EXHIBIT 1-f
XXXXXX XXXXXXX
Xxxxxx Xxxxxxx DirectSecurities(SM)
[FORM OF DISTRIBUTION AGREEMENT]
[_________], 2004
Xxxxxx Xxxxxxx XX Inc.
0000 Xxxxxxxx
Xxx Xxxx, Xxx Xxxx 00000
Xxxxxx Xxxxxxx & Co. Incorporated
0000 Xxxxxxxx
Xxx Xxxx, Xxx Xxxx 00000
Dear Sirs:
Xxxxxx Xxxxxxx, a Delaware corporation (the "Company"), confirms its
agreement with you with respect to the issue and sale from time to time by the
Company of up to U.S.$2,000,000,000 aggregate initial public offering price of
its Xxxxxx Xxxxxxx DirectSecurities(SM) due more than nine months from the date
of issue (the "Notes") or such larger aggregate initial public offering price
as the Company may determine to offer (the "Program Capacity"), subject to
reduction as a result of the sale of the Company's (i) Global Medium-Term
Notes, Series F (issued other than as part of a Unit), (ii) Global Units,
Series F, (iii) Global Medium-Term Notes, Series G and Series H (issued other
than as part of a Unit), to be sold primarily outside of the United States, and
(iv) Global Units, Series G and Series H, to be sold primarily outside of the
United States, and the sale of certain of the Company's other debt securities,
warrants, preferred stock, common stock, purchase contracts and units and of
capital securities of certain Xxxxxx Xxxxxxx Capital Trusts (together with the
Notes, the "Program Securities") in excess of an aggregate initial public
offering price equal to U.S.$[ ] minus the Program Capacity.
The Notes will be issued as senior indebtedness pursuant to the
provisions of a senior indenture dated as of November 1, 2004, between the
Company and JPMorgan Chase Bank, as trustee (the Trustee) (as may be
supplemented or amended from time to time, the Indenture).
The Notes will have the maturities, interest rates, redemption
provisions, if any, and other terms as set forth in supplements to the Basic
Prospectus referred to below.
The Company hereby appoints you as its exclusive agents for the purpose
of soliciting and receiving offers to purchase Notes from the Company by others
and, on the basis of the representations and warranties herein contained, but
subject to the terms and conditions herein set forth, you agree to use
reasonable efforts to solicit and receive offers to purchase Notes upon terms
acceptable to the Company at such times and in such amounts as the Company'shall
from time to time specify. In addition, you may also purchase Notes as principal
pursuant to the terms of a terms agreement relating to such sale (a Notes Terms
Agreement) in accordance with the provisions of Section 2(b) hereof.
The Company has filed with the Securities and Exchange Commission (the
Commission) a registration statement, including a prospectus, relating to the
Notes. Such registration statement, including the exhibits thereto, as amended
at the Commencement Date (as hereinafter defined), is hereinafter referred to as
the Registration Statement. The Company proposes to file with the Commission
from time to time, pursuant to Rule 424 under the Securities Act of 1933, as
amended (the Securities Act), supplements to the prospectus relating to the
Notes included in the Registration Statement that will describe certain terms of
the Notes. The prospectus relating to the Notes in the form in which it appears
in the Registration Statement is hereinafter referred to as the Basic
Prospectus. The term Prospectus means the Basic Prospectus together with the
prospectus supplement or supplements (each, a Prospectus Supplement)
specifically relating to the Notes, as filed with, or transmitted for filing to,
the Commission pursuant to Rule 424 under the Securities Act. As used herein,
the terms Basic Prospectus and Prospectus shall include in each case the
documents, if any, incorporated by reference therein. The terms supplement,
amendment and amend as used herein shall include all documents deemed to be
incorporated by reference in the Prospectus that are filed subsequent to the
date of the Basic Prospectus by the Company with the Commission pursuant to the
Securities Exchange Act of 1934, as amended (the Exchange Act). If the Company
has filed an abbreviated registration statement to register additional Program
Securities pursuant to Rule 462(b) under the Securities Act (the Rule 462
Registration Statement), then any reference herein to the term Registration
Statement shall be deemed to include such Rule 462 Registration Statement.
1. Representations and Warranties. The Company represents and warrants
to and agrees with you as of the Commencement Date, as of each date on which you
solicit offers to purchase Notes, as of each date on which the Company accepts
an offer to purchase Notes (including any purchase by you as principal pursuant
to a Notes Terms Agreement), as of each date the Company issues and delivers
Notes and as of each date the Registration Statement or the Basic
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Prospectus is amended or supplemented, as follows (it being understood that such
representations, warranties and agreements shall be deemed to relate to the
Registration Statement, the Basic Prospectus and the Prospectus, each as amended
or supplemented to each such date):
(a) The Registration Statement has become effective, no stop order
suspending the effectiveness of the Registration Statement is in effect, and no
proceedings for such purpose are pending before or threatened by the Commission.
(b) (i) Each document, if any, filed or to be filed pursuant to the
Exchange Act and incorporated by reference in the Prospectus complied or will
comply when so filed in all material respects with the Exchange Act and the
applicable rules and regulations of the Commission thereunder, (ii) each part of
the Registration Statement, when such part became effective, did not contain and
each such part, as amended or supplemented, if applicable, will not contain any
untrue statement of a material fact or omit to state a material fact required to
be stated therein or necessary to make the statements therein not misleading,
(iii) the Registration Statement and the Prospectus comply and, as amended or
supplemented, if applicable, will comply in all material respects with the
Securities Act and the applicable rules and regulations of the Commission
thereunder and (iv) the Prospectus does not contain and, as amended or
supplemented, if applicable, will not contain any untrue statement of a material
fact or omit to state a material fact necessary to make the statements therein,
in the light of the circumstances under which they were made, not misleading,
except that (1) the representations and warranties set forth in this Section
1(b) do not apply (A) to statements or omissions in the Registration Statement
or the Prospectus based upon information relating to you furnished to the
Company in writing by you expressly for use therein or (B) to those parts of the
Registration Statement that constitute the Statements of Eligibility (Form T-1)
under the Trust Indenture Act of 1939, as amended (the Trust Indenture Act), of
the Trustees and (2) the representations and warranties set forth in clauses
(iii) and (iv) above, when made as of the Commencement Date or as of any date on
which you solicit offers to purchase Notes or on which the Company accepts an
offer to purchase Notes, shall be deemed not to cover information concerning an
offering of particular Notes to the extent such information will be set forth in
a supplement to the Basic Prospectus.
(c) The Company has been duly incorporated, is validly existing as a
corporation in good standing under the laws of the State of Delaware, has the
corporate power and authority to own its property and to conduct its business as
described in the Prospectus and is duly qualified to transact business and is in
good standing in each jurisdiction in which the conduct of its business or its
ownership or leasing of property requires such qualification, except to the
extent
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that the failure to be so qualified or be in good standing would not have a
material adverse effect on the Company and its consolidated subsidiaries, taken
as a whole.
(d) Each subsidiary of the Company has been duly incorporated, is
validly existing as a corporation in good standing under the laws of the
jurisdiction of its incorporation, has the corporate power and authority to own
its property and to conduct its business as described in the Prospectus and is
duly qualified to transact business and is in good standing in each jurisdiction
in which the conduct of its business or its ownership or leasing of property
requires such qualification, except to the extent that the failure to be so
qualified or be in good standing would not have a material adverse effect on the
Company and its consolidated subsidiaries, taken as a whole.
(e) Each of this Agreement and any applicable Written Notes Terms
Agreement (as hereinafter defined) has been duly authorized, executed and
delivered by the Company.
(f) The Indenture has been duly qualified under the Trust Indenture Act
and has been duly authorized, executed and delivered by the Company and is a
valid and binding agreement of the Company, enforceable in accordance with its
terms except as the enforceability thereof (i) may be limited by bankruptcy,
insolvency, reorganization, liquidation, moratorium and other similar laws
affecting creditors rights generally and (ii) is subject to general principles
of equity, regardless of whether such enforceability is considered at a
proceeding in equity or at law.
(g) The form of the Notes has been duly authorized and established in
conformity with the provisions of the Indenture and, when the Notes have been
executed and authenticated in accordance with the provisions of the Indenture
and delivered to and duly paid for by the purchasers thereof, the Notes will be
entitled to the benefits of such Indenture and will be valid and binding
obligations of the Company, enforceable in accordance with their respective
terms except as the enforceability thereof (i) may be limited by bankruptcy,
insolvency, reorganization, liquidation, moratorium and other similar laws
affecting creditors rights generally and (ii) is subject to general principles
of equity, regardless of whether such enforceability is considered at a
proceeding in equity or at law.
(h) The execution and delivery by the Company of this Agreement, the
Notes, the Indenture and any applicable Written Notes Terms Agreement and the
performance by the Company of its obligations under this Agreement, the Notes,
the Indenture and any applicable Notes Terms Agreement will not contravene any
provision of applicable law or the certificate of incorporation or by-laws of
the Company or any agreement or other instrument binding upon the Company or any
of its subsidiaries that is material to the Company and its consolidated
subsidiaries, taken as a whole, or any judgment, order or decree of any
governmental body,
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agency or court having jurisdiction over the Company or any consolidated
subsidiary, and no consent, approval, authorization or order of, or
qualification with, any governmental body or agency is required for the
performance by the Company of its obligations under this Agreement, the Notes,
the Indenture and any applicable Notes Terms Agreement, except such as may be
required by the securities or Blue Sky laws of the various states in connection
with the offer and sale of the Notes; provided, however, that no representation
is made or warranty given as to whether the purchase of the Notes constitutes a
prohibited transaction under Section 406 of the Employee Retirement Income
Security Act of 1974, as amended, or Section 4975 of the Internal Revenue Code
of 1986, as amended.
(i) There has not occurred any material adverse change, or any
development involving a prospective material adverse change, in the condition,
financial or otherwise, or in the earnings, business or operations of the
Company and its subsidiaries, taken as a whole, from that set forth in the
Prospectus.
(j) There are no legal or governmental proceedings pending or
threatened to which the Company or any of its consolidated subsidiaries is a
party or to which any of the properties of the Company or any of its
consolidated subsidiaries is subject that are required to be described in the
Registration Statement or the Prospectus and are not so described or any
statutes, regulations, contracts or other documents that are required to be
described in the Registration Statement or the Prospectus or to be filed or
incorporated by reference as exhibits to the Registration Statement that are not
described, filed or incorporated as required.
(k) Each of the Company and its consolidated subsidiaries has all
necessary consents, authorizations, approvals, orders, certificates and permits
of and from, and has made all declarations and filings with, all federal, state,
local and other governmental authorities, all self-regulatory organizations and
all courts and other tribunals, to own, lease, license and use its properties
and assets and to conduct its business in the manner described in the
Prospectus, except to the extent that the failure to obtain or file would not
have a material adverse effect on the Company and its consolidated subsidiaries,
taken as a whole.
(l) Xxxxxx Xxxxxxx XX Inc. is registered as a broker-dealer and
investment adviser with the Commission, is registered with the Commodity Futures
Trading Commission as a futures commission merchant and is a member of the New
York Stock Exchange, Inc. and the National Association of Securities Dealers,
Inc.
(m) Xxxxxx Xxxxxxx & Co. Incorporated is registered as a broker-dealer
and investment adviser with the Commission, is registered with the Commodity
Futures Trading Commission as a futures commission merchant and is a member
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of the New York Stock Exchange, Inc. and the National Association of Securities
Dealers, Inc.
(n) The Company is not, and after giving effect to the offering and
sale of the Notes and the application of the proceeds thereof as described in
the Prospectus, will not be required to register as, an investment company as
such term is defined in the Investment Company Act of 1940, as amended.
2. Solicitations as Agents; Purchases as Principals.
(a) Solicitations as Agents. In connection with your actions as agents
hereunder, you agree to use reasonable efforts to solicit offers to purchase
Notes upon the terms and conditions set forth in the Prospectus as then amended
or supplemented.
The Company reserves the right, in its sole discretion, to instruct you
to suspend at any time, for any period of time or permanently, the solicitation
of offers to purchase Notes. Upon receipt of at least one business day s prior
notice from the Company, you will forthwith suspend solicitations of offers to
purchase Notes from the Company until such time as the Company has advised you
that such solicitation may be resumed. While such solicitation is suspended, the
Company'shall not be required to deliver any certificates, opinions or letters
in accordance with Sections 5(a), 5(b) and 5(c); provided, however, that if the
Registration Statement or Prospectus is amended or supplemented during the
period of suspension (other than by an amendment or supplement providing solely
for (i) a change in the interest rates, repayment provisions, redemption
provisions or maturities offered on the Notes or (ii) for a change you deem to
be immaterial), you shall not be required to resume soliciting offers to
purchase Notes until the Company has delivered such certificates, opinions and
letters as you may request.
The Company agrees to pay to you, as consideration for the sale of each
Note resulting from a solicitation made or an offer to purchase received by you,
a commission in the form of a discount from the purchase price of such Note
equal to between 0.2% and 3.0% (depending upon such Note s maturity) of the
principal amount of such Note or such other discount as may be specified in the
Prospectus Supplement relating to such Note.
You shall communicate to the Company, orally or in writing, each offer
to purchase Notes received by you as agent that in your judgment should be
considered by the Company. The Company'shall have the sole right to accept
offers to purchase Notes and may reject any offer in whole or in part. You shall
have the right to reject any offer to purchase Notes that you consider to be
unacceptable, and any such rejection shall not be deemed a breach of your
agreements contained herein. The procedural details relating to the issue and
6
delivery of Notes sold by you as agent and the payment therefor shall be as set
forth in the Administrative Procedures (as hereinafter defined).
(b) Purchases as Principals. Each sale of Notes to you as principals
shall be made in accordance with the terms of this Agreement. In connection with
each such sale, the Company will enter into a Notes Terms Agreement that will
provide for the sale of such Notes to and the purchase thereof by you. Each
Notes Terms Agreement will take the form of either (i) a written agreement
between you and the Company, which may be substantially in the form of Exhibit A
hereto (a Written Notes Terms Agreement), or (ii) an oral agreement between you
and the Company confirmed in writing by you to the Company.
Your commitment to purchase Notes as principal pursuant to a Notes
Terms Agreement shall be deemed to have been made on the basis of the
representations and warranties of the Company herein contained and shall be
subject to the terms and conditions herein set forth. Each Notes Terms Agreement
shall specify the principal amount of Notes to be purchased by you pursuant
thereto, the maturity date of such Notes, the price to be paid to the Company
for such Notes, the interest rate and interest rate formula, if any, applicable
to such Notes and any other terms of such Notes. Each such Notes Terms Agreement
may also specify any requirements for officers certificates, opinions of counsel
and letters from the independent auditors of the Company pursuant to Section 4
hereof. A Notes Terms Agreement may also specify certain provisions relating to
the reoffering of such Notes by you.
Each Notes Terms Agreement shall specify the time and place of delivery
of and payment for such Notes. Unless otherwise specified in a Notes Terms
Agreement, the procedural details relating to the issue and delivery of Notes
purchased by you as principal and the payment therefor shall be as set forth in
the Administrative Procedures. Each date of delivery of and payment for Notes to
be purchased by you as principal pursuant to a Notes Terms Agreement is referred
to herein as a Settlement Date.
Unless otherwise specified in a Notes Terms Agreement, if you are
purchasing Notes as principal you may resell such Notes to other dealers. Any
such sales may be at a discount, which shall not exceed the amount set forth in
the Prospectus Supplement relating to such Notes.
(c) Administrative Procedures. You and the Company agree to perform the
respective duties and obligations specifically provided to be performed in the
DirectSecurities, Administrative Procedures (attached hereto as Exhibit B) (the
Administrative Procedures), as amended from time to time. The Administrative
Procedures may be amended only by written agreement of the Company and you.
7
(d) Delivery. The documents required to be delivered by Section 4 of
this Agreement as a condition precedent to your obligation to begin soliciting
offers to purchase Notes as agents of the Company'shall be delivered at the
office of Xxxxx Xxxx & Xxxxxxxx, your counsel, not later than 4:00 p.m., New
York City time, on the date hereof, or at such other time and/or place as you
and the Company may agree upon in writing, but in no event later than the day
prior to the earlier of (i) the date on which you begin soliciting offers to
purchase Notes and (ii) the first date on which the Company accepts any offer by
you to purchase Notes as principal. The date of delivery of such documents is
referred to herein as the Commencement Date.
3. Agreements. The Company agrees with you that:
(a) Prior to the termination of the offering of the Notes pursuant to
this Agreement or pursuant to any Notes Terms Agreement, the Company will not
file any Prospectus Supplement relating to the Notes or any amendment to the
Registration Statement relating to the Notes unless the Company has previously
furnished to you a copy thereof for your review and will not file any such
proposed supplement or amendment to which you reasonably object; provided,
however, that the foregoing requirement shall not apply to any of the Company's
periodic filings with the Commission required to be filed pursuant to Section
13(a), 13(c), 13(f), 14 or 15(d) of the Exchange Act, copies of which filings
the Company will cause to be delivered to you promptly after being transmitted
for filing with the Commission. Subject to the foregoing sentence, the Company
will promptly cause each Prospectus Supplement to be filed with or transmitted
for filing to the Commission in accordance with Rule 424(b) under the Securities
Act. The Company will promptly advise you (i) of the filing of any amendment or
supplement to the Basic Prospectus, (ii) of the filing and effectiveness of any
amendment to the Registration Statement, (iii) of any request by the Commission
for any amendment to the Registration Statement or any amendment or supplement
to the Basic Prospectus or for any additional information, (iv) of the issuance
by the Commission of any stop order suspending the effectiveness of the
Registration Statement or the institution or threatening of any proceeding for
that purpose and (v) of the receipt by the Company of any notification with
respect to the suspension of the qualification of the Notes for sale in any
jurisdiction or the initiation or threatening of any proceeding for such
purpose. The Company will use its best efforts to prevent the issuance of any
such stop order or notice of suspension of qualification and, if issued, to
obtain as soon as possible the withdrawal thereof. If the Basic Prospectus is
amended or supplemented as a result of the filing under the Exchange Act of any
document incorporated by reference in the Prospectus, you shall not be obligated
to solicit offers to purchase Notes so long as you are not reasonably satisfied
with such document.
(b) If, at any time when a prospectus relating to the Notes is required
to be delivered under the Securities Act, any event occurs or condition exists
as a
8
result of which the Prospectus, as then amended or supplemented, would include
an untrue statement of a material fact, or omit to state any material fact
necessary to make the statements therein, in the light of the circumstances when
the Prospectus, as then amended or supplemented, is delivered to a purchaser,
not misleading, or if, in your opinion or in the opinion of the Company, it is
necessary at any time to amend or supplement the Prospectus, as then amended or
supplemented, to comply with applicable law, the Company will immediately notify
you by telephone (with confirmation in writing) to suspend solicitation of
offers to purchase Notes and, if so notified by the Company, you shall forthwith
suspend such solicitation and cease using the Prospectus, as then amended or
supplemented. If the Company'shall decide to amend or supplement the
Registration Statement or Prospectus, as then amended or supplemented, it shall
so advise you promptly by telephone (with confirmation in writing) and, at its
expense, shall prepare and cause to be filed promptly with the Commission an
amendment or supplement to the Registration Statement or Prospectus, as then
amended or supplemented, satisfactory in all respects to you, that will correct
such statement or omission or effect such compliance and will supply such
amended or supplemented Prospectus to you in such quantities as you may
reasonably request. If any documents, certificates, opinions and letters
furnished to you pursuant to paragraph (f) below and Sections 5(a), 5(b) and
5(c) in connection with the preparation and filing of such amendment or
supplement are satisfactory in all respects to you, upon the filing with the
Commission of such amendment or supplement to the Prospectus or upon the
effectiveness of an amendment to the Registration Statement, you will resume the
solicitation of offers to purchase Notes hereunder. Notwithstanding any other
provision of this Section 3(b), until the distribution of any Notes you may own
as principal has been completed, if any event described above in this paragraph
(b) occurs, the Company will, at its own expense, forthwith prepare and cause to
be filed promptly with the Commission an amendment or supplement to the
Registration Statement or Prospectus, as then amended or supplemented,
satisfactory in all respects to you, will supply such amended or supplemented
Prospectus to you in such quantities as you may reasonably request and shall
furnish to you pursuant to paragraph (f) below and Sections 5(a), 5(b) and 5(c)
such documents, certificates, opinions and letters as you may request in
connection with the preparation and filing of such amendment or supplement.
(c) The Company will make generally available to its security holders
and to you as soon as practicable earning statements that satisfy the provisions
of Section 11(a) of the Securities Act and the rules and regulations of the
Commission thereunder covering twelve month periods beginning, in each case, not
later than the first day of the Company's fiscal quarter next following the
effective date (as defined in Rule 158 under the Securities Act) of the
Registration Statement with respect to each sale of Notes. If such fiscal
quarter is the first fiscal quarter of the Company's fiscal year, such earning
statement shall
9
be made available not later than 90 days after the close of the period covered
thereby and in all other cases shall be made available not later than 45 days
after the close of the period covered thereby.
(d) The Company will furnish in New York City, without charge, (i) to
each Agent, a signed copy of the Registration Statement, including exhibits and
all amendments thereto, and as many copies of the Prospectus, any documents
incorporated by reference therein and any supplements and amendments thereto as
you may reasonably request and (ii) to each Agent that purchases Notes pursuant
to a Notes Terms Agreement or solicits an offer to purchase Notes that is
accepted by the Company, prior to 10:00 a.m. New York City time on the business
day next succeeding the date of such Notes Terms Agreement or the acceptance of
such offer, as many copies of the Prospectus, as then amended or supplemented
(including the Prospectus Supplement relating to the Notes to be purchased
pursuant to such Notes Terms Agreement or accepted offer), as such Agent may
reasonably request.
(e) The Company will endeavor to qualify the Notes for offer and sale
under the securities or Blue Sky laws of such jurisdictions as you shall
reasonably request and to maintain such qualifications for as long as you shall
reasonably request.
(f) During the term of this Agreement, the Company'shall furnish to you
such relevant documents and certificates of officers of the Company relating to
the business, operations and affairs of the Company, the Registration Statement,
the Basic Prospectus, any amendments or supplements thereto, the Indenture, the
Notes, this Agreement, the Administrative Procedures, any Notes Terms Agreement
and the performance by the Company of its obligations hereunder or thereunder as
you may from time to time reasonably request.
(g) The Company'shall notify you promptly in writing of any
downgrading, or of its receipt of any notice of any intended or potential
downgrading or of any review for possible change that does not indicate the
direction of the possible change, in the rating accorded the Company or any of
the Company's securities by any nationally recognized statistical rating
organization, as such term is defined for purposes of Rule 436(g)(2) under the
Securities Act.
(h) The Company will, whether or not any sale of Notes is consummated,
pay all expenses incident to the performance of its obligations under this
Agreement and any Notes Terms Agreement, including: (i) the preparation and
filing of the Registration Statement and the Prospectus and all amendments and
supplements thereto, (ii) the preparation, issuance and delivery of the Notes,
(iii) the fees and disbursements of the Company's counsel and accountants and of
the Trustees and their counsel, (iv) the qualification of the
10
Notes under securities or Blue Sky laws in accordance with the provisions of
Section 3(e), including filing fees and the fees and disbursements of your
counsel in connection therewith and in connection with the preparation of any
Blue Sky or Legal Investment Memoranda, (v) the printing and delivery to you in
quantities as hereinabove stated of copies of the Registration Statement and all
amendments thereto and of the Prospectus and any amendments or supplements
thereto, (vi) the printing and delivery to you of copies of the Indenture and
any Blue Sky or Legal Investment Memoranda, (vii) any fees charged by rating
agencies for the rating of the Notes, (viii) the fees and expenses, if any,
incurred with respect to any filing with the National Association of Securities
Dealers, Inc., (ix) the fees and disbursements of your counsel incurred in
connection with the offering and sale of the Notes, including any opinions to be
rendered by such counsel hereunder, and (x) any out-of-pocket expenses incurred
by you; provided that any advertising expenses incurred by you shall have been
approved by the Company.
(i) During the period beginning on the date of any Notes Terms
Agreement and continuing to and including the Settlement Date with respect to
such Notes Terms Agreement, the Company will not, without your prior consent,
offer, sell, contract to sell or otherwise dispose of any debt securities of the
Company'substantially similar to the Notes set forth in such Notes Terms
Agreement (other than (A) the Notes that are to be sold pursuant to such Notes
Terms Agreement, (B) Notes previously agreed to be sold by the Company and (C)
commercial paper issued in the ordinary course of business), except as may
otherwise be provided in the applicable Notes Terms Agreement.
4. Conditions of the Obligations of the Agents. Your obligation to
solicit offers to purchase Notes as agents of the Company, your obligation to
purchase Notes as principals pursuant to any Notes Terms Agreement and the
obligation of any other purchaser to purchase Notes will be subject to the
accuracy of the representations and warranties on the part of the Company
herein, to the accuracy of the statements of the Company's officers made in each
certificate furnished pursuant to the provisions hereof and to the performance
and observance by the Company of all covenants and agreements herein contained
on its part to be performed and observed (in the case of your obligation to
solicit offers to purchase Notes, at the time of such solicitation, and, in the
case of your or any other purchaser s obligation to purchase Notes, at the time
the Company accepts the offer to purchase such Notes and at the time of issuance
and delivery) and (in each case) to the following additional conditions
precedent when and as specified:
(a) Prior to such solicitation or purchase, as the case may be:
(i) there shall not have occurred any change, or any
development involving a prospective change, in the condition, financial
or otherwise, or in the earnings, business or operations of the Company
11
and its subsidiaries, taken as a whole, from that set forth in the
Prospectus, as amended or supplemented at the time of such solicitation
or at the time such offer to purchase was made, that, in your judgment,
is material and adverse and that makes it, in your judgment,
impracticable to market the Notes on the terms and in the manner
contemplated by the Prospectus, as so amended or supplemented;
(ii) there shall not have occurred any (A) suspension or
material limitation of trading generally on or by, as the case may be,
any of the New York Stock Exchange, the American Stock Exchange, the
Nasdaq National Market, the Chicago Board of Options Exchange, the
Chicago Mercantile Exchange or the Chicago Board of Trade, (B)
suspension of trading of any securities of the Company on any exchange
or in any over-the-counter market, (C) material disruption in
securities settlement, payment or clearance services in the United
States or, in the event of a global offering, in any relevant foreign
jurisdiction, (D) declaration of any moratorium on commercial banking
activities by Federal or New York State authorities or (E) any outbreak
or escalation of hostilities or any change in financial markets or any
calamity or crisis that, in your judgment, is material and adverse and
which, singly or together with any other event specified in this clause
(E), makes it, in your judgment, impracticable or inadvisable to
proceed with the offer, sale or delivery of the Notes on the terms and
in the manner contemplated by the Prospectus, as amended or
supplemented, at the time of such solicitation or at the time such
offer to purchase was made; and
(iii) there shall not have occurred any downgrading, nor shall
any notice have been given of any intended or potential downgrading or
of any review for a possible change that does not indicate the
direction of the possible change, in the rating accorded the Company or
any of the Company's securities by any nationally recognized
statistical rating organization, as such term is defined for purposes
of Rule 436(g)(2) under the Securities Act;
(A) except, in each case described in paragraph (i), (ii) or (iii) above, as
disclosed to you in writing by the Company prior to such solicitation or, in the
case of a purchase of Notes, before the offer to purchase such Notes was made or
(B) unless in each case described in (ii) above, the relevant event shall have
occurred and been known to you prior to such solicitation or, in the case of a
purchase of Notes, before the offer to purchase such Notes was made.
(b) On the Commencement Date and, if called for by any Notes Terms
Agreement, on the corresponding Settlement Date, you shall have received:
12
(i) The opinion, dated as of such date, of Sidley Xxxxxx Xxxxx
& Wood LLP, counsel to the Company, or of other counsel satisfactory to
you and who may be an officer of the Company, to the following effect
that:
(A) the Company has been duly incorporated, is
validly existing as a corporation in good standing under the
laws of the State of Delaware, has the corporate power and
authority to own its property and to conduct its business as
described in the Prospectus, as amended or supplemented, and
is duly qualified to transact business and is in good standing
in each jurisdiction in which the conduct of its business or
its ownership or leasing of property requires such
qualification, except to the extent that the failure to be so
qualified or be in good standing would not have a material
adverse effect on the Company and its consolidated
subsidiaries, taken as a whole;
(B) each of Xxxxxx Xxxxxxx XX Inc., Discover Bank,
Xxxxxx Xxxxxxx & Co. Incorporated and Xxxxxx Xxxxxxx
International Holdings Inc. (each a Material Subsidiary) has
been duly incorporated, is validly existing as a corporation
in good standing under the laws of the jurisdiction of its
incorporation, has the corporate power and authority to own
its property and to conduct its business as described in the
Prospectus, as amended or supplemented, and is duly qualified
to transact business and is in good standing in each
jurisdiction in which the conduct of its business or its
ownership or leasing of property requires such qualification,
except to the extent that the failure to be so qualified or be
in good standing would not have a material adverse effect on
the Company and its consolidated subsidiaries, taken as a
whole;
(C) each of the Company and its Material Subsidiaries
has all necessary consents, authorizations, approvals, orders,
certificates and permits of and from, and has made all
declarations and filings with, all federal, state, local and
other governmental authorities, all self-regulatory
organizations and all courts and other tribunals, to own,
lease, license and use its properties and assets and to
conduct its business in the manner described in the
Prospectus, as amended or supplemented, except to the extent
that the failure to obtain or file would not have a material
adverse effect on the Company and its consolidated
subsidiaries, taken as a whole;
13
(D) each of this Agreement and any applicable Written
Notes Terms Agreement has been duly authorized, executed and
delivered by the Company;
(E) the Indenture has been duly qualified under the
Trust Indenture Act and has been duly authorized, executed and
delivered by the Company and is a valid and binding agreement
of the Company, enforceable in accordance with its terms
except as the enforceability thereof (i) may be limited by
bankruptcy, insolvency, reorganization, liquidation,
moratorium and other similar laws affecting creditors rights
generally and (ii) is subject to general principles of equity,
regardless of whether such enforceability is considered at a
proceeding in equity or at law;
(F) the form of the Notes has been duly authorized
and established in conformity with the provisions of the
Indenture and, if the Notes had been executed by the Company
and authenticated by the Trustee or its duly appointed agent
in accordance with the provisions of the Indenture and
delivered to and duly paid for by the purchasers thereof on
the date of such opinion, such Notes would be entitled to the
benefits of such Indenture and would be valid and binding
obligations of the Company, enforceable in accordance with
their respective terms except as the enforceability thereof
(i) may be limited by bankruptcy, insolvency, reorganization,
liquidation, moratorium and other similar laws affecting
creditors rights generally and (ii) is subject to general
principles of equity, regardless of whether such
enforceability is considered at a proceeding in equity or at
law;
(G) the execution and delivery by the Company of the
Notes, the Indenture and any applicable Written Notes Terms
Agreement and the performance by the Company of its
obligations under this Agreement, the Notes, the Indenture and
any applicable Notes Terms Agreement will not contravene any
provision of applicable law or the certificate of
incorporation or by-laws of the Company or, to the best of
such counsel s knowledge, any agreement or other instrument
binding upon the Company or any of its subsidiaries that is
material to the Company and its consolidated subsidiaries,
taken as a whole, or, to the best of such counsel s knowledge,
any judgment, order or decree of any U.S. governmental body,
agency or court having jurisdiction over the Company or any of
its consolidated subsidiaries, and no consent, approval,
authorization or order of
14
or qualification with any U.S. governmental body or agency is
required for the performance by the Company of its obligations
under this Agreement, the Notes, the Indenture and any
applicable Notes Terms Agreement, except such as may be
required by the securities or Blue Sky laws of the various
states in connection with the offer and sale of the Notes;
provided, however, that no opinion is expressed on whether the
purchase of the Notes constitutes a prohibited transaction
under Section 406 of the Employee Retirement Income Security
Act of 1974, as amended, or Section 4975 of the Internal
Revenue Code of 1986, as amended;
(H) the statements (1) in the Prospectus, as then
amended or supplemented, under the captions Description of
Notes (in the Prospectus Supplement), Description of Debt
Securities (in the Basic Prospectus) and Plan of Distribution
(in the Prospectus Supplement and in the Basic Prospectus),
(2) in the Registration Statement, as then amended or
supplemented, under Item 15, (3) in Item 3. Legal Proceedings
of the most recent annual report on Form 10-K incorporated by
reference in the Prospectus and (4) in Item 1. Legal
Proceedings of Part II of the quarterly reports on Form 10-Q,
if any, filed since such annual report and incorporated by
reference in the Prospectus, in each case insofar as such
statements constitute summaries of the legal matters,
documents or proceedings referred to therein, fairly present
the information called for with respect to such legal matters,
documents and proceedings and fairly summarize the matters
referred to therein;
(I) after due inquiry, such counsel does not know of
any legal or governmental proceedings pending or threatened to
which the Company or any of its consolidated subsidiaries is a
party or to which any of the properties of the Company or any
of its consolidated subsidiaries is subject that are required
to be described in the Registration Statement or the
Prospectus, as then amended or supplemented, and are not so
described or of any U.S. federal or state statutes,
regulations, contracts or other documents governed by U.S.
federal or state law that are required to be described in the
Registration Statement or the Prospectus, as then amended or
supplemented, or to be filed or incorporated by reference as
exhibits to such Registration Statement that are not
described, filed or incorporated by reference as required;
15
(J) the Company is not, and after giving effect to
the offering and sale of the Notes and the application of the
proceeds thereof as described in the Prospectus, will not be
required to register as, an investment company as such term is
defined in the Investment Company Act of 1940, as amended; and
(K) such counsel (1) believes that each document, if
any, filed pursuant to the Exchange Act and incorporated by
reference in the Prospectus as then amended or supplemented
(except as to financial statements and schedules and other
financial and statistical data included therein, as to which
such counsel need not express any belief) complied when so
filed as to form in all material respects with the Exchange
Act and the applicable rules and regulations of the Commission
thereunder, (2) has no reason to believe that the Registration
Statement (except as to financial statements and schedules and
other financial and statistical data included therein, as to
which such counsel need not express any belief, and except for
the part of the Registration Statement that constitutes the
Forms T-1) as of the date such opinion is delivered contains,
any untrue statement of a material fact or omitted or omits to
state a material fact required to be stated therein or
necessary to make the statements therein not misleading, (3)
believes that the Registration Statement and Prospectus, as
then amended or supplemented, if applicable (except as to
financial statements and schedules and other financial and
statistical data included therein, as to which such counsel
need not express any belief), complied as to form in all
material respects with the Securities Act and the applicable
rules and regulations of the Commission thereunder and (4) has
no reason to believe that the Prospectus, as then amended or
supplemented, if applicable (except as to financial statements
and schedules and other financial and statistical data
included therein, as to which such counsel need not express
any belief), as of the date such opinion is delivered contains
any untrue statement of a material fact or omits to state a
material fact necessary in order to make the statements
therein, in the light of the circumstances under which they
were made, not misleading; provided that in the case of an
opinion delivered on the Commencement Date or pursuant to
Section 5(b), the opinion and belief set forth in clauses (3)
and (4) above shall be deemed not to cover information
concerning an offering of particular Notes to the extent such
information will be set forth in a supplement to the Basic
Prospectus.
16
(ii) The opinion, dated as of such date, of Xxxxx Xxxx &
Xxxxxxxx, your special counsel, covering the matters in subparagraphs
(D), (E), (F) and (H) (with respect to statements in the Prospectus, as
then amended or supplemented, under the captions Description of Notes
(in the Prospectus Supplement), Description of Debt Securities (in the
Basic Prospectus), Plan of Distribution (in the Prospectus Supplement
and in the Basic Prospectus) and clauses (2), (3) and (4) of
subparagraph (K) in paragraph (b)(i) above.
With respect to subparagraph (K) of paragraph (b)(i) above, if such
opinion is given by counsel who is also an officer of the Company, such counsel
may state that his or her opinion and belief are based upon his or her
participation, or the participation of someone under his or her supervision, in
the preparation of the Registration Statement and Prospectus and any amendments
or supplements thereto and documents incorporated therein by reference and
review and discussion of the contents thereof, but are without independent check
or verification, except as specified. With respect to subparagraph (K) of
paragraph (b)(i) above, Xxxxx Xxxx & Xxxxxxxx and, if Sidley Xxxxxx Xxxxx & Xxxx
LLP is giving such opinion, Sidley Xxxxxx Xxxxx & Xxxx LLP may state that their
opinion and belief are based upon their participation in the preparation of the
Registration Statement and Prospectus and any amendments or supplements thereto
(but not including documents incorporated therein by reference) and review and
discussion of the contents thereof (including documents incorporated therein by
reference), but are without independent check or verification, except as
specified.
(iii) The opinion, dated as of such date, of Sidley Xxxxxx
Xxxxx & Xxxx LLP, special counsel to the Company, to the effect that
the statements set forth under the caption United States Federal Income
Taxation in the Prospectus Supplement and under the caption Forms of
Securities Limitations on Issuance of Bearer Securities and Bearer Debt
Warrants in the Basic Prospectus, insofar as such statements relate to
statements of law or legal conclusions under the laws of the United
States or matters of United States law, fairly present the information
called for and fairly summarize the matters referred to therein.
The opinion of Sidley Xxxxxx Xxxxx & Xxxx LLP described in paragraph
(b)(iii) above and in paragraph (b)(i) above, if such opinion is given by Sidley
Xxxxxx Xxxxx & Xxxx LLP, shall be rendered to you at the request of the Company
and shall so state therein.
(c) On the Commencement Date and, if called for by any Notes Terms
Agreement, on the corresponding Settlement Date, you shall have received a
certificate, dated the Commencement Date or such Settlement Date, as the case
may be, and signed by an executive officer of the Company to the effect set
forth
17
in subparagraph (a)(iii) above and to the effect that the representations and
warranties of the Company contained in this Agreement are true and correct as of
such date and that the Company has complied with all of the agreements and
satisfied all of the conditions on its part to be performed or satisfied on or
before such date.
The officer signing and delivering such certificate may rely upon the
best of his knowledge as to proceedings threatened.
(d) On the Commencement Date and, if called for by any Notes Terms
Agreement, on the corresponding Settlement Date, the Company's independent
auditors shall have furnished to you a letter or letters, dated as of the
Commencement Date or such Settlement Date, as the case may be, in form and
substance satisfactory to you containing statements and information of the type
ordinarily included in accountants comfort letters to underwriters with respect
to the financial statements and certain financial information contained in or
incorporated by reference into the Prospectus, as then amended or supplemented;
provided that each letter so furnished shall use a cut-off date no more than
three business days prior to the date of such letter.
(e) On the Commencement Date and on each Settlement Date, the Company
shall have furnished to you such appropriate further information, certificates
and documents as you may reasonably request
5. Additional Agreements of the Company. (a) Each time the Registration
Statement or Prospectus is amended or supplemented (other than by an amendment
or supplement providing solely for (i) a change in the interest rates, repayment
provisions, redemption provisions or maturities offered on the Notes or (ii) a
change you deem to be immaterial), the Company will deliver or cause to be
delivered forthwith to you a certificate signed by an executive officer of the
Company, dated the date of such amendment or supplement, as the case may be, in
form reasonably satisfactory to you, of the same tenor as the certificate
referred to in Section 4(c) relating to the Registration Statement or the
Prospectus as amended or supplemented to the time of delivery of such
certificate.
(b) Each time the Company furnishes a certificate pursuant to Section
5(a) (other than any amendment or supplement to the Registration Statement or
Prospectus caused by the filing of a Current Report on Form 8-K unless you shall
reasonably request based on disclosure included or omitted from such Report),
the Company will furnish or cause to be furnished forthwith to you a written
opinion of counsel for the Company. Any such opinion shall be dated the date of
such amendment or supplement, as the case may be, shall be in a form
satisfactory to you and shall be of the same tenor as the opinions referred to
in Section 4(b), but modified to relate to the Registration Statement and the
Prospectus as amended and supplemented to the time of delivery of such opinion.
In lieu of such opinion,
18
counsel last furnishing such an opinion to you may furnish to you a letter to
the effect that you may rely on such last opinion to the same extent as though
it were dated the date of such letter (except that statements in such last
opinion will be deemed to relate to the Registration Statement and the
Prospectus as amended or supplemented to the time of delivery of such letter.)
(c) Each time the Registration Statement or the Prospectus is amended
or supplemented to set forth amended or supplemental financial information or
such amended or supplemental information is incorporated by reference in the
Prospectus, the Company'shall cause its independent auditors forthwith to
furnish you with a letter, dated the date of such amendment or supplement, as
the case may be, in form satisfactory to you, of the same tenor as the letter
referred to in Section 4(d), with regard to the amended or supplemental
financial information included or incorporated by reference in the Registration
Statement or the Prospectus as amended or supplemented to the date of such
letter; provided that each letter so furnished shall use a cut-off date no more
than three business days prior to the date of such letter.
6. Indemnification and Contribution. (a) The Company agrees to
indemnify and hold harmless you and each person, if any, who controls you within
the meaning of either Section 15 of the Securities Act or Section 20 of the
Exchange Act from and against any and all losses, claims, damages and
liabilities (including, without limitation, any legal or other expenses
reasonably incurred in connection with defending or investigating any such
action or claim) caused by any untrue statement or alleged untrue statement of a
material fact contained in the Registration Statement or any amendment thereof
or the Prospectus (as amended or supplemented if the Company'shall have
furnished any amendments or supplements thereto), or caused by any omission or
alleged omission to state therein a material fact required to be stated therein
or necessary to make the statements therein not misleading, except insofar as
such losses, claims, damages or liabilities are caused by any such untrue
statement or omission or alleged untrue statement or omission based upon
information relating to you furnished to the Company in writing by you expressly
for use therein.
(b) You agree to indemnify and hold harmless the Company, its
directors, its officers who sign the Registration Statement and each person, if
any, who controls the Company within the meaning of either Section 15 of the
Securities Act or Section 20 of the Exchange Act to the same extent as the
foregoing indemnity from the Company to you, but only with reference to
information relating to you furnished to the Company in writing by you expressly
for use in the Registration Statement or the Prospectus or any amendments or
supplements thereto.
(c) In case any proceeding (including any governmental investigation)
shall be instituted involving any person in respect of which indemnity may be
19
sought pursuant to either paragraph (a) or (b) above, such person (the
indemnified party) shall promptly notify the person against whom such indemnity
may be sought (the indemnifying party) in writing and the indemnifying party,
upon request of the indemnified party, shall retain counsel reasonably
satisfactory to the indemnified party to represent the indemnified party and any
others the indemnifying party may designate in such proceeding and shall pay the
fees and disbursements of such counsel related to such proceeding. In any such
proceeding, any indemnified party shall have the right to retain its own
counsel, but the fees and expenses of such counsel shall be at the expense of
such indemnified party unless (i) the indemnifying party and the indemnified
party shall have mutually agreed to the retention of such counsel or (ii) the
named parties to any such proceeding (including any impleaded parties) include
both the indemnifying party and the indemnified party and representation of both
parties by the same counsel would be inappropriate due to actual or potential
differing interests between them. It is understood that the indemnifying party
shall not, in respect of the legal expenses of any indemnified party in
connection with any proceeding or related proceedings in the same jurisdiction,
be liable for the fees and expenses of more than one separate firm (in addition
to any local counsel) for all such indemnified parties and that all such fees
and expenses shall be reimbursed as they are incurred. Such firm shall be
designated in writing by you, in the case of parties indemnified pursuant to
paragraph (a) above, and by the Company, in the case of parties indemnified
pursuant to paragraph (b) above. The indemnifying party shall not be liable for
any settlement of any proceeding effected without its written consent, but if
settled with such consent or if there were to be a final judgment for the
plaintiff, the indemnifying party agrees to indemnify the indemnified party from
and against any loss or liability by reason of such settlement or judgment.
Notwithstanding the foregoing sentence, if at any time an indemnified party
shall have requested an indemnifying party to reimburse the indemnified party
for fees and expenses of counsel as contemplated by the second and third
sentences of this paragraph, the indemnifying party agrees that it shall be
liable for any settlement of any proceeding effected without its written consent
if (i) such settlement is entered into more than 30 days after receipt by such
indemnifying party of the aforesaid request and (ii) such indemnifying party
shall not have reimbursed the indemnified party in accordance with such request
prior to the date of such settlement. No indemnifying party shall, without the
prior written consent of the indemnified party, effect any settlement of any
pending or threatened proceeding in respect of which any indemnified party is or
could have been a party and indemnity could have been sought hereunder by such
indemnified party, unless such settlement includes an unconditional release of
such indemnified party from all liability on claims that are the subject matter
of such proceeding.
(d) To the extent the indemnification provided for in paragraph (a) or
(b) of this Section 6 is unavailable to an indemnified party or insufficient in
20
respect of any losses, claims, damages or liabilities referred to therein in
connection with any offering of Notes, then each indemnifying party under such
paragraph, in lieu of indemnifying such indemnified party thereunder, shall
contribute to the amount paid or payable by such indemnified party as a result
of such losses, claims, damages or liabilities (i) in such proportion as is
appropriate to reflect the relative benefits received by the Company on the one
hand and you on the other hand from the offering of such Notes or (ii) if the
allocation provided by clause (i) is not permitted by applicable law, in such
proportion as is appropriate to reflect not only the relative benefits referred
to in clause (i) above but also the relative fault of the Company on the one
hand and you on the other hand in connection with the statements or omissions
that resulted in such losses, claims, damages or liabilities, as well as any
other relevant equitable considerations. The relative benefits received by the
Company on the one hand and you on the other hand in connection with the
offering of such Notes shall be deemed to be in the same respective proportions
as the total net proceeds from the offering of such Notes (before deducting
expenses) received by the Company bear to the total discounts and commissions
received by you in respect thereof. The relative fault of the Company on the one
hand and of you on the other hand shall be determined by reference to, among
other things, whether the untrue or alleged untrue statement of a material fact
or the omission or alleged omission to state a material fact relates to
information supplied by the Company or by you and the parties relative intent,
knowledge, access to information and opportunity to correct or prevent such
statement or omission.
(e) The Company and you agree that it would not be just or equitable
if contribution pursuant to this Section 6 were determined by pro rata
allocation or by any other method of allocation that does not take account of
the equitable considerations referred to in paragraph (d) above. The amount paid
or payable by an indemnified party as a result of the losses, claims, damages
and liabilities referred to in paragraph (d) above shall be deemed to include,
subject to the limitations set forth above, any legal or other expenses
reasonably incurred by such indemnified party in connection with investigating
or defending any such action or claim. Notwithstanding the provisions of this
Section 6, you shall not be required to contribute any amount in excess of the
amount by which the total price at which the Notes referred to in paragraph (d)
above that were offered and sold to the public through you exceeds the amount of
any damages that you have otherwise been required to pay by reason of such
untrue or alleged untrue statement or omission or alleged omission. No person
guilty of fraudulent misrepresentation (within the meaning of Section 11(f) of
the Securities Act) shall be entitled to contribution from any person who was
not guilty of such fraudulent misrepresentation. The remedies provided for in
this Section 6 are not exclusive and shall not limit any rights or remedies
which may otherwise be available to any indemnified party at law or in equity.
21
(f) The indemnity and contribution provisions contained in this Section
6 and the representations, warranties and other statements of the Company, its
officers and you set forth in or made pursuant to this Agreement or any Notes
Terms Agreement will remain operative and in full force and effect regardless of
(i) any termination of this Agreement or any such Notes Terms Agreement, (ii)
any investigation made by or on behalf of you or any person controlling you or
by or on behalf of the Company, its officers or directors or any person
controlling the Company and (iii) acceptance of and payment for any of the
Notes.
7. Position of the Agent. In acting under this Agreement and in
connection with the sale of any Notes by the Company (other than Notes sold to
you pursuant to a Notes Terms Agreement), you are acting solely as agent of the
Company and do not assume any obligation towards or relationship of agency or
trust with any purchaser of Notes. You shall make reasonable efforts to assist
the Company in obtaining performance by each purchaser whose offer to purchase
Notes has been solicited by you and accepted by the Company, but you shall not
have any liability to the Company in the event any such purchase is not
consummated for any reason. If the Company'shall default in its obligations to
deliver Notes to a purchaser whose offer it has accepted, the Company'shall hold
you harmless against any loss, claim, damage or liability arising from or as a
result of such default and shall, in particular, pay to you the commission you
would have received had such sale been consummated.
8. Offering Restrictions. If any Notes are to be offered outside the
United States, you will not offer or sell any such Notes in any jurisdiction if
such offer or sale would not be in compliance with any applicable law or
regulation or if any consent, approval or permission is needed for such offer or
sale by you or for or on behalf of the Company unless such consent, approval or
permission has been previously obtained. Subject to the obligations of the
Company'set forth in Section 3 of this Agreement, the Company'shall have no
responsibility for, and you will obtain, any consent, approval or permission
required by you for the subscription, offer, sale or delivery by you of Notes,
or the distribution of any offering materials, under the laws and regulations in
force in any jurisdiction to which you are subject or in or from which you make
any subscription, offer, sale or delivery.
9. Termination. This Agreement may be terminated at any time either by
the Company or by you upon the giving of written notice of such termination to
the other parties hereto, but without prejudice to any rights, obligations or
liabilities of the other parties hereto accrued or incurred prior to such
termination. The termination of this Agreement shall not require termination of
any Notes Terms Agreement, and the termination of any such Notes Terms Agreement
shall not require termination of this Agreement. If this Agreement is
terminated, the provisions of the third paragraph of Section 2(a), the last
sentence of Section 3(b)
22
and Sections 3(c), 3(h), 6, 7, 10, 11 and 13 shall survive; provided that if at
the time of termination an offer to purchase Notes has been accepted by the
Company but the time of delivery to the purchaser or its agent of such Notes has
not occurred, the provisions of Sections 1, 2(b), 2(c), 3(a), 3(d), 3(e), 3(f),
3(g), 3(i), 4 and 5 shall also survive until such delivery has been made.
10. Notices. All communications hereunder will be in writing and
effective only on receipt, and, if sent to you, will be mailed, delivered or
telefaxed and confirmed to you at 0000 Xxxxxxxx, Xxx Xxxx, Xxx Xxxx 00000,
Attention: Manager, Continuously Offered Products (telefax number: 212-761-0781)
or, if sent to the Company, will be mailed, delivered or telefaxed and confirmed
to the Company at 0000 Xxxxxx xx xxx Xxxxxxxx, Xxx Xxxx, Xxx Xxxx 00000,
Attention: Treasurer; Facsimile No.: 000-000-0000.
11. Successors. This Agreement and any Notes Terms Agreement will inure
to the benefit of and be binding upon the parties hereto and their respective
successors and the officers, directors and controlling persons referred to in
Section 6 and the purchasers of Notes (to the extent expressly provided in
Section 4), and no other person will have any right or obligation hereunder.
12. Counterparts. This Agreement may be signed in any number of
counterparts, each of which shall be an original, with the same effect as if the
signatures thereto and hereto were upon the same instrument.
13. Applicable Law. This Agreement will be governed by and construed in
accordance with the internal laws of the State of New York.
14. Headings. The headings of the sections of this Agreement have been
inserted for convenience of reference only and shall not be deemed a part of
this Agreement.
23
If the foregoing is in accordance with your understanding of our
agreement, please sign and return to us the enclosed duplicate hereof, whereupon
this letter and your acceptance shall represent a binding agreement between the
Company and you.
Very truly yours,
XXXXXX XXXXXXX
By:
------------------------------------
Name:
Title:
The foregoing Agreement is hereby
confirmed and accepted as of the date
first above written.
XXXXXX XXXXXXX XX INC.
By:
-----------------------------------
Name:
Title:
XXXXXX XXXXXXX & CO.
INCORPORATED
By:
------------------------------------
Name:
Title:
EXHIBIT A
XXXXXX XXXXXXX
DIRECTSECURITIES(SM)
NOTES TERMS AGREEMENT
_______________, 200_
Xxxxxx Xxxxxxx
0000 Xxxxxxxx
Xxx Xxxx, Xxx Xxxx 00000
Attention:
Re: DirectSecurities Distribution Agreement dated [_______],
2004
(the DirectSecurities Distribution Agreement)
----------------------------------------------------------
The undersigned agrees to purchase your Xxxxxx Xxxxxxx
DirectSecurities(SM) having the following terms:
Principal Amount: Interest Rate:
Purchase Price: Applicability of Modified Payment upon
Acceleration:
Price to Public: If yes, state issue price:
Settlement Date and Time: Applicability of Survivor s Option:
Place of Delivery: Optional Repayment Date(s):
Original Issue Date: Optional Redemption Date(s):
Interest Accrual Date: Initial Redemption Date:
Interest Payment Dates: Initial Redemption Percentage:
Interest Payment Period: Annual Redemption Percentage Reduction:
Maturity Date: Face Amount (if any):
Minimum Denominations:
Other Provisions:
A-1
The provisions of Sections 1, 2(b) and 2(c), 3 through 6, 8 and 10
through 14 of the DirectSecurities Distribution Agreement and the related
definitions are incorporated by reference herein and shall be deemed to have the
same force and effect as if set forth in full herein.
This Agreement is also subject to termination on the terms incorporated
by reference herein. If this Agreement is terminated, the provisions of Sections
3(h), 6, 10, 11, and 13 of the DirectSecurities Distribution Agreement shall
survive for the purposes of this Agreement.
The following information, opinions, certificates, letters and
documents referred to in Section 4 of the DirectSecurities Distribution
Agreement will be required: ________________.
A-2
XXXXXX XXXXXXX XX INC.
By:
------------------------------------
Name:
Title:
XXXXXX XXXXXXX & CO.
INCORPORATED
By:
------------------------------------
Name:
Title:
Accepted:
XXXXXX XXXXXXX
By:
--------------------------------
Name:
Title:
A-3
EXHIBIT B
XXXXXX XXXXXXX
XXXXXX XXXXXXX DIRECTSECURITIES(SM)
ADMINISTRATIVE PROCEDURES
Explained below are the administrative procedures and specific terms of
the offering of Xxxxxx Xxxxxxx DirectSecurities(SM) (the Notes) on a continuous
basis by Xxxxxx Xxxxxxx (the Company) pursuant to the Xxxxxx Xxxxxxx
DirectSecurities Distribution Agreement dated [___________], 2004 (as may be
amended from time to time, the DirectSecurities Distribution Agreement) among
the Company, Xxxxxx Xxxxxxx XX Inc. and Xxxxxx Xxxxxxx & Co. Incorporated
(collectively or individually the Agent as the context requires). The Notes will
be issued as senior indebtedness of the Company pursuant to the provisions of a
senior indenture dated as of November 1, 2004 (as may be supplemented or amended
from time to time, the Indenture), between the Company and JPMorgan Chase Bank (
JPMorgan Chase), as trustee.
In the DirectSecurities Distribution Agreement, the Agent has agreed to
use reasonable efforts to solicit purchases of the Notes, and the administrative
procedures explained below will govern the issuance and settlement of any Notes
sold through the Agent, as agent of the Company. The Agent, as principal, may
also purchase Notes for its own account, and the Company and the Agent will
enter into a terms agreement (a Notes Terms Agreement), as contemplated by the
DirectSecurities Distribution Agreement. The administrative procedures explained
below will govern the issuance and settlement of any Notes purchased by the
Agent, as principal, unless otherwise specified in the applicable Notes Terms
Agreement.
JPMorgan Chase will be the Registrar, Authenticating Agent and Paying
Agent for the Notes and will perform the duties specified herein. Each Note will
be represented by a Global Note (as defined below) delivered to JPMorgan Chase,
as agent for The Depository Trust Company ( DTC), and recorded in the book-entry
system maintained by DTC (a Book-Entry Note). Each Note will be issued in global
form. Except as set forth in the Indenture, an owner of a Book-Entry Note will
not be entitled to receive a certificated note.
Book-Entry Notes will be payable in U.S. dollars and will be issued in
accordance with the administrative procedures set forth in Part I hereof as they
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may subsequently be amended as the result of changes in DTC s operating
procedures.
Unless otherwise defined herein, terms defined in the Indenture, the
Notes or any Prospectus Supplement relating to the Notes shall be used herein as
therein defined.
The Company will advise the Agent in writing of the employees of the
Company with whom the Agent is to communicate regarding offers to purchase Notes
and the related settlement details.
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PART I: ADMINISTRATIVE PROCEDURES FOR BOOK-ENTRY NOTES
In connection with the qualification of the Book-Entry Notes for
eligibility in the book-entry system maintained by DTC, JPMorgan Chase will
perform the custodial, document control and administrative functions described
below, in accordance with its respective obligations under (i) DTC s Operational
Arrangements dated February 20, 2002, as amended from time to time, including by
the Blanket Issuer Letter of Representations from the Company to DTC, dated as
of August 25, 2003 and (ii) its obligations under a Medium-Term Note Certificate
Agreement between JPMorgan Chase and DTC dated as of November 13, 2001, and its
obligations as a participant in DTC, including DTC s Same-Day Funds Settlement
System ( SDFS).
Issuance: On any date of settlement (as defined under
Settlement below) for one or more Book-Entry
Notes, the Company will issue a single global Note in
fully registered form without coupons (a Global
Note) representing up to U.S.$500,000,000 principal
amount of all such Notes that have the same Original
Issue Date, Maturity Date and other terms and that
otherwise comprise the same securities and have the
same terms. Each Global Note will be dated and issued
as of the date of its authentication by JPMorgan Chase.
Each Global Note will bear an Interest Accrual
Date, which will be (i) with respect to an original
Global Note (or any portion thereof), its original
issuance date and (ii) with respect to any Global Note
(or any portion thereof) issued subsequently upon
exchange of a Global Note, or in lieu of a destroyed,
lost or stolen Global Note, the most recent Interest
Payment Date to which interest has been paid or duly
provided for on the predecessor Global Note or Notes
(or if no such payment or provision has been made, the
original issuance date of the predecessor Global Note),
regardless of the date of authentication of such
subsequently issued Global Note. Book-Entry Notes
will be payable in U.S. dollars.
Denominations: Book-Entry Notes will be issued in principal amounts
of U.S.$1,000 or any amount in excess thereof that is an
integral multiple of U.S.$1,000, unless otherwise
indicated in the applicable Pricing Supplement. Global
Notes will be denominated in principal amounts not in
excess of U.S.$500,000,000. If one or more Book-
Entry Notes having an aggregate principal amount in
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excess of U.S.$500,000,000 would, but for the preceding
sentence, be represented by a single Global Note then
one Global Note will be issued to represent each
U.S.$500,000,000 principal amount of such Book- Entry
Note or Notes and an additional Global Note will be
issued to represent any remaining principal amount of
such Book-Entry Note or Notes. In such a case, each of
the Global Notes shall be assigned the same CUSIP
number.
Preparation of
Pricing Supplement:
If any order to purchase a Book-Entry Note is accepted
by or on behalf of the Company, the Company will prepare
a pricing supplement (a Pricing Supplement) reflecting
the terms of such Note. The Company (i) will arrange to
file an electronic format document, in the manner
prescribed by the XXXXX Xxxxx Manual, of such Pricing
Supplement with the Commission in accordance with the
applicable paragraph of Rule 424(b) under the Securities
Act, (ii) will, as soon as possible and in any event not
later than the date on which such Pricing Supplement is
filed with the Commission, deliver the number of copies
of such Pricing Supplement to the Agent as the Agent
shall request and (iii) will, on the Agent s behalf,
promptly file five copies of such Pricing Supplement
with the National Association of Securities Dealers,
Inc. (the NASD), if required under the rules of the
NASD. The Agent will cause such Pricing Supplement to be
delivered to the purchaser of the Note.
In each instance that a Pricing Supplement is prepared,
the Agent will affix the Pricing Supplement to
Prospectuses prior to their use. Outdated Pricing
Supplements, and the Prospectuses to which they are
attached (other than those retained for files), will be
destroyed.
Settlement: The receipt by the Company of immediately available
funds in payment for a Book-Entry Note and the
authentication and issuance of the Global Note
representing such Note shall constitute settlement
with respect to such Note. All orders accepted by the
Company will be settled on the fifth Business Day
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pursuant to the timetable for settlement set forth below
unless the Company and the purchaser agree to settlement
on another day, which shall be no earlier than the next
Business Day.
Settlement Procedures: Settlement Procedures with regard to each Book-Entry Note
sold by the Company to or through the Agent (unless
otherwise specified pursuant to a Notes Terms Agreement),
shall be as follows:
A. The Agent will advise the Company by telephone that such
Note is a Book-Entry Note and of the following settlement
information:
1. Principal amount.
2. Maturity Date.
3. Whether such Note will pay interest monthly,
quarterly, semiannually or annually.
4. Whether a Survivor s Option is applicable.
5. Redemption or repayment provisions, if any.
6. Settlement date and time (Original Issue Date).
7. Interest Accrual Date.
8. Price.
9. Agent s commission, if any, determined as provided in
the DirectSecurities Distribution Agreement.
10. Whether the Note is an Original Issue Discount Note
(an OID Note), and if it is an OID Note, the
applicability of Modified Payment upon Acceleration
(and, if so, the Issue Price).
11. Any other applicable provisions.
B. The Company will advise JPMorgan Chase by telephone or
electronic transmission (confirmed in writing at any time
on the same date) of the information set forth in
Settlement Procedures A above, such
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advice to contain a representation as to the aggregate
principal amount of Notes permitted to be issued
hereunder after such issuance. JPMorgan Chase will then
assign a CUSIP number to the Global Note representing a
Note and will notify the Company and the Agent of such
CUSIP number(s) by telephone as soon as practicable.
C. JPMorgan Chase will enter a pending deposit message
through DTC s Participant Terminal System, providing the
following settlement information to DTC, the Agent and
Standard & Poor s Corporation:
1. The information set forth in Settlement Procedure A
above.
2. The Initial Interest Payment Date for the Notes, the
number of days by which such date succeeds the
related DTC Record Date and, if known, amount of
interest payable on such Initial Interest Payment
Date.
3. The CUSIP number of the Global Note.
4. Whether the Global Note will represent any other
Book-Entry Note (to the extent known at such time).
5. The number of Participant accounts to be maintained
by DTC on behalf of the Agent and JPMorgan Chase.
D. JPMorgan Chase will authenticate, complete and deliver
the Global Note representing the Note.
E. DTC will credit such Note to JPMorgan Chase s participant
account at DTC.
F. JPMorgan Chase will enter an SDFS deliver order through
DTC s Participant Terminal System instructing DTC to (i)
debit the Note to JPMorgan Chase s participant account
and credit such Note to the Agent s participant account
and (ii) debit the Agent s settlement account and credit
JPMorgan Chase s settlement account for an amount equal
to the price of such Note less the Agent s commission, if
any. The entry of such
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a deliver order shall constitute a representation and
warranty by JPMorgan Chase to DTC that (a) the Global
Note representing a Book-Entry Note has been issued and
authenticated and (b) JPMorgan Chase is holding such
Global Note pursuant to the Medium- Term Note Certificate
Agreement between JPMorgan Chase and DTC.
G. Unless the Agent is the end purchaser of a Note, the
Agent will enter an SDFS deliver order through DTC s
Participant Terminal System instructing DTC (i) to debit
such Note to the Agent s participant account and credit
such Note to the participant accounts of the Participants
with respect to such Note and (ii) to debit the
settlement accounts of such Participants and credit the
settlement account of the Agent for an amount equal to
the price of such Note.
H. Transfers of funds in accordance with SDFS deliver orders
described in Settlement Procedures F and G will be
settled in accordance with SDFS operating procedures in
effect on the settlement date.
I. JPMorgan Chase will credit to the account of the Company
maintained at JPMorgan Chase, New York, New York, in
funds available for immediate use in the amount
transferred to JPMorgan Chase in accordance with
"Settlement Procedure" "F".
J. Unless the Agent is the end purchaser of the Note, the
Agent will confirm the purchase of such Note to the
purchaser either by transmitting to the Participants with
respect to such Note a confirmation order or orders
through DTC s institutional delivery system or by mailing
a written confirmation to such purchaser.
K. Monthly, JPMorgan Chase will send to the Company a
statement setting forth the principal amount of Notes
outstanding as of that date under the Indenture and
setting forth a brief description of any sales of which
the Company has advised JPMorgan Chase that have not yet
been settled.
Settlement
Procedures
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Timetable: For sales by the Company of Book-Entry Notes to or
through the Agent (unless otherwise specified pursuant to
a Notes Terms Agreement) for settlement on the first
Business Day after the sale date, Settlement Procedures A
through J set forth above shall be completed as soon as
possible but not later than the respective times in New
York City set forth below:
Settlement
Procedure Time
--------- ----
A 11:00 A.M. on the sale date
B 12:00 Noon on the sale date
C 2:00 P.M. on the sale date
D 9:00 A.M. on the settlement date
E 10:00 A.M. on the settlement date
F-G 2:00 P.M. on the settlement date
H 4:45 P.M. on the settlement date
I-J 5:00 P.M. on the settlement date
If a sale is to be settled more than one Business Day
after the sale date, Settlement Procedures "A", "B" and
"C" shall be completed as soon as practicable but no
later than 11:00 A.M., 12 Noon and 2:00 P.M.,
respectively, on the first Business Day after the sale
date. Settlement Procedure "H" is subject to extension
in accordance with any extension of Fedwire closing
deadlines and in the other events specified in the SDFS
operating procedures in effect on the settlement date.
If settlement of a Book-Entry Note is rescheduled or
canceled, JPMorgan Chase, after receiving notice from the
Company or the Agent, will deliver to DTC, through DTC s
Participant Terminal System, a cancellation message to
such effect by no later than 2:00 P.M. on the Business
Day immediately preceding the scheduled settlement date.
Failure to Settle: If JPMorgan Chase fails to enter an SDFS deliver order
with respect to a Book-Entry Note pursuant to "Settlement
Procedure" "F", JPMorgan Chase may deliver to DTC,
through DTC s Participant Terminal System, as soon as
practicable a withdrawal message instructing DTC to
debit such Note to JPMorgan
B-8
Chase's participant account, provided that JPMorgan
Chase's participant account contains a principal amount
of the Global Note representing such Note that is at
least equal to the principal amount to be debited. If a
withdrawal message is processed with respect to all the
Book-Entry Notes represented by a Global Note, JPMorgan
Chase will xxxx such Global Note canceled, make
appropriate entries in JPMorgan Chase s records and send
such canceled Global Note to the Company. The CUSIP
number assigned to such Global Note shall, in accordance
with the procedures of the CUSIP Service Bureau of
Standard & Poor s Corporation, be canceled and not
immediately reassigned. If a withdrawal message is
processed with respect to one or more, but not all, of
the Book-Entry Notes represented by a Global Note,
JPMorgan Chase will exchange such Global Note for two
Global Notes one of which shall represent such
Book-Entry Note or Notes and shall be canceled
immediately after issuance and the other of which shall
represent the remaining Book-Entry Notes previously
represented by the surrendered Global Note and shall
bear the CUSIP number of the surrendered Global Note.
If the purchase price for any Book-Entry Note is not
timely paid to the Participants with respect to such
Note by the beneficial purchaser thereof (or a person,
including an indirect participant in DTC, acting on
behalf of such purchaser), such Participants and, in
turn, the Agent may enter SDFS deliver orders through
DTC s Participant Terminal System reversing the orders
entered pursuant to Settlement Procedures "F" and "G",
respectively. Thereafter, JPMorgan Chase will deliver
the withdrawal message and take the related actions
described in the preceding paragraph.
Notwithstanding the foregoing, upon any failure to settle
with respect to a Book-Entry Note, DTC may take any
actions in accordance with its SDFS operating procedures
then in effect.
In the event of a failure to settle with respect to one
or more, but not all, of the Book-Entry Notes to have
been represented by a Global Note, JPMorgan Chase will
provide, in accordance with Settlement Procedures "D"
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and "F", for the authentication and issuance of a Global
Note representing the Book-Entry Notes to be represented
by such Global Note and will make appropriate entries in
its records.
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