EXHIBIT 1.1
Countrywide Home Loans, Inc.
U.S. $3,000,000,000
Medium-Term Notes, Series H
Due Nine Months or More
From Date of Issue
Payment of Principal, Premium, if any, and Interest
Fully and Unconditionally Guaranteed by
Countrywide Credit Industries, Inc.
SELLING AGENCY AGREEMENT
__, 1998
Xxxxxx Brothers Inc.
3 World Financial Center - 12th Floor
New York, New York 10285-1200
Chase Securities Inc.
000 Xxxx Xxxxxx
Xxx Xxxx, Xxx Xxxx 00000
Deutsche Bank Securities Inc.
00 X. 00xx Xxxxxx
Xxx Xxxx, Xxx Xxxx 00000
Xxxxxxx, Xxxxx & Co.
00 Xxxxx Xxxxxx
Xxx Xxxx, Xxx Xxxx 00000
Xxxxxxx Xxxxx & Co.
Xxxxxxx Xxxxx, Xxxxxx, Xxxxxx & Xxxxx
Incorporated
World Financial Center
North Tower - 10th Floor
New York, New York 10281-1310
X.X. Xxxxxx Securities Inc.
00 Xxxx Xxxxxx
Xxx Xxxx, Xxx Xxxx 00000
NationsBanc Xxxxxxxxxx Securities LLC
000 Xxxxx Xxxxx Xxxxxx
Xxxxxxxxx, Xxxxx Xxxxxxxx 00000
Xxxxxxx Xxxxx Xxxxxx Inc.
Seven World Trade Center
New York, New York 10048
Countrywide Securities Corporation
0000 Xxxx Xxxxxxx
Xxxxxxxxx, Xxxxxxxxxx 00000
Ladies and Gentlemen:
Countrywide Home Loans, Inc., a New York corporation (the "Company"),
confirms its agreement with each of you (collectively, the "Agents") with
respect to the issue and sale by the Company of up to U.S. $3,000,000,000
aggregate initial offering price of its Medium-Term Notes, Series H, Due Nine
Months or More from Date of Issue (the "Notes"). The Notes will be fully and
unconditionally guaranteed as to payment of principal, premium, if any, and
interest (the "Guarantees") by Countrywide Credit Industries, Inc. (the
"Guarantor"). The Notes and the Guarantees will be issued under an indenture,
dated as of January 1, 1992, as supplemented by Supplemental Indenture No. 1
thereto, dated as of June 15, 1995 (collectively, the "Indenture"), among the
Company, the Guarantor and The Bank of New York, as trustee (the "Trustee").
Unless otherwise specified in the Pricing Supplement referred to below, the
Notes will be issued in minimum denominations of U.S. $1,000 and in
denominations exceeding such amount by integral multiples of U.S. $1,000, and if
denominated in a currency or currency unit other than U.S. dollars, the
equivalent in such other currency or currency unit (the "Specified Currency") as
determined in accordance with the Indenture, of U.S. $1,000 (rounded down to an
integral multiple of 1,000 units of such Specified Currency) and any larger
amount that is an integral multiple of 1,000 units of such Specified Currency,
will be issued only in fully registered certificated or book-entry form, and
will be issued in the currency or currency units and will have the maturities,
annual interest rates (whether fixed or floating), redemption provisions and
other terms set forth in a pricing supplement (the "Pricing Supplement") to the
Prospectus referred to below. The Notes will be issued, and the terms thereof
established, in accordance with the Indenture and the Medium-Term Note
Administrative Procedures attached hereto as Exhibit A (the "Procedures"). The
Procedures may only be amended by written agreement of the Company and each
Agent after notice to, and in the case of amendments which affect the rights,
duties or obligations of the Trustee, with the approval of, the Trustee.
1. Representations and Warranties. The Company and the Guarantor, jointly and
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severally, represent and warrant to, and agree with, each Agent that:
(a) The Company and the Guarantor meet the requirements
for use of Form S-3 under the Securities Act of 1933, as amended
(the "Act") and rules and regulations ("Rules and Regulations")
of the Securities and Exchange Commission (the "Commission")
promulgated thereunder and have filed with the Commission a
registration statement on Form S-3 (File Nos. 333-_____ and 333-
_________) (the "Registration Statement"), and a related
preliminary prospectus for the registration under the Act of
certain securities, including the Notes and the Guarantees
(collectively, the "Securities") and the offering thereof from
time to
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time in accordance with Rule 415 of the Rules and Regulations,
which Registration Statement has been declared effective by the
Commission and copies of which have heretofore been delivered to
you. Such Registration Statement, as it may be amended or
supplemented, meets the requirements set forth in Rule
415(a)(1)(x) and (a)(2) of the Rules and Regulations and complies
in all other material respects with said Rule. In connection with
the sale of Notes, the Company and the Guarantor propose to file
with the Commission pursuant to Rule 424 under the Act a
supplement to the form of prospectus included in such
Registration Statement relating to the Notes and the Guarantees
and the plan of distribution thereof and have previously advised
the Agents of all further information (financial and other) with
respect to the Company and the Guarantor to be set forth therein.
Such Registration Statement, in the form in which it was declared
effective, as amended through the date hereof, including all
documents incorporated or deemed to be incorporated by reference
therein, is hereinafter referred to as the "Registration
Statement". Such prospectus, as supplemented through the date
hereof, is hereinafter called the "Prospectus", except that if
any revised prospectus or prospectus supplement shall be provided
to the Agents by the Company for use in connection with the
offering of the Securities which differs from the Prospectus
(whether or not such revised prospectus or prospectus supplement
is required to be filed by the Company pursuant to Rule 424(b) of
the Rules and Regulations), the term "Prospectus" shall refer to
such revised prospectus or prospectus supplement, as the case may
be, from and after the time it is first provided to the Agents
for such use. Any reference herein to the Registration Statement
or the Prospectus shall be deemed to refer to and include the
documents incorporated by reference therein pursuant to Item 12
of Form S-3 which were filed under the Securities Exchange Act of
1934, as amended (the "Exchange Act"), on or before the date of
this Agreement or the date of the Prospectus, as the case may be;
and any reference herein to the terms "amend", "amendment" or
"supplement" with respect to the Registration Statement or the
Prospectus shall be deemed to refer to and include the filing of
any document under the Exchange Act after the date of this
Agreement or the date of the Prospectus, as the case may be,
deemed to be incorporated therein by reference.
(b) As of the date hereof, when any amendment to the
Registration Statement becomes effective (including the filing of
any document incorporated by reference in the Registration
Statement), when any supplement to the Prospectus is filed with
the Commission, as of the date of any Terms Agreement (as defined
by Section 2 hereof) and at the date of delivery by the Company
of any Notes sold hereunder (a "Settlement Date"), (i) the
Registration Statement, as amended as of any such time, and the
Prospectus, as supplemented as of any such time, and the
Indenture complies, or will comply, as the case may be, in all
material respects with the applicable requirements of the Act,
the Trust Indenture Act of 1939, as amended (the "Trust Indenture
Act"), and the Exchange Act and the respective rules and
regulations thereunder and (ii) neither the Registration
Statement, as amended as of any such time, nor the Prospectus, as
supplemented as of any such time, contains, or will contain, as
the case may be, any untrue statement of a material fact or omit
to state any material fact required to be stated
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therein or necessary in order to make the statements therein not
misleading; provided, however, that the representations or
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warranties in this subsection shall not apply to (a) that part of
the Registration Statement which shall constitute the Statement
of Eligibility on Form T-1 under the Trust Indenture Act of the
Trustee or (b) the information contained in or omitted from the
Registration Statement or the Prospectus or any amendment thereof
or supplement thereto in reliance upon and in conformity with
information furnished in writing to the Company or the Guarantor
by any of you specifically for use in connection with the
preparation of the Registration Statement and the Prospectus or
any amendment thereof or supplement thereto.
(c) Neither the Company nor the Guarantor nor any of their
respective subsidiaries is in violation of its corporate charter
or bylaws or in default under any agreement, indenture or
instrument to which the Company, the Guarantor or any of their
respective subsidiaries is a party, the effect of which violation
or default would be material to the Company or the Guarantor and
its subsidiaries considered as a whole; the execution, delivery
and performance of this Agreement and the Indenture and
consummation of the transactions contemplated hereunder and
thereunder will not conflict with, result in the creation or
imposition of any lien, charge or encumbrance upon any of the
assets of the Company, the Guarantor or any of their respective
subsidiaries pursuant to the terms of, or constitute a default
under, any agreement, indenture or instrument, or result in a
violation of the charter or by-laws of the Company or the
Guarantor or any order, rule or regulation of any court or
governmental agency having jurisdiction over the Company, the
Guarantor or any of their respective subsidiaries; and except as
required by the Act, the Trust Indenture Act, the Exchange Act
and applicable state securities laws, no consent, authorization
or order of, or filing or registration with, any court or
governmental agency is required for the execution, delivery and
performance of this Agreement and the Indenture.
(d) Except as described in or contemplated by the
Registration Statement and the Prospectus, there has not been any
material adverse change in, or any adverse development which
materially affects, the business, properties, financial condition
or results of operations of the Company or the Guarantor and its
subsidiaries considered as a whole since the dates as of which
information is given in the Registration Statement and the
Prospectus.
(e) Xxxxx Xxxxxxxx LLP, whose reports have been included
in the Prospectus and incorporated by reference or included in
the Guarantor's most recent Annual Report on Form 10-K, which is
incorporated by reference in the Prospectus, are independent
public accountants as required by the Act and the Rules and
Regulations.
(f) (i) The Indenture has been duly authorized, executed
and delivered by the Company and the Guarantor and constitutes
the legally binding obligation of the Company and the Guarantor,
respectively, enforceable in accordance with its terms subject to
bankruptcy, insolvency, reorganization,
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fraudulent transfer, fraudulent conveyance, moratorium or other
laws affecting creditors' rights generally and general principles
of equity, (ii) on any Settlement Date, the Notes will have been
duly authorized and, upon payment therefor as provided in this
Agreement, will constitute legally binding obligations of the
Company enforceable in accordance with their terms subject to
bankruptcy, insolvency, reorganization, fraudulent transfer,
fraudulent conveyance, moratorium or other laws affecting
creditors' rights generally and general principles of equity and
the holders of the Notes will be entitled to the benefits of the
Indenture, (iii) on any Settlement Date, the Guarantees will have
been duly authorized and, upon delivery of the related Notes,
will constitute legally binding obligations of the Guarantor
enforceable in accordance with their terms subject to bankruptcy,
insolvency, reorganization, fraudulent transfer, fraudulent
conveyance, moratorium or other laws affecting creditors' rights
generally and general principles of equity and the holders of the
Notes upon which the Guarantees are endorsed will be entitled to
the benefits of the Indenture, and (iv) the Indenture conforms,
and the Notes and related Guarantees will conform, in each case
in all material respects, to the descriptions thereof contained
in the Prospectus.
(g) Each of the Company, the Guarantor and any Significant
Subsidiary of the Company or the Guarantor, as defined in Rule
405 of Regulation C of the Rules and Regulations (individually, a
"Subsidiary" and collectively, the "Subsidiaries"), has been duly
incorporated, is validly existing and in good standing under the
laws of the jurisdiction in which it is chartered or organized,
is duly qualified to do business and is in good standing as a
foreign corporation in each jurisdiction in which its ownership
of property or the conduct of its business requires such
qualification (except where the failure to be so qualified would
not have a material adverse effect on the business operations or
financial condition of the Company or the Guarantor and its
subsidiaries taken as a whole), and has power and authority
necessary to own or hold its property and to conduct the business
in which it is engaged.
(h) All of the outstanding shares of capital stock of each
Subsidiary have been duly and validly authorized and issued and
are fully paid and nonassessable, and all outstanding shares of
capital stock of the Subsidiaries are owned by the Company or the
Guarantor, directly or through subsidiaries, free and clear of
any perfected security interest, other security interests,
claims, liens or encumbrances.
(i) Except as described in the Prospectus, there is no
material litigation or governmental proceeding pending or, to the
knowledge of the Company or the Guarantor, threatened against the
Company, the Guarantor or any of their respective subsidiaries
which is reasonably likely to result in any material adverse
change in the financial condition, results of operations,
business or prospects of the Company or the Guarantor and its
subsidiaries considered as a whole or which is required to be
disclosed in the Registration Statement.
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(j) The financial statements filed or incorporated as part of
the Registration Statement or included or incorporated in the
Prospectus present fairly, or (in the case of any amendment or
supplement to any such document, or any material incorporated by
reference in any such document, filed with the Commission after the
date as of which this representation is being made) will present
fairly, at all times during the effectiveness of this Agreement, the
financial condition and results of operations of the Guarantor, at the
dates and for the periods indicated, and have been, and (in the case
of any amendment or supplement to any such document, or any material
incorporated by reference in any such document, filed with the
Commission after the date as of which this representation is being
made) will be at all times during the effectiveness of this Agreement,
prepared in conformity with generally accepted accounting principles
applied on a consistent basis throughout the periods involved, except
as otherwise required pursuant to such generally accepted accounting
principles; and the summarized financial information of the Company
included or incorporated by reference in the Registration Statement
and the Prospectus presents fairly the information required to be
stated therein.
(k) The documents incorporated by reference into the Prospectus
have been, and (in the case of any amendment or supplement to any such
document, or any material incorporated by reference in any such
document, filed with the Commission after the date as of which this
representation is being made) will be at all times during the
effectiveness of this Agreement, prepared in all material respects in
conformity with the applicable requirements of the Act and the Rules
and Regulations and the Exchange Act and the rules and regulations of
the Commission thereunder and such documents have been, or (in the
case of any amendment or supplement to any such document, or any
material incorporated by reference in any such document, filed with
the Commission after the date as of which this representation is being
made) will be at all times during the effectiveness of this Agreement
hereof, timely filed as required thereby.
(l) There are no contracts or other documents which are
required to be filed as exhibits to the Registration Statement by the
Act or by the Rules and Regulations, or which were required to be
filed as exhibits to any document incorporated by reference in the
Prospectus by the Exchange Act or the rules and regulations of the
Commission thereunder, which have not been filed as exhibits to the
Registration Statement or to such document or incorporated therein by
reference as permitted by the Rules and Regulations or the rules and
regulations of the Commission under the Exchange Act as required.
(m) The Company, the Guarantor and each subsidiary of the
Guarantor have complied, and will comply, with the provisions of
Florida H.B. 1771, codified as Section 517.075 of the Florida
Statutes, 1987, as amended, and all regulations promulgated thereunder
relating to issuers doing business in Cuba.
2. Appointment of Agents; Solicitations by the Agents of Offers to
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Purchase; Sales of Notes to a Purchaser. (a) Subject to the terms and
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conditions set forth herein, and to the
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reservation by the Company of the right to sell, solicit, and accept offers to
purchase Notes directly on its own behalf, the Company hereby authorizes each
Agent to act as its agent to solicit offers for the purchase of all or part of
the Notes from the Company.
On the basis of the representations and warranties, and subject to the
terms and conditions set forth herein, each of the Agents agrees, as agent of
the Company, to use its reasonable best efforts to solicit offers to purchase
the Notes from the Company upon the terms and conditions set forth herein and in
the Prospectus as amended or supplemented and in the Procedures.
The Company reserves the right, in its sole discretion, to instruct the
Agents or any one or more of the Agents from time to time to suspend at any
time, for any period of time or permanently, the solicitation of offers to
purchase the Notes. Upon receipt of instructions from the Company, such Agents
will forthwith suspend solicitation of offers to purchase Notes from the Company
until such time as the Company has advised them that such solicitation may be
resumed.
Unless otherwise agreed between the Company and such Agent, the Company
agrees to pay each Agent a commission in U.S. dollars, at the time of settlement
of each sale of Notes by the Company as a result of a solicitation made by such
Agent, in an amount equal to that percentage specified in Schedule I hereto (or,
with respect to Notes in which the stated maturity is in excess of 30 years,
such percentage as shall be agreed upon by the Company and the related Agent at
such time) of the aggregate principal amount of the Notes sold by the Company as
a result of solicitations by such Agent and such commission shall be payable as
specified in the Procedures.
Subject to the provisions of this Section and to the Procedures, offers for
the purchase of Notes may be solicited by each Agent as agent for the Company at
such time and in such amounts as such Agent deems advisable; provided, however,
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that so long as this Agreement shall be in effect, the Company shall not solicit
offers to purchase Notes through any agents other than the Agents.
Notwithstanding anything to the contrary contained herein, the Company may
authorize any other person, partnership or corporation (an "Additional Agent")
to act as its agent to solicit offers for the purchase of all or part of the
Notes of the Company and/or accept offers to purchase Notes from any such
Additional Agent, provided that any such Additional Agent shall have entered
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into an agreement with the Company upon the same terms and conditions as set
forth in this Agreement.
(b) Subject to the terms and conditions stated herein, the Company
agrees that, whenever the Company determines to sell Notes directly to any
Agent as principal for resale to others, it will enter into a separate
agreement relating to such sale in accordance with the provisions of this
Section 2(b). For the purposes of this Agreement, the term "Agent" shall
refer to each of you acting solely in the capacity as agent for the Company
hereunder and not as principal; the term "Purchaser" shall refer to each of
you acting solely as principal hereunder and not as agent, and the term
"you" shall refer to each of you acting in both such capacities or in
either such capacity.
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Each sale of Notes to a Purchaser shall be made in accordance with the
terms of this Agreement and the Procedures and a supplemental agreement
which will provide for the sale of such Notes to, and the purchase and
reoffering thereof by, a Purchaser. Each such supplemental agreement
(which may be an oral agreement and confirmed in writing between a
Purchaser and the Company) is herein referred to as a "Terms Agreement".
Each such Terms Agreement, whether oral (and confirmed in writing, which
may be by facsimile transmission) or in writing, shall be with respect to
such information (as applicable) as is specified in Exhibit B hereto. A
Purchaser's commitment to purchase Notes shall be deemed to have been made
on the basis of the representations and warranties of the Company and the
Guarantor herein contained and shall be subject to the terms and conditions
herein set forth. Each Terms Agreement shall describe the Notes to be
purchased by the Purchaser pursuant thereto, specify the principal amount
of such Notes, the price to be paid to the Company for such Notes, the
currency or currency unit in which such Notes shall be denominated and be
payable, whether the Notes will be issued in certificated or book-entry
form, whether interest shall be payable at a fixed or floating rate, the
date and time of delivery of payment for such Notes (the "Purchase Date"),
the place of delivery of the Notes and payment therefor, the method of
payment and any requirements for the delivery of the opinions of counsel,
the certificates from the Company, the Guarantor or their officers, or the
letter from Xxxxx Xxxxxxxx LLP pursuant to Section 6(b). Such Terms
Agreement shall also specify the period of time, if applicable, referred to
in Section 4(l). In connection with the resale of any Notes purchased by a
Purchaser, such Purchaser may engage the services of any other broker or
dealer in connection with such resale and may allow all or any portion of
the discount received to such brokers and dealers.
Delivery of the certificates for Notes sold to a Purchaser pursuant to
any Terms Agreement shall be made as agreed to between the Company and the
Purchaser as set forth in the respective Terms Agreement, not later than
the Purchase Date set forth in such Terms Agreement, against payment of
funds to the Company in the net amount due to the Company for such Notes by
the method and in the form set forth in the respective Terms Agreement.
(c) So long as Countrywide Securities Corporation is an Agent under
the Selling Agency Agreement each Agent agrees that it will comply with the
applicable provisions of Conduct Rule 2720(l) of the Conduct Rules of the
National Association of Securities Dealers, Inc.
3. Offering Procedure. (a) Unless otherwise agreed between the Company
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and each Agent, each Agent shall communicate to the Company, orally or in
writing, each offer to purchase Notes received by such Agent (unless such offer
is rejected by such Agent in accordance herewith) on terms previously
communicated by the Company to such Agent, and unless otherwise agreed between
the Company and each Agent, the Company shall have the sole right to accept such
offers to purchase Notes and may refuse any proposed purchase of Notes in whole
or in part for any reason.
(b) Unless otherwise agreed between the Company and each Agent, each
Agent shall have the right, in its discretion reasonably exercised, to
reject any proposed
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purchase of Notes, as a whole or in part, and any such rejection shall not
be deemed a breach of its agreement contained herein. Each Agent and the
Company agree to perform the respective duties and obligations specifically
provided to be performed by them in the Procedures.
4. Agreements. The Company and the Guarantor, jointly and severally,
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agree with each Agent that:
(a) Prior to the termination of the offering of the Notes,
the Company and the Guarantor will not file any amendment of the
Registration Statement or supplement to the Prospectus (except for a
supplement relating to an offering of securities other than the Notes
and related Guarantees) unless the Company or the Guarantor has
furnished to such Agent a copy for its review prior to filing and will
not file any such proposed amendment or supplement to which such Agent
may reasonably object. Subject to the foregoing sentence, the Company
and the Guarantor will cause each supplement to the Prospectus to be
filed (or mailed for filing) with the Commission as required pursuant
to Rule 424. The Company and the Guarantor will promptly advise such
Agent (i) when each supplement to the Prospectus shall have been filed
(or mailed for filing) with the Commission pursuant to Rule 424, (ii)
when any amendment of the Registration Statement shall have become
effective, (iii) of any request by the Commission for any amendment of
the Registration Statement or amendment of or supplement to the
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 or
the Guarantor of any notification with respect to the suspension of
the qualification of the Notes and related Guarantees for sale in any
jurisdiction or the initiation or threatening of any proceeding for
such purpose. The Company and the Guarantor will use their best
efforts to prevent the issuance of any such stop order and, if issued,
to obtain as soon as possible the withdrawal thereof.
(b) If, at any time when a prospectus relating to the Notes
and related Guarantees is required to be delivered under the Act, any
event occurs as a result of which the Registration Statement, as then
amended, or the Prospectus, as then supplemented, would include any
untrue statement of a material fact or omit to state any material fact
necessary to make the statements therein, in the light of the
circumstances under which they were made, not misleading, any facts or
events arise which, individually or in the aggregate, would represent
a fundamental change in the information set forth in the Registration
Statement or the Prospectus, or if it shall be necessary to amend the
Registration Statement or to supplement the Prospectus to comply with
the Act or the Exchange Act or the respective rules and regulations
thereunder, the Company and the Guarantor promptly will (i) notify
such Agent to suspend the solicitation of offers to purchase Notes
(and, if so notified, such Agent shall forthwith suspend such
solicitation and cease using the Prospectus as then amended or
supplemented), (ii) prepare and file with the Commission, subject to
the first sentence of paragraph
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(a) of this Section 4, an amendment or supplement which will correct
such statement or omission or an amendment or supplement which will
effect such compliance and (iii) will supply any such amended or
supplemented Prospectus to such Agent in such quantities as such Agent
may reasonably request. If such amendment or supplement, and any
documents, certificates and opinions furnished to such Agent pursuant
to paragraph (f) of this Section 4 in connection with the preparation
or filing of such amendment or supplement are reasonably satisfactory
in all respects to such Agent, such Agent will, upon the filing of
such amendment or supplement with the Commission and upon the
effectiveness of an amendment to the Registration Statement if such an
amendment is required, resume such Agent's obligation to solicit
offers to purchase Notes hereunder.
(c) As soon as practicable, the Guarantor will make generally
available to the security holders of the Guarantor and to such Agent
an earnings statement which will satisfy the provisions of Section
11(a) of the Act and Rule 158 under the Act.
(d) The Company and the Guarantor will furnish to such Agent and
to its counsel, without charge, copies of the Registration Statement
(including exhibits thereto) and each amendment thereto which shall
become effective and, so long as delivery of a prospectus may be
required by the Act, as many copies of any preliminary prospectus and
the Prospectus and any amendments thereof and supplements thereto as
such Agent may reasonably request.
(e) The Company and the Guarantor will arrange for the
qualification of the Notes and related Guarantees for sale under the
laws of such jurisdictions as such Agent may designate, will maintain
such qualifications in effect so long as required for the distribution
of the Notes and related Guarantees, and will arrange for the
determination of the legality of the Notes and related Guarantees for
purchase by institutional investors.
(f) The Company and the Guarantor shall furnish to such Agent and
counsel for such Agent, such documents, certificates of officers and
opinions of counsel relating to their respective businesses,
operations and affairs, the Registration Statement, any preliminary
prospectus, the Prospectus, and any amendments or supplements thereto,
the Indenture, the Notes, the Guarantees, this Agreement, the
Procedures and the performance by the Company and the Guarantor of
their respective obligations hereunder and thereunder as such Agent
may from time to time and at any time prior to the termination of this
Agreement reasonably request.
(g) The Company and the Guarantor shall, whether or not any sale
of the Notes is consummated, (i) pay all expenses incident to the
performance of their obligations under this Agreement, including the
fees and disbursements of its accountants and counsel, the cost of
printing (or otherwise producing) and delivery of the Registration
Statement, the Prospectus, all amendments thereof and supplements
thereto, the Indenture, this Agreement and all other documents
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relating to the offering, the cost of preparing, printing, packaging
and delivering the Notes and related Guarantees, the fees and
disbursements, including fees of counsel, incurred in connection with
the qualification of the Notes and related Guarantees for sale and
determination of eligibility for investment of the Notes and related
Guarantees under the securities or blue sky laws of each such
jurisdiction as such Agent may reasonably designate, the fees and
disbursements of the Trustee, the Calculation Agent (as such term is
used in the Prospectus, as supplemented, relating to the Notes and
related Guarantees) and the fees of any agency that rates the Notes,
and (ii) reimburse such Agent on a monthly basis for all out-of-pocket
expenses (including without limitation advertising expenses) incurred
by such Agent and approved by the Company or the Guarantor in advance,
in connection with the offering and the sale of the Notes and related
Guarantees, and (iii) be responsible for the reasonable fees and
disbursements of such Agent's counsel incurred heretofore or hereafter
in connection with the offering and sale of the Notes and related
Guarantees.
(h) Each acceptance by the Company of an offer to purchase Notes
will be deemed to be a reconfirmation to you of the representations
and warranties of the Company and the Guarantor in Section 1(b).
(i) Each time that the Registration Statement or the Prospectus
is amended or supplemented (other than by an amendment or supplement
(i) relating to an offering of securities other than the Notes and
related Guarantees or (ii) providing solely for the specification of
the terms of the Notes (excluding (a) any change in the formula by
which interest rates on the Notes may be determined and (b) any
information relating to Specified Currencies other than U.S. dollars))
or there is filed with the Commission any document incorporated by
reference into the Prospectus, the Company and the Guarantor will each
deliver or cause to be delivered forthwith to such Agent a certificate
of its President, Managing Director or any Vice President and its
principal financial or accounting officer or the Treasurer, dated the
date of the effectiveness of such amendment or the date of filing of
such supplement, in form reasonably satisfactory to such Agent, to the
effect that the statements contained in the certificate that was last
furnished to such Agent pursuant to either Section 5(e) or this
Section 4(i) are true and correct at the time of the effectiveness of
such amendment or the filing of such supplement as though made at and
as of such time (except that (i) the last day of the fiscal quarter
for which financial statements of the Guarantor were last filed with
the Commission shall be substituted for the corresponding date in such
certificate and (ii) such statements shall be deemed to relate to the
Registration Statement and the Prospectus as amended and supplemented
to the time of the effectiveness of such amendment or the filing of
such supplement) or, in lieu of such certificate, a certificate of the
same tenor as the certificate referred to in Section 5(e), but
modified to relate to the last day of the fiscal quarter for which
financial statements of the Guarantor were last filed with the
Commission and to the Registration Statement and the Prospectus as
amended and supplemented to the time of the effectiveness of such
amendment or the filing of such supplement.
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(j) Each time that the Registration Statement or the Prospectus
is amended or supplemented (other than by an amendment or supplement
(i) relating to an offering of securities other than the Notes and
related Guarantees, (ii) providing solely for the specification of the
terms of the Notes (excluding (a) any change in the formula by which
interest rates on the Notes may be determined and (b) any information
relating to Specified Currencies other than U.S. dollars) or (iii)
setting forth or incorporating by reference financial statements or
other financial information as of and for a fiscal quarter, unless, in
the case of clause (iii) above, in such Agent's reasonable judgment,
such financial statements or other financial information are of such a
nature that an opinion of counsel should be furnished) or there is
filed with the Commission any document incorporated by reference into
the Prospectus, the Company and the Guarantor shall furnish or cause
to be furnished forthwith to such Agent the written opinion of the
General Counsel of the Company and the Guarantor, or such other
counsel satisfactory to such Agent, dated the date of the
effectiveness of such amendment or the date of filing of such
supplement, in form satisfactory to such Agent, covering all of the
matters referred to in the opinions set forth in Sections 5(b) and
5(c) but modified to relate to the Registration Statement and the
Prospectus as amended and supplemented to the time of the
effectiveness of such amendment or the filing of such supplement or,
in lieu of such opinion, counsel last furnishing such an opinion to
such Agent may furnish a letter to the effect that such Agent may rely
on such last opinion to the same extent as though it were dated the
date of such letter authorizing reliance (except that statements in
such last opinion will be deemed to relate to the Registration
Statement and the Prospectus as amended and supplemented to the time
of the effectiveness of such amendment or the filing of such
supplement); provided, however, that, upon a reasonable request from
-------- -------
such Agent, the Company and the Guarantor shall cause to be furnished
forthwith to such Agent the written opinion of Xxxxx, Xxxxx, Xxxxxx,
Xxxxxxx & Xxxxxxxx, counsel to the Company and the Guarantor, dated
the date of the effectiveness of such amendment or the date of filing
of such supplement, in form satisfactory to such Agent, of the same
tenor as the opinions referred to in Section 5(b) but modified to
relate to the Registration Statement and the Prospectus as amended and
supplemented to the time of the effectiveness of such amendment or the
filing of such supplement.
(k) Each time that 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 Registration Statement or the
Prospectus, the Company and the Guarantor shall cause Xxxxx Xxxxxxxx
LLP, their independent public accountants, forthwith to furnish to
such Agent a letter, dated the date of the effectiveness of such
amendment or the date of filing of such supplement, in form
satisfactory to such Agent, of the same tenor as the letter referred
to in Section 5(f) with such changes as may be necessary to reflect
the amended and supplemental financial information included or
incorporated by reference in the Registration Statement and the
Prospectus, as amended or supplemented to the date of such letter,
provided that if the Registration Statement or the Prospectus is
--------
amended or
12
supplemented solely to include or incorporate by reference financial
information as of and for a fiscal quarter, Xxxxx Xxxxxxxx LLP may
limit the scope of such letter, which shall be satisfactory in form to
such Agent, to the unaudited financial statements included in such
amendment or supplement, unless any other information included or
incorporated by reference therein of an accounting, financial or
statistical nature is of such a nature that, in such Agent's
reasonable judgment, such letter should cover such other information.
(l) During the period, if any, specified in any Terms Agreement,
the Company and the Guarantor shall not, without the prior consent of
the Purchaser, issue or announce the proposed issuance of any debt
securities of the Company or the Guarantor in a public offering or
register any debt securities of the Company or the Guarantor under the
Act in connection with any secondary distribution of such debt
securities.
5. Conditions to the Obligations of the Agents. The obligations of any
-------------------------------------------
Agent to solicit offers to purchase the Notes shall be subject to the accuracy
of the representations and warranties on the part of the Company and the
Guarantor contained herein as of the date hereof, as of the date of the
effectiveness of any amendment to the Registration Statement (including the
filing of any document incorporated by reference therein), as of the date any
supplement to the Prospectus is filed with the Commission and as of each
Settlement Date, to the accuracy of the statements of the Company and the
Guarantor made in any certificates pursuant to the provisions hereof, to the
performance by the Company and the Guarantor of their respective obligations
hereunder and to the following additional conditions:
(a) No stop order suspending the effectiveness of the
Registration Statement, as amended from time to time, shall have been
issued, and no proceedings for that purpose shall have been instituted
or threatened.
(b) The Company and the Guarantor shall have furnished to the
Agents the opinion or opinions of Xxxxx, Xxxxx, Xxxxxx, Xxxxxxx &
Xxxxxxxx, counsel to the Company and the Guarantor, dated the date
hereof, substantially as set forth below, with such additional
qualifications and exceptions as shall be acceptable to the Agents and
their counsel:
(i) Each of the Company and the Guarantor is a corporation
duly incorporated, validly existing and in good standing under
the laws of the state of its incorporation and has the corporate
power and authority to own its properties and to conduct its
business as described in the Prospectus.
(ii) The Company and the Guarantor have the corporate power
and authority to enter into this Agreement and the Terms
Agreement (if applicable), and this Agreement and the Terms
Agreement (if applicable) have been duly and validly authorized,
executed and delivered by the Company and the Guarantor,
respectively.
13
(iii) The form and general terms of the Notes have been
duly and validly authorized and established in conformity with
the provisions of the Indenture by all necessary corporate action
by the Company, and when the particular terms of the Notes have
been duly established in accordance with the provisions of the
Indenture, the Procedures and the resolutions of the Board of
Directors of the Company and such Notes have been duly executed,
authenticated and delivered against payment therefor in
accordance with the provisions of the Indenture, the Procedures
and this Agreement, will constitute the legal, valid and binding
obligations of the Company, enforceable against the Company in
accordance with their terms and the terms of the Indenture, and
the holders of the Notes will be entitled to the benefits of the
Indenture; and the Indenture has been duly authorized, executed
and delivered by each of the Company and Guarantor, has been
qualified under the Trust Indenture Act, and constitutes a legal,
valid and binding obligation enforceable against each of the
Company and the Guarantor in accordance with its terms.
(iv) The Guarantees, in the forms certified to by an
authorized officer of the Guarantor, have been duly and validly
authorized by all necessary corporate action by the Guarantor
and, upon due issuance, authentication and delivery of the
related Notes and due endorsement of the Guarantees, the
Guarantees will have been duly executed, issued and delivered and
will constitute the legal, valid and binding obligations of the
Guarantor enforceable against the Guarantor in accordance with
their terms and the terms of the Indenture, and the holders of
the Notes upon which the Guarantees are endorsed will be entitled
to the benefits of the Indenture.
(v) The Registration Statement has become effective under
the Act; any required filing of the Prospectus, and any
supplements thereto, pursuant to Rule 424(b) has been made in the
manner and within the time period required by Rule 424(b); to the
knowledge of such counsel, no stop order suspending the
effectiveness of the Registration Statement has been issued, no
proceedings for that purpose have been instituted or threatened
and the Registration Statement and the Prospectus (other than (i)
the financial statements and other financial and statistical
information contained therein and (ii) the Statement of
Eligibility on Form T-1 filed as an exhibit thereto, as to which
such counsel need express no opinion), as of their respective
effective or issue dates, as the case may be, appear on their
face to be responsive as to form in all material respects with
the applicable requirements of the Act and the Rules and
Regulations and the Trust Indenture Act and the rules and
regulations of the Commission thereunder.
(vi) No consent, approval, authorization or order of any
United States federal or New York, California or (with respect to
matters arising under the Delaware General Corporation Law)
Delaware court or
14
governmental agency or body is required for the consummation of
the transactions contemplated by this Agreement or the Indenture,
except such as have been obtained under the Act and such as may
be required under the securities and blue sky laws, rules or
regulations of any jurisdiction in connection with the purchase
and distribution of the Notes and related Guarantees by the
Agents and such other approvals as have been obtained.
(vii) Neither the issue and sale of the Notes (in the forms
certified to by an authorized officer of the Company), the
compliance by the Company and the Guarantor with all the
provisions of this Agreement, the Indenture, the Notes or the
Guarantees (in the form certified to by an authorized officer of
the Guarantor), the consummation of the transactions herein or
therein contemplated nor the fulfillment of the terms hereof or
thereof will conflict with, result in a breach of, or constitute
a default under the charter or bylaws of the Company or the
Guarantor or the terms of any indenture or other agreement or
instrument filed with the Commission and to which the Company or
the Guarantor or any of the Guarantor's subsidiaries is a party
or bound, or any order, decree, judgment or regulation (other
than any federal or state securities or blue sky laws, rules or
regulations) known to such counsel to be applicable to the
Company or the Guarantor or any of the Guarantor's subsidiaries
of any court, regulatory body, administrative agency,
governmental body or arbitrator having jurisdiction over the
Company or the Guarantor or any of the Guarantor's subsidiaries.
(viii) To the best knowledge of such counsel, no holders of
securities of the Company or the Guarantor have rights to the
registration of such securities under the Registration Statement.
(ix) Such counsel confirms (i) that the statements in the
Prospectus under the caption "Federal Income Tax Consequences",
insofar as such statements constitute a summary of the legal
matters referred to therein, fairly present the information
disclosed therein in all material respects, (ii) the conformity
in all material respects of the Notes (in the forms certified to
by an authorized officer of the Company) to the statements
relating thereto in the Prospectus, and (iii) the conformity in
all material respects of the Indenture and the Guarantees to the
statements relating thereto in the Prospectus under the captions
"Description of Notes" and "Description of Debt Securities and
Guarantees".
Such counsel shall also state that, in the course of their engagement
to represent or advise the Company and the Guarantor professionally, they
have not become aware of any pending legal proceeding before any court or
administrative agency or authority or any arbitration tribunal, nor have
they devoted substantive attention in the form of legal representation as
to any current overtly threatened litigation against or directly affecting
the Company or its subsidiaries or the Guarantor or its subsidiaries, in
each case that is required to be described in the Registration Statement or
the Prospectus and is not so
15
described. In making the foregoing statement, they shall endeavor, to the
extent they believe necessary, to determine from lawyers currently in their
firm who have performed substantive legal services for the Company or the
Guarantor, whether such services involved substantive attention in the form
of legal representation concerning pending legal proceedings or overtly
threatened litigation of the nature referred to above. Beyond that, they
need not make any review, search or investigation of public files or
records or files or records of the Company or the Guarantor, or of their
respective transactions, or any other investigation or inquiry with respect
to the foregoing statement.
Such counsel shall also state that in the course of the preparation by
the Company, the Guarantor and their counsel of the Registration Statement
and Prospectus (other than the Incorporated Documents (as defined below)),
such counsel attended conferences with certain of the officers of, and the
independent public accountants for, the Company and the Guarantor, at which
the Registration Statement and Prospectus were discussed. Given the
limitations inherent in the independent verification of factual matters and
the character of determinations involved in the registration process, such
counsel need not pass upon and need not assume any responsibility for the
accuracy, completeness or fairness of the statements contained in the
Registration Statement and Prospectus including the Incorporated Documents,
except as specifically described in the opinion set forth in paragraph (ix)
above. Subject to the foregoing and on the basis of the information such
counsel gained in the performance of the services referred to above,
including information obtained from officers and other representatives of
the Company and Guarantor, such counsel shall state that no facts have come
to such counsel's attention that have caused it to believe that the
Registration Statement, at the time it became effective, contained any
untrue statement of a material fact or omitted to state any material fact
required to be stated therein or necessary to make the statements therein
not misleading, or that the Prospectus, at its date or at the date hereof,
included or includes, as the case may be, any untrue statement of material
fact or omitted or omits, as the case may be, 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 such counsel need
not express a view or belief with respect to (i) the financial statements,
the related notes and schedules thereto or other financial and statistical
data included or incorporated by reference in the Registration Statement
and Prospectus or (ii) any part of the Registration Statement which shall
constitute a Statement of Eligibility on Form T-1 under the Trust Indenture
Act. References to the Prospectus in this Section 5(b) include any
amendments or supplements thereto at the date hereof.
In rendering such opinion, such counsel may rely (A) as to matters
involving the application of laws of any jurisdiction other than the State
of California, the State of New York, the State of Delaware (but only with
respect to the Delaware General Corporation Law) or the United States, to
the extent they deem proper and specified in such opinion, upon the opinion
of other counsel of good standing whom they believe to be reliable and who
are satisfactory to counsel for the Agents and (B) as to matters of fact,
to the extent they deem proper, on certificates and oral or written
statements and other information of or from public officials and officers
and representatives of the Company, the Guarantor, their respective
subsidiaries and others.
16
In rendering the opinions set forth in paragraphs (iii) and (iv), such
counsel may state that such opinions are subject to the following: (i)
bankruptcy, insolvency, reorganization, fraudulent transfer, fraudulent
conveyance, moratorium or other laws now or hereafter in effect affecting
creditors' rights generally; and (ii) general principles of equity
(including, without limitation, standards of materiality, good faith, fair
dealing and reasonableness) whether such principles are considered in a
proceeding in equity or at law.
In rendering the opinions set forth above, such counsel need not
express an opinion as to the legality, validity, binding effect or
enforceability of any provision of the Notes, the Indenture or the
Guarantees providing for payments thereunder in a currency other than
currency of the United States of America to the extent that a court of
competent jurisdiction will under applicable law convert any judgment
rendered in such other currency into currency of the United States of
America or to the extent that payment in a currency other than currency of
the United States of America is contrary to applicable law.
In rendering the opinions set forth above, such counsel may state that
it has assumed, with the permission of the Agents, that the amount of Notes
to be issued from time to time will not violate any provision in any such
agreement referred to in paragraph (vii) which imposes limits on the amount
of debt of the Company, the Guarantor or any of the Guarantor's
subsidiaries which may be outstanding at any one time (whether directly or
indirectly, through satisfaction of financial ratios or otherwise).
(c) The Company and the Guarantor shall have furnished to the Agents
the opinion or opinions of Xxxxxx X. Xxxxxxx, General Counsel of the
Company and the Guarantor, dated the date hereof, substantially as set
forth below, with such additional qualifications and exceptions as shall be
acceptable to the Agents and their counsel:
(i) Each Subsidiary, if any, is a corporation, duly
incorporated, validly existing and in good standing under the laws of
the state of its incorporation, with the corporate power and authority
to own its properties and to conduct its business as described in the
Prospectus.
(ii) Each of the Company, the Guarantor and the Subsidiaries is
duly qualified to do business as a foreign corporation and is in good
standing under the laws of each jurisdiction which requires such
qualification wherein it owns or leases material properties or
conducts material business other than jurisdictions in which the
failure to so qualify, when considered in the aggregate and not
individually, would not have a material adverse effect on the Company
or the Guarantor and its Subsidiaries considered as one enterprise.
(iii) All the outstanding shares of capital stock of the Company
and each Subsidiary have been duly and validly authorized and issued
and are fully paid and nonassessable, and, except as otherwise set
forth in the Prospectus, all outstanding shares of capital stock of
the Company and the Subsidiaries are owned by the Guarantor either
directly or through wholly owned subsidiaries free
17
and clear of any perfected security interest and, to the knowledge of
such counsel, after due inquiry, any other security interests, claims,
liens or encumbrances.
(iv) The outstanding shares of common stock of the Guarantor
have been duly and validly authorized and issued and are fully paid
and nonassessable.
(v) Neither the issue and sale of the Notes, the compliance by
the Company and the Guarantor with all the provisions of this
Agreement, the Indenture, the Notes or the Guarantees, the
consummation of any other of the transactions herein or therein
contemplated nor the fulfillment of the terms hereof or thereof will
conflict with, result in a breach of, or constitute a default under
the charter or by-laws of the Company or the Guarantor or, to the
knowledge of such counsel, the terms of any indenture or other
agreement or instrument to which the Company or the Guarantor or any
of the Guarantor's subsidiaries is a party or bound, or any order,
decree, law, judgment, rule or regulation known to such counsel to be
applicable to the Company or the Guarantor or any of the Guarantor's
subsidiaries of any court, regulatory body, administrative agency,
governmental body or arbitrator having jurisdiction over the Company
or the Guarantor or any of the Guarantor's subsidiaries.
(vi) The documents (the "Incorporated Documents") incorporated
by reference in the Registration Statement and Prospectus (except for
the financial statements and other financial or statistical data, as
to which no opinion need be expressed), as of the dates they were
filed with the Commission, complied as to form in all material
respects to the requirements of the Act and the Rules and Regulations
and the Exchange Act and the rules and regulations of the Commission
thereunder.
(vii) No consent, approval, authorization or order of any court
or governmental agency or body is required for the consummation of the
transactions contemplated by this Agreement or the Indenture, except
such as have been obtained under the Act and such as may be required
under the securities and blue sky laws, rules and regulations of any
jurisdiction in connection with the purchase and distribution of the
Notes and related Guarantees by the Agents and such other approvals as
have been obtained.
In rendering the opinions set forth above, such counsel may state that
it has assumed, with the permission of the Agents, that the amount of Notes
to be issued from time to time will not violate any provision in any such
agreement referred to in paragraph (v) which imposes limits on the amount
of debt of the Company, the Guarantor or any of the Guarantor's
subsidiaries which may be outstanding at any one time (whether directly or
indirectly, through satisfaction of financial ratios or otherwise).
(d) Such Agent shall have received from Brown & Wood LLP, counsel for
the Agents, such opinion or opinions, dated the date hereof, with respect
to the issuance and sale of the Notes and related Guarantees, this
Agreement, the Indenture, the Registration Statement, the Prospectus and
other related matters as such Agent may reasonably
18
require, and the Company and the Guarantor shall have furnished to such
counsel such documents as they request for the purpose of enabling them to
pass upon such matters.
(e) The Company and the Guarantor shall have each furnished to such
Agent a certificate of its President, a Managing Director or a Vice
President and its Treasurer or an Assistant Treasurer, dated the date
hereof, to the effect that the signers of such certificate have carefully
examined the Registration Statement, the Prospectus and this Agreement and
that:
(i) the representations and warranties of the Company or the
Guarantor, as the case may be, in this Agreement are true and correct
in all material respects on and as of the date hereof with the same
effect as if made on the date hereof, and the Company or the
Guarantor, as the case may be, has complied with all the agreements
and satisfied all the conditions on its part to be performed or
satisfied as a condition to the obligation of such Agent to solicit
offers to purchase the Notes;
(ii) no stop order suspending the effectiveness of the
Registration Statement has been issued and no proceedings for that
purpose have been instituted or, to the knowledge of the Company or
the Guarantor, as the case may be, threatened; and
(iii) since the date of the most recent financial statements
included or incorporated in the Prospectus, there has been no material
adverse change in the condition (financial or otherwise), earnings,
business or properties of the Company or the Guarantor and its
subsidiaries considered as a whole, whether or not arising from
transactions in the ordinary course of business, except as set forth
in or contemplated in the Prospectus.
(f) On the date hereof, Xxxxx Xxxxxxxx LLP shall have furnished to
such Agent a letter or letters (which may refer to letters previously
delivered to such Agent), dated as of the date hereof, in form and
substance satisfactory to such Agent, confirming that they are independent
accountants within the meaning of the Act and the Exchange Act and the
respective applicable published rules and regulations thereunder and
stating in effect that:
(i) in their opinion the audited consolidated financial
statements and financial statement schedules included or incorporated
in the Registration Statement and the Prospectus and reported on by
them comply as to form in all material respects with the applicable
accounting requirements of the Act and the Exchange Act and the
related published rules and regulations;
(ii) on the basis of a reading of the latest unaudited
consolidated financial statements made available to them; carrying out
certain specified procedures (which shall include, without limitation,
the procedures specified by the American Institute of Certified Public
Accountants for a review of interim financial information as described
in SAS No. 71, Interim Financial Information, with
19
respect to such unaudited consolidated financial statements included
or incorporated by reference in the Registration Statement or the
Prospectus); a reading of the minutes of the meetings of the
stockholders, directors and standing committees thereof; and inquiries
of certain officials who have responsibility for financial and
accounting matters as to transactions and events subsequent to the
date of the most recent audited financial statements included or
incorporated in the Prospectus, nothing came to their attention which
caused them to believe that:
(1) any unaudited financial statements included or
incorporated in the Registration Statement and the
Prospectus do not comply as to form in all material
respects with applicable accounting requirements of the
Exchange Act as they apply to quarterly reports on Form
10-Q or that any material modifications should be made to
said unaudited financial statements for them to be in
conformity with generally accepted accounting principles;
(2) with respect to the period subsequent to the
date of the most recent financial statements (other than
any capsule information), audited or unaudited, in or
incorporated in the Registration Statement and the
Prospectus, there was any change, at a specified date not
more than three business days prior to the date of the
letter, in the capital stock or long and intermediate term
debt of the Company or the Guarantor and its subsidiaries
taken as a whole or any decreases in the shareholders'
equity or consolidated net assets as compared with the
amounts shown on the most recent consolidated balance
sheet included or incorporated in the Registration
Statement and the Prospectus, or for the period from the
date of the most recent financial statements included or
incorporated in the Registration Statement and the
Prospectus to such specified date there were any
decreases, as compared with the corresponding period in
the preceding year in consolidated revenues (net of
interest charges), earnings before income taxes or net
earnings of the Company or the Guarantor and its
subsidiaries, except in all instances for changes or
decreases set forth in such letter; or
(3) the amounts included in any unaudited "capsule"
information included or incorporated in the Registration
Statement and the Prospectus do not agree with the amounts
set forth in the unaudited financial statements for the
same periods or were not determined on a basis
substantially consistent with that of the corresponding
amounts in the audited financial statements included or
incorporated in the Registration Statement and the
Prospectus;
(iii) they have performed certain other specified procedures as
a result of which they determined that certain information of an
accounting, financial or statistical nature set forth in the
Registration Statement and the Prospectus and in
20
Exhibit 12 to the Registration Statement, the information included or
incorporated in Items 1, 2, 6, 7 and 11 of the Guarantor's Annual
Report on Form 10-K (and, if filed, the Company's Annual Report on
Form 10-K), incorporated in the Registration Statement and the
Prospectus and the information included in the "Management's
Discussion and Analysis of Financial Condition and Results of
Operations" included or incorporated in the Company's or the
Guarantor's Quarterly Reports on Form 10-Q incorporated in the
Registration Statement and the Prospectus, agrees with the accounting
records of the Company, the Guarantor and their respective
subsidiaries, excluding any questions of legal interpretation; and
(iv) if pro forma financial statements are included or
incorporated in the Registration Statement and the Prospectus, on the
basis of a reading of the unaudited pro forma financial statements,
carrying out certain specified procedures, inquiries of certain
officials of the Company or the Guarantor, as the case may be, who
have responsibility for financial and accounting matters, and proving
the arithmetic accuracy of the application of the pro forma
adjustments to the historical amounts in the pro forma financial
statements, nothing came to their attention which caused them to
believe that the pro forma financial statements do not comply in form
in all material respects with the applicable accounting requirements
of Rule 11-02 of Regulation S-X or that the pro forma adjustments have
not been properly applied to the historical amounts in the compilation
of such statements.
References to the Registration Statement and the Prospectus in this
paragraph (f) are to such documents as amended and supplemented at the date
of the letter.
(g) Subsequent to the respective dates as of which information is
given in the Registration Statement and the Prospectus (as amended or
supplemented, in the case of a Terms Agreement) there shall not have been
(i) any change or decrease specified in the letter or letters referred to
in paragraph (f) of this Section 5 or (ii) any change, or any development
involving a prospective change, in or affecting the business or properties
of the Company, the Guarantor and their respective subsidiaries the effect
of which, in any case referred to in clause (i) or (ii) above, is, in the
judgment of such Agent, so material and adverse as to make it impractical
or inadvisable to proceed with the soliciting of offers to purchase the
Notes as contemplated by the Registration Statement and the Prospectus (or,
in the case of a Terms Agreement, to proceed with the offering or the
delivery of the Notes to be purchased as contemplated by the Terms
Agreement).
(h) Prior to the date hereof, the Company and the Guarantor shall
have furnished to such Agent such further information, certificates and
documents as such Agent may reasonably request.
(i) Prior to the date hereof, the Notes shall have been rated, and on
the date hereof the Notes shall be rated, at least BBB- by Standard &
Poor's Ratings Services, a division of The XxXxxx-Xxxx Companies, Inc.
("S&P") and Baa3 by Xxxxx'x Investors Service, Inc. ("Moody's").
21
If any of the conditions specified in this Section 5 shall not have been
fulfilled in all material respects when and as provided in this Agreement, or if
any of the opinions and certificates mentioned above or elsewhere in this
Agreement shall not be in all material respects reasonably satisfactory in form
and substance to such Agent and its counsel, this Agreement and all obligations
of such Agent hereunder may be canceled at any time by such Agent. Notice of
such cancellation shall be given to the Company and the Guarantor in writing or
by telephone or telegraph confirmed in writing.
The documents required to be delivered by this Section 5 shall be delivered
to the office of Fried, Xxxxx, Xxxxxx, Xxxxxxx & Xxxxxxxx, Xxx Xxx Xxxx Xxxxx,
Xxx Xxxx, Xxx Xxxx 00000, or such other location as shall be mutually agreed
upon, on the date hereof.
6. Conditions to the Obligations of a Purchaser. The obligations of a
--------------------------------------------
Purchaser to purchase Notes pursuant to any Terms Agreement will be subject to
the accuracy of the representations and warranties on the part of the Company
and the Guarantor herein as of the date of the respective Terms Agreement and as
of the Purchase Date thereunder, to the performance and observance by the
Company and the Guarantor of all covenants and agreements herein contained on
its part to be performed and observed and to the following additional conditions
precedent:
(a) No stop order suspending the effectiveness of the Registration
Statement, as amended from time to time, shall have been issued and no
proceedings for that purpose shall have been instituted or threatened.
(b) Except to the extent modified by the respective Terms Agreement,
the Purchaser shall have received, appropriately updated in a manner
consistent with Section 5 hereof, (i) certificates of the Company and the
Guarantor, dated as of the Purchase Date, to the effect set forth in
Section 5(e), (ii) the opinion or opinions of Xxxxx, Xxxxx, Xxxxxx, Xxxxxxx
& Xxxxxxxx, counsel to the Company and the Guarantor, dated as of the
Purchase Date, to the effect set forth in Section 5(b), (iii) the opinion
or opinions of Xxxxxx X. Xxxxxxx, General Counsel to the Company and the
Guarantor, dated as of the Purchase Date, to the effect set forth in
Section 5(c), (iv) the opinion or opinions of Xxxxx & Wood LLP, counsel for
the Purchaser, dated as of the Purchase Date, to the effect set forth in
Section 5(d) and (v) letter of Xxxxx Xxxxxxxx LLP, dated as of the Purchase
Date, to the effect set forth in Section 5(f).
(c) The conditions set forth in Section 5(g) shall have been
satisfied.
(d) Prior to the Purchase Date, the Company and the Guarantor shall
have furnished to the Purchaser such further information, certificates and
documents as the Purchaser may reasonably request.
(e) Prior to and at the Purchase Date, the Notes shall have been
rated at least BBB- by S&P and Baa3 by Moody's.
(f) Subsequent to the execution of any Terms Agreement and prior to
the Purchase Date pursuant to such Terms Agreement, the rating assigned by
S&P or Moody's to any debt securities of the Company or the Guarantor has
not been lowered
22
and neither S&P nor Moody's has publicly announced that it has under
surveillance or review, with possible negative implications, its rating of
any debt securities of the Company or the Guarantor.
If any of the conditions specified in this Section 6 shall not have been
fulfilled in all material respects when and as provided in this Agreement, or if
any of the opinions and certificates mentioned above or elsewhere in this
Agreement shall not be in all material respects reasonably satisfactory in form
and substance to the Purchaser and its counsel, this Agreement and all
obligations of the Purchaser hereunder may be canceled at, or at any time prior
to, the respective Purchase Date by the Purchaser. Notice of such cancellation
shall be given to the Company or the Guarantor in writing or by telephone or
telegraph confirmed in writing.
7. Reimbursement of the Agent's Expenses. If any condition to the
-------------------------------------
obligations or any Agent set forth in Section 5 hereof is not satisfied, if any
condition to the obligations of a Purchaser set forth in Section 6 hereof is not
satisfied, if any termination pursuant to Section 9 hereof shall occur or in the
case of any refusal, inability or failure on the part of the Company or the
Guarantor to perform any agreement herein or comply with any provision hereof
other than by reason of a default by an Agent, the Company and the Guarantor
will reimburse such Agent upon demand for all expenses that shall have been
incurred by such Agent pursuant to Section 4(g) hereof in connection with this
Agreement.
8. Indemnification and Contribution. (a) The Company and the Guarantor,
--------------------------------
jointly and severally, agree to indemnify and hold harmless each Agent and each
person who controls such Agent within the meaning of either the Act or the
Exchange Act against any and all losses, claims, damages or liabilities, joint
or several, to which such Agent or any of them may become subject under the Act,
the Exchange Act or other federal or state statutory law or regulation, at
common law or otherwise, insofar as such losses, claims, damages or liabilities
(or actions in respect thereof) arise out of or are based upon any untrue
statement or alleged untrue statement of a material fact contained in the
Registration Statement for the registration of the Notes as originally filed or
in any amendment thereof, or in the Prospectus or any preliminary Prospectus, or
in any amendment thereof or supplement thereto, or arise out of or are based
upon the omission or alleged omission to state therein a material fact required
to be stated therein or necessary to make the statements therein not misleading,
and agrees to reimburse each such indemnified party, as incurred, for any legal
or other expenses reasonably incurred by them in connection with investigating
or defending any such loss, claim, damage, liability or action; provided,
--------
however, that (i) the Company and the Guarantor will not be liable in any such
-------
case to the extent that any such loss, claim, damage or liability arises out of
or is based upon any such untrue statement or alleged untrue statement or
omission or alleged omission made therein in reliance upon and in conformity
with written information furnished to the Company or the Guarantor by or on
behalf of such Agent specifically for use in connection with the preparation
thereof, and (ii) such indemnity with respect to any preliminary Prospectus or
any Prospectus as supplemented or amended shall not inure to the benefit of any
Agent (or any person controlling such Agent) from whom the person asserting any
such loss, claim, damage or liability purchased the Notes which are the subject
thereof if such Agent (or any person controlling such Agent) received a copy of
such Prospectus (or such Prospectus as so amended or supplemented) and such
person did not receive a copy of the Prospectus (or the Prospectus as amended or
supplemented) excluding documents incorporated therein by reference at or prior
to the
23
confirmation of the sale of such Notes to such person in any case where such
delivery is required by the Act and the untrue statement or omission or the
alleged untrue statement or omission was corrected in the Prospectus (or the
Prospectus as amended or supplemented). This indemnity agreement will be in
addition to any liability which the Company or the Guarantor may otherwise have.
(b) Each Agent agrees to indemnify and hold harmless the Company and the
Guarantor, their respective directors, each of their officers who sign the
Registration Statement, and each person who controls the Company or the
Guarantor within the meaning of either the Act or the Exchange Act, to the same
extent as the foregoing indemnity from the Company and the Guarantor to such
Agent, but only with reference to written information relating to such Agent
furnished to the Company or the Guarantor by or on behalf of such Agent
specifically for use in the preparation of the documents referred to in the
foregoing indemnity. This indemnity agreement will be in addition to any
liability which such Agent may otherwise have. The Company and the Guarantor
acknowledge that the statements set forth in the last paragraph of the cover
page and under the heading "Plan of Distribution of Notes" in any preliminary
Prospectus and the Prospectus constitute the only information furnished in
writing by or on behalf of such Agent for inclusion in the documents referred to
in the foregoing indemnity, and you confirm that such statements are correct.
(c) Promptly after receipt by an indemnified party under this Section 8 of
notice of the commencement of any action, such indemnified party will, if a
claim in respect thereof is to be made against the indemnifying party under this
Section 8, notify the indemnifying party in writing of the commencement thereof;
but the omission so to notify the indemnifying party will not relieve it from
any liability which it may have to any indemnified party otherwise than under
this Section 8. In case any such action is brought against any indemnified
party, and it notifies the indemnifying party of the commencement thereof, the
indemnifying party will be entitled to participate therein, and to the extent
that it may elect by written notice delivered to the indemnified party promptly
after receiving the aforesaid notice from such indemnified party, to assume the
defense thereof, with counsel satisfactory to such indemnified party; provided,
--------
however, that if the defendants in any such action include both the indemnified
-------
party and the indemnifying party, and the indemnified party shall have
reasonably concluded that there may be legal defenses available to it and/or
other indemnified parties which are different from or additional to those
available to the indemnifying party, the indemnified party or parties shall have
the right to select separate counsel to assert such legal defenses and to
otherwise participate in the defense of such action on behalf of such
indemnified party or parties. Upon receipt of notice from the indemnifying
party to such indemnified party of its election so to assume the defense of such
action and approval by the indemnified party of counsel, the indemnifying party
will not be liable to such indemnified party under this Section 8 for any legal
or other expenses subsequently incurred by such indemnified party in connection
with the defense thereof, unless (i) the indemnified party shall have employed
separate counsel in connection with the assertion of legal defenses in
accordance with the proviso to the next preceding sentence (it being understood,
however, that the indemnifying party shall not be liable for the expenses of
more than one separate counsel, approved by the Agents in the case of paragraph
(a) of this Section 8, representing the indemnified parties under such paragraph
(a) who are parties to such action), (ii) the indemnifying party shall not have
employed counsel satisfactory to the indemnified party to represent the
indemnified party within a reasonable time after notice of commencement of the
24
action or (iii) the indemnifying party has authorized the employment of counsel
for the indemnified party at the expense of the indemnifying party; and except
that, if clause (i) or (iii) is applicable, such liability shall be only in
respect of the counsel referred to in such clause (i) or (iii).
(d) If the indemnification provided for in this Section 8 is unavailable
to or insufficient to hold harmless an indemnified party under subsection (a) or
(b) above in respect of any losses, claims, damages or liabilities (or actions
in respect thereof) referred to therein, then each indemnifying party shall
contribute to the amount paid or payable to such indemnified party as a result
of such losses, claims, damages, or liabilities (or actions in respect thereof)
in such proportion as is appropriate to reflect the relative benefits received
by the Company and the Guarantor on the one hand and each Agent on the other
from the offering of the Notes to which such loss, claim, damage or liability
(or action in respect thereof) relates. If, however, the allocation provided by
the immediately preceding sentence is not permitted by applicable law or if the
indemnified party failed to give the notice required under subsection (c) above,
then each indemnifying party shall contribute to such amount paid or payable by
such indemnified party in such proportion as is appropriate to reflect not only
such relative benefits but also the relative fault of the Company and the
Guarantor on the one hand and each Agent on the other in connection with the
statements or omissions which resulted in such losses, claims, damages or
liabilities (or actions in respect thereof), as well as any other relevant
equitable considerations. The relative benefits received by the Company and the
Guarantor on the one hand and each Agent on the other shall be deemed to be in
the same proportion as the total net proceeds from such offering (before
deducting expenses) received by the Company bear to the total commissions
received by each Agent. The relative fault shall be determined by reference to,
among other things, whether the untrue or alleged untrue statement of a material
fact or the omission or alleged omission to state a material fact relates to
information supplied by the Company or the Guarantor on the one hand or any
Agent on the other and the parties' relative intent, knowledge, access to
information and opportunity to correct or prevent such statement or omission.
The Company, the Guarantor and each Agent agree that it would not be just and
equitable if contribution pursuant to this subsection (d) were determined by pro
rata allocation (even if the Agents were treated as one entity for such purpose)
or by any other method of allocation which does not take account of the
equitable considerations referred to above in this subsection (d). The amount
paid or payable by an indemnified party as a result of the losses, claims,
damages, or liabilities (or actions in respect thereof) referred to above in
this subsection (d) shall be deemed to include any legal or other expenses
reasonably incurred by such indemnified party in connection with investigating
or defending any such action or claim. Notwithstanding the provisions of this
subsection (d), no Agent shall be required to contribute any amount in excess of
the amount by which the total price at which Notes sold by it exceeds the amount
of any damages which such Agent has otherwise been required to pay by reason of
such untrue or alleged untrue statement or omission or alleged omission. No
person guilty of fraudulent misrepresentation (within the meaning of Section
11(f) of the Act) shall be entitled to contribution from any person who was not
guilty of such fraudulent misrepresentation. The obligations of the Agents in
this subsection (d) to contribute are several in proportion to their respective
underwriting obligations with respect to such Notes and not joint.
9. Termination. This Agreement will continue in effect until terminated
-----------
as provided in this Section 9.
25
(a) This Agreement may be terminated by either the Company or any
Agent giving written notice of such termination to the other party hereto.
This Agreement shall so terminate at the close of business on the first
business day following the receipt of such notice by the party to whom such
notice is given. This Agreement may be terminated as to one or more of the
Agents, and to the extent not terminated with respect to any Agent, this
Agreement shall remain in full force and effect as between the Company and
any such Agent. In the event of such termination, no party shall have any
liability to the other party hereto, except as provided in the fourth
paragraph of Section 2(a), Section 4(g), Section 7, Section 8 and Section
10.
(b) Each Terms Agreement shall be subject to termination in the
absolute discretion of the Purchaser, by notice given to the Company and
the Guarantor prior to delivery of and payment for Notes to be purchased
thereunder, if prior to such time (i) trading in securities generally, or
in the securities of the Guarantor, on the New York Stock Exchange shall
have been suspended or limited or minimum prices shall have been
established on such exchange, (ii) a banking moratorium shall have been
declared by either federal or New York State authorities or, in the case of
Notes denominated in other than U.S. dollars, by the authorities of the
country of the currency in which such Notes are so denominated or (iii)
there shall have occurred any outbreak or material escalation of
hostilities or other calamity or crisis the effect of which on the
financial markets of the United States or in the country or countries of
origin of any foreign currency or currency unit in which the Notes are
denominated, indexed or payable is such as to make it, in the judgment of
the Purchaser, impracticable to market such Notes.
10. Representations and Indemnities to Survive. The respective
------------------------------------------
agreements, representations, warranties, indemnities and other statements of the
Company, the Guarantor or any of their officers and of each Agent set forth in
or made pursuant to this Agreement will remain in full force and effect,
regardless of any investigation made by or on behalf of such Agent or the
Company, the Guarantor or any of their officers, directors or controlling
persons referred to in Section 8 hereof, and will survive delivery of and
payment for the Notes. The provisions of Sections 7 and 8 hereof shall survive
the termination or cancellation of this Agreement.
11. Right of Person Who Agreed to Purchase to Refuse to Purchase. The
------------------------------------------------------------
Company and the Guarantor agree that any person who has agreed to purchase and
pay for any Note, including a Purchaser and any person who purchases pursuant to
a solicitation by any of the Agents, shall have the right to refuse to purchase
such Note if, at the Settlement Date therefor, either (a) any condition set
forth in Section 5 or 6, as applicable, shall not be satisfied or (b) subsequent
to the agreement to purchase such Note, any change, or any development involving
a prospective change, in or affecting the business or properties of the Company
or the Guarantor and its subsidiaries shall have occurred the effect of which
is, in the reasonable judgment of the Purchaser or the Agent which presented the
offer to purchase such Note, as applicable, so material and adverse as to make
it impractical or inadvisable to proceed with the delivery of such Note.
12. Notices. All communications hereunder will be in writing and
-------
effective only on receipt, and, if sent to an Agent, will be mailed, delivered
or telegraphed and confirmed to such
26
Agent, at the address specified in Schedule 1 hereto; or, if sent to the
Company, will be mailed, delivered or telegraphed and confirmed to it at 0000
Xxxx Xxxxxxx, Xxxxxxxxx, Xxxxxxxxxx 00000, Attention: General Counsel.
13. Successors. This Agreement will inure to the benefit of and be
----------
binding upon the parties hereto and their respective successors and the officers
and directors and controlling persons referred to in Section 8 hereof, and no
other person will have any right or obligation hereunder.
14. Applicable Law. This Agreement will be governed by and construed in
--------------
accordance with the laws of the State of New York applicable to agreements made
and to be performed in said State.
27
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 the acceptance by each of you shall represent a binding agreement
among the Company, the Guarantor and each of you.
Very truly yours,
COUNTRYWIDE HOME LOANS, INC.
By:__________________________________
Name:
Title:
COUNTRYWIDE CREDIT INDUSTRIES, INC.
By:__________________________________
Name:
Title:
The foregoing Agreement is
hereby confirmed and accepted
as of the date hereof.
XXXXXX BROTHERS INC.
By:______________________________
Title:
CHASE SECURITIES INC.
By:______________________________
Title:
DEUTSCHE BANK SECURITIES INC.
By:_____________________________
Title:
_________________________________
Xxxxxxx, Xxxxx & Co.
28
XXXXXXX LYNCH, XXXXXX, XXXXXX & XXXXX
INCORPORATED
By:______________________________
Title:
X.X. XXXXXX SECURITIES INC.
By:______________________________
Title:
29
NATIONSBANC XXXXXXXXXX SECURITIES LLC
By:______________________________
Title:
XXXXXXX XXXXX XXXXXX INC.
By:______________________________
Title:
COUNTRYWIDE SECURITIES CORPORATION
By:______________________________
Title:
30
SCHEDULE 1
Selling Agency Agreement dated _______ __, 1998
Unless otherwise agreed between the Company and such Agent, the Company
agrees to pay any Agent a commission equal to the following percentage of the
principal amount of each Note sold by such Agent:
Term Commission Rate(a)
---- ------------------
From 9 months to less than 1 year......................... 0.125%
From 1 year to less than 18 months........................ 0.150%
From 18 months to less than 2 years....................... 0.200%
From 2 years to less than 3 years......................... 0.250%
From 3 years to less than 4 years......................... 0.350%
From 4 years to less than 5 years......................... 0.450%
From 5 years to less than 6 years......................... 0.500%
From 6 years to less than 7 years......................... 0.550%
From 7 years to less than 10 years........................ 0.600%
From 10 years to less than 15 years....................... 0.625%
From 15 years to less than 20 years....................... 0.650%
From 20 years up to and including 30 years(b)............. 0.750%
_____________
(a) With respect to each Note that is an Original Issue Discount Note (as
defined in the Indenture), the commission payable to each Agent with
respect to each such Note sold as a result of a solicitation made by such
Agent shall be based on the purchase price of such Note, rather than on the
principal amount of such Note.
(b) Commissions for Notes with terms in excess of 30 years will be agreed upon
by the Company and the related Agent at the time of sale.
31
Addresses for Notices to Agents:
Notices to Xxxxxx Brothers Inc. shall be directed to it at 0 Xxxxx
Xxxxxxxxx Xxxxxx, 00xx Xxxxx, Xxx Xxxx, Xxx Xxxx 00000-0000, Attention: Medium-
Term Note Department.
Notices to Chase Securities Inc. shall be directed to it at 000 Xxxx
Xxxxxx, 0xx Xxxxx, Xxx Xxxx, Xxx Xxxx 00000, Attention: Medium-Term Note Desk.
Notices to Deutsche Bank Securities Inc. shall be directed to it at 00 X.
00xx Xxxxxx, Xxx Xxxx, Xxx Xxxx 00000, Attention: Xxx Xxxxxxx.
Notices to Xxxxxxx, Xxxxx & Co. shall be directed to it at 00 Xxxxx Xxxxxx,
Xxx Xxxx, Xxx Xxxx 00000, Attention: Xxxxx Xxxxxxxxx.
Notices to Xxxxxxx Lynch, Xxxxxx, Xxxxxx & Xxxxx Incorporated shall be
directed to it at World Financial Center, North Tower - 10th Floor, New York,
New York 10281-1310, Attention: MTN Product Management.
Notices to X.X. Xxxxxx Securities Inc. shall be directed to it at 00 Xxxx
Xxxxxx, 0xx Xxxxx, Xxx Xxxx, Xxx Xxxx, 00000, Attention: Medium-Term Note
Trading Desk.
Notices to NationsBanc Xxxxxxxxxx Securities LLC shall be directed to it at
000 Xxxxx Xxxxx Xxxxxx, Xxxxxxxxx, XX 00000, XX0-000-07-01, Attention: Product
Management.
Notices to Xxxxxxx Xxxxx Xxxxxx Inc. shall be directed to it at Seven World
Trade Center, New York, New York 10048, Attention: Medium-Term Note Department.
Notices to Countrywide Securities Corporation, 0000 Xxxx Xxxxxxx,
Xxxxxxxxx, Xxxxxxxxxx 00000, Attention: Xxxxx St. Xxxxx.
32
EXHIBIT A
COUNTRYWIDE HOME LOANS, INC.
MEDIUM-TERM NOTE
ADMINISTRATIVE PROCEDURES
__, 1998
Medium-Term Notes, Series H, Due Nine Months or More From Date of Issue
(the "Notes") are to be offered on a continuing basis by Countrywide Home Loans,
Inc. (the "Company"). Xxxxxx Brothers Inc., Chase Securities Inc., Deutsche Bank
Securities Inc., Xxxxxxx, Xxxxx & Co., Xxxxxxx Xxxxx & Co., Xxxxxxx Lynch,
Pierce, Xxxxxx & Xxxxx Incorporated, X.X. Xxxxxx Securities Inc., NationsBanc
Xxxxxxxxxx Securities LLC, Xxxxxxx Xxxxx Xxxxxx Inc. and Countrywide Securities
Corporation (each individually, an "Agent", and collectively, the "Agents"),
have agreed to solicit purchases of the Notes. The Agents will not be obligated
to purchase Notes as principal. The Notes are being sold pursuant to a Selling
Agency Agreement among the Company, Countrywide Credit Industries, Inc. (the
"Guarantor") and the Agents dated __, 1998 (the "Agency Agreement"). The
Notes will be fully and unconditionally guaranteed as to payment of principal,
premium, if any, and interest by the Guarantor (the "Guarantees"). The Notes
will rank equally with all other unsecured and unsubordinated debt of the
Company and have been registered with the Securities and Exchange Commission
(the "Commission"). Capitalized terms used but not defined herein shall have the
meanings assigned to such terms in the Indenture referred to below.
Each Note and related Guarantee will be issued under an Indenture dated as
of January 1, 1992, as supplemented by Supplemental Indenture No. 1 thereto
dated as of June 15, 1995 (collectively, the "Indenture"), among the Company,
the Guarantor and The Bank of New York, as trustee (the "Trustee"). The Notes
will bear interest at either fixed rates ("Fixed Rate Notes") or floating rates
("Floating Rate Notes"). Each Note will be represented by either a certificate
delivered to the Holder thereof or a Person designated by such Holder (a
"Certificated Note") or a Global Security (as defined hereinafter) delivered to
the Trustee, as agent for The Depository Trust Company ("DTC"), and recorded in
the book-entry system maintained by DTC (a "Book-Entry Note"). An owner of a
Book-Entry Note will not be entitled to receive a certificate representing such
Note except in the limited circumstances described in the Prospectus (as defined
in the Agency Agreement).
The procedures to be followed during, and the specific terms of, the
solicitation of offers by the Agents and the sale as a result thereof by the
Company are explained below. Certificated Notes will be issued in accordance
with the administrative procedures set forth in Part I hereof and Book-Entry
Notes will be issued in accordance with the administrative procedures set forth
in Part II hereof. The Company will advise each Agent and the Trustee in writing
of those persons handling administrative responsibilities with whom the Agents
and the Trustee are to communicate regarding offers to purchase Notes and the
details of their delivery.
33
Administrative procedures and specific terms of the offering are explained
below. To the extent the procedures set forth below conflict with the provisions
of the Notes, the Indenture or the Agency Agreement, the relevant provisions of
the Notes, the Indenture and the Agency Agreement shall control.
PART I: ADMINISTRATIVE PROCEDURES FOR CERTIFICATED NOTES
Maturities: Each Certificated Note will mature on a date (the
----------
"Stated Maturity Date") nine months or more after
the date of delivery by the Company of such
Certificated Note (the "Settlement Date"), subject
to any applicable provisions relating to
redemption or repayment or the extension of
maturity.
Price to Public: Each Certificated Note will be issued at the
---------------
percentage of principal amount specified in the
Prospectus.
Currencies: The Certificated Notes will be denominated in U.S.
----------
dollars or in such other currency or currency unit
as is specified in the Prospectus (the "Specified
Currency").
Denominations: Except as set forth in the Certificated Note, the
-------------
denomination of any Certificated Note will be a
minimum of U.S. $1,000 or any amount in excess
thereof which is an integral multiple of U.S.
$1,000 or, in a Specified Currency other than U.S.
dollars, of the equivalent of U.S. $1,000 and any
amount in excess thereof which is an integral
multiple of the equivalent of U.S. $1,000, as
determined pursuant to the provisions of the
Indenture.
Registration: Certificated Notes will be issued only in fully
------------
registered form.
Interest Payments: Except as set forth in the Certificated Note, each
-----------------
Certificated Note which is a Fixed Rate Note will
bear interest from the Settlement Date of such
Certificated Note at the annual rate stated on the
face thereof, payable semiannually on January 15
and July 15 of each year (each, an "Interest
Payment Date") and on the Stated Maturity Date or
date of earlier redemption or repayment (such date
is herein referred to as the "Maturity Date" with
respect to the principal repayable on such date),
and each Certificated Note which is a Floating
Rate Note will bear interest as determined in the
manner set forth on the face thereof, payable on
the dates set forth on the face thereof. Unless
34
otherwise specified on the face thereof, interest
(including payments for partial periods) on Fixed
Rate Notes will be calculated on the basis of a
360-day year of twelve 30-day months. Interest on
Floating Rate Notes will be determined in the
manner agreed upon by the Company and the
purchaser thereof in accordance with the
provisions of the Prospectus. Except as set forth
in the Certificated Note, the "Record Date" with
respect to any Interest Payment Date for Floating
Rate Notes shall be the date 15 calendar days
immediately preceding such Interest Payment Date,
and for Fixed Rate Notes shall be the December 31
or June 30 next preceding such Interest Payment
Date, whether or not such date shall be a Business
Day, as defined in the Prospectus. The first
payment of interest on any Certificated Note
originally issued between a Record Date and an
Interest Payment Date will be made on the Interest
Payment Date following the next Record Date to the
Holder on such next succeeding Record Date.
Notwithstanding the record date provisions above,
interest payable on the Maturity Date will be
payable to the person to whom principal shall be
payable. Interest on the Certificated Notes will
be paid in the Specified Currency by mailing a
check (from an account at a bank located outside
of the United States if such check is payable in a
Specified Currency other than U.S. dollars) to the
Holder at the address of such Holder appearing on
the Security Register on the applicable Record
Date; provided, however, that a Holder of U.S.
-------- -------
$10,000,000 (or the equivalent thereof in a
Specified Currency other than U.S. dollars) or
more in aggregate principal amount of Notes
(whether or not having identical terms and
provisions) shall be entitled: (i) if the
Specified Currency is U.S. dollars, to receive
U.S. dollar payments by wire transfer of
immediately available funds to an account
maintained by the payee with a bank located in the
United States, but only if appropriate wire
transfer instructions have been received in
writing by the Trustee not later than the Record
Date immediately preceding the applicable Interest
Payment Date, and (ii) if the Specified Currency
is other than U.S. dollars, to receive by wire
transfer of immediately available funds to an
account maintained by the payee with a bank
located in a jurisdiction in which payment in such
Specified Currency is then lawful. Within ten days
following each Record Date, the Trustee will
inform the Company of the total amount of the
interest
35
payments to be made by the Company on the next
succeeding Interest Payment Date and the
currencies or currency units in which such
interest payments are to be made. The Trustee will
provide monthly to the Company a list of the
principal and interest to be paid on Certificated
Notes maturing in the next succeeding month.
Procedure for Rate Setting
--------------------------
and Posting:
------------
The Company and the Agents will discuss from time
to time the aggregate principal amount of, the
issuance price of, and the interest rates to be
borne by, Certificated Notes that may be sold as a
result of the solicitation or offers by the
Agents. If the Company decides to establish prices
of (including the currency of issuance), and rates
borne by, any Certificated Notes to be sold (the
establishment of such prices and rates to be
referred to herein as "posting") or if the Company
decides to change prices or rates previously
posted by it, it will promptly advise the Agents
of the prices and rates to be posted.
Acceptance of Offers:
--------------------
Unless otherwise agreed between the Company and
such Agent, any Agent which receives an offer to
purchase Certificated Notes will promptly advise
the Company of each such offer other than offers
rejected by such Agent as provided below. The
Company will have the sole right to accept any
such offer to purchase Certificated Notes. The
Company may reject any such offer in whole or in
part.
Unless otherwise agreed between the Company and
any Agent, each Agent may, in its discretion
reasonably exercised, reject any offer to purchase
Certificated Notes received by it in whole or in
part.
Preparation of Pricing
----------------------
Supplement:
-----------
If any offer to purchase a Certificated Note is
accepted by or on behalf of the Company, the
Company and the Guarantor, with the approval of
the Agents, will prepare a Pricing Supplement
reflecting the terms of such Certificated Note and
will arrange to have requisite copies of such
Pricing Supplement filed with the Commission, in
each case no later than the second Business Day
after the earlier of the determination of the
offering price or the date it is first used and
will supply at least ten copies thereof (or
36
additional copies if requested) to the Agents and
one copy to the Trustee no later than 11:00 A.M.,
New York City time, on the Business Day following
the date of acceptance at the following applicable
address (unless otherwise specified in the
applicable trading confirmation): if to Xxxxxx
Brothers Inc., to Xxxxxx Brothers Inc., Prospectus
Department, 3 World Financial Center, 9th Floor,
New York, New York 10285-0900, attention of
Xxxxxxx Xxxxxxx, telephone no. (000)000-0000,
telecopier no. (000) 000-0000; if to Chase
Securities Inc., to Chase Securities Inc., 000
Xxxx Xxxxxx, 0xx xxxxx, Xxx Xxxx, Xxx Xxxx 00000,
Attention: Medium-Term Note Desk, telephone no.
(000) 000-0000, telecopier no. (000) 000-0000; if
to Deutsche Bank Securities Inc. to Deutsche Bank
Securities Inc., attention of Xxx Xxxxxxx,
telephone no. (000) 000-0000, telecopier no. (212)
469-8173; with a copy to Deutshe Bank Securities
Inc., c/o ADP Prospectus, 000 Xxxxxxxxxxx Xxxx,
Xxxxxxxx, XX 00000, xxxxxxxxx xx Xxxxxx Xxxxx,
telephone no. (000) 000-0000, telecopier no. (516)
254-7134; if to Xxxxxxx, Xxxxx & Co., to Xxxxxxx,
Sachs & Co., 00 Xxxxx Xxxxxx, Xxx Xxxx, Xxx Xxxx
00000, attention of Xxxxx Xxxxxxxxx; if to Xxxxxxx
Xxxxx & Co., to Xxxxxxx Xxxxx & Co. -Tritech
Services, 00X Xxxxxxxx Xxxxx, Xxxxxxxxxx, Xxx
Xxxxxx 00000, attention of Final Prospectus
Unit/Xxxxxxx Xxxxxxxxxx, telephone no. (732) 885-
2768, telecopier no. (000) 000-0000, with a copy
to Xxxxxxx Lynch, Xxxxxx, Xxxxxx & Xxxxx
Incorporated, World Financial Center, North Tower,
10th Floor, New York, New York 10281-1310,
attention of MTN Product Management, telephone no.
(000) 000-0000, telecopier no. (000) 000-0000; if
to X.X. Xxxxxx Securities Inc., to X.X. Xxxxxx
Securities Inc. 00 Xxxx Xxxxxx, 0xx Xxxxx, Xxx
Xxxx, Xxx Xxxx 00000, xxxxxxxxx xx Xxx Xxxxxx,
telephone no. (000) 000-0000, telecopier no. (212)
648-5909; if to NationsBanc Xxxxxxxxxx Securities
LLC to Bank of New York, Xxx Xxxx Xxxxxx, 0xx
Floor, Dealers Clearance, Window B, A/C
NationsBanc Xxxxxxxxxx Securities LLC; if to
Xxxxxxx Xxxxx Xxxxxx Inc. to Xxxxxxx Xxxxx Xxxxxx,
Brookyn Army Terminal, 000 00xx Xxxxxx, 0xx Xxxxx,
Xxxxxxxx, XX 00000, attention of Xxxx Xxxxxxxx,
telephone no. (000) 000-0000, telecopier no. (718)
921-8472; if to Countrywide Securities
Corporation, to Countrywide Securities
Corporation, 0000 Xxxx Xxxxxxx, Xxxxxxxxx,
Xxxxxxxxxx 00000, attention of Xxxxx St. Xxxxx,
telephone no. (000) 000-0000, telecopier no. (818)
225-4014 ; and if to the Trustee, to The Bank of
New York, 000 Xxxxxxx Xxxxxx, Xxx Xxxx, Xxx Xxxx
00000, attention of Corporate Trust Office. Such
Agent will cause a Pricing Supplement to be
delivered to the purchaser of the Certificated
Note. In all respects, the Company and the
Guarantor will prepare and
37
file each such Pricing Supplement in accordance
with Rule 424 under the Act.
In each instance that a Pricing Supplement is
prepared, each Agent will affix the Pricing
Supplement to Prospectuses prior to their use;
provided, however, that pursuant to Rule 434
("Rule 434") under the Securities Act of 1933, as
amended, the Pricing Supplement may be delivered
separately from the Prospectuses. Outdated Pricing
Supplements, and the Prospectuses to which they
are attached or relate (other than those retained
for files), will be destroyed.
Suspension of Solicitation;
--------------------------
Amendment or Supplement:
-----------------------
The Company reserves the right, in its sole
discretion, to instruct the Agents to suspens at
any time, for any period of time or permanently,
the solicitation of offers to purchase
Certificated Notes. As soon as practicable, but in
no event later than one Business Day after receipt
of instructions from the Company, the Agents will
suspend solicitation of offers to purchase
Certificated Notes from the Company until such
time as the Company has advised them that such
solicitation may be resumed.
If the Company or the Guarantor decides to amend
or supplement the Registration Statement or the
Prospectus relating to the Notes (except in the
case of a Pricing Supplement to the Prospectus),
the Company or the Guarantor, as the case may be,
will promptly advise the Agents and the Trustee
and will furnish the Agents and the Trustee with
the proposed amendment or supplement in accordance
with the terms of the Agency Agreement. The
Company or the Guarantor will mail or transmit to
the Commission for filing therewith any supplement
to the Prospectus relating to the Notes, provide
the Agents with copies of any supplement, and
confirm to the Agents that such supplement has
been filed with the Commission.
In the event that at the time the Company suspends
solicitation of offers to purchase Certificated
Notes there shall be any outstanding offers to
purchase Certificated Notes that have been
accepted by the Company but for which settlement
has not yet occurred, the Company will promptly
advise the Agents and the Trustee whether such
38
sales may be settled and whether copies of the
Prospectus as supplemented to the time of the
suspension may be delivered in connection with the
settlement of such sales. The Company will have
the sole responsibility for such decision and for
any arrangements which may be made in the event
that the Company determines that such sales may
not be settled or that copies of such Prospectus
may not be so delivered.
Delivery of Prospectus:
----------------------
Each Agent shall, for each offer to purchase a
Certificated Note that is solicited by such Agent
and accepted by the Company, deliver a copy of the
Prospectus as most recently amended or
supplemented (including the applicable Pricing
Supplement which, pursuant to Rule 434, may be
delivered separately from the Prospectus) with the
earlier of the delivery of the confirmation of
sale or the Certificated Note to the purchaser
thereof or such purchaser's agent.
Confirmation: For each offer to purchase a Certificated Note
------------
solicited by any Agent and accepted by the
Company, such Agent will issue a confirmation to
the purchaser, with a copy to the Company, setting
forth the details set forth above and delivery and
payment instructions.
Settlement: The Settlement Date with respect to any offer to
----------
purchase Certificated Notes accepted by or on
behalf of the Company will be a date on or before
the third Business Day next succeeding the date of
acceptance unless otherwise agreed by the
purchaser and the Company and shall be specified
upon acceptance of such offer. The Company will
instruct the Trustee to effect delivery of each
Certificated Note no later than 1:00 p.m., New
York City time, on the Settlement Date to such
Agent for delivery to the purchaser.
Details for Settlement:
----------------------
For each offer to purchase a Certificated Note
received by any Agent and accepted pursuant to the
terms of the Agency Agreement, such Agent will
provide (unless provided by the purchaser directly
to the Company) by telephone the following
information (to the extent applicable) to the
Company:
39
1. Exact name of Holder.
2. Exact address of Holder and address for
payment of principal, premium, if any, and
interest.
3. Taxpayer identification number of Holder
(if available).
4. Principal amount of the Note.
5. Specified Currency.
6. Interest rate or interest rate basis.
7. Base Rate(s), Index Maturity, Initial
Interest Rate, Maximum Interest Rate, Minimum
Interest Rate, Interest Reset Dates, Interest
Payment Dates, Calculation Dates, Interest
Reset Dates and Spread and/or Spread
Multiplier (as each such term is defined in
the Prospectus).
8. Issue price of Note and proceeds to
Company.
9. Settlement Date.
10. Stated Maturity Date.
11. Redemption and/or repayment provisions,
if any.
12. Agent's commission to be paid in the
form of a discount upon settlement.
13. Other relevant terms, including any
reset and/or extension provisions.
Such Agent will advise the Company of the
foregoing information (unless provided by the
purchaser directly to the Company) for each offer
to purchase a Certificated Note solicited by such
Agent and accepted by the Company in time for the
Trustee to prepare and authenticate the required
Certificated Note. Before accepting any offer to
purchase a Certificated Note to be settled in less
than three Business Days, the Company shall verify
that the Trustee will have adequate time to
prepare and authenticate such Certificated Note.
After receiving from such Agent the details for
each offer to purchase a Certificated Note, the
Company will, after recording the details and any
necessary calculations, provide appropriate
documentation to the Trustee, including the
information provided by such Agent necessary for
the preparation and authentication of such
Certificated Note. Prior to preparing the
Certificated Note for delivery (but in any case no
later than 11:00 a.m., New
40
York City time, on the Business Day next preceding
the Settlement Date therefor), the Trustee will
confirm the details of such issue with such Agent
by telephone.
Note Deliveries and Cash
------------------------
Payment:
--------
Upon receipt of appropriate documentation and
instructions, the Company will cause the Trustee
to prepare and authenticate the pre-printed 4-ply
Certificated Note packet containing the following
documents in forms approved by the Company, the
Agents and the Trustee:
1. Certificated Note with customer confirmation.
2. Stub 1--For the applicable Agent.
3. Stub 2--For the Company.
4. Stub 3--For the Trustee.
Each Certificated Note shall be authenticated on
or before the Settlement Date therefor. The
Trustee will authenticate each Certificated Note
and deliver it to such Agent (and deliver the
stubs as indicated above), all in accordance with
written instructions (which may be in the form of
facsimile transmission) from the Company. Delivery
by the Trustee of each Certificated Note will be
made against receipt by the Company by 1:00 p.m.,
New York City time, on the Settlement Date in
immediately available funds of an amount equal to
the issue price of such Certificated Note or the
U.S. dollar equivalent of the issue price of such
Note as agreed between the Company and such Agent,
unless otherwise agreed between the Company and
such Agent, less such Agent's commission.
Upon verification by such Agent that a Note has
been prepared and properly authenticated by the
Trustee and registered in the name of the
purchaser in the proper principal amount and that
the related Guarantee has been duly endorsed
thereon, payment will be made to the Company by
such Agent the same day in immediately available
funds in the Specified Currency. Such payment
shall be made only upon prior receipt by such
Agent of immediately available funds from or on
behalf of the purchaser in the Specified Currency
unless such Agent decides, at its option, to
advance its own funds for such payment against
subsequent receipt of funds from the purchaser.
41
Upon delivery of a Certificated Note to such
Agent, such Agent shall promptly deliver such
Certificated Note to the purchaser.
In the event any Certificated Note is incorrectly
prepared, the Trustee shall promptly issue a
replacement Certificated Note in exchange for the
incorrectly prepared Certificated Note.
Failure to Settle: If any Agent, at its own option, has advanced its
-----------------
own funds for payment against subsequent receipt
of funds from the purchaser, and if the purchaser
shall fail to make payment for the Certificated
Note on the Settlement Date therefor, such Agent
will promptly notify the Trustee and the Company
by tele- phone, promptly confirmed in writing (but
no later than the next Business Day). In such
event, the Company shall promptly provide the
Trustee with appropriate documentation and
instructions consistent with these procedures for
the return of the Certificated Note to the Trustee
and such Agent will promptly return the
Certificated Note to the Trustee. Upon
confirmation (i) from the Trustee in writing
(which may be given by telex or telecopy) that the
Trustee has received the Certificated Note and
(ii) from such Agent in writing (which may be
given by telex or telecopy) that such Agent has
not received payment from the purchaser (the
matters referred to in clauses (i) and (ii) are
referred to hereinafter as the "Confirmations"),
the Company will promptly pay to such Agent an
amount in immediately available funds equal to the
amount previously paid by such Agent in respect of
such Certificated Note. Assuming receipt of the
Certificated Note by the Trustee and of the
Confirmations by the Company, such payment will be
made on the Settlement Date, if reasonably
practicable, and in any event not later than the
Business Day following the date of receipt of the
Certificated Note and Confirmations. If a
purchaser shall fail to make payment for the
Certificated Note for any reason other than the
failure of such Agent to provide the necessary
information to the Company as described above for
settlement or to provide a confirmation to the
purchaser within a reasonable period of time as
described above or otherwise to satisfy its
obligation hereunder or in the Agency Agreement,
and if such Agent shall have otherwise complied
with its obligations hereunder and in the Agency
Agreement, the Company will
42
reimburse such Agent on an equitable basis for its loss
of the use of funds during the period when they were
credited to the account of the Company.
Immediately upon receipt of the Certificated Note in
respect of which the failure occurred, the Trustee will
void said Certificated Note, make appropriate entries
in its records and destroy the Certificated Note; and
upon such action, the Certificated Note will be deemed
not to have been issued, authenticated and delivered.
Trustee Not to Nothing herein shall be deemed to require the Trustee
--------------
Risk Funds: to risk or expend its own funds in connection with any
----------
any payment to the Company, or any Agent or the
purchaser, it being understood by all parties that
payments made by the Trustee to either the Company or
any Agent shall be made only to the extent that funds
are provided to the Trustee for such purpose.
Authenticity of
---------------
Signatures:
----------
The Company will cause the Trustee and the Guarantor to
furnish each Agent from time to time with the specimen
signatures of the officers, employees or agents who
have been authorized to authenticate Certificated Notes
or execute the related Guarantee, as the case may be,
but each Agent will have no obligation or liability to
the Company, the Guarantor or the Trustee in respect of
the authenticity of the signature of any officer,
employee or agent of the Company, the Guarantor or the
Trustee on any Certificated Note.
Payment of Expenses:
-------------------
Each Agent shall forward to the Company and the
Guarantor, from time to time (but not more often than
monthly), a statement of the out-of-pocket expenses
incurred by such Agent during the related period which
are reimbursable to it pursuant to the terms of the
Agency Agreement. The Company and the Guarantor will
promptly remit payment to such Agent.
Advertising The Company will determine with each Agent the amount
-----------
Costs: of advertising that may be appropriate in soliciting
-----
offers to purchase the Notes. Advertising expenses will
be paid by the Company and the Guarantor.
43
PART II: ADMINISTRATIVE PROCEDURES FOR BOOK-ENTRY NOTES
In connection with the qualification of Book-Entry Notes for eligibility in
the book-entry system maintained by DTC, the Trustee will perform the custodial,
document control and administrative functions described below, in accordance
with its respective obligations under a Letter of Representations from the
Company, the Guarantor and the Trustee to The Depository Trust Company ("DTC")
of even date herewith and a Medium-Term Note Certificate Agreement between the
Trustee and DTC, dated April 14, 1989 and its obligations as a participant in
DTC, including DTC's Same-Day Funds Settlement System ("SDFS").
Issuance: On any Settlement Date (as defined under "Settlement"
--------
below) for one or more Fixed Rate Book-Entry Notes, the
Company will issue a single global security in fully
registered form without coupons (a "Global Security")
representing up to U.S. $200,000,000 principal amount
of all of such Notes that have the same Issue Date,
Specified Currency, Interest Rate, Stated Maturity
Date, redemption and/or repayment provisions and
Interest Payment Dates. Similarly, on any Settlement
Date for one or more Floating Rate Book-Entry Notes,
the Company will issue a single Global Security
representing up to U.S. $200,000,000 principal amount
of all of such Notes that have the same Issue Date,
Specified Currency, Base Rate(s), Index Maturity,
Interest Reset Dates, Spread and/or Spread Multiplier
(if any), Initial Interest Rate, Interest Payment
Dates, Minimum Interest Rate (if any), Maximum Interest
Rate (if any), Stated Maturity Date and redemption
and/or repayment provisions. Each Global Security will
be dated and issued as of the date of its
authentication by the Trustee. Each Global Security
will bear an "Interest Accrual Date", which will be (i)
with respect to an original Global Security (or any
portion thereof), its original issuance date and (ii)
with respect to any Global Security (or portion
thereof) issued subsequently upon exchange of a Global
Security or in lieu of a destroyed, lost or stolen
Global Security, the most recent Interest Payment Date
to which interest has been paid or duly provided for on
the predecessor Global Security or Securities (or if no
such payment or provision has been made, the original
issuance date of the predecessor Global Security),
regardless of the date of authentication of such
subsequently issued Global Security. No Global Security
will represent any Certificated Note.
Price to Public: Each Book-Entry Note will be issued at the percentage
---------------
of principal amount specified in the Prospectus.
44
Identification Numbers:
-----------------------
The Company will arrange, on or prior to commencement
of a program for the offering of Book-Entry Notes, with
the CUSIP Service Bureau of Standard & Poor's Ratings
Group (the "CUSIP Service Bureau") for the reservation
of a series of CUSIP numbers (including tranche
numbers), consisting of approximately 900 CUSIP numbers
and relating to Global Securities representing the
Book-Entry Notes. The Trustee has or will obtain from
the CUSIP Service Bureau a written list of such series
of reserved CUSIP numbers and will deliver to the
Company and DTC such written list of 900 CUSIP numbers
of such series. The Company will assign CUSIP numbers
to Global Securities as described below under
Settlement Procedure "B". DTC will notify the CUSIP
Service Bureau periodically of the CUSIP numbers that
the Company has assigned to Global Securities. The
Trustee will notify the Company at any time when fewer
than 100 of the reserved CUSIP numbers remain
unassigned to Global Securities, and if it deems
necessary, the Company will reserve additional CUSIP
numbers for assignment to Global Securities
representing Book-Entry Notes. Upon obtaining such
additional CUSIP numbers, the Trustee shall deliver
such additional CUSIP numbers to the Company and DTC.
Registration: Each Global Security will be registered in the name of
------------
CEDE & CO., as nominee for DTC, on the Securities
Register maintained under the Indenture governing such
Global Security. The beneficial owner of a Book-Entry
Note (or one or more indirect participants in DTC
designated by such owner) will designate one or more
participants in DTC (with respect to such Note, the
"Participants") to act as agent or agents for such
owner in connection with the book-entry system
maintained by DTC, and DTC will record in book-entry
form, in accordance with instructions provided by such
Participants, a credit balance with respect to such
Note in the account of such Participants. The ownership
interest of such beneficial owner in such Note will be
recorded through the records of such Participants or
through the separate records of such Participants and
one or more indirect participants in DTC.
Transfers: Transfer of a Book-Entry Note will be accomplished by
---------
book entries made by DTC and, in turn, by Participants
(and in certain cases, one or more indirect
participants in
45
DTC) acting on behalf of beneficial transferors
and transferees of such Note.
Consolidation and Exchange: The Trustee may deliver to DTC and the
---------------------------
CUSIP Service Bureau at any time a written
notice of consolidation specifying (i) the CUSIP
numbers of two or more outstanding Global
Securities that represent (A) Fixed Rate
Book-Entry Notes having the same Issue Date,
Specified Currency, Interest Rate, Stated
Maturity Date, redemption and/or repayment
provisions (if any) and Interest Payment Dates
and with respect to which interest has been paid
to the same date or (B) Floating Rate Book-Entry
Notes having the same Issue Date, Specified
Currency, Base Rate, Index Maturity, Interest
Reset Dates, Spread and/or Spread Multiplier (if
any), Initial Interest Rate, Interest Payment
Dates, Minimum Interest Rate (if any), Maximum
Interest Rate (if any), redemption and/or
repayment provisions (if any) and Stated
Maturity Date and with respect to which interest
has been paid to the same date, (ii) a date,
occurring at least thirty days after such
written notice is delivered and at least thirty
days before the next Interest Payment Date for
such Book-Entry Notes, on which such Global
Securities shall be exchanged for a single
replacement Global Security and (iii) a new
CUSIP number, obtained from the Company, to be
assigned to such replacement Global Security.
Upon receipt of such a notice, DTC will send to
its Participants (including the Trustee) a
written reorganization notice to the effect that
such exchange will occur on such date. Prior to
the specified exchange date, the Trustee will
deliver to the CUSIP Service Bureau a written
notice setting forth such exchange date and the
new CUSIP number and stating that, as of such
exchange date, the CUSIP numbers of the Global
Securities to be exchanged will no longer be
valid. On the specified exchange date, the
Trustee will exchange such Global Securities for
a single Global Security bearing the new CUSIP
number and a new Interest Accrual Date, and the
CUSIP numbers of the exchanged Global Securities
will, in accordance with CUSIP Service Bureau
procedures, be cancelled and not immediately
reassigned. Notwithstanding the foregoing, if
the Global Securities to be exchanged exceed
U.S. $200,000,000 in aggregate principal amount,
one Global Security will be authenticated and
issued to represent each U.S. $200,000,000 of
principal amount of the exchanged Global
Securities and an additional Global Security
will be authenticated and issued
46
to represent any remaining principal amount of
such Global Securities (see "Denominations"
below).
Maturities: Each Book-Entry Note will mature on a date nine
----------
months or more after the Settlement Date for
such Note.
Notice of Redemption Date: The Trustee will notify DTC not more
--------------------------
than 60 but not less than 30 days prior to each
redemption date, if any, with respect to a Book-
Entry Note, of the CUSIP number of such Note,
the redemption date, the redemption price and
the principal amount of such Book-Entry Note to
be redeemed.
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. Global Securities will be denominated in
principal amounts not in excess of U.S.
$200,000,000. If one or more Book-Entry Notes
having an aggregate principal amount in excess
of U.S. $200,000,000 would, but for the
preceding sentence, be represented by a single
Global Security, then one Global Security will
be issued to represent each U.S. $200,000,000
principal amount of such Book-Entry Note or
Notes and an additional Global Security will be
issued to represent any remaining principal
amount of such Book-Entry Note or Notes. In such
a case, each of the Global Securities
representing such Book-Entry Note or Notes shall
be assigned the same CUSIP number.
Interest: General. Interest on each Book-Entry Note will
-------- -------
accrue from the Interest Accrual Date of the
Global Security representing such Note. Except
as set forth in the underlying Global Security,
each Book-Entry Note which is a Fixed Rate Note
will bear interest at the annual rate stated in
such Global Security, payable semiannually on
January 15 and July 15 of each year (each, an
"Interest Payment Date") and on the Maturity
Date, and each Book-Entry Note which is a
Floating Rate Note will bear interest as
determined in the manner set forth in such
Global Security, payable on the dates set forth
on such Global Security. Except as set forth in
the underlying Global Security, interest
(including payments for partial periods) on
Fixed Rate Notes will be calculated on the basis
of a 360-day year of twelve 30-day months.
Except as set forth in the underlying Global
Security, interest on Book-Entry Notes which are
Floating Rate Notes will be determined in the
manner agreed upon by the Company and the
purchaser
47
thereof in accordance with the provisions of the
Prospectus. Except as set forth in the
underlying Global Security, the "Record Date"
with respect to any Interest Payment Date for
Book-Entry Notes which are Floating Rate Notes
shall be the date 15 calendar days immediately
preceding such Interest Payment Date, and for
Fixed Rate Notes shall be the December 31 or
June 30 next preceding such Interest Payment
Date, whether or not such date shall be a
Business Day. The first payment of interest on
any Book-Entry Note originally issued between a
Record Date and an Interest Payment Date will be
made on the Interest Payment Date following the
next succeeding Record Date to the Holder on
such next succeeding Record Date.
Notwithstanding the record date provisions
above, interest payable on the Maturity Date
will be payable to the person to whom principal
shall be payable.
Standard & Poor's Ratings Group will use the
information received in the pending deposit
message described under Settlement Procedure "C"
below in order to include the amount of any
interest payable and certain other information
regarding the related Global Security in the
appropriate weekly bond report published by
Standard & Poor's Ratings Group.
On the first Business Day of January, April,
July and October of each year, the Trustee will
deliver to the Company and DTC a written list of
Record Dates and Interest Payment Dates that
will occur with respect to Floating Rate Book-
Entry Notes during the six-month period
beginning on such first Business Day. Promptly
after each Interest Determination Date (as
defined in the Prospectus) for Floating Rate
Notes, the Company will notify the Trustee, and
the Trustee in turn will notify Standard &
Poor's Ratings Group, of the interest rates
determined on such Interest Determination Date.
Payments of Principal and
-------------------------
Interest:
---------
Payments of Interest Only. Promptly after each
-------------------------
Record Date, the Trustee will deliver to the
Company and DTC a written notice specifying by
CUSIP number the amount of interest to be paid
on each Global Security on the following
Interest Payment Date (other than an Interest
Payment Date coinciding with a Maturity Date)
and the total of such amounts. DTC will confirm
the amount payable on each Global Security on
such Interest Payment Date by reference
48
to the daily bond reports published by Standard
& Poor's Corporation. The Company will pay to
the Trustee, as paying agent, the total amount
of interest due on such Interest Payment Date
(other than on the Maturity Date), and the
Trustee will pay such amount to DTC at the times
and in the manner set forth below under "Manner
of Payment".
Payments at Maturity. On or about the first
--------------------
Business Day of each month, the Trustee will
deliver to the Company and DTC a written list of
principal and interest to be paid on each Global
Security with a Maturity Date in the following
month. The Company, the Trustee and DTC will
confirm the amounts of such principal and
interest payments with respect to each such
Global Security on or about the fifth Business
Day preceding the Maturity Date of such Global
Security. The Company will pay to the Trustee,
as the paying agent, the principal amount of
such Global Security, together with interest due
on such Maturity Date. The Trustee will pay such
amount to DTC at the time and in the manner set
forth below under "Manner of Payment".
Promptly after payment to DTC of the principal
and interest due on the Maturity Date of such
Global Security, the Trustee will cancel such
Global Security and deliver it to the Company
with an appropriate debit advice. On the first
Business Day of each month, the Trustee will
prepare a written statement indicating the total
principal amount of outstanding Global
Securities for which it serves as trustee as of
the immediately preceding Business Day.
Manner of Payment. The total amount of any
-----------------
principal and interest due on Global Securities
on any Interest Payment Date or on the Maturity
Date shall be paid by the Company to the Trustee
in funds available for use by the Trustee as of
9:30 A.M. (New York City time) on such date. The
Company will make such payment on such Global
Securities by instructing the Trustee to
withdraw funds from an account maintained by the
Company at the Trustee. For maturity,
redemption, repayment or any other principal
payments: prior to 10:00 A.M. (New York City
time) on such date or as soon as possible
thereafter, the Trustee will make such payments
to DTC in same day funds in accordance with
DTC's Same Day Funds Settlement Paying Agent
Operating Procedures. For interest payments: the
Trustee will make such payments to DTC in
accordance with existing arrangements between
DTC and the Trustee.
49
DTC will allocate such payments to its
participants in accordance with its existing
operating procedures. Neither the Company
(either as Issuer or as Paying Agent), the
Trustee or any Agent shall have any direct
responsibility or liability for the payment by
DTC to such Participants of the principal of and
interest on the Book-Entry Notes.
Withholding Taxes. The amount of any taxes
-----------------
required under applicable law to be withheld
from any interest payment on a Book-Entry Note
will be determined and withheld by the
Participant, indirect participant in DTC or
other Person responsible for forwarding payments
and materials directly to the beneficial owner
of such Note.
Procedure for Rate Setting
--------------------------
and Posting:
-----------
The Company and the Agents will discuss from
time to time the aggregate principal amount of,
the issuance price of, and the interest rates to
be borne by, Book-Entry Notes that may be sold
as a result of the solicitation or offers by the
Agents. If the Company decides to establish
prices of (including the currency of issuance),
and rates borne by, any Book-Entry Notes to be
sold (the establishment of such prices and rates
to be referred to herein as "posting") or if the
Company decides to change prices or rates
previously posted by it, it will promptly advise
the Agents of the prices and rates to be posted.
Acceptance Unless otherwise agreed between the Company and
----------
of Offers: such Agent, any Agent which receives an offer to
---------
purchase Book-Entry Notes will promptly advise
the Company of each such offer other than offers
rejected by such Agent as provided below. The
Company will have the sole right to accept any
such offer to purchase Book-Entry Notes. The
Company may reject any such offer in whole or in
part.
Unless otherwise agreed between the Company and
any Agent, each Agent may, in its discretion
reasonably exercised, reject any offer to
purchase Book-Entry Notes received by it in
whole or in part.
Preparation of Pricing
----------------------
Supplement:
----------
If any offer to purchase a Book-Entry Note is
accepted by or on behalf of the Company, the
Company and the Guarantor, with the approval of
the Agents, will prepare a Pricing Supplement
reflecting the terms of such
50
Book-Entry Note and will arrange to have requisite
copies of such Pricing Supplement filed with the
Commission, in each case no later than the second
Business Day after the earlier of the
determination of the offering price or the date it
is first used and will supply at least ten copies
thereof (or additional copies if requested) to the
Agents and one copy to the Trustee no later than
11:00 A.M., New York City time, on the Business
Day following the date of acceptance at the
following applicable address (unless otherwise
specified in the applicable trading confirmation):
if to Xxxxxx Brothers Inc., to Xxxxxx Brothers
Inc., Prospectus Department, 0 Xxxxx Xxxxxxxxx
Xxxxxx, 9th Floor, New York, New York 10285-0900,
attention of Xxxxxxx Xxxxxxx, telecopier no. (212)
528-7035; if to Chase Securities, Inc., if to
Chase Securities Inc., to Chase Securities Inc.,
000 Xxxx Xxxxxx,0xx xxxxx, Xxx Xxxx, Xxx Xxxx
00000, Attention: Medium-Term Note Desk, telephone
no. (000) 000-0000, telecopier no. (000) 000-0000;
if to Deutsche Bank Securities Inc. to Deutsche
Bank Securities Inc., attention of Xxx Xxxxxxx,
telephone no. (000) 000-0000, telecopier no. (212)
469-8173; with a copy to Deutshe Bank Securities
Inc., c/o ADP Prospectus, 000 Xxxxxxxxxxx Xxxx,
Xxxxxxxx, XX 00000, xxxxxxxxx xx Xxxxxx Xxxxx,
telephone no. (000) 000-0000, telecopier no. (516)
254-7134; if to Xxxxxxx, Xxxxx & Co., to Xxxxxxx,
Sachs & Co., 00 Xxxxx Xxxxxx, 00xx Xxxxx, Xxx
Xxxx, Xxx Xxxx 00000, attention of Xxxxx
Xxxxxxxxx; if to Xxxxxxx Xxxxx & Co., to Xxxxxxx
Xxxxx & Co. - Tritech Services, 00X Xxxxxxxx
Xxxxx, Xxxxxxxxxx, Xxx Xxxxxx 00000, attention of
Xxxxxxx Xxxxxxxxxx/Final Prospectus Unit,
telephone no. (000) 000-0000, telecopier no. (732)
885-2774, with a copy to Xxxxxxx Lynch, Xxxxxx,
Xxxxxx & Xxxxx Incorporated, World Financial
Center, North Tower, 10th Floor, New York, New
York 10281-1310, attention of MTN Product
Management, telephone no. (000) 000-0000,
telecopier no. (000)000-0000; if to X.X. Xxxxxx
Securities Inc. to X.X. Xxxxxx Securities Inc., 00
Xxxx Xxxxxx, 0xx Xxxxx, Xxx Xxxx, Xxx Xxxx 00000,
xxxxxxxxx xx Xxx Xxxxxx, telephone no. (212) 648-
0591, telecopier no. (000) 000-0000; if to
NationsBanc Xxxxxxxxxx Securities LLC, to
NationsBanc Xxxxxxxxxx Securities LLC, 000 Xxxxx
Xxxxx Xxxxxx, Xxxxxxxxx, XX 00000, XX0-000-07-01,
attention of Xxx Xxxxxxx, MTN Trading, telecopier
no. (000) 000-0000; if to Xxxxxxx Xxxxx Xxxxxx
Inc. to Xxxxxxx Xxxxx Xxxxxx, Brookyn Army
Terminal, 000 00xx Xxxxxx, 0xx Xxxxx, Xxxxxxxx, XX
00000, attention of Xxxx Xxxxxxxx, telephone no.
(000) 000-0000, telecopier no. (000) 000-0000 ; if
to Countrywide Securities Corporation, to
Countrywide Securities Corporation, 0000 Xxxx
Xxxxxxx, Xxxxxxxxx, Xxxxxxxxxx 00000, attention of
Xxxxx St. Xxxxx, telephone no. (000) 000-0000,
telecopier no. (000) 000-0000; and if to the
51
Trustee, to The Bank of New York, 000 Xxxxxxx
Xxxxxx, Xxx Xxxx, Xxx Xxxx 00000, attention of
Corporate Trust Office. Such Agent will cause a
Pricing Supplement to be delivered to the
purchaser of the Book-Entry Note. In all
respects, the Company and the Guarantor will
prepare and file each such Pricing Supplement in
accordance with Rule 424 under the Act.
In each instance that a Pricing Supplement is
prepared, each Agent will affix the Pricing
Supplement to Prospectuses prior to their use;
provided, however, that pursuant to Rule 434,
the Pricing Supplement may be delivered
separately from the Prospectuses. Outdated
Pricing Supplements, and the Prospectuses to
which they are attached or relate (other than
those retained for files), will be destroyed.
Suspension of Solicitation;
---------------------------
Amendment or Supplement:
------------------------
The Company reserves the right, in its sole
discretion, to instruct the Agents to suspend at
any time, for any period of time or permanently,
the solicitation of offers to purchase Book-
Entry Notes. As soon as practicable, but in no
event later than one Business Day after receipt
of instructions from the Company, the Agents
will suspend solicitation of offers to purchase
Book-Entry Notes from the Company until such
time as the Company has advised them that such
solicitation may be resumed.
If the Company or the Guarantor decides to amend
or supplement the Registration Statement or the
Prospectus relating to the Notes (except in the
case of a Pricing Supplement to the Prospectus),
the Company or the Guarantor, as the case may
be, will promptly advise the Agents and the
Trustee and will furnish the Agents and the
Trustee with the proposed amendment or
supplement in accordance with the terms of the
Agency Agreement. The Company or the Guarantor
will mail or transmit to the Commission for
filing therewith any supplement to the
Prospectus relating to the Notes, provide the
Agents with copies of any supplement, and
confirm to the Agents that such supplement has
been filed with the Commission.
In the event that at the time the Company
suspends solicitation of offers to purchase
Book-Entry Notes there shall be any outstanding
offers to purchase Book-Entry Notes that have
been accepted by the Company but for which
settlement has not yet occurred, the Company
will
52
promptly advise the Agents and the Trustee
whether such sales may be settled and whether
copies of the Prospectus as supplemented to the
time of the suspension may be delivered in
connection with the settlement of such sales.
The Company will have the sole responsibility
for such decision and for any arrangements which
may be made in the event that the Company
determines that such sales may not be settled or
that copies of such Prospectus may not be so
delivered.
Delivery of Each Agent shall, for each offer to
-----------
Prospectus: purchase a Book-Entry Note that is solicited by
----------
such Agent and accepted by the Company, deliver
a copy of the Prospectus as most recently
amended or supplemented (including the
applicable Pricing Supplement which, pursuant to
Rule 434, may be delivered separately from the
Prospectus) with the earlier of the delivery of
the confirmation of sale or the Book-Entry Note
to the purchaser thereof or such purchaser's
agent.
Confirmation: Such 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 .
Settlement: The receipt by the Company of immediately
----------
available funds in payment for a Book-Entry Note
and the authentication and issuance of the
Global Security representing such Note shall
constitute "settlement" with respect to such
Note. The "Settlement Date" with respect to any
offer to purchase Book-Entry Notes accepted by
or on behalf of the Company will be a date on or
before the third Business Day next succeeding
the date of acceptance unless otherwise agreed
by the purchaser and the Company and shall be
specified upon acceptance of such offer.
Settlement Settlement Procedures with regard to
----------
Procedures: each Book-Entry Note sold by the Company through
----------
an Agent, as agent, shall be as follows:
X. Xxxx Agent will advise the Company by
telephone of the following settlement
information :
1. Principal amount.
2. Specified Currency.
3. Stated Maturity Date.
53
4. In the case of a Fixed Rate Book-Entry Note,
the interest rate, or, in the case of a Floating
Rate Book-Entry Note, Base Rate, Index Maturity,
Initial Interest Rate, Maximum Interest Rate,
Minimum Interest Rate, Interest Reset Dates,
Interest Payment Dates, Calculation Dates,
Interest Reset Dates and Spread and/or Spread
Multiplier.
5. Settlement Date.
6. Redemption and/or repayment provisions, if
any.
7. Agent's commission, determined as provided
in the Agency Agreement between the Company and
such Agent.
8. The DTC Participant account number of such
Agent.
9. Taxpayer identification number of
beneficial owner (if available).
10. Issue price of Book-Entry Note and
proceeds to the Company.
B. The Trustee will assign a CUSIP number to
the Global Security representing such Book-Entry
Note and will then advise the Company of such
CUSIP number. The Company will then advise the
Trustee by electronic transmission (confirmed by
telephone) of the information set forth in
Settlement Procedure "A" above and the name of
such Agent. Each such communication by the
Company shall constitute a representation and
warranty by the Company to the Trustee and each
Agent that (i) such Note is then, and at the
time of issuance and sale thereof will be, duly
authorized for issuance and sale by the Company,
(ii) such Note, and the Global Security
representing such Note, will conform with the
terms of the Indenture pursuant to which such
Note and Global Security are issued and (iii)
upon authentication and delivery of such Global
Security, the aggregate initial offering price
of all Notes issued under the Indenture will not
exceed $3,000,000,000 (except for Book-Entry
Notes represented by Global Securities
authenticated and delivered in exchange for or
in lieu of Global Securities pursuant to the
Indenture and except for Certificated Notes
authenticated and delivered upon registration of
transfer of, in
54
exchange for, or in lieu of Certificated Notes
pursuant to the Indenture).
C. The Trustee will enter a pending deposit
message through DTC's Participant Terminal
System, providing the following settlement
information to DTC, such Agent, Standard &
Poor's Ratings Group and, upon request, the
Trustee under the Indenture pursuant to which
such Note is to be issued:
1. The information set forth in
Settlement Procedure " A".
2. Identification as a Fixed Rate
Book-Entry Note or a Floating Rate
Book-Entry Note.
3. Initial Interest Payment Date for
such Note and amount of interest payable on
such Interest Payment Date.
4. Frequency of interest payments
(monthly, semiannually, quarterly, etc.).
5. CUSIP number of Global Security
representing such Note.
6. Whether such Global Security will
represent any other Book-Entry Note (to the
extent known at such time).
D. The Trustee will complete the Global
Security, the form of which was previously
approved by the Company, the Agents and the
Trustee.
E. The Trustee, as Trustee, will authenticate
the Global Security representing such Note.
F. DTC will credit such Note to the Trustee's
participant account at DTC.
G. The Trustee will enter an SDFS deliver
order through DTC's Participant Terminal System
instructing DTC to (i) debit such Note to the
55
Xxxxxxx's participant account and credit such
Note to such Agent's participant account and
(ii) debit such Agent's settlement account and
credit the Trustee's settlement account for an
amount equal to the price of such Note less such
Agent's commission. The entry of such a deliver
order shall constitute a representation and
warranty by the Trustee to DTC that (i) the
Global Security representing such Book-Entry
Note has been issued and authenticated and (ii)
the Trustee is holding such Global Security
pursuant to the Certificate Agreement.
X. Xxxx Agent will enter an SDFS deliver order
through DTC's Participant Terminal System
instructing DTC (i) to debit such Note to such
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 such Agent for
an amount equal to the price of such Note.
I. Transfers of funds in accordance with SDFS
deliver orders described in Settlement
Procedures "G" and "H" will be settled in
accordance with SDFS operating procedures in
effect on the Settlement Date .
J. The Trustee will credit to an account of the
Company maintained at the Trustee funds
available for immediate use in the amount
transferred to the Trustee in accordance with
Settlement Procedure "G".
K. The Trustee will hold the Global Security
pursuant to the Certificate Agreement and will
send a photocopy of such Global Security to the
Company by first-class mail. Upon written
request the Trustee will deliver a photocopy of
such Global Security to such Agent.
Periodically, the Trustee will send to the
Company a statement setting forth the principal
amount of Notes Outstanding as of that date and
setting forth a brief description of any sales
of which the Company has advised the Trustee but
which have not yet been settled.
56
L. As set forth in "Delivery of Prospectus"
above, such Agent will deliver to the purchaser
a copy of the most recent Prospectus applicable
to the Book-Entry Note with or prior to any
written offer of Book-Entry Notes and the
confirmation and payment by the purchaser of
such Note.
Such 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.
Settlement Procedures
---------------------
Timetable:
----------
For offers to purchase Book-Entry Notes solicited by an
Agent, as agent,and accepted by the Company for
settlement on the first Business Day after the sale
date, Settlement Procedures "A" through "L" set forth
above shall be completed as soon as possible but not
later than the respective times (New York City time)
set forth below: Settlement
Procedure Time
--------- ----
A-B 11:00 A.M. on the sale date
C 2:00 P.M. on the sale date
D 3:00 P.M. on day before Settlement Date
E 9:00 A.M. on Settlement Date
F 10:00 A.M. on Settlement Date
G-H 2:00 P.M. on Settlement Date
I 4:45 P.M. on Settlement Date
X-X 5:00 P.M. on 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. and 2:00 P.M., as the case may
be, on the first Business Day after the sale date. If
the initial interest rate for a Floating Rate Book-
Entry Note has not been determined at the time that
Settlement Procedure "A" is completed, Settlement
Procedures "B" and "C" shall be completed as soon as
such rate has been determined but no later than 11:00
A.M. and 12:00 Noon, respectively, on the
57
second Business Day before the Settlement Date.
Settlement Procedure "I" 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.
Failure to Settle: If the Trustee fails to enter an SDFS deliver order
-----------------
with respect to a Book-Entry Note pursuant to
Settlement Procedure "G", the Trustee may deliver to
DTC, through DTC's Participant Terminal System, as soon
as practicable a withdrawal message instructing DTC to
debit such Note to the Trustee's participant account.
DTC will process the withdrawal message, provided that
the Trustee's participant account contains a principal
amount of the Global Security representing such Note
that is at least equal to the principal amount to be
debited. If a withdrawal message is processed with
respect to all the Book-Entry Notes represented by a
Global Security, the Trustee will mark such Global
Security "canceled", make appropriate entries in the
Trustee's records and send such canceled Global
Security to the Company. The CUSIP number assigned to
such Global Security shall, in accordance with CUSIP
Service Bureau procedures, be canceled and not
immediately reassigned. If a withdrawal message is
processed with respect to one or more, but not all, of
the Book-Entry Notes represented by a Global Security,
the Trustee will exchange such Global Security for two
Global Securities, one of which shall represent such
Book-Entry Note or Notes and shall be canceled
immediately after issuance and other Book-Entry Notes
previously represented by the surrendered Global
Security and shall bear the CUSIP number of the
surrendered Global Security.
If the purchase price for any Book-Entry Note is not
timely paid to the Participants with respect to such
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 for such Note may enter SDFS deliver
orders through DTC's Participant Terminal System
reversing the orders entered pursuant to Settlement
Procedures "H" and "G", respectively. Thereafter, the
Trustee will deliver the withdrawal message and take
the related actions described in the preceding
paragraph.
Notwithstanding the foregoing, upon any failure to
settle with respect to a Book-Entry Note, DTC may take
any
58
actions in accordance with its SDFS operating
procedures then in effect. In the event of a failure to
settle with respect to one or more, but not all, of the
Book-Entry Notes to have been represented by a Global
Security, the Trustee will provide, in accordance with
Settlement Procedures "D" and "E", for the
authentication and issuance of a Global Security
representing the other Book-Entry Notes to have been
represented by such Global Security and will make
appropriate entries in its records.
Trustee Not to Nothing herein shall be deemed to require the Trustee
--------------
Risk Funds: to risk or expend its own funds in connection with any
----------
payment to the Company, or any Agent or the purchaser,
it being understood by all parties that payments made
by the Trustee to either the Company or any Agent shall
be made only to the extent that funds are provided to
the Trustee for such purpose.
Authenticity of
---------------
Signatures: The Company will cause the Trustee and the Guarantor to
----------
furnish each Agent from time to time with the specimen
signatures of the officers, employees or agents who
have been authorized to authenticate Notes or execute
the related Guarantee, but each Agent will have no
obligation or liability to the Company, the Guarantor
or the Trustee in respect of the authenticity of the
signature of any officer, employee or agent of the
Company, the Guarantor or the Trustee on any Note.
Payment of Expenses:
--------------------
Each Agent shall forward to the Company and the
Guarantor, from time to time (but not more often than
monthly), a statement of the out-of-pocket expenses
incurred by such Agent during the related period which
are reimbursable to it pursuant to the terms of the
Agency Agreement. The Company and the Guarantor will
promptly remit payment to such Agent.
Advertising Costs:
------------------
The Company will determine with each Agent the amount
of advertising that maybe appropriate in soliciting
offers to purchase the Notes. Advertising expenses will
be paid by the Company and the Guarantor.
59
EXHIBIT B
Countrywide Home Loans, Inc. U.S. $3,000,000,000
Medium-Term Notes, Series H Due Nine Months or
More From Date of Issue Payment of Principal,
Premium, if any, and Interest Fully and
Unconditionally Guaranteed by Countrywide Credit
Industries, Inc.
TERMS AGREEMENT
___________,19__
Countrywide Home Loans, Inc.
000 Xxxxx Xxxx Xxxxxx
Xxxxxxxx, Xxxxxxxxxx 00000
Attention: Corporate Counsel
Subject in all respects to the terms and conditions of the Selling Agency
Agreement dated _______, 1998 among Xxxxxx Brothers, Inc. Chase Securities Inc.,
Deutsche Bank Securities Inc.., Xxxxxxx, Xxxxx & Co., Xxxxxxx Xxxxx & Co.,
Xxxxxxx Lynch, Pierce, Xxxxxx & Xxxxx Incorporated, X.X. Xxxxxx Securities Inc.,
NationsBanc Xxxxxxxxxx Securities LLC, Xxxxxxx Xxxxx Xxxxxx Inc. and Countrywide
Securities Corporation and you (the "Agreement"), the undersigned agrees to
purchase the following Medium-Term Notes, Series H (the "Notes"), of Countrywide
Home Loans, Inc.:
Aggregate Principal Amount:
Currency or Currency Unit:
Interest Rate or Base Rate(s):
Spread:
Spread Multiplier:
Stated Maturity Date:
Interest Payment Dates:
Record Dates:
Purchase Price: % of Principal Amount [plus accrued interest, if any, from
_______________, 19 __]
Purchase Date and Time:
60
Certificated or Book-Entry Form:
Place for Delivery of Notes
and Payment Therefor:
Method of Payment:
Modification, if any, in
the requirements to
deliver the documents
specified in Section 6(b)
of the Agreement:
Period during which additional
Notes may not be sold pursuant to
Section 4(l) of the Agreement:
Default provisions, if any:
Other terms:
XXXXXX BROTHERS INC.
By: _______________________________
CHASE SECURITIES INC.
By:_______________________________
DEUTSCHE BANK SECURITIES INC.
By:_______________________________
__________________________________
Xxxxxxx, Xxxxx & Co.
XXXXXXX LYNCH, XXXXXX, XXXXXX & XXXXX
INCORPORATED
By: _______________________________
61
X.X. XXXXXX SECURITIES INC.
By: _______________________________
NATIONSBANC XXXXXXXXXX SECURITIES LLC
By: _______________________________
XXXXXXX XXXXX XXXXXX INC.
By: _______________________________
COUNTRYWIDE SECURITIES CORPORATION
By: _______________________________
Accepted:
COUNTRYWIDE HOME LOANS, INC.
By: ______________________________
Title:
COUNTRYWIDE CREDIT INDUSTRIES, INC.
By: ______________________________
Title:
62
