Exhibit 1
XxXXXXXXX & COMPANY, INCORPORATED
$375,000,000
Medium-Term Notes, Series [ ]
DISTRIBUTION AGREEMENT
September [ ], 2000
Xxxxxxx, Sachs & Co.
00 Xxxxx Xxxxxx
Xxx Xxxx, Xxx Xxxx 00000
Ladies and Gentlemen:
XxXxxxxxx & Company, Incorporated, a Maryland corporation (the
"Company"), proposes to issue and sell from time to time its Medium-Term Notes
(the "Securities") in an aggregate amount up to $375,000,000 and agrees with you
(the "Agent") as set forth in this Agreement.
Subject to the terms and conditions stated herein and to the
reservation by the Company of the right to sell Securities directly on its own
behalf, the Company hereby (i) appoints the Agent as an agent of the Company for
the purpose of soliciting and receiving offers to purchase Securities from the
Company pursuant to Section 2(a) hereof and (ii) agrees that, except as
otherwise contemplated herein, whenever it determines to sell Securities
directly to the Agent as principal, it will enter into a separate agreement
(each a "Terms Agreement"), substantially in the form of Annex I hereto,
relating to such sale in accordance with Section 2(b) hereof. This Distribution
Agreement shall not be construed to create either an obligation on the part of
the Company to sell any Securities or an obligation of the Agent to purchase
Securities as principal.
The Securities will be issued under an indenture, dated as of September
[ ], 2000 (the "Indenture"), between the Company and SunTrust Bank, as Trustee
(the "Trustee"). The Securities shall have the maturity ranges, interest rates,
if any, redemption provisions and other terms set forth in the Prospectus
referred to below as it may be amended or supplemented from time to time. The
Securities will be issued, and the terms and rights thereof established, from
time to time by the Company in accordance with the Indenture.
1. The Company represents and warrants to, and agrees with, the Agent
that:
(a) A registration statement on Form S-3 (File No. 333-[ ]
in respect of the Securities has been filed with the Securities and
Exchange Commission (the "Commission"); such registration statement and
any post-effective amendment thereto, each in the form heretofore
delivered or to be delivered to the Agent, excluding exhibits to such
registration statement, but including all documents incorporated by
reference in the prospectus included therein, have been declared
effective by the Commission in such form; no other document with
respect to such registration statement or document incorporated by
reference therein has heretofore been filed or transmitted for filing
with the Commission (other than the prospectuses filed pursuant to Rule
424(b) of the rules and regulations of the Commission under the
Securities Act of 1933, as amended (the "Act"), each in the form
heretofore delivered to the Agent); and no stop order suspending the
effectiveness of such registration statement has been issued and no
proceeding for that purpose has been initiated or threatened by the
Commission (any preliminary prospectus included in such registration
statement or filed with the Commission pursuant to Rule 424(a) of the
rules and regulations of the Commission under the Act, are hereinafter
called a "Preliminary Prospectus"; the various parts of such
registration statement, including all exhibits thereto and the
documents incorporated by reference in the prospectus contained in the
registration statement at the time such part of the registration
statement became effective but excluding Form T-1, each as amended at
the time such part of the registration statement became effective, are
hereinafter collectively called the "Registration Statement"; the
prospectus (including, if applicable, any prospectus supplement)
relating to the Securities, in the form in which it has most recently
been filed, or transmitted for filing, with the Commission on or prior
to the date of this Agreement, is hereinafter called the "Prospectus";
any reference herein to any Preliminary Prospectus or the Prospectus
shall be deemed to refer to and include the documents incorporated by
reference therein pursuant to the applicable form under the Act, as of
the date of such Preliminary Prospectus or Prospectus, as the case may
be; any reference to any amendment or supplement to any Preliminary
Prospectus or the Prospectus, including any supplement to the
Prospectus that sets forth only the terms of a particular issue of the
Securities (a "Pricing Supplement"), shall be deemed to refer to and
include any documents filed after the date of such Preliminary
Prospectus or Prospectus, as the case may be, under the Securities
Exchange Act of 1934, as amended (the "Exchange Act"), and incorporated
therein by reference; any reference to any amendment to the
Registration Statement shall be deemed to refer to and include any
annual report of the Company filed pursuant to Section 13(a) or 15(d)
of the Exchange Act after the effective date of the Registration
Statement that is incorporated by reference in the Registration
Statement; and any reference to the Prospectus as amended or
supplemented shall be deemed to refer to and include the Prospectus as
amended or supplemented (including by the applicable Pricing Supplement
filed in accordance with Section 4(a) hereof) in relation to the
Securities to be sold pursuant to this Agreement, in the form filed or
transmitted for filing with the Commission pursuant to Rule 424(b)
under the Act and in accordance with Section 4(a) hereof, including any
documents incorporated by reference therein as of the date of such
filing);
(b) The documents incorporated by reference in the Prospectus,
when they became effective or were filed with the Commission, as the
case may be, conformed in all material respects to the requirements of
the Act or the Exchange Act, as applicable, and the rules and
regulations of the Commission thereunder, and none of such documents
contained an untrue statement of a material fact or omitted to state a
material fact required to be stated therein or necessary to make the
statements therein not misleading; and any further documents so filed
and incorporated by reference in the Prospectus, or any further
amendment or supplement thereto, when such documents become effective
or are filed with the Commission, as the case may be, will conform in
all material respects to the requirements of the Act or the Exchange
Act, as applicable, and the rules and regulations of the Commission
thereunder and will not contain an 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;
(c) The Registration Statement and the Prospectus conform, and
any further amendments or supplements to the Registration Statement or
the Prospectus will conform, in all material respects to the
requirements of the Act and the Trust Indenture Act of 1939, as amended
(the "Trust Indenture Act"), and the rules and regulations of the
Commission thereunder and do not and will not, as of the applicable
effective date as to the Registration Statement and any amendment
thereto and as of the applicable filing date as to the Prospectus and
any amendment or supplement thereto, contain an 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
(PROVIDED, HOWEVER, that no representation or warranty is made as to
information contained in or omitted from that part of the Registration
Statement
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which shall constitute the Statement of Eligibility on Form T-1
under the Trust Indenture Act of the Trustee under the Indenture);
PROVIDED, HOWEVER, that this representation and warranty shall not
apply to any statements or omissions made in reliance upon and in
conformity with information furnished in writing to the Company by
the Agent expressly for use in the Registration Statement or
Prospectus as amended or supplemented to relate to a particular
issuance of Securities;
(d) Neither the Company nor any of its subsidiaries has
sustained since the date of the latest audited financial statements
included or incorporated by reference in the Prospectus any material
loss or interference with its business from fire, explosion, flood or
other calamity, whether or not covered by insurance, or from any labor
dispute or court or governmental action, order or decree, otherwise
than as set forth or contemplated in the Prospectus; and, since the
respective dates as of which information is given in the Registration
Statement and the Prospectus, there has not been any change in the
capital stock or long-term debt of the Company or any of its
subsidiaries, taken as a whole, or any material adverse change, or any
adverse development which may reasonably be expected to result in a
material adverse change, in or affecting the business, financial
position, business prospects or results of operations of the Company
and its subsidiaries, taken as a whole, otherwise than as set forth or
contemplated in the Prospectus;
(e) The Company was duly incorporated and is validly existing
and in good standing under the laws of the jurisdiction of its
incorporation, with the corporate power and the corporate authority
under its Certificate of Incorporation and the Maryland General
Corporation Law (the "MGCL") to own, lease and operate its current
properties and to conduct its business as described in the Prospectus;
(f) The Company has an authorized capitalization as set forth
in the Prospectus, and all of the issued shares of capital stock of the
Company have been duly and validly authorized and issued and are fully
paid and non-assessable;
(g) The Securities have been duly authorized, and (assuming
due execution, authentication, issuance and delivery of the Securities
as provided in the Indenture) will constitute valid and legally binding
obligations of the Company entitled to the benefits provided by the
Indenture, which will be substantially in the form filed as an exhibit
to the Registration Statement and will be enforceable in accordance
with their terms, except as the enforcement thereof may be limited by
bankruptcy, insolvency, reorganization, moratorium or other laws
affecting creditors' rights (including, without limitation, the effect
of statutory and other law regarding fraudulent conveyances, fraudulent
transfers and preferential transfers) and as may be limited by the
exercise of judicial discretion and the application of principles of
equity including, without limitation, requirements of good faith, fair
dealing, conscionability and materiality (regardless of whether the
Securities are considered in a proceeding at law or in equity), and
except further as enforcement thereof may be limited by (1)
requirements that a claim with respect to any Securities other than in
U.S. dollars (or a foreign or composite currency judgment in respect of
such claim) be converted into U.S. dollars at a rate or exchange
prevailing on a date determined pursuant to applicable law or (2)
governmental authority to limit, delay or prohibit the making of
payments outside the United States; the Indenture has been duly
authorized and duly qualified under the Trust Indenture Act and
constitutes a valid and binding obligation of the Company and will be
enforceable in accordance with its terms, except as the enforcement
thereof may be limited by bankruptcy, insolvency, reorganization,
moratorium or other laws affecting creditors' rights (including,
without limitation, the effect of statutory and other law regarding
fraudulent conveyances, fraudulent transfers and preferential
transfers) and as may be limited by the exercise of judicial discretion
and the application of principles of equity including, without
limitation, requirements
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of good faith, fair dealing, conscionability and materiality
(regardless of whether the Securities are considered in a proceeding
at law or in equity), and except further as enforcement thereof may
be limited by (1) requirements that a claim with respect to any
Securities other than in U.S. dollars (or a foreign or composite
currency judgment in respect of such claim) be converted into U.S.
dollars at a rate or exchange prevailing on a date determined
pursuant to applicable law or (2) governmental authority to limit,
delay or prohibit the making of payments outside the United States;
and the Indenture conforms in all material respects and the
Securities of any particular issuance of Securities will conform in
all material respects to the descriptions thereof contained in the
Prospectus as amended or supplemented to relate to such issuance of
Securities;
(h) The issue and sale of the Securities, the compliance by
the Company with all of the provisions of the Securities, the
Indenture, this Agreement and any Terms Agreement, and the consummation
of the transactions herein and therein contemplated will not conflict
with or result in a breach or violation of any of the terms or
provisions of, or constitute a default under, any indenture, mortgage,
deed of trust, loan agreement or other material agreement or material
instrument to which the Company is a party or by which the Company is
bound or to which any of the property or assets of the Company is
subject, nor will such action result in any violation of the provisions
of the Certificate of Incorporation, as amended, or the By-laws of the
Company or any statute or any order, rule or regulation of any court or
governmental agency or body having jurisdiction over the Company or any
of its properties; and no consent, approval, authorization, order,
registration or qualification of or with any court or governmental
agency or body is required for the solicitation of offers to purchase
Securities, the issue and sale of the Securities or the consummation by
the Company of the other transactions contemplated by this Agreement,
any Terms Agreement or the Indenture, except such as have been, or will
have been prior to the Commencement Date (as defined in Section 3
hereof), obtained under the Act or the Trust Indenture Act and such
consents, approvals, authorizations, registrations or qualifications as
may be required under state securities or Blue Sky laws in connection
with the solicitation by the Agent of offers to purchase Securities
from the Company and with purchases of Securities by the Agent as
principal, as the case may be, in each case in the manner contemplated
hereby;
(i) Neither the Company nor any of its subsidiaries is in
violation of its Certificate of Incorporation or By-laws or in default
in the performance or observance of any material obligation, covenant
or condition contained in any indenture, mortgage, deed of trust, loan
agreement, lease or other material agreement or material instrument to
which it is a party or by which it or any of its properties may be
bound;
(j) The statements set forth in the Prospectus under the
captions "Description of Debt Securities" and "Description of Notes",
insofar as they purport to constitute a summary of the terms of the
Securities, under the caption "United States Taxation", and under the
caption "Plan of Distribution", insofar as they purport to describe the
provisions of the laws and documents specifically referred to therein,
are accurate and fair summaries in all material respects of such laws
or documents;
(k) Other than as set forth in the Prospectus, there are no
legal or governmental proceedings pending to which the Company or any
of its subsidiaries is a party or to which any property of the Company
or any of its subsidiaries is subject, which, if determined adversely
to the Company or any of its subsidiaries, would individually or in the
aggregate have a material adverse effect on the current or future
consolidated financial position, shareholders' equity or results of
operations of the Company and its subsidiaries, and, to the best of the
Company's knowledge, no such proceedings are threatened or contemplated
by governmental authorities or threatened by others;
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(l) The Company is not, and immediately after giving effect to
each offering and sale of the Securities will not be, an "investment
company" as such term is defined in the Investment Company Act of 1940,
as amended (the "Investment Company Act");
(m) Neither the Company nor any of its affiliates does
business with the government of Cuba or with any person or affiliate
located in Cuba within the meaning of Section 517.075, Florida
Statutes;
(n) Immediately after any sale of Securities by the Company
hereunder or under any Terms Agreement, the aggregate amount of
Securities which shall have been issued and sold by the Company
hereunder or under any Terms Agreement and of any debt securities of
the Company (other than such Securities) that shall have been issued
and sold pursuant to the Registration Statement will not exceed the
amount of debt securities registered under the Registration Statement;
and
(o) Ernst & Young LLP, who have certified certain financial
statements of the Company and its subsidiaries, are independent public
accountants as required by the Act and the rules and regulations of the
Commission thereunder.
2. (a) On the basis of the representations and warranties herein
contained, and subject to the terms and conditions herein set forth,
the Agent hereby severally and not jointly agrees, as agent of the
Company, to use its reasonable efforts to solicit and receive offers to
purchase the Securities from the Company upon the terms and conditions
set forth in the Prospectus as amended or supplemented from time to
time. So long as this Agreement shall remain in effect with respect to
the Agent, the Company shall not, without the consent of the Agent,
solicit or accept offers to purchase, or sell, any debt securities with
a maturity at the time of original issuance of 9 months to 40 years
from the date of issuance except pursuant to this Agreement, any Terms
Agreement, or except pursuant to a private placement not constituting a
public offering under the Act or except in connection with a firm
commitment underwriting pursuant to an underwriting agreement that does
not provide for a continuous offering of medium-term debt securities.
However, the Company reserves the right to sell, and may solicit and
accept offers to purchase, Securities directly on its own behalf in
transactions with persons other than broker-dealers, and, in the case
of any such sale not resulting from a solicitation made by the Agent,
no commission will be payable with respect to such sale. These
provisions shall not limit Section 4(f) hereof or any similar provision
included in any Terms Agreement. For purposes of a particular sale of
Securities, upon notifying the Agent, the Company may appoint on a
transaction by transaction basis other persons as agents for the
purpose of soliciting purchases of such Securities from the Company by
others; provided, however, that in the event that the Company so
appoints one or more other persons, the Company and such person or
persons shall execute a counterpart to this Agreement relating to such
particular sale, whereupon from and after the date of such execution,
the term "Agent" shall for purposes of such particular sale include
such person or persons and such person or persons shall be subject to
the terms and conditions stated herein.
Procedural details relating to the issue and delivery of
Securities, the solicitation of offers to purchase Securities and the
payment in each case therefor shall be as set forth in the
Administrative Procedure attached hereto as Annex II as it may be
amended from time to time by written agreement between the Agent and
the Company (the "Administrative Procedure"). The provisions of the
Administrative Procedure shall apply to all transactions contemplated
hereunder other than those made pursuant to a Terms Agreement. The
Agent and the Company agree to perform the respective duties and
obligations specifically provided to be performed by each of them in
the Administrative Procedure. The Company will furnish to the Trustee a
copy of the Administrative Procedure as from time to time in effect.
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The Company reserves the right, in its sole discretion, to
instruct the Agent to suspend at any time, for any period of time or
permanently, the solicitation of offers to purchase the Securities. As
soon as practicable, but in any event not later than one business day
in New York City, after receipt of notice from the Company, the Agent
will suspend solicitation of offers to purchase Securities from the
Company until such time as the Company has advised the Agent that such
solicitation may be resumed. During such period, the Company shall not
be required to comply with the provisions of Sections 4(a), 4(h), 4(i),
4(j) and 4(k). Upon advising the Agent that such solicitation may be
resumed, however, the Company shall simultaneously provide the
documents required to be delivered by Sections 4(a), 4(h), 4(i), 4(j)
and 4(k), and the Agent shall have no obligation to solicit offers to
purchase the Securities until such documents have been received by the
Agent. In addition, any failure by the Company to comply with its
obligations hereunder, including without limitation its obligations to
deliver the documents required by Sections 4(h), 4(i), 4(j) and 4(k),
shall automatically terminate the Agent's obligations hereunder,
including without limitation its obligations to solicit offers to
purchase the Securities hereunder as agent or to purchase Securities
hereunder as principal.
The Company agrees to pay the Agent a commission, at the time
of settlement of any sale of a Security by the Company as a result of a
solicitation made by the Agent, in an amount equal to the following
applicable percentage of the principal amount of such Security sold:
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Commission (percentage of
aggregate principal amount of
Range of Maturities Securities sold)
------------------- -----------------------------
From 9 months to less than 1 year .125%
From 1 year to less than 18 months .150%
From 18 months to less than 2 years .200%
From 2 years to less than 3 years .250%
From 3 years to less than 4 years .350%
From 4 years to less than 5 years .450%
From 5 years to less than 6 years .500%
From 6 years to less than 7 years .550%
From 7 years to less than 10 years .600%
From 10 years to less than 15 years .625%
From 15 years to less than 20 years .700%
From 20 years to less than 30 years .750%
From 30 years to less than 40 years .825%
40 years and more .900%
(b) Each sale of Securities to the Agent as principal shall be
made in accordance with the terms of this Agreement and (unless the
Company and the Agent shall otherwise agree) a Terms Agreement which
will provide for the sale of such Securities to, and the purchase
thereof by, the Agent; a Terms Agreement may also specify certain
provisions relating to the reoffering of such Securities by the Agent;
the commitment of the Agent to purchase Securities as principal,
whether pursuant to any Terms Agreement or otherwise, shall be deemed
to have been made on the basis of the representations and warranties of
the Company herein contained and shall be subject to the terms and
conditions herein set forth; each Terms Agreement shall specify the
principal amount of Securities to be purchased by the Agent pursuant
thereto, the price to be paid to the Company for such Securities, any
provisions relating to rights of, and default by, underwriters acting
together with the Agent in the reoffering of the Securities and the
time and date and place of delivery of and payment for such Securities;
and such Terms Agreement shall also specify any requirements for
opinions of counsel, accountants' letters and officers' certificates
pursuant to Section 4 hereof. The Agent proposes to offer Securities
purchased by it as principal for sale at prevailing market prices or
prices related thereto at the time of sale, which may be equal to,
greater than or less than the price at which such Securities are
purchased by the Agent from the Company.
For each sale of Securities to the Agent as principal that is
not made pursuant to a Terms Agreement, the procedural details relating
to the issue and delivery of such Securities and payment therefor shall
be as set forth in the Administrative Procedure. For each such sale of
Securities to the Agent as principal that is not made pursuant to a
Terms Agreement, the Company agrees to pay the Agent a commission (or
grant an equivalent discount) as provided in Section 2(a) hereof and in
accordance with the schedule set forth therein.
Each time and date of delivery of and payment for Securities
to be purchased by the Agent as principal, whether set forth in a Terms
Agreement or in accordance with the Administrative Procedure, is
referred to herein as a "Time of Delivery".
(c) The Agent agrees, with respect to any Security denominated
in a currency other than U.S. dollars, as agent, directly or
indirectly, not to solicit offers to purchase, and as principal under
any Terms Agreement or otherwise, directly or indirectly, not to offer,
sell or
7
deliver, such Security in, or to residents of, the country issuing such
currency, except as permitted by applicable law.
3. The documents required to be delivered pursuant to Section 6 hereof
on the Commencement Date (as defined below) shall be delivered to the Agent at
the offices of Xxxxxxx Xxxxxxx & Xxxxxxxx, 000 Xxxxxxxxx Xxxxxx, Xxx Xxxx, Xxx
Xxxx, at 11:00 a.m., New York City time, on the date of this Agreement, which
date and time of such delivery may be postponed by agreement between the Agent
and the Company but in no event shall be later than the day prior to the date on
which solicitation of offers to purchase Securities is commenced or on which any
Terms Agreement is executed (such time and date being referred to herein as the
"Commencement Date").
4. The Company covenants and agrees with the Agent:
(a) (i) [ ]; (ii) to prepare, with respect to any
Securities to be sold through or to the Agent pursuant to this
Agreement, a Pricing Supplement with respect to such Securities in a
form previously approved by the Agent and to timely file such
Pricing Supplement pursuant to Rule 424(b)(3) under the Act; (iii)
to make no amendment or supplement to the Registration Statement or
Prospectus, other than any Pricing Supplement, at any time prior to
having afforded the Agent a reasonable opportunity to review and
comment thereon; (iv) to file promptly all reports and any
definitive proxy or information statements required to be filed by
the Company with the Commission pursuant to Section 13(a), 13(c), 14
or 15(d) of the Exchange Act for so long as the delivery of a
prospectus is required in connection with the offering or sale of
the Securities, and during such same period to advise the Agent,
promptly after the Company receives notice thereof, of the time when
any amendment to the Registration Statement has been filed or has
become effective or any supplement to the Prospectus or any amended
Prospectus has been filed with the Commission, of the issuance by
the Commission of any stop order or of any order preventing or
suspending the use of any prospectus relating to the Securities, of
the suspension of the qualification of the Securities for offering
or sale in any jurisdiction, of the initiation or threatening of any
proceeding for any such purpose, or of any request by the Commission
for the amendment or supplement of the Registration Statement or
Prospectus or for additional information; and (v) in the event of
the issuance of any such stop order or of any such order preventing
or suspending the use of any such prospectus or suspending any such
qualification, to use promptly its best efforts to obtain its
withdrawal; (provided, however, that notwithstanding any other
provision of this subsection, except as set forth below, the Company
shall not be required to give the Agent (directly or through
counsel) notice of its intention to file, to furnish the Agent
(directly or through counsel) a copy in advance of filing, or to
make available to the Agent (directly or through counsel) upon
filing (A) Quarterly Reports on Form 10-Q, any Current Report on
Form 8-K relating solely to the inclusion of additional financial
information (including a press release containing such information)
or any filings pursuant to Section 14 of the Exchange Act, provided
however, that the Company promptly notifies the Agent and counsel to
the Agent of such filings with the Commission, and provided further
that, if any such document is to be filed in order that the
Prospectus does not include an untrue statement of a material fact
or omit to state a material fact necessary in order to make the
statements therein not misleading in light of the circumstances then
existing, then the Company shall give immediate notice (prior to the
filing of any such document) to the Agent to cease solicitations of
offers to purchase the Securities in its capacity as agent and to
cease sales of any Securities the Agent may then own as principal
pursuant to a Terms Agreement; (B) any pricing supplement to the
Prospectus in connection with a sale of the Securities (except that
a pricing supplement shall be provided to the Agent who solicits the
sale or purchase of or who purchases as principal the Securities to
which such pricing supplement relates); (C) any amendment or
supplement to the Prospectus that relates exclusively to an
8
offering of debt securities other than the Securities; or (D) any
Current Report on Form 8-K filed solely for the purpose of
incorporating an exhibit by reference into a registration statement,
except that the Company shall make available to the Agent any such
Current Report on Form 8-K promptly after the filing thereof);
(b) Promptly from time to time to take such action as the
Agent may reasonably request to qualify the Securities for offering and
sale under the securities laws of such jurisdictions as the Agent may
reasonably request and to comply with such laws so as to permit the
continuance of sales and dealings therein for as long as may be
necessary to complete the distribution or sale of the Securities;
PROVIDED, HOWEVER, that in connection therewith the Company shall not
be required to qualify as a foreign corporation or to file a general
consent to service of process in any jurisdiction;
(c) To furnish the Agent with copies of the Registration
Statement and each amendment thereto, with copies of the Prospectus as
each time amended or supplemented, other than any Pricing Supplement
(except as provided in the Administrative Procedure), in the form in
which it is filed with the Commission pursuant to Rule 424 under the
Act, and with copies of the documents incorporated by reference
therein, all in such quantities as the Agent may reasonably request
from time to time; and, if the delivery of a prospectus is required at
any time in connection with the offering or sale of the Securities
(including Securities purchased from the Company by the Agent as
principal) and if at such time any event shall have occurred as a
result of which the Prospectus as then amended or supplemented would
include an untrue statement of a material fact or omit to state any
material fact necessary in order to make the statements therein, in the
light of the circumstances under which they were made when such
Prospectus is delivered, not misleading, or, if for any other reason it
shall be necessary during such same period to amend or supplement the
Prospectus or to file under the Exchange Act any document incorporated
by reference in the Prospectus in order to comply with the Act, the
Exchange Act or the Trust Indenture Act, to notify the Agent and
request the Agent, in its capacity as agent of the Company, to suspend
solicitation of offers to purchase Securities from the Company (and, if
so notified, the Agent shall cease such solicitations as soon as
practicable, but in any event not later than one business day later);
and if the Company shall decide to amend or supplement the Registration
Statement or the Prospectus as then amended or supplemented, to so
advise the Agent promptly by telephone (with confirmation in writing)
and to prepare and cause to be filed promptly with the Commission an
amendment or supplement to the Registration Statement or the Prospectus
as then amended or supplemented that will correct such statement or
omission or effect such compliance; PROVIDED, HOWEVER, that if during
such same period the Agent continues to own Securities purchased from
the Company by the Agent as principal or the Agent is otherwise
required to deliver a prospectus in respect of transactions in the
Securities, the Company shall promptly prepare and file with the
Commission such an amendment or supplement;
(d) To make generally available to its securityholders as soon
as practicable, but in any event not later than eighteen months after
the effective date of the Registration Statement (as defined in Rule
158(c) under the Act), an earnings statement of the Company and its
subsidiaries (which need not be audited) complying with Section 11(a)
of the Act and the rules and regulations of the Commission thereunder
(including, at the option of the Company, Rule 158);
(e) So long as any Securities are outstanding, to furnish to
the Agent copies of all reports or other communications (financial or
other) furnished to shareholders, and deliver to the Agent (i) as soon
as they are available, copies of any reports and financial statements
furnished to or filed with the Commission or any national securities
exchange on which any class of securities of the Company is listed; and
(ii) such other publicly available information
9
concerning the business and financial condition of the Company as
the Agent may from time to time reasonably request (such financial
statements to be on a consolidated basis to the extent the accounts
of the Company and its subsidiaries are consolidated in reports
furnished to its shareholders generally or to the Commission);
(f) That, from the date of any Terms Agreement with the Agent
or other agreement by the Agent to purchase Securities as principal and
continuing to and including the later of (i) the termination of the
trading restrictions for the Securities purchased thereunder, as
notified to the Company by the Agent and (ii) the related Time of
Delivery, not to offer, sell, contract to sell or otherwise dispose of
any debt securities of the Company which both mature more than 9 months
after such Time of Delivery and are substantially similar to the
Securities, without the prior written consent of the Agent;
(g) That each acceptance by the Company of an offer to
purchase Securities hereunder (including any purchase by the Agent as
principal not pursuant to a Terms Agreement), and each execution and
delivery by the Company of a Terms Agreement with the Agent, shall be
deemed to be an affirmation to the Agent that the representations and
warranties of the Company contained in or made pursuant to this
Agreement are true and correct as of the date of such acceptance or of
such Terms Agreement, as the case may be, as though made at and as of
such date, and an undertaking that such representations and warranties
will be true and correct as of the settlement date for the Securities
relating to such acceptance or as of the Time of Delivery relating to
such sale, as the case may be, as though made at and as of such date
(except that such representations and warranties shall be deemed to
relate to the Registration Statement and the Prospectus as amended and
supplemented relating to such Securities);
(h) That reasonably in advance of each time the Registration
Statement or the Prospectus shall be amended or supplemented (other
than by a Pricing Supplement or by an amendment or supplement relating
solely to the interest rates, interest payment dates or maturity dates
of the Securities or the sale of other securities), each time a
document filed under the Act or the Exchange Act is incorporated by
reference into the Prospectus, and each time the Company sells
Securities to the Agent as principal pursuant to a Terms Agreement and
such Terms Agreement specifies the delivery of an opinion or opinions
by Xxxxxxx Xxxxxxx & Xxxxxxxx, counsel to the Agent, as a condition to
the purchase of Securities pursuant to such Terms Agreement, the
Company shall furnish to such counsel such papers and information as
they may reasonably request to enable them to furnish to the Agent the
opinion or opinions referred to in Section 6(b) hereof;
(i) That each time the Registration Statement or the
Prospectus shall be amended or supplemented (other than by a Pricing
Supplement or by an amendment or supplement relating solely to the
interest rates, interest payment dates or maturity dates of the
Securities or the sale of other securities), each time a document filed
under the Act or the Exchange Act is incorporated by reference into the
Prospectus and each time the Company sells Securities to the Agent as
principal pursuant to a Terms Agreement and such Terms Agreement
specifies the delivery of an opinion under this Section 4(i) as a
condition to the purchase of Securities pursuant to such Terms
Agreement, the Company shall furnish or cause to be furnished forthwith
to the Agent a written opinion of the General Counsel of the Company,
Deputy General Counsel of the Company, Associate General Counsel of the
Company, Senior Counsel of the Company or other counsel for the Company
(including Xxxxx & Xxxxxxx LLP) reasonably satisfactory to the Agent,
dated the date of such amendment, supplement, incorporation or Time of
Delivery relating to such sale, as the case may be, in form
satisfactory to the Agent, to the effect that the Agent may rely on the
opinion of such counsel referred to in Section 6(c) hereof which was
last furnished to the Agent to the same extent as though it were
10
date of such letter authorizing reliance (except that the statements
in such last opinion shall be deemed to relate to the Registration
Statement and the Prospectus as amended and supplemented to such
date) or, in lieu of such opinion, an opinion of the same tenor as
the opinion of such counsel referred to in Section 6(c) hereof but
modified to relate to the Registration Statement and the Prospectus
as amended and supplemented to such date;
(j) That each time the Registration Statement or the
Prospectus shall be amended or supplemented and each time that a
document filed under the Act or the Exchange Act is incorporated by
reference into the Prospectus, in either case to set forth financial
information included in or derived from the Company's consolidated
financial statements or accounting records, and each time the Company
sells Securities to the Agent as principal pursuant to a Terms
Agreement and such Terms Agreement specifies the delivery of a letter
under this Section 4(j) as a condition to the purchase of Securities
pursuant to such Terms Agreement, the Company shall cause the
independent certified public accountants who have certified the
financial statements of the Company and its subsidiaries included or
incorporated by reference in the Registration Statement forthwith to
furnish the Agent a letter, dated the date of such amendment,
supplement, incorporation or Time of Delivery relating to such sale, as
the case may be, in form satisfactory to the Agent, of the same tenor
as the letter referred to in Section 6(d) hereof but modified to relate
to the Registration Statement and the Prospectus as amended or
supplemented to the date of such letter, with such changes as may be
necessary to reflect changes in the financial statements and other
information derived from the accounting records of the Company, to the
extent such financial statements and other information are available as
of a date not more than five business days prior to the date of such
letter; PROVIDED, HOWEVER, that, with respect to any financial
information or other matter, such letter may reconfirm as true and
correct at such date as though made at and as of such date, rather than
repeat, statements with respect to such financial information or other
matter made in the letter referred to in Section 6(d) hereof which was
last furnished to the Agent;
(k) That each time the Registration Statement or the
Prospectus shall be amended or supplemented (other than by a Pricing
Supplement or by an amendment or supplement relating solely to the
interest rates, interest payment dates or maturity dates of the
Securities or the sale of other securities), each time a document filed
under the Act or the Exchange Act is incorporated by reference into the
Prospectus and each time the Company sells Securities to the Agent as
principal and the applicable Terms Agreement specifies the delivery of
a certificate under this Section 4(k) as a condition to the purchase of
Securities pursuant to such Terms Agreement, the Company shall furnish
or cause to be furnished forthwith to the Agent a certificate, dated
the date of such supplement, amendment, incorporation or Time of
Delivery relating to such sale, as the case may be, in such form and
executed by such officers of the Company as shall be reasonably
satisfactory to the Agent, to the effect that the statements contained
in the certificates referred to in Section 6(i) hereof which was last
furnished to the Agent are true and correct at such date as though made
at and as of such date (except that such statements shall be deemed to
relate to the Registration Statement and the Prospectus as amended and
supplemented to such date) or, in lieu of such certificate,
certificates of the same tenor as the certificates referred to in said
Section 6(i) but modified to relate to the Registration Statement and
the Prospectus as amended and supplemented to such date; and
(l) To offer to any person who has agreed to purchase
Securities from the Company as the result of an offer to purchase
solicited by the Agent the right to refuse to purchase and pay for such
Securities if, on the related settlement date fixed pursuant to the
Administrative Procedure, any condition set forth in Section 6(a),
6(e), 6(f) or 6(g) hereof shall not have been satisfied (it being
understood that the judgment of person with respect to the
impracticability or inadvisability of such purchase of Securities shall
be substituted, for purposes of this Section
11
4(l), for the respective judgments of the Agent with respect to
certain matters referred to in such Sections 6(e) and 6(g), and that
the Agent shall have no duty or obligation whatsoever to exercise
the judgment permitted under such Sections 6(e) and 6(g) on behalf
of any such person).
5. The Company covenants and agrees with the Agent that the Company
will pay or cause to be paid the following: (i) the fees, disbursements and
expenses of the Company's counsel and accountants in connection with the
registration of the Securities under the Act and all other expenses in
connection with the preparation, printing and filing of the Registration
Statement, any Preliminary Prospectus, the Prospectus and any Pricing
Supplements and all other amendments and supplements thereto and the mailing and
delivering of copies thereof to the Agent; (ii) the reasonable fees,
disbursements and expenses of counsel for the Agent in connection with the
establishment of the program contemplated hereby, any opinions to be rendered by
such counsel hereunder and under any Terms Agreement and the transactions
contemplated hereunder and under any Terms Agreement; (iii) the cost of
printing, producing or reproducing this Agreement, any Terms Agreement, any
Indenture, any Blue Sky and legal investment memoranda, closing documents
(including any compilations thereof) and any other documents in connection with
the offering, purchase, sale and delivery of the Securities; (iv) all expenses
in connection with the qualification of the Securities for offering and sale
under state securities laws as provided in Section 4(b) hereof, including the
fees and disbursements of counsel for the Agent in connection with such
qualification and in connection with the Blue Sky and legal investment surveys;
(v) any fees charged by securities rating services for rating the Securities;
(vi) any filing fees incident to, and the fees and disbursements of counsel for
the Agent in connection with, any required review by the National Association of
Securities Dealers, Inc. of the terms of the sale of the Securities; (vii) the
cost of preparing the Securities; (viii) the fees and expenses of any Trustee
and any agent of any Trustee and any transfer or paying agent of the Company and
the fees and disbursements of counsel for any Trustee or such agent in
connection with any Indenture and the Securities; (ix) any advertising expenses
connected with the solicitation of offers to purchase and the sale of Securities
so long as such advertising expenses have been approved by the Company; and (x)
all other costs and expenses incident to the performance of its obligations
hereunder which are not otherwise specifically provided for in this Section.
Except as provided in Sections 7 and 8 hereof, the Agent shall pay all other
expenses it incurs.
6. The obligation of the Agent, as agent of the Company, at any time
("Solicitation Time") to solicit offers to purchase the Securities and the
obligation of the Agent to purchase Securities as principal, pursuant to any
Terms Agreement or otherwise, shall in each case be subject, in the Agent's
discretion, to the condition that all representations and warranties and other
statements of the Company herein (and, in the case of an obligation of the Agent
under a Terms Agreement, in or incorporated by reference in such Terms
Agreement) are true and correct at and as of the Commencement Date and any
applicable date referred to in Section 4(k) hereof that is prior to such
Solicitation Time or Time of Delivery, as the case may be, and at and as of such
Solicitation Time or Time of Delivery, as the case may be, the condition that
prior to such Solicitation Time or Time of Delivery, as the case may be, the
Company shall have performed all of its obligations hereunder theretofore to be
performed, and the following additional conditions:
(a) (i) With respect to any Securities sold at or prior to
such Solicitation Time or Time of Delivery, as the case may be, the
Prospectus as amended or supplemented (including the Pricing
Supplement) with respect to such Securities shall have been filed with
the Commission pursuant to Rule 424(b) under the Act within the
applicable time period prescribed for such filing by the rules and
regulations under the Act and in accordance with Section 4(a) hereof;
(ii) no stop order suspending the effectiveness of the Registration
Statement shall have been issued and no proceeding for that purpose
shall have been initiated or threatened by the
12
Commission; and (iii) all requests for additional information on the
part of the Commission shall have been complied with to the
reasonable satisfaction of the Agent;
(b) At the Commencement Date and, if specified in a Terms
Agreement, if any, at the time of delivery of the Securities described
in such Terms Agreement, the Agent or the Purchasing Agent, as the case
may be, shall have received from Xxxxxxx Xxxxxxx & Xxxxxxxx, counsel
for the Agent, such opinion or opinions, dated the Commencement Date or
such date of delivery, as the case may be, with respect to the
incorporation of the Company, the validity of the Securities, the
Registration Statement, the Prospectus and other related matters as
they may require, and the Company shall have furnished to such counsel
such documents as they request for the purpose of enabling them to pass
upon such matters. In rendering such opinion, Xxxxxxx Xxxxxxx &
Xxxxxxxx may rely as to the incorporation of the Company and all other
matters governed by Maryland law upon the opinion of Xxxxx & Xxxxxxx
LLP referred to above.
(c) The General Counsel of the Company, Deputy General Counsel
of the Company, Associate General Counsel of the Company, Senior
Counsel of the Company or other counsel for the Company (including
Xxxxx & Xxxxxxx LLP) reasonably satisfactory to the Agent, shall have
furnished to the Agent their written opinions, dated the Commencement
Date and each applicable date referred to in Section 4(i) hereof that
is on or prior to such Solicitation Time or Time of Delivery, as the
case may be, in form and substance satisfactory to the Agent, to the
effect that (paragraphs marked with an asterisk shall be provided by
Xxxxx & Xxxxxxx LLP):
(i) The Company was duly incorporated and is
validly existing and in good standing under the laws of the
State of Maryland, with the corporate power and authority
under its Certificate of Incorporation and the MGCL to own,
lease and operate its current properties and to conduct its
business as described in the Prospectus as amended or
supplemented;
(ii) The Company has an authorized capitalization
as set forth in the Prospectus as amended or supplemented
and all of the issued shares of capital stock of the
Company have been duly and validly authorized and issued
and are fully paid and non-assessable;
(iii) To the best of such counsel's knowledge and
other than as set forth in the Prospectus, there are no legal
or governmental proceedings pending to which the Company or
any of its subsidiaries is a party or to which any property of
the Company or any of its subsidiaries is subject, which, if
determined adversely to the Company or any of its
subsidiaries, would individually or in the aggregate have a
material adverse effect on the business, financial position,
business prospects or results of operations of the Company and
its subsidiaries, taken as a whole; and to the best of such
counsel's knowledge, no such proceedings are threatened or
contemplated by governmental authorities or threatened by
others;
(iv) This Agreement and any applicable Terms
Agreement have been duly authorized, executed and delivered on
behalf of the Company;
(v) The Securities have been duly authorized and
(assuming due execution, authentication, issuance and delivery
of the Securities as provided in the Indenture) will
constitute valid and legally binding obligations of the
Company entitled to the benefits provided by the Indenture;
and the Indenture conforms and the Securities will conform to
the descriptions thereof in the Prospectus as amended or
supplemented and will be enforceable in accordance with their
terms, except as the enforcement thereof may be limited by
bankruptcy, insolvency, reorganization, moratorium or other
laws affecting
13
creditors' rights (including, without limitation, the
effect of statutory and other law regarding fraudulent
conveyances, fraudulent transfers and preferential
transfers) and as may be limited by the exercise of
judicial discretion and the application of principles of
equity including, without limitation, requirements of good
faith, fair dealing, conscionability and materiality
(regardless of whether the Securities are considered in a
proceeding at law or in equity), and except further as
enforcement thereof may be limited by (1) requirements that
a claim with respect to any Securities other than in U.S.
dollars (or a foreign or composite currency judgment in
respect of such claim) be converted into U.S. dollars at a
rate or exchange prevailing on a date determined pursuant
to applicable law or (2) governmental authority to limit,
delay or prohibit the making of payments outside the United
States;
(vi) The Indenture has been duly authorized and
constitutes a valid and binding obligation of the Company and
will be enforceable in accordance with its terms, except as
the enforcement thereof may be limited by bankruptcy,
insolvency, reorganization, moratorium or other laws affecting
creditors' rights (including, without limitation, the effect
of statutory and other law regarding fraudulent conveyances,
fraudulent transfers and preferential transfers) and as may be
limited by the exercise of judicial discretion and the
application of principles of equity including, without
limitation, requirements of good faith, fair dealing,
conscionability and materiality (regardless of whether the
Securities are considered in a proceeding at law or in
equity), and except further as enforcement thereof may be
limited by (1) requirements that a claim with respect to any
Securities other than in U.S. dollars (or a foreign or
composite currency judgment in respect of such claim) be
converted into U.S. dollars at a rate or exchange prevailing
on a date determined pursuant to applicable law of (2)
governmental authority to limit, delay or prohibit the making
of payments outside the United States ; and the Indenture has
been duly qualified under the Trust Indenture Act;
(vii) The issue and sale of the Securities, the
compliance by the Company with all of the provisions of the
Securities, the Indenture, this Agreement and any applicable
Terms Agreement and the consummation of the transactions
herein and therein contemplated will not conflict with or
result in a breach or violation of any of the terms or
provisions of, or constitute a default under, any indenture,
mortgage, deed of trust, loan agreement or other material
agreement or material instrument known to such counsel to
which the Company is a party or by which the Company is bound
or to which any of the property or assets of the Company is
subject, nor will such action result in any violation of the
provisions of the Certificate of Incorporation, as amended, of
the Company or the By-laws of the Company or any statute or
any order, rule or regulation known to such counsel of any
court or governmental agency or body having jurisdiction over
the Company or any of its properties;
(viii) To the best of such counsel's knowledge, no
consent, approval, authorization, order, registration or
qualification of or with any court or governmental agency or
body is required for the solicitation of offers to purchase
Securities, the issue and sale of the Securities or the
consummation by the Company of the other transactions
contemplated by this Agreement, any applicable Terms
Agreement, or the Indenture, except such as have been obtained
under the Act and the Trust Indenture Act and such consents,
approvals, authorizations, registrations or qualifications as
may be required under state securities or Blue Sky laws in
connection with the solicitation by the Agent of offers to
purchase Securities from the Company and with purchases of
Securities by the Agent as principal, as the case may be, in
each case in the manner contemplated hereby;
14
(ix) To the best of such counsel's knowledge,
neither the Company nor any of its subsidiaries is in
violation of its Certificate of Incorporation or By-laws or
in default in the performance or observance of any material
obligation, covenant or condition contained in any
indenture, mortgage, deed of trust, loan agreement, lease
or other material agreement or material instrument to which
it is a party or by which it or any of its properties may
be bound;
(x) The statements set forth in the Prospectus
under the captions "Description of the Debt Securities" and
"Description of Notes", insofar as they purport to
constitute a summary of the terms of the Securities, under
the caption "United States Taxation", and under the caption
"Plan of Distribution", insofar as they purport to describe
the provisions of the laws and documents specifically
referred to therein, are accurate and fair summaries in all
material respects of such laws or documents;
(xi) The Company is not, and immediately after
giving effect to the offering and sale of the Securities
will not be, an "investment company" as such term is
defined in the Investment Company Act;
(xii) The documents incorporated by reference in the
Prospectus (other than the financial statements, related
schedules and other financial data included or incorporated
therein, or omitted therefrom, as to which such counsel need
express no opinion), when they became effective or were filed
with the Commission, as the case may be, complied as to form
in all material respects with the requirements of the Act or
the Exchange Act, as applicable, and the rules and regulations
of the Commission thereunder; and they have no reason to
believe that any of such documents (other than the financial
statements, related schedules and other financial data
included or incorporated therein, or omitted therefrom, as to
which such counsel need express no opinion), when they became
effective or were so filed, as the case may be, contained, in
the case of a registration statement which became effective
under the Act, an untrue statement of a material fact or
omitted to state a material fact required to be stated therein
or necessary to make the statements therein not misleading,
and, in the case of other documents which were filed under the
Act or the Exchange Act with the Commission, an untrue
statement of a material fact or omitted to state a material
fact necessary in order to make the statements therein, in the
light of the circumstances under which they were made when
such documents were so filed, not misleading; and
(xiii) The Registration Statement and the Prospectus
as amended and supplemented and any further amendments and
supplements thereto made by the Company prior to the date of
such opinion (other than the financial statements, related
schedules and other financial data included or incorporated
therein, or omitted therefrom, as to which such counsel need
express no opinion) comply as to form in all material respects
with the requirements of the Act and the Trust Indenture Act
and the rules and regulations thereunder; although they do not
assume any responsibility for the accuracy, completeness or
fairness of the statements contained in the Registration
Statement or the Prospectus, except for those referred to in
the opinion in subsection (x) of this Section 6(c), they have
no reason to believe that, as of its effective date, the
Registration Statement or any further amendment or supplement
thereto made by the Company prior to the date of such opinion
(other than the financial statements, related schedules and
other financial data included or incorporated therein, or
omitted therefrom, as to which such counsel need express no
opinion) contained an untrue statement of a material fact or
omitted to state a material fact required to be stated therein
or necessary to make the statements therein not misleading or
that, as of the date of such opinion, the Prospectus as
amended or supplemented or any further
15
amendment or supplement thereto made by the Company prior
to the date of such opinion (other than the financial
statements, related schedules and other financial data
included or incorporated therein, or omitted therefrom, as
to which such counsel need express no opinion) contained an
untrue statement of a material fact or omitted to state a
material fact necessary to make the statements therein, in
light of the circumstances in which they were made, not
misleading; and they do not know of any amendment to the
Registration Statement required to be filed or any
contracts or other documents of a character required to be
filed as an exhibit to the Registration Statement or
required to be incorporated by reference into the
Prospectus as amended or supplemented or required to be
described in the Registration Statement or the Prospectus
as amended or supplemented which are not filed or
incorporated by reference or described as required;
(d) Not later than 10:00 a.m., New York City time, on the
Commencement Date and on each applicable date referred to in Section
4(j) hereof that is on or prior to such Solicitation Time or Time of
Delivery, as the case may be, the independent certified public
accountants who have certified the financial statements of the Company
and its subsidiaries included or incorporated by reference in the
Registration Statement shall have furnished to the Agent a letter,
dated the Commencement Date or such applicable date, as the case may
be, in form and substance satisfactory to the Agent, to the effect set
forth in Annex III hereto;
(e) (i) Neither the Company nor any of its subsidiaries shall
have sustained since the date of the latest audited financial
statements included or incorporated by reference in the Prospectus as
amended or supplemented prior to the date of the Pricing Supplement
relating to the Securities to be delivered at the relevant Time of
Delivery any loss or interference with its business from fire,
explosion, flood or other calamity, whether or not covered by
insurance, or from any labor dispute or court or governmental action,
order or decree, otherwise than as set forth or contemplated in the
Prospectus as amended or supplemented prior to the date of the Pricing
Supplement relating to the Securities to be delivered at the relevant
Time of Delivery and (ii) since the respective dates as of which
information is given in the Prospectus as amended or supplemented prior
to the date of the Pricing Supplement relating to the Securities to be
delivered at the relevant Time of Delivery there shall not have been
any change in the capital stock or long-term debt of the Company or any
of its subsidiaries or any change, or any development involving a
prospective change, in or affecting the general affairs, management,
financial position, shareholders' equity or results of operations of
the Company and its subsidiaries, taken as a whole, other than as set
forth or contemplated in the Prospectus as amended or supplemented
prior to the date of the Pricing Supplement relating to the Securities
to be delivered at the relevant Time of Delivery, the effect of which,
in any such case described in clause (i) or (ii), is in the judgment of
the Agent so material and adverse as to make it impracticable or
inadvisable to proceed with the solicitation by the Agent of offers to
purchase Securities from the Company or the purchase by the Agent of
Securities from the Company as principal, as the case may be, on the
terms and in the manner contemplated in the Prospectus as amended or
supplemented prior to the date of the Pricing Supplement relating to
the Securities to be delivered at the relevant Time of Delivery;
(f) On or after the date hereof or on any applicable Terms
Agreement (i) no downgrading shall have occurred in the rating accorded
the Company's debt securities by any "nationally recognized statistical
rating organization", as that term is defined by the Commission for
purposes of Rule 436(g)(2) under the Act, and (ii) no such organization
shall have publicly announced that it has under surveillance or review,
with possible negative implications, its rating of any of the Company's
debt securities;
16
(g) On or after the date hereof or of any applicable Terms
Agreement there shall not have occurred any of the following: (i) a
suspension or material limitation in trading in securities generally on
the New York Stock Exchange; (ii) a suspension or material limitation
in trading in the Company's securities on the New York Stock Exchange;
(iii) a general moratorium on commercial banking activities in New York
declared by either Federal or New York State authorities; or (iv) the
outbreak or escalation of hostilities involving the United States or
the declaration by the United States of a national emergency or war, if
the effect of any such event specified in the clause (iv) in the
judgment of the Agent makes it impracticable or inadvisable to proceed
with the solicitation of offers to purchase Securities or the purchase
of the Securities from the Company as principal pursuant to the
applicable Terms Agreement or otherwise, as the case may be, on the
terms and in the manner contemplated in the Prospectus;
(h) On the date hereof or during the period from the date of
an acceptance of an offer to purchase Securities through the date of
settlement of such sale or during the period from the date of any
applicable Terms Agreement through the date of closing under such Terms
Agreement, with respect to any Security denominated in a currency other
than the U.S. dollar, more than one currency or a composite currency or
any Security the principal or interest of which is indexed to such
currency, currencies or composite currency, there shall not have
occurred a suspension or material limitation in foreign exchange
trading in such currency, currencies or composite currency by a major
international bank, a general moratorium on commercial banking
activities in the country or countries issuing such currency,
currencies or composite currency, the outbreak or escalation of
hostilities involving, the occurrence of any material adverse change in
the existing financial, political or economic conditions of, or the
declaration of war or a national emergency by, the country or countries
issuing such currency, currencies or composite currency or the
imposition or proposal of exchange controls by any governmental
authority in the country or countries issuing such currency, currencies
or composite currency; and
(i) The Company shall have furnished or caused to be
furnished to the Agent certificates of officers of the Company dated
the Commencement Date and each applicable date referred to in Section
4(k) hereof that is on or prior to such Solicitation Time or Time of
Delivery, as the case may be, in such form and executed by such
officers of the Company as shall be reasonably satisfactory to the
Agent, based on such officers' knowledge after due inquiry, as to the
accuracy of the representations and warranties of the Company herein at
and as of the Commencement Date or such applicable date, as the case
may be, as to the performance by the Company of all of its obligations
hereunder to be performed at or prior to the Commencement Date or such
applicable date, as the case may be, as to the matters set forth in
subsections (a) and (e) of this Section 6, and as to such other matters
as the Agent may reasonably request.
7. (a) The Company will indemnify and hold harmless the Agent against
any losses, claims, damages or liabilities, joint or several, to which
the Agent may become subject, under the Act or otherwise, insofar as
such losses, claims, damages or liabilities (or actions in respect
thereof) arise out of or are based upon an untrue statement or alleged
untrue statement of a material fact contained in any Preliminary
Prospectus, the Registration Statement, the Prospectus, the Prospectus
as amended or supplemented or any other prospectus relating to the
Securities, or any amendment 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 will reimburse the Agent for any
legal or other expenses reasonably incurred by it in connection with
investigating or defending any such action or claim as such expenses
are incurred; PROVIDED, HOWEVER, that the Company
17
shall 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 an
untrue statement or alleged untrue statement or omission or alleged
omission made in any Preliminary Prospectus, the Registration
Statement, the Prospectus, the Prospectus as amended or supplemented
or any other prospectus relating to the Securities, or any such
amendment or supplement, in reliance upon and in conformity with
written information furnished to the Company by the Agent expressly
for use therein.
(b) The Agent will indemnify and hold harmless the Company
against any losses, claims, damages or liabilities to which the Company
may become subject, under the Act or otherwise, insofar as such losses,
claims, damages or liabilities (or actions in respect thereof) arise
out of or are based upon an untrue statement or alleged untrue
statement of a material fact contained in any Preliminary Prospectus,
the Registration Statement, the Prospectus, the Prospectus as amended
or supplemented or any other prospectus relating to the Securities, or
any amendment 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, in each case to the extent, but only to the
extent, that such untrue statement or alleged untrue statement or
omission or alleged omission was made in any Preliminary Prospectus,
the Registration Statement, the Prospectus, the Prospectus as amended
or supplemented or any other prospectus relating to the Securities, or
any such amendment or supplement, in reliance upon and in conformity
with written information furnished to the Company by the Agent
expressly for use therein; and will reimburse the Company for any legal
or other expenses reasonably incurred by the Company in connection with
investigating or defending any such action or claim as such expenses
are incurred.
(c) Promptly after receipt by an indemnified party under
subsection (a) or (b) above of notice of the commencement of any
action, such indemnified party shall, if a claim in respect thereof is
to be made against the indemnifying party under such subsection, notify
the indemnifying party in writing of the commencement thereof; but the
omission so to notify the indemnifying party shall not relieve it from
any liability which it may have to any indemnified party otherwise than
under such subsection. In case any such action shall be brought against
any indemnified party and it shall notify the indemnifying party of the
commencement thereof, the indemnifying party shall be entitled to
participate therein and, to the extent that it shall wish, jointly with
any other indemnifying party similarly notified, to assume the defense
thereof, with counsel reasonably satisfactory to such indemnified party
(who shall not, except with the consent of the indemnified party, be
counsel to the indemnifying party), and, after notice from the
indemnifying party to such indemnified party of its election so to
assume the defense thereof, the indemnifying party shall not be liable
to such indemnified party under such subsection for any legal expenses
of other counsel or any other expenses, in each case subsequently
incurred by such indemnified party, in connection with the defense
thereof other than reasonable costs of investigation. No indemnifying
party shall, without the written consent of the indemnified party,
effect the settlement or compromise of, or consent to the entry of any
judgment with respect to, any pending or threatened action or claim in
respect of which indemnification or contribution may be sought
hereunder (whether or not the indemnified party is an actual or
potential party to such action or claim) unless such settlement,
compromise or judgment (i) includes an unconditional release of the
indemnified party from all liability arising out of such action or
claim and (ii) does not include a statement as to, or an admission of,
fault, culpability or a failure to act, by or on behalf of any
indemnified party.
(d) If the indemnification provided for in this Section 7 is
unavailable 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
18
indemnifying party shall contribute to the amount paid or payable by
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 on the one hand and the Agent on the other from the offering
of the Securities 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 on the
one hand and the 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 on the one hand and the Agent on the other
shall be deemed to be in the same proportion as the total net
proceeds from the sale of Securities (before deducting expenses)
received by the Company bear to the total commissions or discounts
received by the Agent in respect thereof. 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 required to be
stated therein or necessary in order to make the statements therein
not misleading relates to information supplied by the Company on the
one hand or by the 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 and the Agent
agree that it would not be just and equitable if contribution
pursuant to this subsection (d) were determined by PER CAPITA
allocation 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), the Agent shall not be required
to contribute any amount in excess of the amount by which the total
public offering price at which the Securities purchased by or
through it were sold exceeds the amount of any damages which the
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.
(e) The obligations of the Company under this Section 7 shall
be in addition to any liability which the Company may otherwise have
and shall extend, upon the same terms and conditions, to each person,
if any, who controls the Agent within the meaning of the Act; and the
obligations of the Agent under this Section 7 shall be in addition to
any liability which the Agent may otherwise have and shall extend, upon
the same terms and conditions, to each officer and director of the
Company and to each person, if any, who controls the Company within the
meaning of the Act.
8. The Agent, in soliciting offers to purchase Securities from the
Company and in performing the other obligations of the Agent hereunder (other
than in respect of any purchase by the Agent as principal, pursuant to a Terms
Agreement or otherwise), is acting solely as agent for the Company and not as
principal. The Agent will make reasonable efforts to assist the Company in
obtaining performance by each purchaser whose offer to purchase Securities from
the Company was solicited by the Agent and has been accepted by the Company, but
the Agent shall not have any liability to the Company in the event such purchase
is not consummated for any reason. If the Company shall default on its
obligation to deliver Securities to a purchaser whose offer it has accepted, the
Company
19
shall (i) hold the Agent harmless against any loss, claim or damage arising
from or as a result of such default by the Company and (ii) notwithstanding
such default, pay to the Agent that solicited such offer any commission to
which it would be entitled in connection with such sale.
9. The respective indemnities, agreements, representations, warranties
and other statements by the Agent and the Company set forth in or made pursuant
to this Agreement shall remain in full force and effect regardless of any
investigation (or any statement as to the results thereof) made by or on behalf
of the Agent or any controlling person of the Agent, or the Company, or any
officer or director or any controlling person of the Company, and shall survive
each delivery of and payment for any of the Securities.
10. The provisions of this Agreement relating to the solicitation of
offers to purchase Securities from the Company may be suspended or terminated at
any time by the Agent upon the giving of written notice of such suspension or
termination to the Agent or the Company, as the case may be. In the event of
such suspension or termination, this Agreement shall remain in full force and
effect with respect to the rights and obligations of any party which have
previously accrued or which relate to Securities which are already issued,
agreed to be issued or the subject of a pending offer at the time of such
suspension or termination and in any event, this Agreement shall remain in full
force and effect insofar as the fourth paragraph of Section 2(a), and Sections
4(d), 4(e), 5, 7, 8 and 9 hereof are concerned.
11. Except as otherwise specifically provided herein or in the
Administrative Procedure, all statements, requests, notices and advices
hereunder shall be in writing, or by telephone if promptly confirmed in writing,
and if to Xxxxxxx, Xxxxx & Co. shall be sufficient in all respects when
delivered or sent by facsimile transmission or registered mail to 00 Xxxxx
Xxxxxx, Xxx Xxxx, Xxx Xxxx 00000, Facsimile Transmission No. (000) 000-0000,
Attention: Credit Department, and if to the Company, shall be sufficient in all
respects when delivered or sent by facsimile transmission or registered mail to
00 Xxxxxxx Xxxxxx, Xxxxxx, Xxxxxxxx 00000, Attention: Corporate Secretary.
12. This Agreement and any Terms Agreement shall be binding upon, and
inure solely to the benefit of, the Agent and the Company, and to the extent
provided in Sections 7, 8 and 9 hereof, the officers and directors of the
Company and any person who controls the Agent or the Company, and their
respective personal representatives, successors and assigns, and no other person
shall acquire or have any right under or by virtue of this Agreement or any
Terms Agreement. No purchaser of any of the Securities through or from the Agent
hereunder shall be deemed a successor or assign by reason merely of such
purchase.
13. As used herein, the term "business day" shall mean any day when the
Commission's office in Washington, D.C. is open for business.
14. THIS AGREEMENT AND ANY TERMS AGREEMENT SHALL BE GOVERNED BY, AND
CONSTRUED IN ACCORDANCE WITH, THE LAWS OF THE STATE OF NEW YORK.
15. This Agreement and any Terms Agreement may be executed by any one
or more of the parties hereto and thereto in any number of counterparts, each of
which shall be an original, but all of such respective counterparts shall
together constitute one and the same instrument.
20
If the foregoing is in accordance with your understanding, please sign
and return to us [ ] counterparts hereof, whereupon this letter and the
acceptance by you thereof shall constitute a binding agreement between the
Company and you in accordance with its terms.
Very truly yours,
XxXxxxxxx & Company, Incorporated
By:
------------------------------
Name:
Title:
Accepted in New York, New York,
as of the date hereof:
-------------------------------
(Xxxxxxx, Sachs & Co.)
21
ANNEX I
XxXxxxxxx & Company, Incorporated
Medium Term Notes, Series [ ]
TERMS AGREEMENT
[ ], 2000
Xxxxxxx, Sachs & Co.
00 Xxxxx Xxxxxx
Xxx Xxxx, Xxx Xxxx 00000
Ladies and Gentlemen:
XxXxxxxxx & Company, Incorporated (the "Company") proposes, subject to
the terms and conditions stated herein and in the Distribution Agreement, dated
September [ ], 2000 (the "Distribution Agreement"), between the Company on the
one hand and Xxxxxxx, Sachs & Co. (the "Agent") on the other, to issue and sell
to the Agent the securities specified in the Schedule hereto (the "Purchased
Securities"). Each of the provisions of the Distribution Agreement not
specifically related to the solicitation by the Agent, as agent of the Company,
of offers to purchase Securities is incorporated herein by reference in its
entirety, and shall be deemed to be part of this Terms Agreement to the same
extent as if such provisions had been set forth in full herein. Nothing
contained herein or in the Distribution Agreement shall make any party hereto an
agent of the Company or make such party subject to the provisions therein
relating to the solicitation of offers to purchase Securities from the Company,
solely by virtue of its execution of this Terms Agreement. Each of the
representations and warranties set forth therein shall be deemed to have been
made at and as of the date of this Terms Agreement, except that each
representation and warranty in Section 1 of the Distribution Agreement which
makes reference to the Prospectus shall be deemed to be a representation and
warranty as of the date of the Distribution Agreement in relation to the
Prospectus (as therein defined), and also a representation and warranty as of
the date of this Terms Agreement in relation to the Prospectus as amended and
supplemented to relate to the Purchased Securities.
An amendment to the Registration Statement, or a supplement to the
Prospectus, as the case may be, relating to the Purchased Securities, in the
form heretofore delivered to you is now proposed to be filed with the
Commission.
Subject to the terms and conditions set forth herein and in the
Distribution Agreement incorporated herein by reference, the Company agrees to
issue and sell to the Agent and the Agent agrees to purchase from the Company
the Purchased Securities, at the time and place, in the principal amount and at
the purchase price set forth in the Schedule hereto.
If the foregoing is in accordance with your understanding, please sign
and return to us [ ] counterparts hereof, and upon acceptance hereof by you,
this letter and such acceptance hereof,
including those provisions of the Distribution Agreement incorporated herein
by reference, shall constitute a binding agreement between you and the
Company.
XxXxxxxxx & Company, Incorporated
By:
------------------------------
Name:
Title:
Accepted:
-------------------------------
(Xxxxxxx, Sachs & Co.)
2
Schedule to Annex I
TITLE OF PURCHASED SECURITIES:
[ %] Medium-Term Notes, Series [ ]
AGGREGATE PRINCIPAL AMOUNT:
[$....................]
[PRICE TO PUBLIC:]
PURCHASE PRICE BY AGENT:
[ ]% of the principal amount of the Purchased Securities[, plus accrued
interest from to ] [and accrued amortization, if any, from
to ]
METHOD OF AND SPECIFIED FUNDS FOR PAYMENT OF PURCHASE PRICE:
By wire transfer to a bank account specified by the Company in immediately
available funds
INDENTURE:
Indenture, dated as of September [ ], 2000, between the Company and
SunTrust Bank, as Trustee
TIME OF DELIVERY:
CLOSING LOCATION FOR DELIVERY OF SECURITIES:
MATURITY:
INTEREST RATE:
[ %]
INTEREST PAYMENT DATES:
[months and dates]
DOCUMENTS TO BE DELIVERED:
The following documents referred to in the Distribution Agreement shall
be delivered as a condition to the Closing:
(1) The opinion or opinions of counsel to the Agent referred to in
Section 4(h).
(2) The opinion of counsel to the Company referred to in Section 4(i).
(3) The accountants' letter referred to in Section 4(j).
(4) The officers' certificate referred to in Section 4(k).
OTHER PROVISIONS (INCLUDING SYNDICATE PROVISIONS, IF APPLICABLE):
I-1
ANNEX II
XxXXXXXXX & COMPANY, INCORPORATED
ADMINISTRATIVE PROCEDURE
This Administrative Procedure relates to the Securities defined in the
Distribution Agreement, dated September [ ], 2000 (the "Distribution
Agreement"), between XxXxxxxxx & Company, Incorporated (the "Company") and
Xxxxxxx, Xxxxx & Co. (the "Agent"), to which this Administrative Procedure is
attached as Annex II. Defined terms used herein and not defined herein shall
have the meanings given such terms in the Distribution Agreement, the Prospectus
as amended or supplemented or the Indenture.
The procedures to be followed with respect to the settlement of sales
of Securities directly by the Company to purchasers solicited by the Agent, as
agent, are set forth below. The terms and settlement details related to a
purchase of Securities by the Agent, as principal, from the Company will be set
forth in a Terms Agreement pursuant to the Distribution Agreement, unless the
Company and the Agent otherwise agree as provided in Section 2(b) of the
Distribution Agreement, in which case the procedures to be followed in respect
of the settlement of such sale will be as set forth below. The Agent, in
relation to a purchase of a Security by a purchaser solicited by the Agent, is
referred to herein as the "Selling Agent" and, in relation to a purchase of a
Security by the Agent as principal other than pursuant to a Terms Agreement, as
the "Purchasing Agent"
The Company will advise the Agent in writing of those persons with whom
the Agent is to communicate regarding offers to purchase Securities and the
related settlement details.
Each Security will be issued only in fully registered form and will be
represented by either a global security (a "Global Security") delivered to the
Trustee, as agent for The Depository Trust Company (the "Depositary") and
recorded in the book-entry system maintained by the Depositary (a "Book-Entry
Security") or a certificate issued in definitive form (a "Certificated
Security") delivered to a person designated by the Agent, as set forth in the
applicable Pricing Supplement. An owner of a Book-Entry Security will not be
entitled to receive a certificate representing such a Security, except as
provided in the Indenture.
Book-Entry Securities will be issued in accordance with the
Administrative Procedure set forth in Part I hereof, and Certificated Securities
will be issued in accordance with the Administrative Procedure set forth in Part
II hereof.
PART I: ADMINISTRATIVE PROCEDURE FOR BOOK-ENTRY SECURITIES
In connection with the qualification of the Book-Entry Securities for
eligibility in the book-entry system maintained by the Depositary, the Trustee
will perform the custodial, document control and administrative functions
described below, in accordance with its respective obligations under a Letter of
Representation from the Company and the Trustee to the Depositary, dated the
date hereof, and a Medium-Term Note Certificate Agreement between the Trustee
and the Depositary, dated as of [ ], 2000, (the "Certificate Agreement"), and
its obligations as a participant in the Depositary, including the Depositary's
Same-Day Funds Settlement System ("SDFS").
II-1
POSTING RATES BY THE COMPANY:
The Company and the Agent will discuss from time to time the rates of
interest per annum to be borne by and the maturity of Book-Entry Securities that
may be sold as a result of the solicitation of offers by the Agent. The Company
may establish a fixed set of interest rates and maturities for an offering
period ("posting"). If the Company decides to change already posted rates, it
will promptly advise the Agent to suspend solicitation of offers until the new
posted rates have been established with the Agent.
ACCEPTANCE OF OFFERS BY THE COMPANY:
The Agent will promptly advise the Company by telephone or other
appropriate means of all reasonable offers to purchase Book-Entry Securities,
other than those rejected by the Agent. The Agent may, in its discretion
reasonably exercised, reject any offer received by it in whole or in part. The
Agent also may make offers to the Company to purchase Book-Entry Securities as a
Purchasing Agent. The Company will have the sole right to accept offers to
purchase Book-Entry Securities and may reject any such offer in whole or in
part.
The Company will promptly notify the Agent or Purchasing Agent, as the
case may be, of its acceptance or rejection of an offer to purchase Book-Entry
Securities. If the Company accepts an offer to purchase Book-Entry Securities,
it will confirm such acceptance in writing to the Selling Agent or Purchasing
Agent, as the case may be, and the Trustee.
COMMUNICATION OF SALE INFORMATION TO THE COMPANY BY AGENT AND SETTLEMENT
PROCEDURES:
A. After the acceptance of an offer by the Company, the Selling Agent
or Purchasing Agent, as the case may be, will communicate promptly, but in no
event later than the time set forth under "Settlement Procedure Timetable"
below, the following details of the terms of such offer (the "Sale Information")
to the Company by telephone (confirmed in writing) or by facsimile transmission
or other acceptable written means:
(1) Principal Amount of Book-Entry Securities to be purchased;
(2) If a Fixed Rate Book-Entry Security, the interest rate and initial
interest payment date;
(3) Trade Date;
(4) Settlement Date;
(5) Maturity Date;
(6) Specified Currency and, if the Specified Currency is other than U.S.
dollars, the applicable Exchange Rate for such Specified Currency
(it being understood that currently the Depositary accepts deposits
of Global Securities denominated in U.S. dollars only);
(7) Indexed Currency, the Base Rate and the Exchange Rate Determination
Date, if applicable;
(8) Issue Price;
(9) Selling Agent's commission or Purchasing Agent's discount, as the
case may be;
(10) Net Proceeds to the Company;
(11) If a redeemable Book-Entry Security, such of the following as are
applicable:
(i) Redemption Commencement Date,
(ii) Initial Redemption Price (% of par), and
(iii) Amount (% of par) that the Redemption Price shall decline (but
not below par) on each anniversary of the Redemption
Commencement Date;
II-2
(12) If a Floating Rate Book-Entry Security, such of the following as are
applicable:
(i) Interest Rate Basis,
(ii) Index Maturity,
(iii) Spread or Spread Multiplier,
(iv) Maximum Rate,
(v) Minimum Rate,
(vi) Initial Interest Rate,
(vii) Interest Reset Dates,
(viii) Calculation Dates,
(ix) Interest Determination Dates,
(x) Interest Payment Dates,
(xi) Regular Record Dates, and
(xii) Calculation Agent;
(13) Name, address and taxpayer identification number of the registered
owner(s);
(14) Denomination of certificates to be delivered at settlement;
(15) Book-Entry Security or Certificated Security; and
(16) Selling Agent or Purchasing Agent.
B. After receiving the Sale Information from the Selling Agent or
Purchasing Agent, as the case may be, the Company will communicate such Sale
Information to the Trustee by facsimile transmission or other acceptable written
means. The Trustee will assign a CUSIP number to the Global Security from a list
of CUSIP numbers previously delivered to the Trustee by the Company representing
such Book-Entry Security and then advise the Company and the Selling Agent or
Purchasing Agent, as the case may be, of such CUSIP number.
C. The Trustee will enter a pending deposit message through the
Depositary's Participant Terminal System, providing the following settlement
information to the Depositary, and the Depositary shall forward such information
to the Agent and Standard & Poor's Corporation:
(1) The applicable Sale Information;
(2) CUSIP number of the Global Security representing such
Book-Entry Security;
(3) Whether such Global Security will represent any other
Book-Entry Security (to the extent known at such time);
(4) Number of the participant account maintained by the
Depositary on behalf of the Selling Agent or Purchasing Agent,
as the case may be;
(5) The interest payment period; and
(6) Initial Interest Payment Date for such Book-Entry Security,
number of days by which such date succeeds the record date for
the Depositary's purposes (which in the case of Floating Rate
Securities which reset weekly shall be the date five calendar
days immediately preceding the applicable Interest Payment
Date and in the case of all other Book-Entry Securities shall
be the Regular Record Date, as defined in the Security) and,
if calculable at that time, the amount of interest payable on
such Interest Payment Date.
II-3
D. The Trustee will complete and authenticate the Global Security
previously delivered by the Company representing such Book-Entry Security.
E. The Depositary will credit such Book-Entry Security to the Trustee's
participant account at the Depositary.
F. The Trustee will enter an SDFS deliver order through the
Depositary's Participant Terminal System instructing the Depositary to (i) debit
such Book-Entry Security to the Trustee's participant account and credit such
Book-Entry Security to the Agent's participant account and (ii) debit the
Agent's settlement account and credit the Trustee's settlement account for an
amount equal to the price of such Book-Entry Security less the Agent's
commission. The entry of such a deliver order shall constitute a representation
and warranty by the Trustee to the Depositary that (a) the Global Security
representing such Book-Entry Security has been issued and authenticated and (b)
the Trustee is holding such Global Security pursuant to the Certificate
Agreement.
G. The Agent will enter an SDFS deliver order through the Depositary's
Participant Terminal System instructing the Depositary (i) to debit such
Book-Entry Security to the Agent's participant account and credit such
Book-Entry Security to the participant accounts of the Participants with respect
to such Book-Entry Security and (ii) to debit the settlement accounts of such
Participants and credit the settlement account of the Agent for an amount equal
to the price of such Book-Entry Security.
H. Transfers of funds in accordance with SDFS deliver orders described
in Settlement Procedures "F" and "G" will be settled in accordance with SDFS
operating procedures in effect on the settlement date.
I. Upon confirmation of receipt of funds, the Trustee will transfer to
the account of the Company maintained at [Name of Bank], New York, New York, or
such other account as the Company may have previously specified to the Trustee,
in funds available for immediate use in the amount transferred to the Trustee in
accordance with Settlement Procedure "F".
J. Upon request, the Trustee will send to the Company a statement
setting forth the principal amount of Book-Entry Securities outstanding as of
that date under the Indenture.
K. The Agent will confirm the purchase of such Book-Entry Security to
the purchaser either by transmitting to the Participants with respect to such
Book-Entry Security a confirmation order or orders through the Depositary's
institutional delivery system or by mailing a written confirmation to such
purchaser.
L. The Depositary will, at any time, upon request of the Company or the
Trustee, promptly furnish to the Company or the Trustee a list of the names and
addresses of the participants for whom the Depositary has credited Book-Entry
Securities.
PREPARATION OF PRICING SUPPLEMENT:
If the Company accepts an offer to purchase a Book-Entry Security, it
will prepare a Pricing Supplement reflecting the terms of such Book-Entry
Security and arrange to have delivered to the Selling Agent or Purchasing Agent,
as the case may be, at least ten copies of such Pricing Supplement, not later
than 5:00 p.m., New York City time, on the Business Day following the Trade Date
(as defined below), or if the Company and the purchaser agree to settlement on
the Business Day following the date of acceptance of such offer, not later than
noon, New York City time, on such date. The Company will arrange to have ten
Pricing Supplements filed with the Commission not later
II-4
than the close of business of the Commission on the fifth Business Day
following the date on which such Pricing Supplement is first used.
DELIVERY OF CONFIRMATION AND PROSPECTUS TO PURCHASER BY SELLING AGENT:
The Selling Agent will deliver to the purchaser of a Book-Entry
Security a written confirmation of the sale and delivery and payment
instructions. In addition, the Selling Agent will deliver to such purchaser or
its agent the Prospectus as amended or supplemented (including the Pricing
Supplement) in relation to such Book-Entry Security prior to or together with
the earlier of the delivery to such purchaser or its agent of (a) the
confirmation of sale or (b) the Book-Entry Security.
DATE OF SETTLEMENT:
The receipt by the Company of immediately available funds in payment
for a Book-Entry Security and the authentication and issuance of the Global
Security representing such Book-Entry Security shall constitute "settlement"
with respect to such Book-Entry Security. All orders of Book-Entry Securities
solicited by a Selling Agent or made by a Purchasing Agent and accepted by the
Company on a particular date (the "Trade Date") will be settled on a date (the
"Settlement Date") which is the third Business Day after the Trade Date pursuant
to the "Settlement Procedure Timetable" set forth below, unless the Company and
the purchaser agree to settlement on another Business Day which shall be no
earlier than the next Business Day after the Trade Date.
SETTLEMENT PROCEDURE TIMETABLE:
For orders of Book-Entry Securities solicited by a Selling Agent and
accepted by the Company for settlement on the third Business Day after the Trade
Date, Settlement Procedures "A" through "I" set forth above shall be completed
as soon as possible but not later than the respective times (New York City time)
set forth below:
SETTLEMENT
PROCEDURE TIME
--------- ----
A 5:00 p.m. on the Business Day following the Trade Date or 10:00 a.m. on the Business Day
prior to the Settlement Date, whichever is earlier
B 12:00 noon on the second Business Day immediately preceding the Settlement Date
C 2:00 p.m. on the second Business Day immediately preceding the Settlement Date
D 9:00 a.m. on the Settlement Date
E 10:00 a.m. on the Settlement Date
F-G 2:00 p.m. on the Settlement Date
H 4:45 p.m. on the Settlement Date
I 5:00 p.m. on the Settlement Date
If the initial interest rate for a Floating Rate Book-Entry Security
has not been determined at the time that Settlement Procedure "A" is completed,
Settlement Procedures "B" and "C" shall be completed as soon as such rate has
been determined but no later than 2:00 p.m. on the second Business Day
immediately preceding the Settlement Date. Settlement Procedure "H" is subject
to extension in accordance with any extension of Fedwire closing deadlines and
in the other events specified in the SDFS operating procedures in effect on the
Settlement Date.
II-5
If settlement of a Book-Entry Security is rescheduled or canceled, the
Trustee, upon obtaining knowledge thereof, will deliver to the Depositary,
through the Depositary's Participation Terminal System, a cancellation message
to such effect by no later than 2:00 p.m. on the Business Day immediately
preceding the scheduled Settlement Date.
FAILURE TO SETTLE:
If the Trustee fails to enter an SDFS deliver order with respect to a
Book-Entry Security pursuant to Settlement Procedure "F", the Trustee may
deliver to the Depositary, through the Depositary's Participant Terminal System,
as soon as practicable a withdrawal message instructing the Depositary to debit
such Book-Entry Security to the Trustee's participant account, provided that the
Trustee's participant account contains a principal amount of the Global Security
representing such Book-Entry Security that is at least equal to the principal
amount to be debited. If a withdrawal message is processed with respect to all
the Book-Entry Securities represented by a Global Security, the Trustee will
xxxx such Global Security "canceled", make appropriate entries in the Trustee's
records and send such canceled Global Security to the Company. The CUSIP number
assigned to such Global Security shall, in accordance with CUSIP Service Bureau
procedures, be canceled and not immediately reassigned. If a withdrawal message
is processed with respect to one or more, but not all, of the Book-Entry
Securities represented by a Global Security, the Trustee will exchange such
Global Security for two Global Securities, one of which shall represent such
Book-Entry Security or Securities and shall be canceled immediately after
issuance and the other of which shall represent the remaining Book-Entry
Securities previously represented by the surrendered Global Security and shall
bear the CUSIP number of the surrendered Global Security.
If the purchase price for any Book-Entry Security is not timely paid to
the participants with respect to such Book-Entry Security by the beneficial
purchaser thereof (or a person, including an indirect participant in the
Depositary, acting on behalf of such purchaser), such participants and, in turn,
the Agent for such Book-Entry Security may enter deliver orders through the
Depositary's Participant Terminal System debiting such Book-Entry Security to
such participant's account and crediting such Book-Entry Security to the Agent's
account and then debiting such Book-Entry Security to the Agent's participant
account and crediting such Book-Entry Security to the Trustee's participant
account and shall notify the Company and the Trustee thereof. Thereafter, the
Trustee will (i) immediately notify the Company of such order and the Company
shall transfer to the Agent funds available for immediate use in an amount equal
to the price of such Book-Entry Security which was credited to the account of
the Company maintained at the Trustee in accordance with Settlement Procedure I,
and (ii) deliver the withdrawal message and take the related actions described
in the preceding paragraph. If such failure shall have occurred for any reason
other than default by the Agent to perform its obligations hereunder or under
the Distribution Agreement, the Company and the Agent will mutually agree upon
an amount of compensation to reimburse the Agent for the loss of its use of
funds during the period when the funds were credited to the account of the
Company; provided however, it is understood that the parties will, during the
course of reaching such mutual agreement, take into consideration, among other
things, any adverse effect (including he magnitude thereof) on each of the
parties as a result of such failure.
Notwithstanding the foregoing, upon any failure to settle with respect
to a Book-Entry Security, the Depositary may take any actions in accordance with
its SDFS operating procedures then in effect. In the event of a failure to
settle with respect to one or more, but not all, of the Book-Entry Securities to
have been represented by a Global Security, the Trustee will provide, in
accordance with Settlement Procedure "D", for the authentication and issuance of
a Global Security representing the other Book-Entry Securities to have been
represented by such Global Security and will make
II-6
appropriate entries in its records. The Company will, from time to time,
furnish the Trustee with a sufficient quantity of Securities.
PART II: ADMINISTRATIVE PROCEDURE FOR CERTIFICATED SECURITIES
POSTING RATES BY COMPANY:
The Company and the Agent will discuss from time to time the rates of
interest per annum to be borne by and the maturity of Certificated Securities
that may be sold as a result of the solicitation of offers by the Agent. The
Company may establish a fixed set of interest rates and maturities for an
offering period ("posting"). If the Company decides to change already posted
rates, it will promptly advise the Agent to suspend solicitation of offers until
the new posted rates have been established with the Agent.
ACCEPTANCE OF OFFERS BY COMPANY:
The Agent will promptly advise the Company by telephone or other
appropriate means of all reasonable offers to purchase Certificated Securities,
other than those rejected by the Agent. The Agent may, in its discretion
reasonably exercised, reject any offer received by it in whole or in part. The
Agent also may make offers to the Company to purchase Certificated Securities as
a Purchasing Agent. The Company will have the sole right to accept offers to
purchase Certificated Securities and may reject any such offer in whole or in
part.
The Company will promptly notify the Selling Agent or Purchasing Agent,
as the case may be, of its acceptance or rejection of an offer to purchase
Certificated Securities. If the Company accepts an offer to purchase
Certificated Securities, it will confirm such acceptance in writing to the
Selling Agent or Purchasing Agent, as the case may be, and the Trustee.
COMMUNICATION OF SALE INFORMATION TO COMPANY BY AGENT:
After the acceptance of an offer by the Company, the Selling Agent or
Purchasing Agent, as the case may be, will communicate the following details of
the terms of such offer (the "Sale Information") to the Company by telephone
(confirmed in writing) or by facsimile transmission or other acceptable written
means:
(1) Principal Amount of Certificated Securities to be purchased;
(2) If a Fixed Rate Certificated Security, the interest rate and
initial interest payment date;
(3) Trade Date;
(4) Settlement Date;
(5) Maturity Date;
(6) Specified Currency and, if the Specified Currency is other than
U.S. dollars, the applicable Exchange Rate for such Specified
Currency;
(7) Indexed Currency, the Base Rate and the Exchange Rate
Determination Date, if applicable;
(8) Issue Price;
(9) Selling Agent's commission or Purchasing Agent's discount, as the
case may be;
(10) Net Proceeds to the Company;
(11) If a redeemable Certificated Security, such of the following as
are applicable:
(i) Redemption Commencement Date,
(ii) Initial Redemption Price (% of par), and
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(iii) Amount (% of par) that the Redemption Price shall decline
(but not below par) on each anniversary of the Redemption
Commencement Date;
(12) If a Floating Rate Certificated Security, such of the following
as are applicable:
(i) Interest Rate Basis,
(ii) Index Maturity,
(iii) Spread or Spread Multiplier,
(iv) Maximum Rate,
(v) Minimum Rate,
(vi) Initial Interest Rate,
(vii) Interest Reset Dates,
(viii) Calculation Dates,
(ix) Interest Determination Dates,
(x) Interest Payment Dates,
(xi) Regular Record Dates, and
(xii) Calculation Agent;
(13) Name, address and taxpayer identification number of the
registered owner(s);
(14) Denomination of certificates to be delivered at settlement;
(15) Book-Entry Security or Certificated Security; and
(16) Selling Agent or Purchasing Agent.
PREPARATION OF PRICING SUPPLEMENT BY COMPANY:
If the Company accepts an offer to purchase a Certificated Security, it
will prepare a Pricing Supplement reflecting the terms of such Certificated
Security and arrange to have delivered to the Selling Agent or Purchasing Agent,
as the case may be, at least ten copies of such Pricing Supplement, not later
than 5:00 p.m., New York City time, on the Business Day following the Trade
Date, or if the Company and the purchaser agree to settlement on the date of
acceptance of such offer, not later than noon, New York City time, on such date.
The Company will arrange to have ten Pricing Supplements filed with the
Commission not later than the close of business of the Commission on the fifth
Business Day following the date on which such Pricing Supplement is first used.
DELIVERY OF CONFIRMATION AND PROSPECTUS TO PURCHASER BY SELLING AGENT:
The Selling Agent will deliver to the purchaser of a Certificated
Security a written confirmation of the sale and delivery and payment
instructions. In addition, the Selling Agent will deliver to such purchaser
or its agent the Prospectus as amended or supplemented (including the Pricing
Supplement) in relation to such Certificated Security prior to or together
with the earlier of the delivery to such purchaser or its agent of (a) the
confirmation of sale or (b) the Certificated Security.
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DATE OF SETTLEMENT:
All offers of Certificated Securities solicited by a Selling Agent
or made by a Purchasing Agent and accepted by the Company will be settled on
a date (the "Settlement Date") which is the third Business Day after the date
of acceptance of such offer, unless the Company and the purchaser agree to
settlement (a) on another Business Day after the acceptance of such offer or
(b) with respect to an offer accepted by the Company prior to 10:00 a.m., New
York City time, on the date of such acceptance.
INSTRUCTION FROM COMPANY TO TRUSTEE FOR PREPARATION OF CERTIFICATED SECURITIES:
After receiving the Sale Information from the Selling Agent or
Purchasing Agent, as the case may be, the Company will communicate such Sale
Information to the Trustee by telephone (confirmed in writing) or by facsimile
transmission or other acceptable written means.
The Company will instruct the Trustee by facsimile transmission or
other acceptable written means to authenticate and deliver the Certificated
Securities no later than 2:15 p.m., New York City time, on the Settlement Date.
Such instruction will be given by the Company prior to 3:00 p.m., New York City
time, on the Business Day immediately preceding the Settlement Date unless the
Settlement Date is the date of acceptance by the Company of the offer to
purchase Certificated Securities in which case such instruction will be given by
the Company by 11:00 a.m., New York City time.
PREPARATION AND DELIVERY OF CERTIFICATED SECURITIES BY TRUSTEE AND RECEIPT OF
PAYMENT THEREFOR:
The Trustee will prepare each Certificated Security and appropriate
receipts that will serve as the documentary control of the transaction.
In the case of a sale of Certificated Securities to a purchaser
solicited by a Selling Agent, the Trustee will, by 2:15 p.m., New York City
time, on the Settlement Date, deliver the Certificated Securities to the Selling
Agent for the benefit of the purchaser of such Certificated Securities against
delivery by the Selling Agent of a receipt therefor. On the Settlement Date the
Selling Agent will deliver payment for such Certificated Securities in
immediately available funds to the Company in an amount equal to the issue price
of the Certificated Securities less the Selling Agent's commission; provided
that the Selling Agent reserves the right to withhold payment for which it has
not received funds from the purchaser. The Company shall not use any proceeds
advanced by a Selling Agent to acquire securities.
In the case of a sale of Certificated Securities to a Purchasing Agent,
the Trustee will, by 2:15 p.m., New York City time, on the Settlement Date,
deliver the Certificated Securities to the Purchasing Agent against delivery of
payment for such Certificated Securities in immediately available funds to the
Company in an amount equal to the issue price of the Certificated Securities
less the Purchasing Agent's discount.
FAILURE OF PURCHASER TO PAY SELLING AGENT:
If a purchaser (other than a Purchasing Agent) fails to make payment
to the Selling Agent for a Certificated Security, the Selling Agent will
promptly notify the Trustee and the Company thereof by telephone (confirmed
in writing) or by facsimile transmission or other acceptable written means.
The Selling Agent will immediately return the Certificated Security to the
Trustee. Immediately upon receipt of such Certificated Security by the
Trustee, the Company will return to the Selling Agent an amount equal to the
amount previously paid to the Company in respect of such Certificated
Security.
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The Company and the Selling Agent will mutually agree upon an amount of
compensation to reimburse the Selling Agent for the loss of its use of funds
during the period when they were credited to the account of the Company;
provided, however, it is understood that the parties will, during the course
of reaching such mutual agreement, take into consideration, among other
things, any adverse effect (including the magnitude thereof) on each of the
parties as a result of such failure.
The Trustee will cancel the Certificated Security in respect of which
the failure occurred, make appropriate entries in its records and, unless
otherwise instructed by the Company, destroy the Certificated Security.
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ANNEX III
ACCOUNTANTS' LETTER
Pursuant to Sections 4(j) and 6(d), as the case may be, of the
Distribution Agreement, the Company's independent certified public accountants
shall furnish letters to the effect that:
(i) They are independent certified public accountants with
respect to the Company and its subsidiaries within the meaning of the
Act and the applicable published rules and regulations thereunder;
(ii) In their opinion, the financial statements and any
supplementary financial information and schedules audited (and, if
applicable, financial forecasts and/or pro forma financial information)
examined by them and included or incorporated by reference in the
Registration Statement or the Prospectus comply as to form in all
material respects with the applicable accounting requirements of the
Act or the Exchange Act, as applicable, and the related published rules
and regulations thereunder; and, if applicable, they have made a review
in accordance with standards established by the American Institute of
Certified Public Accountants of the consolidated interim financial
statements, selected financial data, pro forma financial information,
financial forecasts and/or condensed financial statements derived from
audited financial statements of the Company for the periods specified
in such letter, as indicated in their reports thereon, copies of which
have been separately furnished to the Agent;
(iii) They have made a review in accordance with standards
established by the American Institute of Certified Public Accountants
of the unaudited condensed consolidated statements of income,
consolidated balance sheets and consolidated statements of cash flows
included in the Prospectus and/or included in the Company's quarterly
report on Form 10-Q incorporated by reference into the Prospectus as
indicated in their reports thereon copies of which have been separately
furnished to the Agent; and on the basis of specified procedures
including inquiries of officials of the Company who have responsibility
for financial and accounting matters regarding whether the unaudited
condensed consolidated financial statements referred to in paragraph
(vi)(A)(i) below 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, nothing came to their
attention that caused them to believe that the unaudited condensed
consolidated financial statements do not 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;
(iv) The unaudited selected financial information with respect
to the consolidated results of operations and financial position of the
Company for the five most recent fiscal years included in the
Prospectus and included or incorporated by reference in Item 6 of the
Company's Annual Report on Form 10-K for the most recent fiscal year
agrees with the corresponding amounts (after restatement where
applicable) in the audited consolidated financial statements for five
such fiscal years which were included or incorporated by reference in
the Company's Annual Reports on Form 10-K for such fiscal years;
(v) They have compared the information in the Prospectus under
selected captions with the disclosure requirements of Regulation S-K
and on the basis of limited procedures specified in such letter nothing
came to their attention as a result of the foregoing procedures
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that caused them to believe that this information does not conform in
all material respects with the disclosure requirements of Items 301,
302, 402 and 503(d), respectively, of Regulation S-K;
(vi) On the basis of limited procedures, not constituting an
examination in accordance with generally accepted auditing standards,
consisting of a reading of the unaudited financial statements and other
information referred to below, a reading of the latest available
interim financial statements of the Company and its subsidiaries,
inspection of the minute books of the Company and its subsidiaries
since the date of the latest audited financial statements included or
incorporated by reference in the Prospectus, inquiries of officials of
the Company and its subsidiaries responsible for financial and
accounting matters and such other inquiries and procedures as may be
specified in such letter, nothing came to their attention that caused
them to believe that:
(A) (i) the unaudited condensed consolidated statements
of income, consolidated balance sheets and consolidated
statements of cash flows included in the Prospectus and/or
included or incorporated by reference in the Company's Quarterly
Reports on Form 10-Q incorporated by reference in the Prospectus
do not comply as to form in all material respects with the
applicable accounting requirements of the Exchange Act and the
related published rules and regulations, or (ii) any material
modifications should be made to the unaudited condensed
consolidated statements of income, consolidated balance sheets
and consolidated statements of cash flows included in the
Prospectus or included in the Company's Quarterly Reports on
Form 10-Q incorporated by reference in the Prospectus for them
to be in conformity with generally accepted accounting
principles;
(B) any other unaudited income statement data and balance
sheet items included in the Prospectus do not agree with the
corresponding items in the unaudited consolidated financial
statements from which such data and items were derived, and any
such unaudited data and items were not determined on a basis
substantially consistent with the basis for the corresponding
amounts in the audited consolidated financial statements
included or incorporated by reference in the Company's Annual
Report on Form 10-K for the most recent fiscal year;
(C) the unaudited financial statements which were not
included in the Prospectus but from which were derived the
unaudited condensed financial statements referred to in clause
(A) and any unaudited income statement data and balance sheet
items included in the Prospectus and referred to in clause (B)
were not determined on a basis substantially consistent with the
basis for the audited financial statements included or
incorporated by reference in the Company's Annual Report on Form
10-K for the most recent fiscal year;
(D) any unaudited pro forma consolidated condensed
financial statements included or incorporated by reference in
the Prospectus do not comply as to form in all material respects
with the applicable accounting requirements of the Act and the
published rules and regulations thereunder or the pro forma
adjustments have not been properly applied to the historical
amounts in the compilation of those statements;
(E) as of a specified date not more than five days prior
to the date of such letter, there have been any changes in the
consolidated capital stock (other than issuances of capital
stock upon exercise of options and stock appreciation rights,
upon earn-outs of
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performance shares and upon conversions of convertible
securities, in each case which were outstanding on the date
of the latest balance sheet included or incorporated by
reference in the Prospectus) or any increase in the consolidated
long-term debt of the Company and its subsidiaries, or any
decreases in consolidated net current assets or shareholders'
equity or other items specified by the Agent, or any increases
in any items specified by the Agent, in each case as compared
with amounts shown in the latest balance sheet included or
incorporated by reference in the Prospectus, except in each case
for changes, increases or decreases which the Prospectus
discloses have occurred or may occur or which are described in
such letter; and
(F) for the period from the date of the latest financial
statements included or incorporated by reference in the
Prospectus to the specified date referred to in clause (E) there
were any decreases in consolidated net revenues or operating
profit or the total or per share amounts of consolidated net
income or other items specified by the Agent, or any increases
in any items specified by the Agent, in each case as compared
with the comparable period of the preceding year and with any
other period of corresponding length specified by the Agent,
except in each case for increases or decreases which the
Prospectus discloses have occurred or may occur or which are
described in such letter; and
(vii) In addition to the audit referred to in their report(s)
included or incorporated by reference in the Prospectus and the limited
procedures, inspection of minute books, inquiries and other procedures
referred to in paragraphs (iii) and (vi) above, they have carried out
certain specified procedures, not constituting an audit in accordance
with generally accepted auditing standards, with respect to certain
amounts, percentages and financial information specified by the Agent
which are derived from the general accounting records of the Company
and its subsidiaries, which appear in the Prospectus (excluding
documents incorporated by reference), or in Part II of, or in exhibits
and schedules to, the Registration Statement specified by the Agent or
in documents incorporated by reference in the Prospectus specified by
the Agent, and have compared certain of such amounts, percentages and
financial information with the accounting records of the Company and
its subsidiaries and have found them to be in agreement.
All references in this Annex III to the Prospectus shall be deemed to
refer to the Prospectus (including the documents incorporated by reference
therein) as defined in the Distribution Agreement as of the Commencement Date
referred to in Section 6(d) thereof and to the Prospectus as amended or
supplemented (including the documents incorporated by reference therein) as of
the date of the amendment, supplement, incorporation or the Time of Delivery
relating to the Terms Agreement requiring the delivery of such letter under
Section 4(j) thereof.
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