1
Exhibit 1.2
$__
Medium-Term Notes, Series A
Due Nine Months or More From Date of Issue
CONVERGYS CORPORATION
Selling Agency Agreement
New York, New York
_________, 2000
Xxxxxxx Xxxxx Xxxxxx Inc.
000 Xxxxxxxxx
Xxx Xxxx, Xxx Xxxx 00000
Banc of America Securities LLC
000 Xxxxx Xxxxx Xxxxxx
Xxxxxxxxx, Xxxxx Xxxxxxxx 00000
Banc One Capital Markets, Inc.
0 Xxxx Xxx Xxxxx
Xxxxxxx, Xxxxxxxx 00000
Chase Securities Inc.
000 Xxxx Xxxxxx, 0xx Xxxxx
Xxx Xxxx, Xxx Xxxx 00000
Ladies and Gentlemen:
Convergys Corporation, an Ohio corporation (the "Company"), confirms
its agreement with each of you with respect to the issue and sale by the Company
of up to $__ aggregate principal amount of its Medium-Term Notes Due Nine Months
or More from Date of Issue (the "Notes"). The Notes will be issued under an
indenture (as may be amended from time to time, the "Indenture") dated as of __,
2000 between the Company and The Chase Manhattan Trust Company, National
Association, as trustee (the "Trustee"). Unless otherwise specifically provided
for and set forth in a Pricing Supplement (as defined below), the Notes will be
issued in minimum denominations of $1,000 and in denominations exceeding such
amount by integral multiples of $1,000, will be issued only in fully registered
form and will have the interest rates, maturities and, if applicable, other
terms set forth in such Pricing Supplement. The Notes will be issued, and the
terms thereof established, in accordance with the Indenture and the Medium- Term
Notes Administrative Procedures attached hereto as Exhibit A (the "Procedures")
(unless a Terms Agreement (as defined in Section 2(b)) modifies or otherwise
supersedes such Procedures with respect to the Notes issued pursuant to such
Terms Agreement). The Procedures may be amended only by written agreement of the
Company and you after notice to, and with the approval of, the Trustee. For the
purposes of this Agreement and subject to Section 12 hereof, the term "Agent"
shall refer to any of you acting solely in the capacity as agent for the Company
pursuant to Section 2(a) and not as principal (collectively, the "Agents"), the
term "Purchaser" shall refer to any of you acting solely as principal pursuant
to Section 2(b) and not as agent, and the term "you" shall refer to you
collectively whether at any time any of you is acting in both such capacities or
in either
1
2
such capacity. In acting under this Agreement, in whatever capacity, each of you
is acting individually and not jointly.
1. REPRESENTATIONS AND WARRANTIES. The Company represents and warrants
to, and agrees with, you as set forth below in this Section 1. Certain terms
used in this Section 1 are defined in paragraph (p) hereof.
(a) The Company has complied with the requirements for use of Form S-3
under the Securities Act of 1933, as amended (the "Act"), and has filed with the
Securities and Exchange Commission (the "Commission") a registration statement
on such Form (File Number: 333-__), including a basic prospectus, which has
become effective, for the registration under the Act of $500,000,000 aggregate
issue amount of debt and equity securities (the "Securities"), including the
Notes. Such registration statement, as amended at the date of this Agreement,
meets the requirements set forth in Rule 415(a)(1)(ix) or (x) under the Act and
complies in all other material respects with said Rule. The Company has included
in such registration statement, or has filed or will file with the Commission
pursuant to the applicable paragraph of Rule 424(b) under the Act, a supplement
to the form of prospectus included in such registration statement relating to
the Notes and the plan of distribution thereof (the "Prospectus Supplement"). In
connection with the sale of Notes the Company proposes to file with the
Commission pursuant to the applicable paragraph of Rule 424(b) under the Act
further supplements to the Prospectus Supplement (each a "Pricing Supplement")
specifying the interest rates, maturity dates and, if appropriate, other
material terms of the Notes sold pursuant hereto or the offering thereof.
(b) As of the Execution Time, on the Effective Date, when any
supplement to the Prospectus is filed with the Commission, as of the date of a
Terms Agreement and at the date of delivery by the Company of any Notes sold
hereunder (a "Closing Date"), (i) the Registration Statement, as amended as of
any such time, and the Prospectus, as supplemented as of any such time, and the
Indenture will comply in all material respects with the applicable requirements
of the Act, the Trust Indenture Act of 1939, as amended (the "Trust Indenture
Act"), and the Securities Exchange Act of 1934, as amended (the "Exchange Act"),
and the respective rules thereunder; (ii) the Registration Statement, as amended
as of any such time, did not or will not contain any untrue statement of a
material fact or omit to state any material fact required to be stated therein
or necessary in order to make the statements therein not misleading; and (iii)
the Prospectus, as supplemented as of any such time, will not contain any untrue
statement of a material fact or omit to state a material fact necessary in order
to make the statements therein, in the light of the circumstances under which
they were made, not misleading; PROVIDED, HOWEVER, that the Company does not
make any representations or warranties as to (i) that part of the Registration
Statement which shall constitute the Statement of Eligibility and Qualification
(Form T-1) under the Trust Indenture Act of the Trustee or (ii) the information
contained in or omitted from the Registration Statement or the Prospectus (or
any supplement thereto) in reliance upon and in conformity with information
furnished in writing to the Company by any of you specifically for inclusion in
the Registration Statement or the Prospectus (or any supplement thereto).
(c) The documents incorporated by reference in the Prospectus, at the
time they were or hereafter are filed with the Commission, complied or when so
filed will comply, as the case may be, in all material respects with the
requirements of the Exchange Act, and, when read together and with the other
information in the Prospectus, did not and will not include an untrue statement
of a material fact or omit to state a material fact required to be stated
therein or necessary in order to make the statements therein, in the light of
the circumstances under which they were or are made, not misleading.
2
3
(d) The Company has been duly incorporated and is validly existing as a
corporation in good standing under the laws of the State of Ohio, with power and
authority (corporate and other) to own its properties and conduct its business
as described in the Prospectus, and has been duly qualified as a foreign
corporation for the transaction of business and is in good standing (or the
local equivalent) under the laws of each other jurisdiction in which it owns or
leases properties or conducts any business so as to require such qualification,
or is subject to no material liability or disability by reason of the failure to
be so qualified in any such jurisdiction.
(e) Each subsidiary of the Company that would constitute a "significant
subsidiary" (as such term is defined in Rule 1-02 of Regulation S-X) as of the
last day of the Company's most recently ended fiscal quarter (each a
"Significant Subsidiary" and collectively, the "Significant Subsidiaries") has
been duly incorporated and is validly existing as a corporation in good standing
under the laws of the jurisdiction of its incorporation, with power and
authority (corporate and other) to own its properties and conduct its business
as described in the Prospectus, and has been duly qualified as a foreign
corporation for the transaction of business and is in good standing (or the
local equivalent) under the laws of each other jurisdiction in which it owns or
leases properties or conducts any business so as to require such qualification,
or is subject to no material liability or disability by reason of the failure to
be so qualified in any such jurisdiction.
(f) All the outstanding shares of capital stock of the Company and each
Significant Subsidiary have been duly and validly authorized and issued and are
fully paid and nonassessable, and, except as otherwise set forth in the
Prospectus, all outstanding shares of capital stock of the Significant
Subsidiaries are owned by the Company either directly or through wholly owned
subsidiaries free and clear of any perfected security interest or any other
security interests, claims, liens or encumbrances.
(g) The financial statements and schedules of the Company and its
consolidated subsidiaries included or incorporated by reference in the
Prospectus and the Registration Statement present fairly in all material
respects the consolidated financial condition, results of operations and cash
flows of the Company and its consolidated subsidiaries as of the dates and for
the periods indicated, comply as to form with the applicable accounting
requirements of the Act or the Exchange Act, as applicable, and have been
prepared in conformity with generally accepted accounting principles applied on
a consistent basis throughout the periods involved (except as otherwise noted
therein); and any pro forma consolidated financial statements of the Company and
its subsidiaries and the related notes thereto included in the Registration
Statement and the Prospectus present fairly the information shown therein, have
been prepared in accordance with the Commission's rules and guidelines with
respect to pro forma financial statements and have been properly compiled on the
bases described therein, and the assumptions used in the preparation thereof are
reasonable and the adjustments used therein are appropriate to give effect to
the transactions and circumstances referred to therein.
(h) PricewaterhouseCoopers LLP, who have certified the financial
statements included or incorporated by reference in the Prospectus, are
independent public accountants as required by the Act.
(i) No action, suit or proceeding by or before any court or
governmental agency, authority or body or any arbitration involving the Company
or any of its subsidiaries or its or their property is pending or, to the best
knowledge of the Company, threatened that (i) could reasonably be expected to
have a material adverse effect on the Company's performance of its obligations
under this Agreement or the consummation of any of the transactions contemplated
hereby or (ii) could reasonably be expected to have a material adverse effect on
the condition (financial or otherwise), prospects, earnings, business or
properties of the Company and its subsidiaries, taken as a whole, whether or
3
4
not arising from transactions in the ordinary course of business, except as set
forth in or contemplated in the Prospectus (exclusive of any supplement
thereto).
(j) Since the respective dates as of which information is given in the
Registration Statement and the Prospectus, except as may otherwise be stated
therein or contemplated thereby, there has been no material adverse change, or
any development involving a prospective material adverse change, in the
condition (financial or otherwise), prospects, earnings, business or properties
of the Company and its subsidiaries, taken as a whole, whether or not arising in
the ordinary course of business.
(k) This Agreement has been duly authorized, executed and delivered by
the Company.
(l) The Indenture has been duly authorized, executed and delivered by
the Company and (assuming the due authorization, execution and delivery thereof
by the Trustee) is a valid and legally binding obligation of the Company
enforceable in accordance with its terms, except as enforcement thereof may be
limited by bankruptcy, insolvency, reorganization, moratorium or other laws
relating to or affecting enforcement of creditors' rights generally or by
general equity principles; and the Indenture has been duly qualified under the
Trust Indenture Act.
(m) The Notes have been duly authorized for issuance, offer and sale
pursuant to this Agreement and, when issued, authenticated and delivered
pursuant to the provisions of this Agreement and the Indenture against payment
of the consideration therefor specified in the Prospectus, the Notes will
constitute valid and legally binding obligations of the Company enforceable in
accordance with their terms, except as enforcement thereof may be limited by
bankruptcy, insolvency, reorganization, moratorium or other laws relating to or
affecting enforcement of creditors' rights generally or by general equity
principles; and the Notes and the Indenture conform to the descriptions thereof
in the Prospectus.
(n) The issue and sale of the Notes and the compliance by the Company
with all of the provisions of the Notes, the Indenture and this 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 agreement or instrument to which the Company or
any of its Significant Subsidiaries is a party or by which the Company or any of
its Significant Subsidiaries is bound or to which any of the property or assets
of the Company or any of its Significant Subsidiaries is subject, nor will such
action result in any violation of the provisions of the charter or regulations
of the Company or any statute or any order, rule or regulation of any court or
governmental agency having jurisdiction over the Company or any of its
Significant Subsidiaries or any of their respective properties; and no consent,
approval, authorization, order or decree of any court or governmental agency or
body is required for the consummation by the Company of the transactions
contemplated by this Agreement or in connection with the sale of Notes
hereunder, except such as have been obtained or rendered, as the case may be, or
as may be required under state securities laws.
(o) The Company is not and, after giving effect to the offering and
sale of the Notes and the application of the proceeds thereof as described in
the Prospectus, will not be an "investment company" as defined in the Investment
Company Act of 1940, as amended (the "Investment Company Act").
(p) The terms which follow, when used in this Agreement, shall have the
meanings indicated. The term "the Effective Date" shall mean each date that the
Registration Statement and any post-effective amendment or amendments thereto
became
4
5
or become effective and each date after the date hereof on which a document
incorporated by reference in the Registration Statement is filed. "Execution
Time" shall mean the date and time that this Agreement is executed and delivered
by the parties hereto. "Basic Prospectus" shall mean the form of basic
prospectus relating to the Securities contained in the Registration Statement at
the Effective Date. "Prospectus" shall mean the Basic Prospectus as supplemented
by the Prospectus Supplement. "Registration Statement" shall mean the
registration statement referred to in paragraph (a) above, including
incorporated documents, exhibits and financial statements and related notes and
schedules as amended at the Execution Time. "Rule 462(b) Registration Statement"
shall mean any registration statement filed pursuant to Rule 462(b) under the
Act and after such filing, the term "Registration Statement" shall include the
Rule 462(b) Registration Statement. "Rule 415" and "Rule 424" refer to such
rules under the Act. Any reference herein to the Registration Statement, the
Basic Prospectus, the Prospectus Supplement or the Prospectus shall be deemed to
refer to and include the documents incorporated by reference therein pursuant to
Item 12 of Form S-3, which were filed under the Exchange Act on or before the
Effective Date of the Registration Statement or the issue date of the Basic
Prospectus, the Prospectus Supplement or the Prospectus, as the case may be; and
any reference herein to the terms "amend", "amendment" or "supplement" with
respect to the Registration Statement, the Basic Prospectus, the Prospectus
Supplement or the Prospectus shall be deemed to refer to and include the filing
of any document under the Exchange Act after the Effective Date of the
Registration Statement or the issue date of the Basic Prospectus, the Prospectus
Supplement or the Prospectus, as the case may be, deemed to be incorporated
therein by reference.
2. APPOINTMENT OF AGENTS; SOLICITATION BY THE AGENTS OF OFFERS TO
PURCHASE; SALES OF NOTES TO A PURCHASER. (a) Subject to the terms and conditions
set forth herein, the Company hereby authorizes each of the Agents to act as its
agent to solicit offers for the purchase of all or part of the Notes from the
Company.
On the basis of the representations and warranties, and subject to the
terms and conditions set forth herein, each of the Agents agrees, as agent of
the Company, to use its reasonable efforts to solicit offers to purchase the
Notes from the Company upon the terms and conditions set forth in the Prospectus
(and any supplement thereto) and in the Procedures. Such Agent will communicate
to the Company, orally, each offer for the purchase of Notes solicited by it on
an agency basis other than those offers rejected by such Agent. Such Agent shall
have the right, in its discretion reasonably exercised, to reject any offer for
the purchase of Notes, in whole or in part, and any such rejection shall not be
deemed a breach of its agreement contained herein. The Company may accept or
reject any offer for the purchase of Notes, in whole or in part. Each Agent
shall make reasonable efforts to assist the Company in obtaining performance by
each purchaser whose offer to purchase Notes has been solicited by such Agent
and accepted by the Company, but such Agent shall not, except as otherwise
provided in this Agreement, be obligated to disclose the identity of any
purchaser or have any liability to the Company in the event any such purchase is
not consummated for any reason. Except as provided in Section 2(b), under no
circumstances will any Agent be obligated to purchase any Notes for its own
account. It is understood and agreed, however, that any Agent may purchase Notes
as principal pursuant to Section 2(b).
The Company reserves the right, in its sole discretion, to instruct the
Agents to suspend at any time, for any period of time or permanently, the
solicitation of offers to purchase Notes. Upon receipt of instructions from the
Company, the Agents will forthwith suspend solicitation of offers to purchase
Notes from the Company until such time as the Company has advised them that such
solicitation may be resumed.
The Company agrees to pay each Agent a commission, on the Closing Date
with respect to each sale of Notes by the Company as a result of a solicitation
made by such
5
6
Agent, in an amount equal to that percentage specified in Schedule I hereto of
the aggregate principal amount of the Notes sold by the Company. Such commission
shall be payable as specified in the Procedures.
Subject to the provisions of this Section and to the Procedures, offers
for the purchase of Notes may be solicited by an Agent as agent for the Company
at such time and in such amounts as such Agent deems advisable. The Company may
from time to time offer Notes for sale otherwise than through an Agent;
PROVIDED, HOWEVER, that, subject to Section 12 hereof, so long as this Agreement
is in effect the Company shall not solicit or accept offers to purchase Notes
through any agent other than an Agent. It is understood, however, that if from
time to time the Company is approached by a prospective agent offering to
solicit a specific purchase of Notes, the Company may engage such agent with
respect to such specific purchase, provided that (i) such agent is engaged on
terms substantially similar (including the same commission schedule) to the
terms of this Agreement and (ii) the Agents are given notice of such purchase
promptly.
If the Company shall default in its obligations to deliver Notes to a
purchaser whose offer it has accepted, the Company shall indemnify and hold each
of you harmless against any loss, claim or damage arising from or as a result of
such default by the Company.
(b) Subject to the terms and conditions stated herein, whenever the
Company and any of you determines that the Company shall sell Notes directly to
any of you as principal, each such sale of Notes shall be made in accordance
with the terms of this Agreement and a supplemental agreement relating to such
sale. Each such supplemental agreement (which may be either an oral or written
agreement) is herein referred to as a "Terms Agreement." Each Terms Agreement
shall describe the Notes to be purchased by the Purchaser pursuant thereto and
shall specify the aggregate issue amount of such Notes, the price to be paid to
the Company for such Notes, the maturity date of such Notes, the rate at which
interest will be paid on such Notes, the dates on which interest will be paid on
such Notes and the record date with respect to each such payment of interest,
the Closing Date for the purchase of such Notes, the place of delivery of the
Notes and payment therefor, the method of payment, any other material terms and
any requirements for the delivery of opinions of counsel, certificates from the
Company or its officers or a letter from the Company's independent public
accountants as described in Section 6(b). Any such Terms Agreement may also
specify the period of time referred to in Section 4(m). Any written Terms
Agreement may be in the form attached hereto as Exhibit B. The Purchaser's
commitment to purchase Notes 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.
Delivery of the certificates for Notes sold to the Purchaser pursuant
to a Terms Agreement shall be made not later than the Closing Date agreed to in
such Terms Agreement, against payment of funds to the Company in the net amount
due to the Company for such Notes by the method and in the form set forth in the
Procedures unless otherwise agreed to between the Company and the Purchaser in
such Terms Agreement.
Unless otherwise agreed to between the Company and the Purchaser in a
Terms Agreement, any Note sold to a Purchaser (i) shall be purchased by such
Purchaser at a price equal to 100% of the principal amount thereof less a
percentage equal to the commission applicable to an agency sale of a Note of
identical maturity and (ii) may be resold by such Purchaser at varying prices
from time to time or, if set forth in the applicable Terms Agreement and Pricing
Supplement, at a fixed public offering price. In connection with any resale of
Notes purchased, a Purchaser may use a selling or dealer group and may reallow
to any broker or dealer any portion of the discount or commission payable
pursuant hereto.
6
7
3. OFFERING AND SALE OF NOTES. Each of you and the Company agree to
perform the respective duties and obligations specifically provided to be
performed by them in the Procedures.
4. AGREEMENTS. The Company agrees with you that:
(a) Prior to the termination of the offering of the Notes (including by
way of resale by a Purchaser of Notes), the Company will not file any amendment
of the Registration Statement or supplement to the Prospectus (except for (i)
periodic or current reports filed under the Exchange Act, (ii) a supplement
relating to any offering of Notes providing solely for the specification of or a
change in the maturity dates, interest rates, issuance prices or other similar
terms of any Notes or (iii) a supplement relating to an offering of Securities
other than the Notes) unless the Company has furnished each of you a copy for
your review prior to filing and given each of you a reasonable opportunity to
comment on any such proposed amendment or supplement and will not file any such
proposed amendment or supplement to which you reasonably object. Subject to the
foregoing sentence, the Company will cause each supplement to the Prospectus to
be filed with the Commission pursuant to the applicable paragraph of Rule 424(b)
within the time period prescribed and will provide evidence satisfactory to you
of such filing. The Company will promptly advise each of you (i) when the
Prospectus, and any supplement thereto, shall have been filed with the
Commission pursuant to Rule 424(b), (ii) when, prior to termination of any
offering of Notes, any amendment of the Registration Statement shall have been
filed or become effective, (iii) of any request by the Commission for any
amendment of the Registration Statement or supplement to the Prospectus or for
any additional information, (iv) of the issuance by the Commission of any stop
order suspending the effectiveness of the Registration Statement or the
institution or threatening of any proceeding for that purpose and (v) of the
receipt by the Company of any notification with respect to the suspension of the
qualification of the Notes for sale in any jurisdiction or the initiation or
threatening of any proceeding for such purpose. The Company will use its best
efforts to prevent the issuance of any such stop order and, if issued, to obtain
as soon as possible the withdrawal thereof.
(b) If, at any time when a prospectus relating to the Notes is required
to be delivered under the Act, any event occurs as a result of which the
Prospectus as then supplemented would include any untrue statement of a material
fact or omit to state any material fact necessary to make the statements
therein, in the light of the circumstances under which they were made, not
misleading, or if it shall be necessary to amend the Registration Statement or
to supplement the Prospectus to comply with the Act or the Exchange Act or the
respective rules thereunder, the Company promptly will notify each of you to
suspend solicitation of offers to purchase Notes (and, if so notified by the
Company, each of you shall forthwith suspend such solicitation and cease using
the Prospectus as then supplemented) and, upon such notification, your
obligation to solicit offers to purchase Notes hereunder shall cease. In the
event that the Company desires you to thereafter commence solicitations of
offers to purchase Notes, or in the event that any of you are holding Notes for
resale, the Company shall (i) prepare and file with the Commission, subject to
the first sentence of paragraph (a) of this Section 4, an amendment or
supplement which will correct such statement or omission or effect such compli-
ance and (ii) supply any supplemented Prospectus to each of you in such
quantities as you may reasonably request. If such amendment or supplement, and
any documents, certificates and opinions furnished to each of you pursuant to
paragraphs (g), (j), (k) and (l) of this Section 4 in connection with the
preparation or filing of such amendment or supplement are satisfactory in all
respects to you, you will, upon the filing of such amendment or supplement with
the Commission and upon the effectiveness of an amendment to the Registration
Statement, if such an amendment is required, resume your obligation to solicit
offers to purchase Notes hereunder.
7
8
(c) The Company, during the period when a prospectus relating to the
Notes is required to be delivered under the Act, will file promptly all
documents required to be filed with the Commission pursuant to Section 13(a),
13(c) or 15(d) of the Exchange Act and will furnish to each of you copies of
such documents. In addition, on or prior to the date on which the Company makes
any announcement to the general public concerning earnings or concerning any
other event which is required to be described, or which the Company proposes to
describe, in a document filed pursuant to the Exchange Act, the Company will
furnish to each of you the information contained or to be contained in such
announcement. The Company will notify each of you as soon as practicable of (i)
any decrease in the rating of the Notes or any other debt securities of the
Company by any "nationally recognized statistical rating organization" (as
defined for purposes of Rule 436(g) under the Act) or (ii) any notice given of
any intended or potential decrease in any such rating or of a possible change in
any such rating that does not indicate the direction of the possible change, as
soon as the Company learns of any such decrease or notice.
(d) As soon as practicable, the Company will make generally available
to its security holders and to each of you an earnings statement or statements
of the Company and its subsidiaries which will satisfy the provisions of Section
11(a) of the Act and Rule 158 under the Act.
(e) The Company will furnish to each of you and your counsel, without
charge, copies of the Registration Statement (including exhibits thereto) and,
so long as delivery of a prospectus may be required by the Act, as many copies
of the Prospectus and any supplement thereto as you may reasonably request.
(f) The Company will arrange, if necessary, for the qualification of
the Notes for sale under the laws of such jurisdictions as the Agents may
designate, will maintain such qualifications in effect so long as required for
the distribution of the Notes; provided that in no event shall the Company be
obligated to qualify to do business in any jurisdiction where it is not now so
qualified or to take any action that would subject it to service of process in
suits, other than those arising out of the offering or sale of the Notes, in any
jurisdiction where it is not now so subject.
(g) The Company shall furnish to each of you such information,
documents, certificates of officers of the Company and opinions of counsel for
the Company relating to the business, operations and affairs of the Company, the
Registration Statement, the Prospectus, and any amendments thereof or
supplements thereto, the Indenture, the Notes, this Agreement, the Procedures
and the performance by the Company and you of its and your respective
obligations hereunder and thereunder as any of you may from time to time and at
any time prior to the termination of this Agreement reasonably request.
(h) The Company shall, whether or not any sale of the Notes is
consummated, (i) pay all expenses incident to the performance of its obligations
under this Agreement and any Terms Agreement, including the fees and
disbursements of its accountants and counsel, the cost of printing or other
production and delivery of the Registration Statement, the Prospectus, all
amendments thereof and supplements thereto, the Indenture, this Agreement, any
Terms Agreement and all other documents relating to the offering, the cost of
preparing, printing, packaging and delivering the Notes, the fees and
disbursements, including fees of counsel, incurred in compliance with Section
4(f), the fees and disbursements of the Trustee and the fees of any agency that
rates the Notes, (ii) reimburse each of you as requested for all reasonable
out-of-pocket expenses (including without limitation advertising expenses), if
any, incurred by you in connection with this Agreement and (iii) pay the
reasonable fees and expenses of your counsel incurred in connection with this
Agreement and incurred from time to time in connection with the transactions
contemplated hereby.
8
9
(i) Each acceptance by the Company of an offer to purchase Notes will
be deemed to be an affirmation that the representations and warranties of the
Company contained in this Agreement are true and correct at the time of such
acceptance, as though made at and as of such time, and a covenant that such
representations and warranties will be true and correct at the time of delivery
to the purchaser of the Notes relating to such acceptance, as though made at and
as of such time (it being understood that for purposes of the foregoing
affirmation and covenant such representations and warranties shall relate to the
Registration Statement and Prospectus as amended or supplemented at each such
time). Each such acceptance by the Company of an offer for the purchase of Notes
shall be deemed to constitute an additional representation, warranty and
agreement by the Company that, as of the settlement date for the sale of such
Notes, after giving effect to the issuance of such Notes, of any other Notes to
be issued on or prior to such settlement date and of any other Securities to be
issued and sold by the Company on or prior to such settlement date, the
aggregate amount of Securities (including any Notes) which have been issued and
sold by the Company will not exceed the amount of Securities registered pursuant
to the Registration Statement. The Company will inform you promptly upon your
request of the aggregate amount of Securities registered under the Registration
Statement which remain unsold.
(j) Each time that (i) the Registration Statement or the Prospectus is
amended or supplemented (other than by an amendment or supplement relating to
any offering of Securities other than the Notes or providing solely for the
specification of or a change in the maturity dates, the interest rates, the
issuance prices or other similar terms of any Notes sold pursuant hereto) or
(ii) if required in connection with the purchase of Notes from the Company by
one or more Purchasers, the Company sells Notes to one or more Purchasers, the
Company will deliver or cause to be delivered promptly to each of you a
certificate of the Company, signed by the Chief Executive Officer, the
President, or any Vice President and the principal financial officer, Treasurer,
or principal accounting officer of the Company, dated the date of the
effectiveness of such amendment or the date of the filing of such supplement or
the date of delivery of such Notes, in form reasonably satisfactory to you, of
the same tenor as the certificate referred to in Section 5(d), but modified as
necessary to relate to the Registration Statement and the Prospectus as amended
and supplemented to the time of delivery of such certificate.
(k) Each time that (i) the Registration Statement or the Prospectus is
amended or supplemented (other than by an amendment or supplement relating to
any offering of Securities other than the Notes or providing solely for the
specification of or a change in the maturity dates, the interest rates, the
issuance prices or other similar terms of any Notes sold pursuant hereto), or
(ii) (if required in connection with the purchase of Notes from the Company by
one or more Purchasers) the Company sells Notes to one or more Purchasers, the
Company shall furnish or cause to be furnished promptly to each of you a written
opinion of counsel of the Company satisfactory to each of you, dated the date of
the effectiveness of such amendment or the date of the filing of such supplement
or the date of delivery of such Notes, in form satisfactory to each of you, of
the same tenor as the opinion referred to in Section 5(b) but modified as
necessary to relate to the Registration Statement and the Prospectus as amended
and supplemented to the time of such opinion or, in lieu of such opinion,
counsel last furnishing such an opinion to you may furnish each of you with a
letter to the effect that you may rely on such last opinion to the same extent
as though it were dated the date of such letter authorizing reliance (except
that statements in such last opinion will be deemed to relate to the
Registration Statement and the Prospectus as amended and supplemented to the
time of delivery of such letter authorizing reliance).
(l) Each time that (i) the Registration Statement or the Prospectus is
amended or supplemented to include or incorporate amended or supplemental
financial information or (ii) (if required in connection with the purchase of
Notes from the Company by one or more Purchasers) the Company sells
Notes to one or more Purchasers, the Company shall cause its
independent public accountants promptly to furnish each of
9
10
you a letter, dated the date of the effectiveness of such amendment or the date
of the filing of such supplement or the date of delivery of such Notes, in form
satisfactory to each of you, of the same tenor as the letter referred to in
Section 5(e) with such changes as may be necessary to reflect the amended and
supplemental financial information included or incorporated by reference in the
Registration Statement and the Prospectus, as amended or supplemented to the
date of such letter.
(m) During the period, if any, specified (whether orally or in writing) in any
Terms Agreement, the Company shall not, without the prior written consent of the
Purchaser, offer, sell, contract to sell, pledge, or otherwise dispose of, (or
enter into any transaction which is designed to, or might reasonably be expected
to, result in the disposition (whether by actual disposition or effective
economic disposition due to cash settlement or otherwise) by the Company or any
affiliate of the Company or any person in privity with the Company or any
affiliate of the Company) directly or indirectly, including the filing (or
participation in the filing) of a registration statement with the Commission in
respect of, or establish or increase a put equivalent position or liquidate or
decrease a call equivalent position within the meaning of Section 16 of the
Exchange Act, any debt securities (other than the Notes sold pursuant to the
Terms Agreement) issued or guaranteed by the Company which mature more than one
year after the Closing Date and which are substantially similar to the Notes
sold pursuant to such Terms Agreement, or publicly announce an intention to
effect any such transaction.
(n) The Company shall not be required to comply with the provisions of
subsections (j), (k) or (l) of this Section during any period from the time (i)
the Agents shall have suspended solicitation of purchases of the Notes pursuant
to a request from the Company and (ii) you shall not then hold any Notes
purchased as principal pursuant hereto, until the time the Company shall
determine that solicitation of purchases of the Notes should be resumed or you
shall subsequently purchase Notes from the Company as principal.
5. CONDITIONS TO THE OBLIGATIONS OF THE AGENTS. The obligations of each
Agent to solicit offers to purchase the Notes shall be subject to the accuracy
of the representations and warranties of the Company contained herein as of the
Execution Time, on the Effective Date, when any supplement to the Prospectus is
filed with the Commission and as of each Closing Date, to the accuracy of the
statements of the Company made in any certificates pursuant to the provisions
hereof, to the performance by the Company of its obligations hereunder and to
the following additional conditions:
(a) If filing of the Prospectus, or any supplement thereto, is required
pursuant to Rule 424(b), the Prospectus, and any such supplement, shall have
been filed in the manner and within the time period required by Rule 424(b); and
no stop order suspending the effectiveness of the Registration Statement shall
have been issued and no proceedings for that purpose shall have been instituted
or threatened.
(b) The Company's general counsel shall have furnished to each Agent
such counsel's opinion to the effect of subparagraphs (i), (ii), (iii), (iv),
(vi), (xi) and (xiii) below, and shall have requested and caused Frost & Xxxxxx
LLP, counsel for the Company, to have furnished to each Agent their opinion to
the effect of subparagraphs (v), (vi) (in so far as (vi) relates to the
compliance as to form of the documents incorporated by reference in the
Prospectus as amended or supplemented), (vii), (viii), (ix), (x) and (xii)
below, in each case dated the Execution Time and addressed to each such Agent:
(i) the Company has been duly incorporated and is validly
existing as a corporation in good standing under the laws of the State
of Ohio, with power and authority (corporate and other) to own its
properties and conduct its business
10
11
as described in the Prospectus, and has been duly qualified as a
foreign corporation for the transaction of business and is in good
standing (or the local equivalent) under the laws of each other
jurisdiction in which it owns or leases properties or conducts any
business so as to require such qualification, or is subject to no
material liability or disability by reason of the failure to be so
qualified in any such jurisdiction;
(ii) each Significant Subsidiary of the Company has been duly
organized and is validly existing as a corporation in good standing
under the laws of the jurisdiction of its incorporation, with power and
authority (corporate and other) to own its properties and conduct its
business as described in the Prospectus, and has been duly qualified as
a foreign corporation for the transaction of business and is in good
standing (or the local equivalent) under the laws of each other
jurisdiction in which it owns or leases properties or conducts any
business so as to require such qualification, or is subject to no
material liability or disability by reason of the failure to be so
qualified in any such jurisdiction;
(iii) all the outstanding shares of capital stock of each
Significant Subsidiary have been duly and validly authorized and issued
and are fully paid and non-assessable, and, except as otherwise set
forth in the Prospectus, all outstanding shares of capital stock of the
Significant Subsidiaries are owned by the Company either directly or
through wholly owned subsidiaries free and clear of any perfected
security interest and, to the knowledge of such counsel, after due
inquiry, any other security interest, claim, lien or encumbrance;
(iv) to the knowledge of such counsel, there is no pending or
threatened action, suit or proceeding by or before any court or
governmental agency, authority or body or any arbitrator involving the
Company or any of its subsidiaries or its or their property, of a
character required to be disclosed in the Registration Statement which
is not adequately disclosed in the Prospectus, and there is no
franchise, contract or other document of a character required to be
described in the Registration Statement or Prospectus, or to be filed
as an exhibit thereto, which is not described or filed as required;
(v) the Registration Statement has become effective under the
Act; any required filing of the Prospectus, and any supplements
thereto, pursuant to Rule 424(b) has been made in the manner and within
the time period required by Rule 424(b); to the knowledge of such
counsel, no stop order suspending the effectiveness of the Registration
Statement has been issued, no proceedings for that purpose have been
instituted or threatened, and the Registration Statement and the
Prospectus (other than the financial statements and related schedules
and other financial information contained therein, as to which such
counsel need express no opinion) comply as to form in all material
respects with the applicable requirements of the Act, the Exchange Act
and the Trust Indenture Act and the respective rules thereunder; and
such counsel has no reason to believe that on the Effective Date or at
the Execution Time the Registration Statement contained any untrue
statement of a material fact or omitted to state any material fact
required to be stated therein or necessary to make the statements
therein not misleading or that the Prospectus as of its date and at the
Execution Time included or includes any untrue statement of a material
fact or omitted or omits to state a material fact necessary to make the
statements therein, in the light of the circumstances under which they
were made, not misleading (in each case, other than the financial
statements and related schedules and other financial information
contained therein, as to which such counsel need express no opinion);
11
12
(vi) the documents incorporated by reference in the Prospectus
as amended or supplemented (other than the financial statements and
related schedules and other financial information therein, 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, 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, or, 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;
(vii) this Agreement has been duly authorized, executed and
delivered by the Company;
(viii) the Indenture has been duly authorized, executed and
delivered by the Company and (assuming the due authorization, execution
and delivery thereof by the Trustee) is a valid and legally binding
obligation of the Company enforceable in accordance with its terms,
except as enforcement thereof may be limited by bankruptcy, insolvency,
reorganization, moratorium or other laws relating to or affecting
enforcement of creditors' rights generally or by general equity
principles; and the Indenture has been duly qualified under the Trust
Indenture Act;
(ix) the Notes have been duly authorized for issuance, offer
and sale pursuant to this Agreement and, when issued, authenticated and
delivered pursuant to the provisions of this Agreement and the
Indenture against payment of the consideration therefor specified in
the Prospectus, the Notes will constitute valid and legally binding
obligations of the Company enforceable in accordance with their terms,
except as enforcement thereof may be limited by bankruptcy, insolvency,
reorganization, moratorium or other laws relating to or affecting
enforcement of creditors' rights generally or by general equity
principles; and the descriptions of the Notes and the Indenture
contained in the Prospectus, as supplemented, conform to the terms
thereof;
(x) no consent, approval, authorization, filing with or order
of any court or governmental agency or body is required in connection
with the transactions contemplated herein, except such as have been
obtained under the Act and such as may be required under the blue sky
laws of any jurisdiction in connection with the issuance and sale of
the Notes in the manner contemplated in this Agreement and in the
Prospectus and such other approvals (specified in such opinion) as have
been obtained;
(xi) neither the execution and delivery of the Indenture, the
issue and sale of the Notes, nor the consummation of any other of the
transactions herein contemplated nor the fulfillment of the terms
hereof will conflict with, result in a breach or violation of or
imposition of any lien, charge or encumbrance upon any property or
assets of the Company or any of its Significant Subsidiaries pursuant
to, (i) the charter or regulations of the Company or its Significant
Subsidiaries, (ii) the terms of any indenture, contract, lease,
mortgage, deed of trust, note agreement, loan agreement or other
agreement, obligation, condition, covenant or
12
13
instrument to which the Company or any of its Significant Subsidiaries
is a party or bound or to which its or their property is subject that
is material to the Company and its Significant Subsidiaries taken as a
whole, or (iii) any statute, law, rule, regulation, judgment, order or
decree applicable to the Company or its Significant Subsidiaries of any
court, regulatory body, administrative agency, governmental body,
arbitrator or other authority having jurisdiction over the Company or
its Significant Subsidiaries or any of its or their properties;
(xii) the Company is not and, after giving effect to the
offering and sale of the Notes and the application of the proceeds
thereof as described in the Prospectus, will not be an "investment
company" as defined in the Investment Company Act; and
(xiii) no holders of securities of the Company have rights to
the registration of such securities under the Registration Statement.
In rendering such opinions, each such counsel may (A) limit such opinions to the
laws of the State of Ohio and the Federal laws of the United States and, in the
case of the opinion to be delivered by Xxxxx & Xxxxxx LLP with respect to
paragraphs (ix) and (x) above, Frost & Xxxxxx LLP may assume that the laws of
the State of New York are the same as the laws of the State of Ohio, and (B)
rely as to matters of fact, to the extent they deem proper, on certificates of
responsible officers of the Company and public officials. References to the
Prospectus in this paragraph (b) include any supplements thereto at the
Execution Time.
(c) Each Agent shall have received from Xxxxx, Xxxxx & Xxxxx, counsel
for the Agents, such opinion or opinions, dated the date hereof, with respect to
the issuance and sale of the Notes, the Indenture, the Registration Statement,
the Prospectus (together with any supplement thereto) and other related matters
as the Agents may reasonably require, and the Company shall have furnished to
such counsel such documents as they reasonably request for the purpose of
enabling them to pass upon such matters.
(d) The Company shall have furnished to each Agent a certificate of the
Company, signed by the Chief Executive Officer, the President or any Vice
President and the principal financial officer, Treasurer or principal accounting
officer of the Company, dated the Execution Time, to the effect that to the best
of their knowledge based upon reasonable investigation:
(i) the representations and warranties of the Company in this
Agreement are true and correct on and as of the date hereof with the
same effect as if made on the date hereof and the Company has complied
with all the agreements and satisfied all the conditions on its part
to be performed or satisfied as a condition to the obligation of the
Agents to solicit offers to purchase the Notes;
(ii) no stop order suspending the effectiveness of the
Registration Statement has been issued and no proceedings for that
purpose have been instituted or, to the Company's knowledge,
threatened; and
(iii) since the date of the most recent financial statements
included in the Prospectus (exclusive of any supplement thereto), there
has been no material adverse change or development involving a
prospective material adverse change in the condition (financial or
other), earnings, business, prospects or properties of the Company and
its consolidated subsidiaries taken as a whole, whether or not arising
from transactions in the ordinary course of business, except as set
forth in or contemplated in the Prospectus (exclusive of any supplement
thereto).
13
14
(e) At the Execution Time, PricewaterhouseCoopers LLP shall have
furnished to each Agent a letter or letters (which may refer to letters
previously delivered to the Agents), dated as of the Execution Time, in form and
substance satisfactory to the Agents, confirming that they are independent
accountants within the meaning of the Act and the respective applicable
published rules and regulations thereunder and stating in effect that:
(i) in their opinion the audited financial statements and
financial statement schedules and any pro forma financial statements
included or incorporated in the Registration Statement and the
Prospectus and reported on by them comply in form in all material
respects with the applicable accounting requirements of the Act and the
Exchange Act and the related published rules and regulations;
(ii) on the basis of a reading of the latest unaudited
financial statements made available by the Company and its
subsidiaries; their limited review, in accordance with standards
established under Statement on Auditing Standards No. 71, carrying out
certain specified procedures (but not an examination in accordance
with generally accepted auditing standards) which would not necessarily
reveal matters of significance with respect to the comments set forth
in such letter; a reading of the minutes of the meetings of the
stockholders, directors and executive committee of the Company and its
subsidiaries; and inquiries of certain officials of the Company who
have responsibility for financial and accounting matters of the Company
and its subsidiaries as to transactions and events subsequent to the
date of the most recent audited financial statements in or incorporated
in the Registration Statement and Prospectus, nothing came to their
attention which caused them to believe that:
(1) any unaudited financial statements included or
incorporated in the Registration Statement and the Prospectus
do not comply in form in all material respects with applicable
accounting requirements and with the published rules and
regulations of the Commission with respect to financial
statements included or incorporated in quarterly reports on
Form 10-Q under the Exchange Act; any material modifications
should be made to the unaudited condensed interim financial
statements, included in the Registration Statement, for them
to be in conformity with generally accepted accounting
principles;
(2) with respect to the period subsequent to the date
of the most recent financial statements (other than any
capsule information), audited or unaudited, in or incorporated
in the Registration Statement and the Prospectus, there were
any changes, at a specified date not more than five business
days prior to the date of the letter, in the long-term debt of
the Company and its subsidiaries or capital stock of the
Company or decreases in the stockholders' equity of the
Company as compared with the amounts shown on the most recent
consolidated balance sheet included or incorporated in the
Registration Statement and the Prospectus, or for the period
from the date of the most recent financial statements included
or incorporated in the Registration Statement and the
Prospectus to such specified date there were any decreases, as
compared with the corresponding period in the preceding year
in net revenues or income before income taxes or in total or
per share amounts of net income of the Company and its
subsidiaries, except in all instances for changes or decreases
set forth in such letter, in which case the letter shall be
accompanied by an explanation by the Company as to the
significance
14
15
xxxxxxx unless said explanation is not deemed necessary by the
Representatives;
(3) the information included in the Registration
Statement and Prospectus in response to Regulation S-K, Item
301 (Selected Financial Data), Item 302 (Supplementary
Financial Information), Item 402 (Executive Compensation) and
Item 503(d) (Ratio of Earnings to Fixed Charges) is not in
conformity with the applicable disclosure requirements of
Regulation S-K; and
(4) any amounts included in any unaudited "capsule"
information included or incorporated in the Registration
Statement and the Prospectus do not agree with the amounts set
forth in the unaudited financial statements for the same
periods or were not determined on a basis substantially
consistent with that of the corresponding amounts in the
audited financial statements included or incorporated in the
Registration Statement and the Prospectus;
(iii) they have performed certain other specified procedures
as a result of which they determined that certain information of an
accounting, financial or statistical nature (which is limited to
accounting, financial or statistical information derived from the
general accounting records of the Company and its subsidiaries) set
forth in the Registration Statement and the Prospectus and in Exhibit
12 to the Registration Statement, including the information included or
incorporated in Items 1, 2, 6, 7 and 11 of the Company's Annual Report
on Form 10-K, incorporated in the Registration Statement and the
Prospectus, and the information included in the "Management's
Discussion and Analysis of Financial Condition and Results of
Operations" included or incorporated in the Company's Quarterly Reports
on Form 10-Q, incorporated in the Registration Statement and the
Prospectus, agrees with the accounting records of the Company and its
subsidiaries, excluding any questions of legal interpretation.
References to the Prospectus in this paragraph (e) include any
supplement thereto at the date of the letter.
(f) Prior to the Execution Time, the Company shall have furnished to
each Agent such further information, documents, certificates and opinions of
counsel as the Agents may reasonably request.
If any of the conditions specified in this Section 5 shall not have
been fulfilled in all material respects when and as provided in this Agreement,
or if any of the opinions and certificates mentioned above or elsewhere in this
Agreement shall not be in all material respects reasonably satisfactory in form
and substance to such Agents and counsel for the Agents, this Agreement and all
obligations of any Agent hereunder may be canceled at any time by the Agents.
Notice of such cancellation shall be given to the Company in writing or by
telephone or telecopier confirmed in writing.
The documents required to be delivered by this Section 5 shall be
delivered at the office of Xxxxx, Brown & Xxxxx, counsel for the Agents, at 000
Xxxxx XxXxxxx Xxxxxx, Xxxxxxx, Xxxxxxxx, on the Execution Date.
6. CONDITIONS TO THE OBLIGATIONS OF A PURCHASER. The obligations of a
Purchaser to purchase any Notes will be subject to the accuracy of the
representations and warranties of the Company herein as of the date of the
related Terms Agreement and as of the Closing Date for such Notes, to the
performance and observance by the Company of
15
16
all covenants and agreements herein contained on its part to be performed and
observed and to the following additional conditions precedent:
(a) No stop order suspending the effectiveness of the Registration
Statement shall have been issued and no proceedings for that purpose shall have
been instituted or threatened.
(b) Unless otherwise agreed to between the Company and the Purchaser in
a Terms Agreement, the Purchaser shall have received, appropriately updated, (i)
a certificate of the Company, dated as of the Closing Date, to the effect set
forth in Section 5(d) (except that references to the Prospectus shall be to the
Prospectus as supplemented as of the date of such Terms Agreement and as of the
Closing Date), (ii) the opinions of the general counsel of the Company and Frost
& Xxxxxx LLP, counsel for the Company, dated as of the Closing Date, to the
effect set forth in Section 5(b), (iii) the opinion of Xxxxx, Brown & Xxxxx,
counsel for the Purchaser, dated as of the Closing Date, to the effect set forth
in Section 5(c), and (iv) letter of PricewaterhouseCoopers LLP, independent
accountants for the Company, dated as of the Closing Date, to the effect set
forth in Section 5(e).
(c) Prior to the Closing Date, the Company shall have furnished to the
Purchaser such further information, certificates and documents as the Purchaser
may reasonably request.
If any of the conditions specified in this Section 6 shall not have
been fulfilled in all material respects when and as provided in this Agreement
and the applicable Terms Agreement, or if any of the opinions and certificates
mentioned above or elsewhere in this Agreement or such Terms Agreement and
required to be delivered to the Purchaser pursuant to the terms hereof and
thereof shall not be in all material respects reasonably satisfactory in form
and substance to the Purchaser and its counsel, such Terms Agreement and all
obligations of the Purchaser thereunder and with respect to the Notes subject
thereto may be canceled at, or at any time prior to, the respective Closing Date
by the Purchaser. Notice of such cancellation shall be given to the Company in
writing or by telephone or telecopier confirmed in writing.
7. RIGHT OF PERSON WHO AGREED TO PURCHASE TO REFUSE TO PURCHASE. (a)
The Company agrees that any person who has agreed to purchase and pay for any
Note pursuant to a solicitation by any of the Agents shall have the right to
refuse to purchase such Note if, at the Closing Date therefor, any condition set
forth in Section 5 or 6, as applicable, shall not be satisfied.
(b) The Company agrees that any person who has agreed to purchase and
pay for any Note pursuant to a solicitation by any of the Agents shall have the
right to refuse to purchase such Note if, subsequent to the agreement to
purchase such Note, any change, condition or development specified in any of
Sections 9(b)(i) through (v) shall have occurred (with the judgment of the Agent
which presented the offer to purchase such Note being substituted for any
judgment of a Purchaser required therein) the effect of which is, in the
judgment of the Agent which presented the offer to purchase such Note, so
material and adverse as to make it impractical or inadvisable to proceed with
the sale and delivery of such Note (it being understood that under no
circumstance shall any such Agent have any duty or obligation to the Company or
to any such person to exercise the judgment permitted to be exercised under this
Section 7(b) and Section 9(b)).
8. INDEMNIFICATION AND CONTRIBUTION. (a) The Company agrees to
indemnify and hold harmless each of you, your directors, officers, employees and
agents and each person who controls each of you within the meaning of either the
Act or the Exchange Act against any and all losses, claims, damages or
liabilities, joint or several, to which you, they or
16
17
any of you or them may become subject under the Act, the Exchange Act or other
Federal or state statutory law or regulation, at common law or otherwise,
insofar as such losses, claims, damages or liabilities (or actions in respect
thereof) arise out of or are based upon any untrue statement or alleged untrue
statement of a material fact contained in the registration statement for the
registration of the Securities as originally filed or in any amendment thereof,
or in the Prospectus or any preliminary Prospectus, or in any amendment thereof
or supplement thereto, or arise out of or are based upon the omission or alleged
omission to state therein a material fact required to be stated therein or
necessary to make the statements therein, in the light of the circumstances when
made, not misleading, and agrees to reimburse each such indemnified party, as
incurred, for any legal or other expenses reasonably incurred by them in
connection with investigating or defending any such loss, claim, damage,
liability or action; PROVIDED, HOWEVER, that the Company will not be liable in
any such case to the extent that any such loss, claim, damage or liability
arises out of or is based upon any such untrue statement or alleged untrue
statement or omission or alleged omission made therein in reliance upon and in
conformity with written information furnished to the Company by any of you
specifically for inclusion therein and, PROVIDED, FURTHER, that the foregoing
indemnity agreement with respect to any preliminary Prospectus shall not inure
to the benefit of any Agent, the directors, partners, officers, employees and
agents of each Agent and each person who controls such Agent within the meaning
of either the Act or the Exchange Act from whom the person asserting any such
loss, claim, damage, liability or action purchased securities if a copy of the
Prospectus (as then amended or supplemented if the Company shall have furnished
any amendments or supplements thereto) was not sent or given to such person, if
required by law so to have been delivered, at or prior to the written
confirmation of the sale of Securities to such person, and if the Prospectus (as
so amended or supplemented) would have cured the defect giving rise to such
loss, claim, damage, liability or action. This indemnity agreement will be in
addition to any liability which the Company may otherwise have.
(b) Each of you agrees to indemnify and hold harmless the Company, each
of its directors, each of its officers who signs the Registration Statement and
each person who controls the Company within the meaning of either the Act or the
Exchange Act, to the same extent as the foregoing indemnity from the Company to
you, but only with reference to written information relating to each of you,
respectively, furnished to the Company by each of you, respectively,
specifically for inclusion in the documents referred to in the foregoing
indemnity. This indemnity agreement will be in addition to any liability which
you may otherwise have. The Company acknowledges that the statements set forth
in the second sentence of the last paragraph of the cover page and the fourth
and fifth paragraphs under the heading "Plan of Distribution" of the Prospectus
Supplement constitute the only information furnished in writing by any of you
for inclusion in the documents referred to in the foregoing indemnity, and you
confirm that such statements are correct.
(c) Promptly after receipt by an indemnified party under this Section 8
of notice of the commencement of any action, such indemnified party will, if a
claim in respect thereof is to be made against the indemnifying party under this
Section 8, notify the indemnifying party in writing of the commencement thereof;
but the failure so to notify the indemnifying party (i) will not relieve it from
liability under paragraph (a) or (b) above unless and to the extent it did not
otherwise learn of such action and such failure results in the forfeiture by the
indemnifying party of substantial rights and defenses and (ii) will not, in any
event, relieve the indemnifying party from any obligations to any indemnified
party other than the indemnification obligation provided in paragraph (a) or (b)
above. The indemnifying party shall be entitled to appoint counsel of the
indemnifying party's choice at the indemnifying party's expense to represent the
indemnified party in any action for which indemnification is sought (in which
case the indemnifying party shall not thereafter be responsible for the fees and
expenses of any separate counsel retained by the indemnified party or parties
except as set forth below);
17
18
PROVIDED, HOWEVER, that such counsel shall be reasonably satisfactory to the
indemnified party. Notwithstanding the indemnifying party's election to appoint
counsel to represent the indemnified party in an action, the indemnified party
shall have the right to employ separate counsel (including local counsel), and
the indemnifying party shall bear the reasonable fees, costs and expenses of
such separate counsel if (i) the use of counsel chosen by the indemnifying party
to represent the indemnified party would present such counsel with an actual
conflict of interest, (ii) the actual or potential defendants in, or targets of,
any such action include both the indemnified party and the indemnifying party
and the indemnified party shall have reasonably concluded that there may be
legal defenses available to it and/or other indemnified parties which are
different from or additional to those available to the indemnifying party, (iii)
the indemnifying party shall not have employed counsel reasonably satisfactory
to the indemnified party to represent the indemnified party within a reasonable
time after notice of the institution of such action or (iv) the indemnifying
party shall authorize the indemnified party to employ separate counsel at the
expense of the indemnifying party; PROVIDED, HOWEVER that in no event shall the
indemnifying party be liable for legal fees or expenses of more than one primary
firm representing the indemnified parties or more than one local counsel in each
state or jurisdiction in which an action in which indemnification is available
has been brought. An indemnifying party will not, without the prior written
consent of the indemnified parties, settle or compromise or consent to the entry
of any judgment with respect to any pending or threatened claim, action, suit or
proceeding in respect of which indemnification or contribution may be sought
hereunder (whether or not the indemnified parties are actual or potential
parties to such claim or action) unless such settlement, compromise or consent
includes an unconditional release of each indemnified party from all liability
arising out of such claim, action, suit or proceeding.
(d) In the event that the indemnity provided in paragraph (a) or (b) of
this Section 8 is unavailable to or insufficient to hold harmless an indemnified
party for any reason, the Company and each of you agree to contribute to the
aggregate losses, claims, damages and liabilities (including legal or other
expenses reasonably incurred in connection with investigating or defending same)
(collectively "Losses") to which the Company and one or more of you may be
subject in such proportion as is appropriate to reflect the relative benefits
received by the Company and by each of you from the offering of the Notes from
which such Losses arise; PROVIDED, HOWEVER, that in no case shall any of you be
responsible for any amount in excess of the commissions received by such of you
in connection with the sale of Notes from which such Losses arise. If the
allocation provided by the immediately preceding sentence is unavailable for any
reason, the Company and each of you shall contribute in such proportion as is
appropriate to reflect not only such relative benefits but also the relative
fault of the Company and of each of you in connection with the statements or
omissions which resulted in such Losses as well as any other relevant equitable
considerations. Benefits received by the Company shall be deemed to be equal to
the total net proceeds from the offering (before deducting expenses) of the
Notes from which such Losses arise, and benefits received by each of you shall
be deemed to be equal to the total commissions received by such of you in
connection with the sale of Notes from which such Losses arise. Relative fault
shall be determined by reference to whether any alleged untrue statement or
omission relates to information provided by the Company or any of you and the
parties' relative intent, knowledge, access to information and opportunity to
correct or prevent such statement or omission. The Company and each of you agree
that it would not be just and equitable if contribution were determined by pro
rata allocation or any other method of allocation which does not take account of
the equitable considerations referred to above. Notwithstanding the provisions
of this paragraph (d), 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. For purposes
of this Section 8, each person who controls any of you within the meaning of the
Act or the Exchange Act and each director, officer, employee and agent of any of
18
19
you shall have the same rights to contribution as you and each person who
controls the Company within the meaning of either the Act or the Exchange Act,
each officer of the Company who shall have signed the Registration Statement and
each director of the Company shall have the same rights to contribution as the
Company, subject in each case to the applicable terms and conditions of this
paragraph (d). In addition, in connection with an offering of Notes purchased
from the Company by two or more Purchasers, the respective obligations of such
Purchasers to contribute pursuant to this paragraph (d) are several, and not
joint, in proportion to the aggregate principal amount of Notes that each such
Purchaser has agreed to purchase from the Company.
9. TERMINATION. (a) This Agreement will continue in effect until
terminated as provided in this Section 9. This Agreement may be terminated
either by the Company as to any Agent or by any Agent insofar as this Agreement
relates to such Agent, by giving written notice of such termination to such
Agent or the Company, as the case may be. This Agreement shall so terminate at
the close of business on the first business day following the receipt of such
notice by the party to whom such notice is given. In the event of such
termination, no party shall have any liability to the other party hereto, except
that (i) the Agents shall be entitled to any commissions earned in accordance
with the fourth paragraph of Section 2(a), (ii) if at the time of termination
(A) any Agent shall own any Notes purchased by it from the Company as principal
or (B) an offer to purchase any of the Notes has been accepted by the Company
but the time of delivery to the purchaser or his agent of such Notes relating
thereto has not occurred, the covenants set forth in Section 4 shall remain in
effect until such Notes are so resold or delivered, as the case may be, and
(iii) the covenant set forth in Section 4(d), the provisions of Section 4(h),
the indemnity and contribution agreements set forth in Section 8, and the
provisions of Sections 10, 13 and 14 shall remain in effect.
(b) Each Terms Agreement shall be subject to termination in the
absolute discretion of the Purchaser, by notice given to the Company prior to
delivery of any payment for any Note to be purchased thereunder, if prior to
such time (i) there shall have occurred, subsequent to the agreement to purchase
such Note, any change, or any development involving a prospective change, in or
affecting the condition (financial or otherwise), prospects, earnings, business
or properties of the Company and its consolidated subsidiaries taken as a whole
the effect of which is, in the judgment of the Purchaser, so material and
adverse as to make it impractical or inadvisable to proceed with the offering or
delivery of such Note, (ii) there shall have been, subsequent to the agreement
to purchase such Note, any decrease in the rating of any of the Company's debt
securities by any "nationally recognized statistical rating organization" (as
defined for purposes of Rule 436(g) under the Act) or any notice given of any
intended or potential decrease in any such rating or of a possible change in any
such rating that does not indicate the direction of the possible change, (iii)
trading of any of the Company's securities shall have been suspended by the
Commission or the New York Stock Exchange or trading in securities generally on
the New York Stock Exchange or the Nasdaq Stock Market shall have been suspended
or limited or minimum prices shall have been established on such Exchange or
Market, (iv) a banking moratorium shall have been declared by either Federal or
New York State authorities or (v) there shall have occurred any outbreak or
escalation of hostilities, declaration by the United States of a national
emergency or war or other calamity or crisis the effect of which on financial
markets is such as to make it, in the judgment of the Purchaser, impracticable
or inadvisable to proceed with the offering or delivery of such Notes as
contemplated by the Prospectus (exclusive of any supplement thereto).
10. SURVIVAL OF CERTAIN PROVISIONS. The respective agreements,
representations, warranties, indemnities and other statements of the Company or
its officers and of you set forth in or made pursuant to this Agreement will
remain in full force and effect, regardless of any investigation made by or on
behalf of you or the
19
20
Company or any of the directors, officers, employees, agents or controlling
persons referred to in Section 8 hereof, and will survive delivery of and
payment for the Notes. The provisions of Sections 4(d), 4(h) and 8 hereof shall
survive the termination or cancellation of this Agreement. The provisions of
this Agreement (including without limitation Section 7 hereof) applicable to any
purchase of a Note for which an agreement to purchase exists prior to the
termination hereof shall survive any termination of this Agreement. If at the
time of termination of this Agreement any Purchaser shall own any Notes with the
intention of selling them, the provisions of Section 4 shall remain in effect
until such Notes are sold by the Purchaser.
11. NOTICES. All communications hereunder will be in writing and
effective only on receipt, and, if sent to any of you, will be mailed, delivered
or telecopied and confirmed to such of you, at the address specified in Schedule
I hereto; or, if sent to the Company will be mailed, delivered or telecopied and
confirmed to it at Convergys Corporation, General Counsel (fax no. (513)
000-0000) and confirmed to it at Convergys Corporation, 000 Xxxx Xxxxxx Xxxxxx,
Xxxxxxxxxx, Xxxx 00000, Attention: General Counsel.
12. AMENDMENTS. This Agreement may be amended or supplemented if, but
only if, such amendment or supplement is in writing and is signed by the Company
and each Agent; PROVIDED that the Company may from time to time, on seven days
prior written notice to the Agents but without the consent of any Agent, amend
this Agreement to add as a party hereto one or more additional firms registered
under the Exchange Act, whereupon each such firm shall become an Agent hereunder
on the same terms and conditions as the other Agents that are parties hereto.
The Agents shall sign any amendment or supplement giving effect to the addition
of any such firm as an Agent under this Agreement.
13. SUCCESSORS. This Agreement will inure to the benefit of and be
binding upon the parties hereto, their respective successors, the directors,
officers, employees, agents and controlling persons referred to in Section 8
hereof and, to the extent provided in Section 7, any person who has agreed to
purchase Notes, and no other person will have any right or obligation hereunder.
14. APPLICABLE LAW. THIS AGREEMENT WILL BE GOVERNED BY AND CONSTRUED IN
ACCORDANCE WITH THE LAWS OF THE STATE OF NEW YORK WITHOUT REFERENCE TO
PRINCIPLES OF CONFLICTS OF LAW.
If the foregoing is in accordance with your understanding of our
agreement, please sign and return to us the enclosed duplicate hereof, whereupon
this letter and your acceptance shall represent a binding agreement among the
Company and you.
Very truly yours,
CONVERGYS CORPORATION
By: ___________________________
Name:
Title:
The foregoing Agreement is
hereby confirmed and accepted
as of the date hereof.
20
21
XXXXXXX XXXXX XXXXXX INC.
By:
---------------------------------
Name:
Title:
BANC OF AMERICA SECURITIES LLC
By:
---------------------------------
Name:
Title:
BANC ONE CAPITAL MARKETS, INC.
By:
---------------------------------
Name:
Title:
CHASE SECURITIES INC.
By:
---------------------------------
Name:
Title:
21
22
SCHEDULE I
Commissions:
-----------
The Company agrees to pay each Agent a commission equal to the
following percentage of the principal amount of each Note sold on an agency
basis by such Agent:
Maturity Commission Rate
-------- ---------------
9 months to less than 12 months................................................ .125%
12 months to less than 18 months................................................ .150%
18 months to less than 2 years.................................................. .200%
2 years to less than 3 years................................................... .250%
3 years to less than 4 years................................................... .350%
4 years to less than 5 years................................................... .450%
5 years to less than 6 years................................................... .500%
6 years to less than 7 years................................................... .550%
7 years to less than 8 years................................................... .600%
8 years to less than 9 years................................................... .600%
9 years to less than 10 years.................................................. .600%
10 years to less than 15 years.................................................. .625%
15 years to less than 20 years.................................................. .700%
20 years to less than 30 years.................................................. .750%
30 years and beyond............................................................. to be negotiated
Unless otherwise specified in the applicable Terms Agreement,
the discount or commission payable to a Purchaser shall be determined on the
basis of the commission schedule set forth above.
Address For Notice To You:
-------------------------
Notices to Xxxxxxx Xxxxx Xxxxxx Inc. shall be directed to it at 000
Xxxxxxxxx Xxxxxx, Xxx Xxxx, Xxx Xxxx 00000, xxxxxxxxx of Medium-Term Note
Department, facsimile: (000) 000-0000.
Notices to Banc of America Securities LLC shall be directed to it at
000 Xxxxx Xxxxx, Xxxxxxxxx, Xxxxx Xxxxxxxx 00000, attention of Medium-Term Note
Desk, facsimile: (000) 000-0000.
22
23
Notices to Banc One Capital Markets, Inc. shall be directed to it 0
Xxxx Xxx Xxxxx, Xxxxx XX0 0000, Xxxxxxx, Xxxxxxxx 00000, attention of
Corporate/Securities Structuring, facsimile: (000) 000-0000.
Notices to Chase Securities Inc. shall be directed to it at 000 Xxxx
Xxxxxx, 0xx Xxxxx, Xxx Xxxx, Xxx Xxxx 00000, attention of Medium-Term Note Desk,
facsimile: (000) 000-0000.
23
24
EXHIBIT A
CONVERGYS CORPORATION
MEDIUM-TERM NOTE ADMINISTRATIVE PROCEDURES
________, 2000
The Medium-Term Notes, Series A, Due Nine Months or More from Date of
Issue (the "Notes") of Convergys Corporation (the "Company") are to be offered
on a continuing basis. Xxxxxxx Xxxxx Xxxxxx, Banc of America Securities LLC,
Banc One Capital Markets, Inc. and Chase Securities Inc., as agents (each an
"Agent"), have agreed to solicit purchases of Notes issued in fully registered
form. The Agents will not be obligated to purchase Notes for their own account.
The Notes are being sold pursuant to a Selling Agency Agreement between the
Company and the agents named therein (including the Agents) dated the date
hereof (the "Agency Agreement"). The Notes will rank equally with all other
unsecured and unsubordinated debt of the Company and have been registered with
the Securities and Exchange Commission (the "Commission"). The Notes will be
issued under an Indenture dated as of August -, 2000 (as the same may be amended
from time to time, the "Indenture"), between the Company and Chase Manhattan
Trust Company, National Association, as trustee (the "Trustee").
The Agency Agreement provides that Notes may also be purchased by an
Agent acting solely as principal and not as agent. In the event of any such
purchase, the functions of both the Agent and the beneficial owner under the
administrative procedures set forth below shall be performed by such Agent
acting solely as principal, unless otherwise agreed to between the Company and
such Agent acting as principal.
Each Note will be represented by either a Global Security (as defined
hereinafter) delivered to the Trustee, as agent for The Depository Trust Company
("DTC"), and recorded in the book-entry system maintained by DTC (a "Book-Entry
Note") or a certificate delivered to the Holder thereof or a Person designated
by such Holder (a "Certificated Note"). An owner of a Book-Entry Note will not
be entitled to receive a certificate representing such Note.
The procedures to be followed during, and the specific terms of, the
solicitation of orders by the Agents and the sale as a result thereof by the
Company are explained below. Administrative and record-keeping responsibilities
will be handled for the Company by its Treasurer. The Company will advise the
Agents and the Trustee in writing of those persons handling administrative
responsibilities with whom the Agents and the Trustee are to communicate
regarding orders to purchase Notes and the details of their delivery.
Administrative procedures and specific terms of the offering are
explained below. Book-Entry Notes will be issued in accordance with the
administrative procedures set forth in Part I hereof, as adjusted in accordance
with changes in DTC's operating requirements, and Certificated Notes will be
issued in accordance with the administrative procedures set forth in Part II
hereof. Unless otherwise defined herein, terms defined in the Indenture and the
Notes shall be used herein as therein defined. Notes for which interest is
calculated on the basis of a fixed interest rate, which may be zero, are
referred
24
25
to herein as "Fixed Rate Notes". Notes for which interest is calculated on the
basis of a floating interest rate are referred to herein as "Floating Rate
Notes". To the extent the procedures set forth below conflict with the
provisions of the Notes, the Indenture, DTC's operating requirements or the
Agency Agreement, the relevant provisions of the Notes, the Indenture, DTC's
operating requirements and the Agency Agreement shall control.
PART I
ADMINISTRATIVE PROCEDURES FOR
BOOK-ENTRY NOTES
In connection with the qualification of the Book-Entry Notes for
eligibility in the book-entry system maintained by DTC, the Trustee will perform
the custodial, document control and administrative functions described below, in
accordance with its respective obligations under a Letter of Representations
from the Company and the Trustee to DTC dated as of the date hereof and a
Medium-Term Note Certificate Agreement between the Trustee and DTC and its
obligations as a participant in DTC, including DTC's Same-Day Funds Settlement
system ("SDFS").
ISSUANCE: On any date of settlement (as defined under
"Settlement" below) for one or more
Book-Entry Notes, the Company will issue a
single global security in fully registered
form without coupons (a "Global Security")
representing up to $400,000,000 principal
amount of all such Book-Entry Notes that
have the same original issue date, original
issue discount provisions, if any, Interest
Payment Dates, Regular Record Dates,
Interest Payment Period, redemption,
repayment and extension provisions, if any,
Maturity Date, and, in the case of Fixed
Rate Notes, interest rate, or, in the case
of Floating Rate Notes, initial interest
rate, Base Rate, Index Maturity, Interest
Reset Period, Interest Reset Dates, Spread
or Spread Multiplier, if any, minimum
interest rate, if any, and maximum interest
rate, if any (collectively, the "Terms").
Each Global Security will be dated and
issued as of the date of its authentication
by the Trustee. Each Global Security will
bear an original issue date, which will be
(i) with respect to an original Global
Security (or any portion thereof), the
original issue date specified in such Global
Security and (ii) following a consolidation
of Global Securities, with respect to the
Global Security resulting from such
consolidation, the most recent Interest
Payment Date to which interest has been paid
or duly provided for on the predecessor
Global Securities, regardless of the date of
25
26
authentication of such resulting Global
Security. No Global Security will represent
(i) both Fixed Rate and Floating Rate
Book-Entry Notes or (ii) any Certificated
Note.
IDENTIFICATION The Company has arranged with the
NUMBERS: CUSIP Service Bureau of Standard & Poor's
Corporation (the "CUSIP Service Bureau") for
the reservation of a series of CUSIP
numbers, which series consists of
approximately 900 CUSIP numbers and relates
to Global Securities representing Book-Entry
Notes and book-entry medium-term notes
issued by the Company with other series
designations. The Trustee, the Company and
DTC have obtained from the CUSIP Service
Bureau a written list of such reserved CUSIP
numbers. The Company will assign CUSIP
numbers to Global Securities as described
below under Settlement Procedure "B". DTC
will notify the CUSIP Service Bureau
periodically of the CUSIP numbers that the
Company has assigned to Global Securities.
The Trustee will notify the Company at any
time when fewer than 100 of the reserved
CUSIP numbers remain unassigned to Global
Securities, and, if it deems necessary, the
Company will reserve additional CUSIP
numbers for assignment to Global Securities.
Upon obtaining such additional CUSIP
numbers, the Company shall deliver a list of
such additional CUSIP numbers to the Trustee
and DTC.
REGISTRATION: Global Securities will be issued only in
fully registered form without coupons. Each
Global Security will be registered in the
name of CEDE & CO., as nominee for DTC, on
the securities register for the Notes
maintained under the Indenture. The
beneficial owner of a Book-Entry Note (or
one or more indirect participants in DTC
designated by such owner) will designate one
or more participants in DTC (with respect to
such Book-Entry Note, the "Participants") to
act as agent or agents for such owner in
connection with the book-entry system
maintained by DTC, and DTC will record in
book-entry form, in accordance with
instructions provided by such Participants,
a credit balance with respect to such
beneficial owner in such Book-Entry Note in
the account of such Participants. The
ownership interest of such beneficial owner
(or such participant) in such Book-Entry
Note will be recorded through the records of
such
26
27
Participants or through the separate records
of such Participants and one or more
indirect participants in DTC.
TRANSFERS: Transfers of a Book-Entry Note will be
accomplished by book entries made by DTC
and, in turn, by Participants (and in
certain cases, one or more indirect
participants in DTC) acting on behalf of
beneficial transferors and transferees of
such Note.
EXCHANGES: The Trustee may deliver to DTC and the CUSIP
Service Bureau at any time a written notice
of consolidation (a copy of which shall be
attached to the resulting Global Security
described below) specifying (i) the CUSIP
numbers of two or more outstanding Global
Securities that represent (A) Fixed Rate
Book-Entry Notes having the same Terms and
for which interest has been paid to the same
date or (B) Floating Rate Book-Entry Notes
having the same Terms and for which interest
has been paid to the same date, (ii) a date,
occurring at least thirty days after such
written notice is delivered and at least
thirty days before the next Interest Payment
Date for such Book-Entry Notes, on which
such Global Securities shall be exchanged
for a single replacement Global Security and
(iii) a new CUSIP number, obtained from the
Company, to be assigned to such replacement
Global Security. Upon receipt of such a
notice, DTC will send to its participants
(including the Trustee) a written
reorganization notice to the effect that
such exchange will occur on such date. Prior
to the specified exchange date, the Trustee
will deliver to the CUSIP Service Bureau a
written notice setting forth such exchange
date and such new CUSIP number and stating
that, as of such exchange date, the CUSIP
numbers of the Global Securities to be
exchanged will no longer be valid. On the
specified exchange date, the Trustee will
exchange such Global Securities for a single
Global Security bearing the new CUSIP number
and the CUSIP numbers of the exchanged
Global Securities will, in accordance with
CUSIP Service Bureau procedures, be canceled
and not immediately reassigned. Not-
withstanding the foregoing, if the Global
Securities to be exchanged exceed
$400,000,000 in aggregate principal amount,
one Global Security will be authenticated
and issued to represent each $400,000,000 of
principal amount of the exchanged Global
Securities and an
27
28
additional Global Security will be
authenticated and issued to represent any
remaining principal amount of such Global
Securities (see "Denominations" below).
MATURITIES: Each Book-Entry Note will mature on a date
not less than nine months after the Original
Issue Date for such Note. A Floating Rate
Book-Entry Note will mature only on an
Interest Payment Date for such Note. Any
Note denominated in Japanese yen will mature
on a date not less than one year from the
Original Issue Date (as defined below) for
such Note. Any Note denominated in Pounds
Sterling will mature on a date not less than
one year, nor more than five years, after
its Original Issue Date.
DENOMINATIONS: Book-Entry Notes will be issued in principal
amounts of $1,000 or any amount in excess
thereof that is an integral multiple of
$1,000. Global Securities will be
denominated in principal amounts not in
excess of $400,000,000. If one or more
Book-Entry Notes having an aggregate
principal amount in excess of $400,000,000
would, but for the preceding sentence, be
represented by a single Global Security,
then one Global Security will be
authenticated and issued to represent each
$400,000,000 principal amount of such
Book-Entry Note or Notes and an additional
Global Security will be authenticated and
issued to represent any remaining principal
amount of such Book-Entry Note or Notes. In
such a case, each of the Global Securities
representing such Book-Entry Note or Notes
shall be assigned the same CUSIP number.
INTEREST: GENERAL. Interest, if any, on each Book-
Entry Note will accrue from the original
issue date for the first interest period or
the last date to which interest has been
paid, if any, for each subsequent interest
period, on the Global Security representing
such Book-Entry Note, and will be calculated
and paid in the manner described in such
Book-Entry Note and in the Prospectus (as
defined in the Agency Agreement), as
supplemented by the applicable Pricing
Supplement. Unless otherwise specified
therein, each payment of interest on a Book
Entry Note will include interest accrued to
but excluding the Interest Payment Date
(provided that, in the case of Floating Rate
BookEntry Notes which reset daily or weekly,
interest payments will include accrued
interest to but
28
29
excluding the Regular Record Date
immediately preceding the Interest Payment
Date) or to but excluding Maturity (other
than a Maturity of a Fixed Rate BookEntry
Note occurring on the 31st day of a month,
in which case such payment of interest will
include interest accrued to but excluding
the 30th day of such month). Interest
payable at the Maturity of a Book-Entry
Note will be payable to the Person to whom
the principal of such Note is payable.
Standard & Poor's Corporation will use the
information received in the pending deposit
message described under Settlement Procedure
"C" below in order to include the amount of
any interest payable and certain other
information regarding the related Global
Security in the appropriate (daily or
weekly) bond report published by Standard &
Poor's Corporation.
REGULAR RECORD DATES. The Regular Record
Date with respect to any Interest Payment
Date shall be the date fifteen calendar days
immediately preceding such Interest Payment
Date (whether or not a Business Date).
INTEREST PAYMENT DATES ON FIXED RATE
BOOK-ENTRY NOTES. Unless otherwise specified
pursuant to Settlement Procedure "A" below,
interest payments on Fixed Rate Book-Entry
Notes will be made semiannually on May 1 and
November 1 of each year and at Maturity;
PROVIDED, HOWEVER, that if an Interest
Payment Date for a Fixed Rate Book-Entry
Note is not a Business Day, the payment due
on such day shall be made on the next
succeeding Business Day and no interest
shall accrue on such payment for the period
from and after such Interest Payment Date;
PROVIDED FURTHER, that in the case of a
Fixed Rate Book-Entry Note issued between a
Regular Record Date and an Interest Payment
Date, the first interest payment will be
made on the Interest Payment Date following
the next succeeding Regular Record Date.
INTEREST PAYMENT DATES ON FLOATING RATE
BOOK-ENTRY NOTES. Interest payments will be
made on Floating Rate Book-Entry Notes
monthly, quarterly, semi-annually or
annually. Unless otherwise agreed upon,
interest will be payable, in the case of
Floating Rate Book-Entry Notes with a
monthly Interest Payment Period, on the
third Wednesday of each month; with a
quarterly Interest Payment Period, on the
third Wednesday of March,
29
30
June, September and December of each year;
with a semi-annual Interest Payment Period
on the third Wednesday of the two months
specified pursuant to Settlement Procedure
"A" below; and with an annual Interest
Payment Period, on the third Wednesday of
the month specified pursuant to Settlement
Procedure "A" below; PROVIDED, HOWEVER, that
if an Interest Payment Date for a Floating
Rate Book-Entry Note would otherwise be a
day that is not a Business Day with respect
to such Floating Rate Book-Entry Note, such
Interest Payment Date will be the next
succeeding Business Day with respect to
such Floating Rate Book-Entry Note, except
in the case of a Floating Rate Book-Entry
Note for which the Base Rate is LIBOR, if
such Business Day is in the next succeeding
calendar month, such Interest Payment Date
will be the immediately preceding Business
Day; and PROVIDED FURTHER, that in the case
of a Floating Rate Book-Entry Note issued
between a Regular Record Date and an
Interest Payment Date, the first interest
payment will be made on the Interest
Payment Date following the next succeeding
Regular Record Date.
NOTICE OF INTEREST PAYMENT AND REGULAR
RECORD DATES. On the first Business Day of
January, April, July and October of each
year, the Trustee will deliver to the
Company and DTC a written list of Regular
Record Dates and Interest Payment Dates that
will occur with respect to Book-Entry Notes
during the six-month period beginning on
such first Business Day. Promptly after each
Interest Determination Date for Floating
Rate Book-Entry Notes, the Trustee, as
Calculation Agent, will notify Standard &
Poor's Corporation of the interest rates
determined on such Interest Determination
Date.
CALCULATION OF FIXED RATE BOOK-ENTRY NOTES. Interest
INTEREST: on Fixed Rate Book-Entry Notes (including
interest for partial periods) will be
calculated on the basis of a 360-day year
of twelve 30-day months.
FLOATING RATE BOOK-ENTRY NOTES. Interest
rates on Floating Rate Book-Entry Notes will
be determined as set forth in the form of
Notes. Interest on Floating Rate Book-Entry
Notes, except as otherwise set forth
therein, will be calculated on the basis of
actual days elapsed and a year of 360 days,
except that in the case of a Floating
30
31
Rate Book-Entry Note for which the Base Rate
is Treasury Rate or CMT Rate, interest will
be calculated on the basis of the actual
number of days in the year.
PAYMENTS OF PAYMENT OF INTEREST ONLY. Promptly after
PRINCIPAL AND INTEREST: each Regular Record Date, the Trustee will
deliver to the Company and DTC a written
notice setting forth, by CUSIP number, the
amount of interest to be paid on each Global
Security on the following Interest Payment
Date (other than an Interest Payment Date
coinciding with Maturity) and the total of
such amounts. DTC will confirm the amount
payable on each Global Security on such
Interest Payment Date by reference to the
appropriate (daily or weekly) bond reports
published by Standard & Poor's Corporation.
The Company will pay to the Trustee, as
paying agent, the total amount of interest
due on such Interest Payment Date (other
than at Maturity), and the Trustee will pay
such amount to DTC, at the times and in the
manner set forth below under "Manner of
Payment".
PAYMENTS AT MATURITY. On or about the first
Business Day of each month, the Trustee will
deliver to the Company and DTC a written
list of principal and interest to be paid on
each Global Security maturing (on a Maturity
or Redemption Date or otherwise) in the
following month. The Trustee, the Company
and DTC will confirm the amounts of such
principal and interest payments with respect
to each such Global Security on or about the
fifth Business Day preceding the Maturity of
such Global Security. On or before Maturity,
the Company will pay to the Trustee, as
paying agent, the principal amount of such
Global Security, together with interest due
at such Maturity. The Trustee will pay such
amount to DTC at the times and in the manner
set forth below under "Manner of Payment".
If any Maturity of a Global Security
representing Book-Entry Notes is not a
Business Day, the payment due on such day
shall be made on the next succeeding
Business Day and no interest shall accrue
on such payment for the period from and
after such Maturity. Promptly after payment
to DTC of the principal and interest due at
Maturity of such Global Security, the
Trustee will cancel such Global Security in
accordance with the Indenture and so advise
the Company. If the Maturity of a Book-Entry
Note is not a Business Day, the payment due
on such day shall be
31
32
made on the next succeeding Business Day and
no interest shall accrue on such payment for
the period from and after such Maturity.
MANNER OF PAYMENT. The total amount of any
principal and interest due on Global
Securities on any Interest Payment Date or
at Maturity shall be paid by the Company to
the Trustee in immediately available funds
no later than 9:30 A.M. (New York City time)
on such date. The Company will make such
payment on such Global Securities by
instructing the Trustee to withdraw funds
from an account maintained by the Company at
the Trustee or by wire transfer to the
Trustee. The Company will confirm any such
instructions in writing to the Trustee.
Prior to 10 A.M. (New York City time) on the
date of Maturity or as soon as possible
thereafter, the Trustee will pay by separate
wire transfer (using Fedwire message entry
instructions in a form previously specified
by DTC) to an account at the Federal Reserve
Bank of New York previously specified by
DTC, in funds available for immediate use by
DTC, each payment of principal (together
with interest thereon) due on a Global
Security on such date. On each Interest
Payment Date (other than at Maturity),
interest payments shall be made to DTC, in
funds available for immediate use by DTC, in
accordance with existing arrangements
between the Trustee and DTC. On each such
date, DTC will pay, in accordance with its
SDFS operating procedures then in effect,
such amounts in funds available for
immediate use to the respective Par-
ticipants in whose names the Book-Entry
Notes represented by such Global Securities
are recorded in the book-entry system
maintained by DTC. None of the Company (as
issuer or as paying agent) or the Trustee
shall have any direct responsibility or
liability for the payment by DTC to such
Participants of the principal of and
interest on the Book-Entry Notes.
WITHHOLDING TAXES. The amount of any taxes
required under applicable law to be withheld
from any interest payment on a Book-Entry
Note will be determined and withheld by the
Participant, indirect participant in DTC or
other Person responsible for forwarding
payments and materials directly to the
beneficial owner of such Note.
PROCEDURES UPON COMPANY NOTICE TO TRUSTEE REGARDING EXERCISE
OF
32
33
COMPANY'S EXERCISE OPTIONAL RESET. Not less than 45 or more
OF OPTIONAL RESET than 60 days before an Optional Reset Date
OR OPTIONAL as set forth in a Book-Entry Note, the
EXTENSION OF Company will notify the Trustee whether it
MATURITY: is exercising its option to reset the
Interest Rate or Spread or Spread
Multiplier, as the case may be, for such
Book-Entry Note, and if so, (i) the new
Interest Rate or Spread or Spread
Multiplier, as the case may be, for such
Book-Entry Note during the period from such
Optional Reset Date to the next Optional
Reset Date as set forth in such Book-Entry
Note or, if there is no such next Optional
Reset Date, to the Stated Maturity of such
Book-Entry Note (the "Subsequent Interest
Period"); and (ii) the provisions, if any,
for redemption of such Book-Entry Note
during such Subsequent Interest Period,
including the date or dates on which or the
period or periods during which such
redemption may occur during such Subsequent
Interest Period.
COMPANY NOTICE TO TRUSTEE REGARDING EXERCISE
OF OPTIONAL EXTENSION OF MATURITY. If the
Company elects to exercise an option, as set
forth in a Book-Entry Note, to extend the
Stated Maturity of such Note, it will so
notify the Trustee not less than 45 or more
than 60 days before the Stated Maturity of
such Book-Entry Note, and will further
indicate (i) the new Stated Maturity; (ii)
the Interest Rate or Spread or Spread
Multiplier, as the case may be; and (iii)
the provisions, if any, for redemption of
such Book-Entry Note during such extension
period, including the date or dates on which
or the period or periods during which such
redemption may occur during such extension
period.
TRUSTEE NOTICE TO DTC REGARDING COMPANY'S
EXERCISE OF OPTIONAL EXTENSION OR RESET.
Upon receipt of notice from the Company
regarding the Company's exercise of either
an optional extension of maturity or an
optional reset, the Trustee will
hand-deliver a notice to DTC not less than
40 days before the Optional Reset Date (in
which case a "Reset Notice") or the Stated
Maturity (in which case an "Extension
Notice"), as the case may be, which Reset
Notice or Extension Notice shall identify
such Book-Entry Note by CUSIP number and
shall contain the information required by
the terms of the Book-Entry Note.
33
34
TRUSTEE NOTICE TO COMPANY REGARDING OPTION
TO BE REPAID. If, after receipt of either a
Reset Notice or an Extension Notice, DTC
exercises the option for repayment by
tendering the Global Security representing
the Book-Entry Note to be repaid as set
forth in such Note, the Trustee shall give
notice to the Company not less than 22 days
before the Optional Reset Date or the old
Stated Maturity, as the case may be, of the
principal amount of Book-Entry Notes to be
repaid on such Optional Reset Date or old
Stated Maturity, as the case may be.
COMPANY NOTICE REGARDING NEW INTEREST RATE
OR NEW SPREAD OR SPREAD MULTIPLIER. If the
Company elects to revoke the Interest Rate
or Spread or Spread Multiplier and establish
a higher interest rate or Spread or Spread
Multiplier for an Optional Reset Period or
extension period, as the case may be, it
shall, not less than 20 days before such
Optional Reset Date or old Stated Maturity,
so notify the Trustee. The Trustee will
immediately thereafter notify DTC of the new
Interest Rate or Spread or Spread Multiplier
applicable to such Book-Entry Note.
TRUSTEE NOTICE TO COMPANY REGARDING DTC
REVOCATION OF OPTION TO BE REPAID. If, after
DTC has tendered any Book-Entry Notes for
repayment pursuant to an Extension Notice or
an Optional Reset Notice, DTC then revokes
such tender for repayment, the Trustee shall
give notice to the Company not less than
five days prior to the old Stated Maturity
or Optional Reset Date, as the case may be,
of such revocation and of the principal
amount of Book-Entry Notes for which tender
for repayment has been revoked.
DEPOSIT OF REPAYMENT PRICE. On or before any
old Stated Maturity where the Maturity has
been extended, and on or before an Optional
Reset Date, the Company shall deposit with
the Trustee an amount of money sufficient to
pay the principal amount, plus interest
accrued to such old Stated Maturity or
Optional Reset Date, as the case may be, for
all the Book-Entry Notes or portions thereof
which are to be repaid on such old Stated
Maturity or Optional Reset Date, as the case
may be. Such Trustee will use such money to
repay such
34
35
Book-Entry Notes pursuant to the terms set
forth in such Notes.
PROCEDURES UPON COMPANY NOTICE TO TRUSTEE REGARDING
COMPANY'S EXERCISE OF OPTIONAL REDEMPTION.
EXERCISE OF At least 45 days prior to the date on
OPTIONAL which it intends to redeem a Book-
REDEMPTION: Entry Note, the Company will notify the
Trustee that it is exercising such option
with respect to such Book-Entry Note on
such date.
TRUSTEE NOTICE TO DTC REGARDING COMPANY'S
EXERCISE OF OPTIONAL REDEMPTION. After
receipt of notice that the Company is
exercising its option to redeem a Book-
Entry Note, the Trustee will, at least 30
days before the redemption date for such
Book-Entry Note, hand deliver to DTC a
notice identifying such Book-Entry Note by
CUSIP number and informing DTC of the
Company's exercise of such option with
respect to such Book-Entry Note.
DEPOSIT OF REDEMPTION PRICE. On or before
any redemption date, the Company shall
deposit with such Trustee an amount of money
sufficient to pay the redemption price, plus
interest accrued to such redemption date,
for all the Book-Entry Notes or portions
thereof which are to be repaid on such
redemption date. Such Trustee will use such
money to repay such Book-Entry Notes
pursuant to the terms set forth in such
Notes.
PAYMENTS OF PRIN- TRUSTEE NOTICE TO COMPANY OF OPTION
CIPAL AND INTEREST TO BE REPAID. Upon receipt of notice
UPON EXERCISE OF of exercise of the option for
OPTIONAL REPAYMENT repayment and the Global Securities
(EXCEPT PURSUANT TO representing the Book-Entry Notes so
COMPANY'S EXERCISE to be repaid as set forth in such
OF OPTIONAL RESET OR Notes, the Trustee shall (unless such
OPTIONAL EXTENSION): notice was received pursuant to the
Company's exercise of an optional reset or
an optional extension of maturity, in each
of which cases the relevant procedures set
forth above are to be followed) give notice
to the Company not less than 20 days prior
to each Optional Repayment Date of such
Optional Repayment Date and of the principal
amount of Book-Entry Notes to be repaid on
such Optional Repayment Date.
35
36
DEPOSIT OF REPAYMENT PRICE. On or prior to
any Optional Repayment Date, the Company
shall deposit with such Trustee an amount of
money sufficient to pay the optional
repayment price, and accrued interest
thereon to such date, of all the Book-Entry
Notes or portions thereof which are to be
repaid on such date. Such Trustee will use
such money to repay such Book-Entry Notes
pursuant to the terms set forth in such
Notes.
PROCEDURE FOR RATE The Company and the Agents will discuss
SETTING AND from time to time the aggregate principal
POSTING: amount of, the issuance price of, and the
interest rates to be borne by, Book-Entry
Notes that may be sold as a result of the
solicitation of orders by the Agents. If the
Company decides to set prices of, and rates
borne by, any Book-Entry Notes in respect of
which the Agents are to solicit orders (the
setting of such prices and rates to be
referred to herein as "posting") or if the
Company decides to change prices or rates
previously posted by it, it will promptly
advise the Agents of the prices and rates to
be posted.
ACCEPTANCE AND Unless otherwise instructed by the Company,
REJECTION OF each Agent will advise the Company promptly
ORDERS: by telephone of all orders to purchase Book-
Entry Notes received by such Agent, other
than those rejected by it in whole or in
part in the reasonable exercise of its
discretion. Unless otherwise agreed by the
Company and the Agents, the Company has the
right to accept orders to purchase
Book-Entry Notes and may reject any such
orders in whole or in part.
PREPARATION OF If any order to purchase a Book-Entry Note
PRICING is accepted by or on behalf of the Company,
SUPPLEMENT: the Company will prepare a pricing
supplement (a "Pricing Supplement")
reflecting the applicable interest rates and
other terms of such Book-Entry Note and
will arrange to have ten copies thereof
filed with the Commission in accordance with
the applicable paragraph of Rule 424(b)
under the Act and will supply at least ten
copies thereof (and additional copies if
requested) to the Agent which presented the
order (the "Presenting Agent"). The
Presenting Agent will cause
36
37
a Prospectus and Pricing Supplement to be
delivered to the purchaser of such
Book-Entry Note.
In each instance that a Pricing Supplement
is prepared, the Presenting Agent will affix
the Pricing Supplement to Prospectuses prior
to their use. Outdated Pricing Supplements
(other than those retained for files) will
be destroyed.
SUSPENSION OF The Company reserves the right, in its sole
SOLICITATION; discretion, to instruct the Agents to
AMENDMENT OR suspend at any time, for any period of
SUPPLEMENT: time or permanently, the solicitation of
orders to purchase Book-Entry Notes. Upon
receipt of such instructions, the Agents
will forthwith suspend solicitation until
such time as the Company has advised them
that such solicitation may be resumed.
In the event that at the time the Company
suspends solicitation of purchases there
shall be any orders outstanding for
settlement, the Company will promptly advise
the Agents and the Trustee whether such
orders may be settled and whether copies of
the Prospectus as in effect at the time of
the suspension, together with the
appropriate Pricing Supplement, may be
delivered in connection with the settlement
of such orders. The Company will have the
sole responsibility for such decision and
for any arrangements that may be made in the
event that the Company determines that such
orders may not be settled or that copies of
such Prospectus may not be so delivered.
If the Company decides to amend or
supplement the Registration Statement (as
defined in the Agency Agreement) or the
Prospectus, it will promptly advise the
Agents and furnish the Agents with the
proposed amendment or supplement and with
such certificates and opinions as are
required, all to the extent required by and
in accordance with the terms of the Agency
Agreement. Subject to the provisions of the
Agency Agreement, the Company may file with
the Commission any such supplement to the
Prospectus relating to the Notes. The
Company will provide the Agents and the
Trustee with copies of any such supplement,
and confirm to the Agents that such
supplement has been filed with the
37
38
Commission pursuant to the applicable
paragraph of Rule 424(b).
PROCEDURES FOR When the Company has determined to change
RATE CHANGES: the interest rates of Book-Entry Notes being
offered, it will promptly advise the Agents
and the Agents will forthwith suspend
solicitation of orders. The Agents will
telephone the Company with recommendations
as to the changed interest rates. At such
time as the Company has advised the Agents
of the new interest rates, the Agents may
resume solicitation of orders. Until such
time only "indications of interest" may be
recorded.
DELIVERY OF A copy of the Prospectus and a Pricing
PROSPECTUS: Supplement relating to a Book-Entry Note
must accompany or precede the earliest of
any written offer of such Book-Entry Note,
confirmation of the purchase of such
Book-Entry Note and payment for such Book-
Entry Note by its purchaser. If notice of a
change in the terms of the Book-Entry Notes
is received by the Agents between the time
an order for a Book-Entry Note is placed and
the time written confirmation thereof is
sent by the Presenting Agent to a customer
or his agent, such confirmation shall be
accompanied by a Prospectus and Pricing
Supplement setting forth the terms in effect
when the order was placed. Subject to
"Suspension of Solicitation; Amendment or
Supplement" above, the Presenting Agent will
deliver a Prospectus and Pricing Supplement
as herein described with respect to each
Book-Entry Note sold by it. The Company will
make such delivery if such Book-Entry Note
is sold directly by the Company to a
purchaser (other than an Agent).
CONFIRMATION: For each order to purchase a Book-Entry
Note solicited by any Agent and accepted by
or on behalf of the Company, the Presenting
Agent will issue a confirmation to the
purchaser, with a copy to the Company,
setting forth the details set forth above
and delivery and payment instructions.
SETTLEMENT: The receipt by the Company of immediately
available funds in payment for a Book-Entry
Note and the authentication and issuance of
the Global Security representing such
Book-Entry Note shall constitute
"settlement" with respect to such Book-Entry
Note. All
38
39
orders accepted by the Company will be
settled on the third Business Day following
the date of sale of such Book-Entry Note
pursuant to the timetable for settlement set
forth below unless the Company and the
purchaser agree to settlement on another day
which shall be no earlier than the next
Business Day following the date of sale.
SETTLEMENT Settlement Procedures with regard to
PROCEDURES: each Book-Entry Note sold by the
Company through any Agent, as agent, shall
be as follows:
A. The Presenting Agent will advise
the Company by telephone of the
following settlement information:
1. Principal amount.
2. Maturity Date.
3. In the case of a Fixed Rate
Book-Entry Note, the
interest rate or, in the
case of a Floating Rate
Book-Entry Note, the Base
Rate, initial interest
rate (if known at such
time), Index Maturity,
Interest Reset Period,
Interest Reset Dates,
Spread or Spread
Multiplier (if any),
Minimum Interest Rate (if
any) and Maximum Interest
Rate (if any).
4. Interest Payment Dates and
the Interest Payment
Period.
5. Redemption, repayment and
extension provisions, if
any.
6. Settlement date.
7. Price.
8. Presenting Agent's
commission, determined as
provided in Section 2 of
the Agency Agreement.
9. Whether such Book-Entry
Note is issued at an
original issue discount
and, if so, the total
39
40
amount of OID, the yield to
maturity and the initial
accrual period OID.
B. The Company will assign a CUSIP
number to the Global Security
representing such Book-Entry Note
and then advise the Trustee by
telephone (confirmed in writing at
any time on the same date) or
electronic transmission of the
information set forth in Settlement
Procedure "A" above, such CUSIP
number and the name of the
Presenting Agent. The Company will
also notify the Presenting Agent by
telephone of such CUSIP number as
soon as practicable. Each such
communication by the Company shall
constitute a representation and
warranty by the Company, the
Trustee and the Presenting Agent
that (i) such Note is then, and at
the time of issuance and sale
thereof will be, duly authorized
for issuance and sale by the
Company, (ii) such Note, and the
Global Security representing such
Note, will conform with the terms
of the Indenture for such Note, and
(iii) upon authentication and
delivery of such Global Security,
the aggregate initial offering
price of all Notes issued under the
Indenture will not exceed the
amount registered pursuant to the
Registration Statement (except for
Book-Entry Notes represented by
Global Securities authenticated and
delivered in exchange for or in
lieu of Global Securities pursuant
to the Indenture and except for
Certificated Notes authenticated
and delivered upon registration of
transfer of, in exchange for, or in
lieu of Certificated Notes pursuant
to any such Section).
C. The Trustee will enter a pending
deposit message through DTC's
Participant Terminal System
providing the following settlement
information to DTC (which shall
route such information to Standard
& Poor's Corporation), the
Presenting Agent and, upon request,
the Trustee:
1. The information set forth
in Settlement Procedure
"A".
2. Identification as a Fixed
Rate Book-Entry Note or a
Floating Rate Book-Entry
Note.
40
41
3. Initial Interest Payment
Date for such Book-Entry
Note, number of days by
which such date succeeds
the related Regular Record
Date and amount of interest
payable on such Interest
Payment Date.
4. The Interest Payment
Period.
5. CUSIP number of the Global
Security representing such
Book-Entry Note.
6. Whether such Global
Security will represent any
other Book-Entry Note (to
the extent known at such
time).
D. To the extent the Company has not
already done so, the Company will
deliver to the Trustee a Global
Security in a form that has been
approved by the Company, the Agents
and the Trustee.
E. The Trustee will complete such
Book-Entry Note, stamp the
appropriate legend, as instructed
by DTC, if not already set forth
thereon, and authenticate the
Global Security representing such
Book-Entry Note.
F. DTC will credit such Book-Entry
Note to the Trustee's participant
account at DTC.
G. The Trustee will enter an SDFS
deliver order through DTC's
Participant Terminal System
instructing DTC to (i) debit such
Book-Entry Note to the Trustee's
participant account and credit such
Book-Entry Note to the Presenting
Agent's participant account and
(ii) debit the Presenting Agent's
settlement account and credit the
Trustee's settlement account for an
amount equal to the price of such
Book-Entry Note less the Presenting
Agent's commission. The entry of
such a deliver order shall
constitute a representation and
warranty by the Trustee to DTC that
(i) the Global Security
representing such Book-Entry Note
has been issued and authenticated
and (ii) the Trustee is holding
such Global Security pursuant to
the Medium-Term Note Certificate
Agreement between the Trustee and
DTC.
41
42
H. The Presenting Agent will enter an
SDFS deliver order through DTC's
Participant Terminal System
instructing DTC (i) to debit such
Book-Entry Note to the Presenting
Agent's participant account and
credit such Book-Entry Note to the
participant accounts of the
Participants with respect to such
Book-Entry Note and (ii) to debit
the settlement accounts of such
Participants and credit the
settlement account of the
Presenting Agent for an amount
equal to the price of such
Book-Entry Note.
I. Transfers of funds in accordance
with SDFS deliver orders described
in Settlement Procedures "G" and
"H" will be settled in accordance
with SDFS operating procedures in
effect on the settlement date.
J. The Trustee will, upon receipt of
funds from the Presenting Agent in
accordance with Settlement
Procedure "G", wire transfer to
the account of the Company
maintained at PNC Bank, N.A.,
Pittsburgh, Pennsylvania funds
available for immediate use in the
amount transferred to the Trustee
in accordance with Settlement
Procedure "G".
K. The Presenting Agent will confirm
the purchase of such Book-Entry
Note to the purchaser either by
transmitting to the Participants
with respect to such Book-Entry
Note a confirmation order or orders
through DTC's institutional
delivery system or by mailing a
written confirmation to such pur-
chaser.
SETTLEMENT For orders of Book-Entry Notes solicited by
PROCEDURES any Agent and accepted by the Company for
TIMETABLE: settlement on the first Business Day after
the sale date, Settlement Procedures "A"
through "K" set forth above shall be
completed as soon as
42
43
possible but not later than the respective
times (New York City time) set forth below:
Settlement
Procedure Time
---------- ----
A 11:00 A.M. on the sale
date
B 12:00 Noon on the sale
date
C 2:00 P.M. on the sale
date
D 3.00 P.M. on the day
before
settlement
E 9:00 A.M. on settlement
date
F 10:00 A.M. on settlement
date
G-H 2:00 P.M. on settlement
date
I 4:45 P.M. on settlement
date
J-K 5:00 P.M. on settlement
date
If a sale is to be settled more than one
Business Day after the sale date, Settlement
Procedures "A", "B" and "C" shall be
completed as soon as practicable but no
later than 11:00 A.M. and 12:00 Noon on the
first Business Day after the sale date and
no later than 2:00 P.M. on the Business Day
before the settlement date, respectively. If
the initial interest rate for a Floating
Rate Book-Entry Note has not been determined
at the time that Settlement Procedure "A" is
completed, Settlement Procedures "B" and "C"
shall be completed as soon as such rate has
been determined but no later than 12:00 Noon
and 2:00 P.M., respectively, on the Business
Day before the settlement date. Settlement
Procedure "I" is subject to extension in
accordance with any extension of Fedwire
closing deadlines and in the other events
specified in SDFS operating procedures in
effect on the settlement date.
If settlement of a Book-Entry Note is
rescheduled or canceled, the Trustee will
deliver to DTC, through
43
44
DTC's Participant Terminal System, a
cancellation message to such effect by no
later than 2:00 P.M. on the Business Day
immediately preceding the scheduled set-
tlement date.
FAILURE TO SETTLE: If the Trustee fails to enter an SDFS
deliver order with respect to a Book-Entry
Note pursuant to Settlement Procedure "G",
the Trustee may deliver to DTC, through
DTC's Participant Terminal System, as soon
as practicable, a withdrawal message
instructing DTC to debit such Book-Entry
Note to the Trustee's participant account.
DTC will process the withdrawal message,
provided that the Trustee's participant
account contains a principal amount of the
Global Security representing such Book-Entry
Note that is at least equal to the principal
amount to be debited. If a withdrawal
message is processed with respect to all the
Book-Entry Notes represented by a Global
Security, the Trustee will cancel such
Global Security in accordance with the
Indenture and so advise the Company and the
Trustee, and the Trustee will make
appropriate entries in its records. The
CUSIP number assigned to such Global
Security shall, in accordance with CUSIP
Service Bureau procedures, be canceled and
not immediately reassigned. If a withdrawal
message is processed with respect to one or
more, but not all, of the Book-Entry Notes
represented by a Global Security, the
Trustee will exchange such Book-Entry Note
for two Global Securities, one of which
shall represent such Book-Entry Notes and
shall be canceled immediately after issuance
and the other of which shall represent the
other Book-Entry Notes previously
represented by the surrendered Global
Security and shall bear the CUSIP number of
the surrendered Global Security.
If the purchase price for any Book-Entry
Note is not timely paid to the Participants
with respect to such Note by the beneficial
purchaser thereof (or a Person, including an
indirect participant in DTC, acting on
behalf of such purchaser), such Participants
and, in turn, the Presenting Agent may enter
SDFS deliver orders through DTC's
Participant Terminal System reversing the
orders entered pursuant to Settlement Proce-
dures "H" and "G", respectively. Thereafter,
the Trustee will deliver the withdrawal
message and take the related actions
described in the preceding paragraph. If
such
44
45
failure shall have occurred for any reason
other than a default by the Presenting Agent
in the performance of its obligations
hereunder and under the Agency Agreement,
then the Company will reimburse the
Presenting Agent or the Trustee, as
applicable, on an equitable basis for the
loss of the use of the funds during the
period when they were credited to the
account of the Company.
Notwithstanding the foregoing, upon any
failure to settle with respect to a
Book-Entry Note, DTC may take any actions in
accordance with its SDFS operating
procedures then in effect. In the event of a
failure to settle with respect to one or
more, but not all, of the Book-Entry Notes
to have been represented by a Global
Security, the Trustee will provide, in
accordance with Settlement Procedure "E",
for the authentication and issuance of a
Global Security representing the other
Book-Entry Notes to have been represented by
such Global Security and will make
appropriate entries in its records.
TRUSTEE NOT TO Nothing herein shall be deemed to require
RISK FUNDS: the Trustee to risk or expend its own funds
in connection with any payment to the
Company, DTC, the Agents or the purchaser,
it being understood by all parties that
payments made by the Trustee to the Company,
DTC, the Agents or the purchaser shall be
made only to the extent that funds are
provided to the Trustee for such purpose.
AUTHENTICITY OF The Company will cause the Trustee to
SIGNATURES: furnish the Agents from time to time with
the specimen signatures of each of the
Trustee's officers, employees or agents who
has been authorized by the Trustee to
authenticate Book-Entry Notes, but no Agent
will have any obligation or liability to the
Company or the Trustee in respect of the
authenticity of the signature of any
officer, employee or agent of the Company or
the Trustee on any Book-Entry Note.
PAYMENT OF Each Agent shall forward to the Company, on
EXPENSES: a monthly basis, a statement of the out-of-
pocket expenses incurred by such Agent
during that month that are reimbursable to
it pursuant to the terms of the Agency
Agreement. The Company will remit payment to
the Agents currently on a monthly basis.
45
46
ADVERTISING The Company will determine with the
COSTS: Agents the amount of advertising that
may be appropriate in soliciting offers to
purchase the Book-Entry Notes. Advertising
expenses will be paid by the Company.
PERIODIC STATEMENTS Periodically, the Trustee will send to the
FROM THE TRUSTEE: Company a statement setting forth the
principal amount of Book-Entry Notes
Outstanding as of that date and setting
forth a brief description of any sales of
Book-Entry Notes which the Company has
advised the Trustee but which have not yet
been settled.
46
47
PART II
ADMINISTRATIVE PROCEDURES FOR CERTIFICATED NOTES
The Trustee will serve as registrar and transfer agent in connection
with the Certificated Notes.
ISSUANCE: Each Certificated Note will be dated and
issued as of the date of its authentication
by the Trustee. Each Certificated Note will
bear an Original Issue Date, which will be
(i) with respect to an original Certificated
Note (or any portion thereof), its original
issuance date (which will be the settlement
date) and (ii) with respect to any
Certificated Note (or portion thereof)
issued subsequently upon transfer or
exchange of a Certificated Note or in lieu
of a destroyed, lost or stolen Certificated
Note, the Original Issue Date of the
predecessor Certificated Note, regardless
of the date of authentication of such
subsequently issued Certificated Note.
REGISTRATION: Certificated Notes will be issued only in
fully registered form without coupons.
TRANSFERS AND A Certificated Note may be presented for
EXCHANGES: transfer or exchange at the principal
corporate trust office in the City of New
York of the Trustee. Certificated Notes will
be exchangeable for other Certificated Notes
having identical terms but different
authorized denominations without service
charge. Certificated Notes will not be
exchangeable for Book-Entry Notes.
MATURITIES: Each Certificated Note will mature on a date
not less than nine months after the
settlement date for such Note. A Floating
Rate Certificated Note will mature only on
an Interest Payment Date for such Note. Any
Note denominated in Japanese yen will mature
on a date not less than one year from the
Original Issue Date (as defined below) for
such Note. Any Note denominated in Pounds
Sterling will mature on a date not less than
one year, nor more than five years, after
its Original Issue Date.
DENOMINATIONS: The denomination of any Certificated Note
denominated in U.S. dollars will be a
minimum of $1,000 or any amount in excess
thereof that is an integral multiple of
47
48
$1,000. The authorized denominations of
Certificated Notes denominated in any other
currency will be specified pursuant to
"Settlement Procedures" below.
INTEREST: GENERAL. Interest, if any, on each
Certificated Note will accrue from the
original issue date for the first interest
period or the last date to which interest
has been paid, if any, for each subsequent
interest period, and will be calculated and
paid in the manner described in such Note
and in the Prospectus, as supplemented by
the applicable Pricing Supplement. Unless
otherwise specified therein, each payment
of interest on a Certificated Note will
include interest accrued to but excluding
the Interest Payment Date (provided that, in
the case of Certificated Notes which reset
daily or weekly, interest payments will
include accrued interest to but excluding
the Regular Record Date immediately
preceding the Interest Payment Date) or to
but excluding Maturity (other than a
Maturity of a Fixed Rate Certificated Note
occurring on the 31st day of a month, in
which case such payment of interest will
include interest accrued to but excluding
the 30th day of such month).
REGULAR RECORD DATES. The Regular Record
Dates with respect to any Interest Payment
Date shall be the date fifteen calendar days
immediately preceding such Interest Payment
Date (whether or not a Business Day).
FIXED RATE CERTIFICATED NOTES. Unless
otherwise specified pursuant to Settlement
Procedure "A" below, interest payments on
Fixed Rate Certificated Notes will be made
semiannually on May 1 and November 1 of each
year and at Maturity; PROVIDED, HOWEVER,
that if any Interest Payment Date for a
Fixed Rate Certificated Note is not a
Business Day, the payment due on such day
shall be made on the next succeeding
Business Day and no interest shall accrue on
such payment for the period from and after
such Interest Payment Date; PROVIDED
FURTHER, that in the case of a Fixed Rate
Certificated Note issued between a Regular
Record Date and an Interest Payment Date,
the first interest payment will be made on
the Interest Payment Date following the next
succeeding Regular Record Date.
48
49
FLOATING RATE CERTIFICATED NOTES. Interest
payments will be made on Floating Rate
Certificated Notes monthly, quarterly,
semi-annually or annually. Interest will be
payable, in the case of Floating Rate
Certificated Notes with a monthly Interest
Payment Period, on the third Wednesday of
each month; with a quarterly interest
Payment Period, on the third Wednesday of
March, June, September and December of each
year; with a semi-annual Interest Payment
Period, on the third Wednesday of the two
months specified pursuant to Settlement
Procedure "A" below; and with an annual
Interest Payment Period, on the third
Wednesday of the month specified pursuant to
Settlement Procedure "A" below; PROVIDED,
HOWEVER, that if an Interest Payment Date
for a Floating Rate Certificated Note would
otherwise be a day that is not a Business
Day with respect to such Floating Rate
Certificated Note, such Interest Payment
Date will be the next succeeding Business
Day with respect to such Floating Rate
Certificated Note, except in the case of a
Floating Rate Certificated Note for which
the Base Rate is LIBOR, if such Business Day
is in the next succeeding calendar month,
such Interest Payment Date will be the
immediately preceding Business Day; and
PROVIDED FURTHER, that in the case of a
Floating Rate Certificated Note issued
between a Regular Record Date and an
interest Payment Date, the first interest
payment will be made on the Interest Payment
Date following the next succeeding Regular
Record Date.
CALCULATION OF FIXED RATE CERTIFICATED NOTE.
INTEREST: Interest on Fixed Rate Certificated Notes
(including interest for partial periods)
will be calculated on the basis of a
360-day year of twelve 30-day months.
FLOATING RATE CERTIFICATED NOTES. Interest
rates on Floating Rate Certificated Notes
will be determined as set forth in the form
of Notes. Interest on Floating Rate
Certificated Notes, except as otherwise set
forth therein, will be calculated on the
basis of actual days elapsed and a year of
360 days, except that in the case of a
Floating Rate Certificated Note for which
the Base Rate is Treasury Rate or CMT Rate,
interest will be calculated on the basis of
the actual number of days in the year.
49
50
PAYMENTS OF Interest, if any, on each Certificated
PRINCIPAL AND Note will be calculated and paid in
INTEREST: the manner described in such Note and in the
Prospectus, as supplemented by the
applicable Pricing Supplement. Unless
otherwise provided in the Indenture or the
Certificated Note, the first payment of
interest on any Certificated Note originally
issued between a Record Date and an Interest
Payment Date will be made on the next
succeeding Interest Payment Date. Interest
payable at the Maturity of a Certificated
Note will be payable to the Person to whom
the principal of such Note is payable.
Unless other arrangements are made, all
interest payments (excluding interest
payments made on the Maturity Date) will be
made by check mailed to the person entitled
thereto as provided above; PROVIDED,
HOWEVER, that the holder of $10,000,000 (or
the equivalent thereof in other currencies)
or more of Certificated Notes with similar
tenor and terms will be entitled to receive
payment by wire transfer in U.S. dollars.
Within 10 days following each Record Date,
the Trustee will inform the Company of the
total amount of the interest payments to be
made by the Company on the next succeeding
Interest Payment Date. The Trustee will
provide monthly to the Company a list of the
principal and interest to be paid on
Certificated Notes maturing in the next
succeeding month.
The Trustee will be responsible for
withholding taxes on interest paid on
Certificated Notes as required by applic-
able law.
If the Maturity of a Certificated Note is
not a Business Day, the payment due on such
day shall be made on the next succeeding
Business Day and no interest shall accrue on
such payment for the period from and after
such Maturity.
50
51
PROCEDURES UPON COMPANY NOTICE TO TRUSTEE REGARDING EXERCISE
COMPANY'S EXERCISE OF OPTIONAL RESET. Not less than 45 or more
OF OPTIONAL RESET than 60 days before an Optional Reset Date
OR OPTIONAL as set forth in a Certificated Note, the
EXTENSION OF Company will notify the Trustee whether it
MATURITY: is exercising its option to reset the
Interest Rate or Spread or Spread
Multiplier, as the case may be, for such
Certificated Note, and if so, (i) the new
Interest Rate or Spread or Spread
Multiplier, as the case may be, for such
Certificated Note during the period from
such Optional Reset Date to the next
Optional Reset Date as set forth in such
Certificated Note or, if there is no such
next Optional Reset Date, to the Maturity
Date of such Certificated Note (the
"Subsequent Interest Period"); and (ii) the
provisions, if any, for redemption of such
Certificated Note during such Subsequent
Interest Period, including the date or dates
on which or the period or periods during
which such redemption may occur during such
Subsequent Interest Period.
COMPANY NOTICE TO TRUSTEE REGARDING EXERCISE
OF OPTIONAL EXTENSION OF MATURITY. If the
Company elects to exercise an option, as set
forth in a Certificated Note, to extend the
Maturity Date of such Note, it will so
notify the Trustee not less than 45 or more
than 60 days before the Maturity Date of
such Certificated Note, and will further
indicate (i) the new Maturity Date; (ii) the
Interest Rate or Spread or Spread
Multiplier, as the case may be, and (iii)
the provisions, if any, for redemption of
such Certificated Note during such extension
period, including the date or dates on which
or the period or periods during which such
redemption may occur during such extension
period.
TRUSTEE NOTICE TO HOLDERS REGARDING
COMPANY'S EXERCISE OF OPTIONAL EXTENSION OR
RESET. Upon receipt of notice from the
Company regarding the Company's exercise of
either an optional extension of maturity or
an optional reset, the Trustee will mail a
notice, first class, postage prepaid, to the
Holder not less than 40 days before the
Optional Reset Date (in which case a "Reset
Notice") or the Maturity Date (in which case
an "Extension Notice"), as the case may be,
which Reset Notice or Extension Notice shall
contain the information required by the
terms of the Certificated Note.
51
52
TRUSTEE NOTICE TO COMPANY REGARDING OPTION
TO BE REPAID. If, after receipt of either a
Reset Notice or an Extension Notice, any
Holder of a Certificated Note exercises the
option for repayment by tendering the
Certificated Note to be repaid as set forth
in the Certificated Note, the Trustee shall
give notice to the Company not less than 22
days before the Optional Reset Date or the
old Maturity Date, as the case may be, of
the principal amount of Certificated Notes
to be repaid on such Optional Reset Date or
old Maturity Date, as the case may be.
COMPANY NOTICE REGARDING NEW INTEREST RATE
OR NEW SPREAD OR SPREAD MULTIPLIER. If the
Company elects to revoke the Interest Rate
or Spread or Spread Multiplier and establish
a higher interest rate or Spread or Spread
Multiplier for an Optional Reset Period or
extension period, as the case may be, it
shall, not less than 20 days before such
Optional Reset Date or old Maturity Date, so
notify the Trustee. The Trustee will
immediately thereafter notify the Holder of
such Certificated Note, by first class mail,
postage prepaid of the new Interest Rate or
Spread or Spread Multiplier applicable to
such Certificated Note.
TRUSTEE NOTICE TO COMPANY REGARDING HOLDERS
REVOCATION OF OPTION TO BE REPAID. If, after
the Holder has tendered any Certificated
Notes for repayment pursuant to an Extension
Notice or an Optional Reset Notice, such
Holder then revokes such tender for
repayment, the Trustee shall give notice to
the Company not less than five days prior to
the Maturity Date or Optional Reset Date, as
the case may be, of such revocation and of
the principal amount of Certificated Notes
for which tender for repayment has been
revoked.
DEPOSIT OF REPAYMENT PRICE. On or before any
old Maturity Date where the Maturity has
been extended, and on or before an Optional
Reset Date, the Company shall deposit with
the Trustee an amount of money sufficient to
pay the principal amount, plus interest
accrued to such old Maturity Date or
Optional Reset Date, as the case may be, for
all the Certificated Notes or portions
thereof which are to be repaid on such old
52
53
Maturity Date or Optional Reset Date, as the
case may be. Such Trustee will use such
money to repay such Certificated Notes
pursuant to the terms set forth in such
Notes.
PROCEDURES UPON COMPANY NOTICE TO TRUSTEE REGARDING
COMPANY'S EXERCISE OF OPTIONAL REDEMPTION.
EXERCISE OF At least 45 days prior to the date on
OPTIONAL which it intends to redeem a
REDEMPTION: Certificated Note, the Company will notify
the Trustee that it is exercising such
option with respect to such Certificated
Note on such date.
TRUSTEE NOTICE TO HOLDERS REGARDING
COMPANY'S EXERCISE OF OPTIONAL REDEMPTION.
After receipt of notice that the Company is
exercising its option to redeem a
Certificated Note, the Trustee will, at
least 30 days before the redemption date for
such Certificated Note, mail a notice, first
class, postage prepaid, to the Holder of
such Certificated Note informing such Holder
of the Company's exercise of such option
with respect to such Certificated Note.
DEPOSIT OF REDEMPTION PRICE. On or before
any redemption date, the Company shall
deposit with such Trustee an amount of money
sufficient to pay the redemption price, plus
interest accrued to such redemption date,
for all the Certificated Notes or portions
thereof and which are to be repaid on such
redemption date. Such Trustee will use such
money to repay such Certificated Notes
pursuant to the terms set forth in such
Notes.
PAYMENTS OF PRIN- TRUSTEE NOTICE TO COMPANY OF OPTION
CIPAL AND INTEREST TO BE REPAID. Upon receipt of notice
UPON EXERCISE OF of exercise of the option for
OPTIONAL REPAYMENT repayment and the Global Securities
(EXCEPT PURSUANT TO representing the Certificated Notes so
COMPANY'S EXERCISE to be repaid as set forth in such
OF OPTIONAL RESET OR Notes, the Trustee shall (unless such
OPTIONAL EXTENSION): notice was received pursuant to the
Company's exercise of an optional reset or
an optional extension of maturity, in each
of which cases the relevant procedures set
forth above are to be followed) give notice
to the Company
53
54
not less than 20 days prior to each
Optional Repayment Date of such Optional
Repayment Date and of the principal amount
of Certificated Notes to be repaid on such
Optional Repayment Date.
DEPOSIT OF REPAYMENT PRICE. On or prior to
any Optional Repayment Date, the Company
shall deposit with such Trustee an amount of
money sufficient to pay the optional
repayment price, and accrued interest
thereon to such date, of all the
Certificated Notes or portions thereof which
are to be repaid on such date. Such Trustee
will use such money to repay such
Certificated Notes pursuant to the terms set
forth in such Notes.
PROCEDURE FOR RATE The Company and the Agents will discuss from
SETTING AND time to time the aggregate principal amount
POSTING: of, the issuance price of, and the interest
rates to be borne by, Notes that may be sold
as a result of the solicitation of orders by
the Agents. If the Company decides to set
prices of, and rates borne by, any Notes in
respect of which the Agents are to solicit
orders (the setting of such prices and rates
to be referred to herein as "posting") or if
the Company decides to change prices or
rates previously posted by it, it will
promptly advise the Agents of the prices and
rates to be posted.
ACCEPTANCE AND Unless otherwise instructed by the
REJECTION OF ORDERS: Company, each Agent will advise the Company
promptly by telephone of all orders to
purchase Certificated Notes received by such
Agent, other than those rejected by it in
whole or in part in the reasonable exercise
of its discretion. Unless otherwise agreed
by the Company and the Agents, the Company
has the sole right to accept orders to
purchase Certificated Notes and may reject
any such orders in whole or in part. Before
accepting any order to purchase a
Certificated Note to be settled in less than
three Business Days, the Company shall
verify that the Trustee will have adequate
time to prepare and authenticate such Note.
54
55
PREPARATION OF If any order to purchase a Certificated Note
PRICING is accepted by or on behalf of the Company,
SUPPLEMENT: the Company will prepare a pricing
supplement (a "Pricing Supplement")
reflecting the interest rates and other
terms of such Certified Note and will
arrange to have ten copies thereof filed
with the Commission in accordance with the
applicable paragraph of Rule 424(b) under
the Act and will supply at least ten copies
thereof (and additional copies if requested)
to the Agent which presented the order (the
"Presenting Agent"). The Presenting Agent
will cause a Prospectus and Pricing
Supplement to be delivered to the purchaser
of such Certificated Note.
In each instance that a Pricing Supplement
is prepared, the Presenting Agent will affix
the Pricing Supplement to Prospectuses prior
to their use. Outdated Pricing Supplements
(other than those retained for files) will
be destroyed.
SUSPENSION OF The Company reserves the right, in its sole
SOLICITATION; discretion, to instruct the Agents to
AMENDMENT OR suspend at any time for any period of
SUPPLEMENT: time or permanently, the solicitation of
orders to purchase Certificated Notes. Upon
receipt of such instructions, the Agents
will forthwith suspend solicitation until
such time as the Company has advised them
that such solicitation may be resumed.
In the event that at the time the Company
suspends solicitation of purchases there
shall be any orders outstanding for
settlement, the Company will promptly advise
the Agents and the Trustee whether such
orders may be settled and whether copies of
the Prospectus as in effect at the time of
the suspension, together with the
appropriate Pricing Supplement, may be
delivered in connection with the settlement
of such orders. The Company will have the
sole responsibility for such decision and
for any arrangements that may be made in the
event that the Company determines that such
orders may not be settled or that copies of
such Prospectus may not be so delivered.
55
56
If the Company decides to amend or
supplement the Registration Statement or the
Prospectus, it will promptly advise the
Agents and furnish the Agents with the
proposed amendment or supplement and with
such certificates and opinions as are
required, all to the extent required by and
in accordance with the terms of the Agency
Agreement. Subject to the provisions of the
Agency Agreement, the Company may file with
the Commission any supplement to the
Prospectus relating to the Notes. The
Company will provide the Agents and the
Trustee with copies of any such supplement,
and confirm to the Agents that such
supplement has been filed with the
Commission pursuant to the applicable
paragraph of Rule 424(b).
PROCEDURE FOR When the Company has determined to change
RATE CHANGES: the interest rates of Certificated Notes
being offered, it will promptly advise the
Agents and the Agents will forthwith suspend
solicitation of orders. The Agents will
telephone the Company with recommendations
as to the changed interest rates. At such
time as the Company has advised the Agents
of the new interest rates, the Agents may
resume solicitation of orders. Until such
time only "indications of interest" may be
recorded.
DELIVERY OF A copy of the Prospectus and a Pricing
PROSPECTUS: Supplement relating to a Certificated Note
must accompany or precede the earliest of
any written offer of such Certificated Note,
confirmation of the purchase of such
Certificated Note and payment for such
Certificated Note by its purchaser. If
notice of a change in the terms of the
Certificated Notes is received by the Agents
between the time an order for a Certificated
Note is placed and the time written
confirmation thereof is sent by the
Presenting Agent to a customer or his agent,
such confirmation shall be accompanied by a
Prospectus and Pricing Supplement setting
forth the terms in effect when the order was
placed. Subject to "Suspension of
Solicitation; Amendment or Supplement"
above, the Presenting Agent will deliver a
Prospectus and Pricing Supplement as herein
described with respect to each Certificated
Note sold by it. The Company will make
56
57
such delivery if such Certificated Note is
sold directly by the Company to a purchaser
(other than any Agent).
CONFIRMATION: For each order to purchase a Certificated
Note solicited by any Agent and accepted by
or on behalf of the Company, the Presenting
Agent will issue a confirmation to the
purchaser, with a copy to the Company,
setting forth the details set forth above
and delivery and payment instructions.
SETTLEMENT: The receipt by the Company of immediately
available funds in exchange for an
authenticated Certificated Note delivered to
the Presenting Agent and the Presenting
Agent's delivery of such Certificated Note
against receipt of immediately available
funds shall, with respect to such
Certificated Note, constitute "settlement".
All orders accepted by the Company will be
settled on the third Business Day following
the date of sale pursuant to the timetable
for settlement set forth below, unless the
Company and the purchaser agree to
settlement on another day which shall be no
earlier than the next Business Day following
the date of sale.
SETTLEMENT Settlement Procedures with regard to
PROCEDURES: each Certificated Note sold by the Company
through any Agent, as agent, shall be as
follows:
A. The Presenting Agent will advise
the Company by telephone of the
following settlement information,
in time for the Trustee to prepare
and authenticate the required Note:
1. Name in which such
Certificated Note is to be
registered ("Registered
Owner").
2. Address of the Registered
Owner and address for
payment of principal and
interest.
3. Taxpayer identification
number of the Registered
Owner (if available).
4. Principal amount.
57
58
5. Maturity Date.
6. In the case of a Fixed Rate
Certificated Note, the
interest rate or, in the
case of a Floating Rate
Certificated Note, the
initial interest rate (if
known at such time), Base
Rate, Index Maturity,
Interest Reset Period,
Interest Reset Dates,
Spread or Spread
Multiplier (if any),
Minimum Interest Rate (if
any) and Maximum Interest
Rate (if any).
7. Interest Payment Dates and
the Interest Payment
Period.
8. Specified Currency and
whether the option to
elect payment in a
Specified Currency applies
and if the Specified
Currency is not U.S.
dollars, the authorized
denominations.
9. Redemption, repayment or
extension provisions, if
any.
10. Settlement date.
11. Price (including currency).
12. Presenting Agent's
commission, determined as
provided in Section 2 of
the Agency Agreement.
13. Whether such Certificated
Note is issued at an
original issue discount,
and, if so, the total
amount of OID, the yield to
maturity and the initial
accrual period OID.
B. The Company will advise the Trustee
by telephone (confirmed in writing
at any time on the sale date) or
electronic transmission of the
information set forth in Settlement
Procedure "A" above and the name of
the Presenting Agent.
C. The Company will deliver to the
Trustee a pre-printed four-ply
packet for such Certificated Note,
which packet will contain the
following
58
59
documents in forms that have been
approved by Company, the Agents
and the Trustee:
1. Certificated Note with
customer confirmation.
2. Stub One - For Trustee.
3. Stub Two - For the
Presenting Agent.
4. Stub Three - For the
Company.
D. The Trustee will complete such
Certificated Note and will
authenticate such Certificated Note
and deliver it (with the
confirmation) and Stubs One and Two
to the Presenting Agent, all in
accordance with the written
directions (or oral instructions
confirmed in writing on the next
Business Day) of the Company, and
the Presenting Agent will
acknowledge receipt of the Note by
stamping or otherwise marking Stub
One and returning it to the
Trustee. Such delivery will be made
only against such acknowledgment of
receipt. In the event that the
instructions given by the
Presenting Agent for payment to the
account of the Company are revoked,
the Company will as promptly as
possible wire transfer to the
account of the Presenting Agent an
amount of immediately available
funds equal to the amount of such
payment made.
E. The Presenting Agent will deliver
such Certificated Note (with the
confirmation) to the customer
against payment in immediately
payable funds. The Presenting Agent
will obtain the acknowledgment of
receipt of such Certificated Note
by retaining Stub Two.
F. The Trustee will send Stub Three to
the Company by first-class mail.
59
60
SETTLEMENT For orders of Certificated Notes solicited
PROCEDURES by any Agent, as agent, and accepted by the
Company,
TIMETABLE: Settlement Procedures "A" through "F" set
forth above shall be completed on or before
the respective times (New York City time)
set forth below:
Settlement
Procedure Time
---------- ----
A 2:00 P.M. on the day
before
settlement
B-C 3:00 P.M. on the day
before
settlement
D 2:15 P.M. on settlement
date
E 3:00 P.M. on settlement
date
F 5:00 P.M. on settlement
date
FAILURE TO If a purchaser fails to accept delivery of
SETTLE: and make payment for any Certificated Note,
the Presenting Agent will notify the Company
and the Trustee by telephone and return such
Certificated Note to the Trustee. Upon
receipt of such notice, the Company will
immediately wire transfer to the account of
the Presenting Agent an amount equal to the
amount previously credited to the account of
Company in respect of such Certificated
Note. Such wire transfer will be made on the
settlement date, if possible, and in any
event not later than the Business Day
following the settlement date. If the
failure shall have occurred for any reason
other than a default by the Presenting Agent
in the performance of its obligations
hereunder and under the Agency Agreement,
then the Company will reimburse the
Presenting Agent or the Trustee, as
appropriate, on an equitable basis for its
loss of the use of the funds during the
period when they were credited to the
account of the Company. Immediately upon
receipt of the Certificated Note in respect
of which such failure occurred, the Trustee
will cancel such Certificated Note in
accordance with the Indenture and so advise
the Company and the Trustee, and the Trustee
will make appropriate entries in its
records.
60
61
TRUSTEE NOT TO Nothing herein shall be deemed to require
RISK FUNDS: the Trustee to risk or expend its own funds
in connection with any payment to the
Company, the Agents or the purchaser, it
being understood by all parties that
payments made by the Trustee to the Company,
the Agents or the purchaser shall be made
only to the extent that funds are provided
to the Trustee for such purpose.
AUTHENTICITY OF The Company will cause the Trustee to
SIGNATURES: furnish the Agents from time to time with
the specimen signatures of each of the
Trustee's officers, employees or agents who
has been authorized by the Trustee to
authenticate Certificated Notes, but no
Agent will have any obligation or liability
to the Company or the Trustee in respect of
the authenticity of the signature of any
officer, employee or agent of the Company
or the Trustee on any Certificated Note.
PAYMENT OF Each Agent shall forward to the Company, on
EXPENSES: a monthly basis, a statement of the out-of-
pocket expenses incurred by such Agent
during that month that are reimbursable to
it pursuant to the terms of the Agency
Agreement. The Company will remit payment to
the Agents currently on a monthly basis.
ADVERTISING COSTS: The Company will determine with the Agents
the amount of advertising that may be
appropriate in soliciting orders to purchase
the Certificated Notes. Advertising expenses
will be paid by the Company.
PERIODIC STATEMENTS Periodically, the Trustee will send to the
FROM THE TRUSTEE: Company a statement setting forth the
principal amount of Certificated Notes
Outstanding as of that date and setting
forth a brief description of any sales of
Certificated Notes which the Company has
advised the Trustee but which have not yet
been settled.
61
62
EXHIBIT B
Medium Term Notes, Series A
Due More Than Nine Months from Date of Issue
CONVERGYS CORPORATION
Terms Agreement
, 200__
Attention:
Subject in all respects to the terms and conditions of the Selling
Agency Agreement (the "Agreement") dated August -, 2000, between Xxxxxxx Xxxxx
Xxxxxx Inc, Banc of America Securities LLC, Banc One Capital Markets, Inc. and
Chase Securities Inc. and you, the undersigned agrees to purchase the following
Notes of Convergys Corporation.
[Add additional terms as may be needed to identify Notes.]
[Specified Currency]:
Aggregate Principal Amount: $
Interest Rate Base(s):
Interest Rate:
Date of Maturity:
Interest Payment Dates:
Regular Record Dates:
Discount or Commission: % of Principal Amount
Purchase Price: % of Principal Amount [plus
accrued interest from
, 200 ]
62
63
Purchase Date and Time:
Place for Delivery of Notes
and Payment Therefor:
Method of Payment:
Modification, if any, in
the requirements to
deliver the documents
specified in Section 6(b)
of the Agreement:
Period during which additional
Notes may not be sold pursuant
to Section 4(m) of the Agreement:
Other Material Terms:
[Purchaser]
By:____________________
Accepted:
CONVERGYS CORPORATION
By: ______________________________
Name:
Title:
63
64
[Form of Reverse Inquiry Letter]
[Trade Date]
[Dealer]
[Address]
[Address]
Re: $__,000,000 Medium-Term Notes, Series A
Pricing Supplement Number:________
Settlement Date:__________________
(See attached Term Sheet)
Dear [Dealer]:
Reference is made to the Selling Agency Agreement dated August -, 2000
(the "Agreement") pertaining to up to $-,000,000 aggregate principal amount of
Medium- Term Notes, Series A (the "Notes") to be offered from time to time by
Convergys Corporation (the "Company"). The provisions of the Agreement (a copy
of which has been previously provided to you) are hereby incorporated by
reference and each of the representations and warranties set forth therein shall
be deemed to be made to you as of the date hereof. Subject to the terms set
forth therein, the Company hereby appoints you as an Agent (as such term is
defined in the Agreement) of the Company for purposes of soliciting one offer to
purchase Notes from the Company containing the terms as set forth in the above
referenced Pricing Supplement. This appointment is effective as to and extends
only to the one transaction which you are presenting to the Company (see
attached Term Sheet) and the Agreement shall automatically be terminated as to
you upon the earlier to occur of (i) payment made in full to the Company for the
Notes sold pursuant to the offer presented or (ii) the Company or you determine
not to proceed with the transaction. Upon such termination of the Agreement by
the Company, neither you nor the Company shall have any liability to the other
except as provided in those sections of the Agreement referenced in Section___
thereof. You agree to be bound by, and comply with, all of the provisions of the
Agreement applicable to the Agents thereunder.
*[As a condition precedent to your obligation to consummate the transaction
referred to above, you shall receive the following: (i) the opinions of counsel,
dated __________ [recent date or most recent periodic update [pursuant to
Sections ___ and ____ of the Agreement; (ii) an Officer's Certificate dated
_______ [recent date], pursuant to Section ___ of the Agreement; (iii) a letter
from PricewaterhouseCoopers LLP dated ________ [most recent date or most recent
periodic update] delivered pursuant to Section ___ of the Agreement; and (iv) a
copy of the resolutions adopted by the Company with respect to
64
65
the Form of Note evidencing the securities described in the above-referenced
Pricing Supplement, certified by an appropriate officer of the Company.]
This letter shall be governed by and construed in accordance with the
laws of the State of New York.
If the foregoing is in accordance with your understanding, please sign
and return to us two counterparts hereof, whereupon this letter shall constitute
a binding agreement between the Company and you in accordance with its terms.
Very truly yours,
CONVERGYS CORPORATION
By:_____________________________
Name:
Title:
Agreed and Accepted as of the date hereof:
[Dealer]
By:________________________
Name:
Title:
*This language is to be negotiated between the Issuer and the Reverse Inquiry
Agent at the time of the trade.
65
