repayment Date(s):
Original Issue Date: Optional Redemption Date(s):
Interest Accrual Date: Initial Redemption Date:
Interest Payment Dates: Initial Redemption Percentage:
Interest Payment Period: Annual Redemption Percentage Reduction:
Maturity Date: Face Amount (if any):
Minimum Denominations:
Other Provisions:
The provisions of Sections 1, 2(b) and 2(c), 3 through 6, 8 and 10 through
14 of the DirectSecurities Distribution Agreement and the related definitions
are incorporated by reference herein and shall be deemed to have the same force
and effect as if set forth in full herein.
A-1
This Agreement is also subject to termination on the terms incorporated by
reference herein. If this Agreement is terminated, the provisions of Sections
3(k), 6, 10, 11, and 13 of the DirectSecurities Distribution Agreement shall
survive for the purposes of this Agreement.
The following information, opinions, certificates, letters and documents
referred to in Section 4 of the DirectSecurities Distribution Agreement will be
required: ________________.
A-2
XXXXXX XXXXXXX XX INC.
By:
-------------------------------
Name:
Title:
XXXXXX XXXXXXX & CO.
INCORPORATED
By:
-------------------------------
Name: Xxxxxxx Xxxxx
Title: Executive Director
Accepted:
XXXXXX XXXXXXX
By:
---------------------------------
Name: Xxx Xxxxxxx
Title: Assistant Treasurer
A-3
EXHIBIT B
XXXXXX XXXXXXX
XXXXXX XXXXXXX DIRECTSECURITIES(SM)
ADMINISTRATIVE PROCEDURES
-----------------------
Explained below are the administrative procedures and specific terms of the
offering of Xxxxxx Xxxxxxx DirectSecurities(SM) (the "Notes") on a continuous
basis by Xxxxxx Xxxxxxx (the "Company") pursuant to the Xxxxxx Xxxxxxx
DirectSecurities Distribution Agreement dated January 25, 2006 (as may be
amended from time to time, the "DirectSecurities Distribution Agreement") among
the Company, Xxxxxx Xxxxxxx XX Inc. and Xxxxxx Xxxxxxx & Co. Incorporated
(collectively or individually the "Agent" as the context requires). The Notes
will be issued as senior indebtedness of the Company pursuant to the provisions
of a senior indenture dated as of November 1, 2004 (as may be supplemented or
amended from time to time, the "Indenture"), between the Company and JPMorgan
Chase Bank, N.A. (formerly known as JPMorgan Chase Bank), ("JPMorgan Chase"), as
trustee.
In the DirectSecurities Distribution Agreement, the Agent has agreed to use
reasonable efforts to solicit purchases of the Notes, and the administrative
procedures explained below will govern the issuance and settlement of any Notes
sold through the Agent, as agent of the Company. The Agent, as principal, may
also purchase Notes for its own account, and the Company and the Agent will
enter into a terms agreement (a "Notes Terms Agreement"), as contemplated by the
DirectSecurities Distribution Agreement. The administrative procedures explained
below will govern the issuance and settlement of any Notes purchased by the
Agent, as principal, unless otherwise specified in the applicable Notes Terms
Agreement.
JPMorgan Chase will be the Registrar, Authenticating Agent and Paying Agent
for the Notes and will perform the duties specified herein. Each Note will be
represented by a Global Note (as defined below) delivered to JPMorgan Chase, as
agent for The Depository Trust Company ("DTC"), and recorded in the book-entry
system maintained by DTC (a "Book-Entry Note"). Each Note will be issued in
global form. Except as set forth in the Indenture, an owner of a Book-Entry Note
will not be entitled to receive a certificated note.
Book-Entry Notes will be payable in U.S. dollars and will be issued in
accordance with the administrative procedures set forth in Part I hereof as they
may subsequently be amended as the result of changes in DTC's operating
procedures.
Unless otherwise defined herein, terms defined in the Indenture, the Notes
or any Prospectus Supplement relating to the Notes shall be used herein as
therein defined.
B-1
The Company will advise the Agent in writing of the employees of the
Company with whom the Agent is to communicate regarding offers to purchase Notes
and the related settlement details.
B-2
PART I: ADMINISTRATIVE PROCEDURES FOR BOOK-ENTRY NOTES
In connection with the qualification of the Book-Entry Notes for
eligibility in the book-entry system maintained by DTC, JPMorgan Chase will
perform the custodial, document control and administrative functions described
below, in accordance with its respective obligations under (i) DTC's Operational
Arrangements dated February 20, 2002, as amended from time to time, including by
the Blanket Issuer Letter of Representations from the Company to DTC, dated as
of August 25, 2003 and (ii) its obligations under a Medium Term Note Certificate
Agreement between JPMorgan Chase and DTC dated as of November 13, 2001, and its
obligations as a participant in DTC, including DTC's Same Day Funds Settlement
System ("SDFS").
Issuance: On any date of settlement (as defined under
"Settlement" below) for one or more Book-Entry
Notes, the Company will issue a single global
Note in fully registered form without coupons (a
"Global Note") representing up to
U.S.$500,000,000 principal amount of all such
Notes that have the same Original Issue Date,
Maturity Date and other terms and that otherwise
comprise the same securities and have the same
terms. Each Global Note will be dated and issued
as of the date of its authentication by JPMorgan
Chase. Each Global Note will bear an "Interest
Accrual Date," which will be (i) with respect to
an original Global Note (or any portion
thereof), its original issuance date and (ii)
with respect to any Global Note (or any portion
thereof) issued subsequently upon exchange of a
Global Note, or in lieu of a destroyed, lost or
stolen Global Note, the most recent Interest
Payment Date to which interest has been paid or
duly provided for on the predecessor Global Note
or Notes (or if no such payment or provision has
been made, the original issuance date of the
predecessor Global Note), regardless of the date
of authentication of such subsequently issued
Global Note. Book-Entry Notes will be payable in
U.S. dollars.
Denominations: Book-Entry Notes will be issued in principal
amounts of U.S.$1,000 or any amount in excess
thereof that is an integral multiple of
U.S.$1,000, unless otherwise indicated in any
applicable free writing prospectus, Term Sheet
and Pricing Supplement. Global Notes will be
denominated in principal amounts not in excess
of U.S.$500,000,000. If one or more Book-Entry
Notes having an aggregate principal amount in
excess of U.S.$500,000,000 would, but for the
preceding sentence, be represented by a single
Global Note then one Global Note will be issued
to represent each U.S.$500,000,000 principal
amount of such Book-Entry Note or Notes and an
additional Global Note will be issued to
represent any remaining principal amount
B-3
of such Book-Entry Note or Notes. In such a
case, each of the Global Notes shall be assigned
the same CUSIP number.
Preparation of
Pricing Supplement: If any order to purchase a Book-Entry Note is
accepted by or on behalf of the Company, the
Company will prepare a free writing prospectus,
and/or Term Sheet, if applicable and a pricing
supplement (a "Pricing Supplement") reflecting
the terms of such Note. The Company (i) will
arrange to file with the Commission an
electronic format document, in the manner
prescribed by the XXXXX Xxxxx Manual, of such
Term Sheet and Pricing Supplement in accordance
with, in the case of any free writing prospectus
and/or Term Sheet, Rule 433 under the Securities
Act and, in the case of the Pricing Supplement,
the applicable paragraph of Rule 424(b) under
the Securities Act, (ii) will, with respect to
each of the free writing prospectus and/or Term
Sheet, if applicable, and the Pricing
Supplement, as soon as possible and in any event
not later than the date on which the applicable
document is filed with the Commission, deliver
the number of copies of such document to the
Agent as the Agent shall request and (iii) will,
on the Agent's behalf, promptly file five copies
of such Pricing Supplement with the National
Association of Securities Dealers, Inc. (the
"NASD"), if required under the rules of the
NASD. The Agent will cause the free writing
prospectus and/or Term Sheet, if applicable, and
the Pricing Supplement to be delivered, or
otherwise made available, to the purchaser of
the Note.
In each instance that a Pricing Supplement is
prepared, the Agent will affix the Pricing
Supplement to Prospectuses prior to their use.
Outdated free writing prospectuses, Term Sheets,
Pricing Supplements, and the Prospectuses to
which they are attached (other than those
retained for files), will be destroyed.
Settlement: The receipt by the Company of immediately
available funds in payment for a Book-Entry Note
and the authentication and issuance of the
Global Note representing such Note shall
constitute "settlement" with respect to such
Note. All orders accepted by the Company will be
settled on the fifth Business Day pursuant to
the timetable for settlement set forth below
unless the Company and the purchaser agree to
settlement on another day, which shall be no
earlier than the next Business Day.
B-4
Settlement Procedures: Settlement Procedures with regard to each
Book-Entry Note sold by the Company to or
through the Agent (unless otherwise specified
pursuant to a Notes Terms Agreement), shall be
as follows:
A. The Agent will advise the Company by telephone
that such Note is a Book-Entry Note and of the
following settlement information:
1. Principal amount.
2. Maturity Date.
3. Whether such Note will pay interest monthly,
quarterly, semiannually or annually.
4. Whether a Survivor's Option is applicable.
5. Redemption or repayment provisions, if any.
6. Settlement date and time (Original Issue
Date).
7. Interest Accrual Date.
8. Price.
9. Agent's commission, if any, determined as
provided in the DirectSecurities
Distribution Agreement.
10. Whether the Note is an Original Issue
Discount Note (an "OID Note"), and if it is
an OID Note, the applicability of Modified
Payment upon Acceleration (and, if so, the
Issue Price).
11. Any other applicable provisions.
B. The Company will advise JPMorgan Chase by
telephone or electronic transmission (confirmed
in writing at any time on the same date) of the
information set forth in "Settlement Procedures"
"A" above, such advice to contain a
representation as to the aggregate principal
amount of Notes permitted to be issued hereunder
after such issuance. JPMorgan Chase will then
assign a CUSIP number to the Global Note
representing a Note and will notify the Company
and the Agent of such CUSIP number(s) by
telephone as soon as practicable.
B-5
C. JPMorgan Chase will enter a pending deposit
message through DTC's Participant Terminal
System, providing the following settlement
information to DTC, the Agent and Standard &
Poor's Corporation:
1. The information set forth in "Settlement
Procedure" "A" above.
2. The Initial Interest Payment Date for the
Notes, the number of days by which such date
succeeds the related DTC Record Date and, if
known, amount of interest payable on such
Initial Interest Payment Date.
3. The CUSIP number of the Global Note.
4. Whether the Global Note will represent any
other Book-Entry Note (to the extent known
at such time).
5. The number of Participant accounts to be
maintained by DTC on behalf of the Agent and
JPMorgan Chase.
D. JPMorgan Chase will authenticate, complete and
deliver the Global Note representing the Note.
E. DTC will credit such Note to JPMorgan Chase's
participant account at DTC.
F. JPMorgan Chase will enter an SDFS deliver order
through DTC's Participant Terminal System
instructing DTC to (i) debit the Note to
JPMorgan Chase's participant account and credit
such Note to the Agent's participant account and
(ii) debit the Agent's settlement account and
credit JPMorgan Chase's settlement account for
an amount equal to the price of such Note less
the Agent's commission, if any. The entry of
such a deliver order shall constitute a
representation and warranty by JPMorgan Chase to
DTC that (a) the Global Note representing a Book
Entry Note has been issued and authenticated and
(b) JPMorgan Chase is holding such Global Note
pursuant to the Medium-Term Note Certificate
Agreement between JPMorgan Chase and DTC.
G. Unless the Agent is the end purchaser of a Note,
the Agent will enter an SDFS deliver order
through DTC's Participant Terminal System
instructing DTC (i) to debit such Note
B-6
to the Agent's participant account and credit
such Note to the participant accounts of the
Participants with respect to such Note and (ii)
to debit the settlement accounts of such
Participants and credit the settlement account
of the Agent for an amount equal to the price of
such Note.
H. Transfers of funds in accordance with SDFS
deliver orders described in Settlement
Procedures "F" and "G" will be settled in
accordance with SDFS operating procedures in
effect on the settlement date.
I. JPMorgan Chase will credit to the account of the
Company maintained at JPMorgan Chase, New York,
New York, in funds available for immediate use
in the amount transferred to JPMorgan Chase in
accordance with "Settlement Procedure" "F".
J. Unless the Agent is the end purchaser of the
Note, the Agent will confirm the purchase of
such Note to the purchaser either by
transmitting to the Participants with respect to
such Note a confirmation order or orders through
DTC's institutional delivery system or by
mailing a written confirmation to such
purchaser.
K. Monthly, JPMorgan Chase will send to the Company
a statement setting forth the principal amount
of Notes outstanding as of that date under the
Indenture and setting forth a brief description
of any sales of which the Company has advised
JPMorgan Chase that have not yet been settled.
Settlement
Procedures
Timetable: For sales by the Company of Book Entry Notes to
or through the Agent (unless otherwise specified
pursuant to a Notes Terms Agreement) for
settlement on the first Business Day after the
sale date, Settlement Procedures "A" through "J"
set forth above shall be completed as soon as
possible but not later than the respective times
in New York City set forth below:
B-7
Settlement
Procedure Time
A 11:00 A.M. on the sale date
B 12:00 Noon on the sale date
C 2:00 P.M. on the sale 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-J 5:00 P.M. on the settlement date
If a sale is to be settled more than one
Business Day after the sale date, Settlement
Procedures "A", "B" and "C" shall be completed
as soon as practicable but no later than 11:00
A.M., 12 Noon and 2:00 P.M., respectively, on
the first Business Day after the sale 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 Note is
rescheduled or canceled, JPMorgan Chase, after
receiving notice from the Company or the Agent,
will deliver to DTC, through DTC's Participant
Terminal System, a cancellation message to such
effect by no later than 2:00 P.M. on the
Business Day immediately preceding the scheduled
settlement date.
Failure to Settle: If JPMorgan Chase fails to enter an SDFS deliver
order with respect to a Book-Entry Note pursuant
to "Settlement Procedure" "F", JPMorgan Chase
may deliver to DTC, through DTC's Participant
Terminal System, as soon as practicable a
withdrawal message instructing DTC to debit such
Note to JPMorgan Chase's participant account,
provided that JPMorgan Chase's participant
account contains a principal amount of the
Global Note representing such Note that is at
least equal to the principal amount to be
debited. If a withdrawal message is processed
with respect to all the Book-Entry Notes
represented by a Global Note, JPMorgan Chase
will xxxx such Global Note "canceled," make
appropriate entries in JPMorgan Chase's records
and send such canceled Global Note to the
Company. The CUSIP number assigned to such
Global Note shall, in accordance with the
procedures of the CUSIP Service Bureau of
Standard & Poor's Corporation, be canceled and
not immediately reassigned. If a withdrawal
message is
B-8
processed with respect to one or more, but not
all, of the Book Entry Notes represented by a
Global Note, JPMorgan Chase will exchange such
Global Note for two Global Notes one of which
shall represent such Book Entry Note or Notes
and shall be canceled immediately after issuance
and the other of which shall represent the
remaining Book-Entry Notes previously
represented by the surrendered Global Note and
shall bear the CUSIP number of the surrendered
Global Note.
If the purchase price for any Book Entry Note is
not timely paid to the Participants with respect
to such Note by the beneficial purchaser thereof
(or a person, including an indirect participant
in DTC, acting on behalf of such purchaser),
such Participants and, in turn, the Agent may
enter SDFS deliver orders through DTC's
Participant Terminal System reversing the orders
entered pursuant to Settlement Procedures "F"
and "G", respectively. Thereafter, JPMorgan
Chase will deliver the withdrawal message and
take the related actions described in the
preceding paragraph.
Notwithstanding the foregoing, upon any failure
to settle with respect to a Book-Entry Note, DTC
may take any actions in accordance with its SDFS
operating procedures then in effect.
In the event of a failure to settle with respect
to one or more, but not all, of the Book-Entry
Notes to have been represented by a Global Note,
JPMorgan Chase will provide, in accordance with
Settlement Procedures "D" and "F", for the
authentication and issuance of a Global Note
representing the Book-Entry Notes to be
represented by such Global Note and will make
appropriate entries in its records.
B-9
