1
EXHIBIT 1.1
ENRON CORP.
MEDIUM-TERM NOTES
DUE NINE MONTHS OR MORE FROM DATE OF ISSUE
DISTRIBUTION AGREEMENT
[Date]
[Name and Address of Agent]
Dear Sirs:
Enron Corp., an Oregon corporation (the "Company"), confirms its
agreement with the agent set forth above and on the signature page hereto (the
"Agent") with respect to the issue and sale by the Company of its Medium-Term
Notes Due Nine Months or More From Date of Issue (the "Notes"). The Notes are
to be issued pursuant to an Indenture, dated as of November 1, 1985, as amended
or modified from time to time (the "Indenture"), between the Company and The
Bank of New York (as successor to Xxxxxx Trust and Savings Bank), as trustee
(the "Trustee"). As of the date hereof, the Company has authorized the issuance
and sale of up to U.S. $500,000,000 aggregate initial offering price of Notes
(or its equivalent, based upon the exchange rate on the applicable trade date
in such foreign currencies as the Company shall designate at the time of
issuance) to or through the Agent pursuant to the terms of this Agreement. It
is understood, however, that the Company may from time to time authorize the
issuance of additional Notes and that such additional Notes may be sold to or
through the Agent pursuant to the terms of this Agreement, all as though the
issuance of such Notes were authorized as of the date hereof.
This Agreement provides both for the sale of Notes by the Company to
the Agent as principal for resale to investors and other purchasers and for the
sale of Notes by the Company directly to investors (as may from time to time be
agreed to by the Company and the Agent), in which case the Agent will act as an
agent of the Company in soliciting offers for the purchase of Notes.
The Company has filed with the Securities and Exchange Commission (the
"Commission") a registration statement on Form S-3 (No. 333-70465) for the
registration of its common stock, preferred stock, depositary shares and debt
securities, including the Notes, under the Securities Act of 1933, as amended
(the "1933 Act"), and the offering thereof from time to time in accordance with
Rule 415 of the rules and regulations of the Commission under the 1933 Act (the
"1933 Act Regulations"). Such registration statement has been declared
effective by the Commission and the Indenture has been duly qualified under the
Trust Indenture Act of 1939, as amended (the "1939 Act"), and the Company has
filed such post-effective amendments thereto as may be required prior to its
acceptance of any offer for the purchase of Notes and each such post-effective
amendment has been declared effective by the Commission. Such registration
2
statement, in the form in which it or any post-effective amendment thereto
became effective, is referred to herein as the "Registration Statement"; and
the final prospectus and all applicable amendments or supplements thereto
(including the final prospectus supplement and pricing supplement relating to
the offering of Notes), in the form first furnished to the Agent for use in
confirming sales of Notes, are collectively referred to herein as the
"Prospectus"; provided, however, that all references to the "Registration
Statement" and the "Prospectus" shall also be deemed to include all documents
incorporated therein by reference pursuant to the Securities Exchange Act of
1934, as amended (the "1934 Act"), prior to the effectiveness of the
Registration Statement or any acceptance by the Company of an offer for the
purchase of Notes, respectively; provided, further, that if the Company files a
registration statement with the Commission pursuant to Rule 462(b) of the 1933
Act Regulations (the "Rule 462(b) Registration Statement"), then, after such
filing, all references to the "Registration Statement" shall also be deemed to
include the Rule 462(b) Registration Statement. A "preliminary prospectus"
shall be deemed to refer to any prospectus used before the Registration
Statement became effective and any prospectus furnished by the Company after
the registration statement became effective and before any acceptance by the
Company of an offer for the purchase of Notes which omitted information to be
included upon pricing in a form of prospectus filed with the Commission
pursuant to Rule 424(b) of the 1933 Act Regulations. All references in this
Agreement to amendments or supplements to the Registration Statement,
Prospectus or preliminary prospectus shall be deemed to include the filing of
any document under the 1934 Act which is incorporated by reference in the
Registration Statement, Prospectus or preliminary prospectus, as the case may
be. For purposes of this Agreement, all references to the Registration
Statement, Prospectus or preliminary prospectus or to any amendment or
supplement thereto shall be deemed to include any copy filed with the
Commission pursuant to its Electronic Data Gathering, Analysis and Retrieval
system ("XXXXX").
SECTION 1. Appointment as Agent.
(a) Appointment. Subject to the terms and conditions stated herein and
subject to the reservation by the Company of the right to sell Notes directly
on its own behalf, the Company hereby agrees that Notes will be sold to or
through the Agent on a non-exclusive basis.
(b) Sale of Notes. The Company shall not sell or approve the
solicitation of offers for the purchase of Notes in excess of the amount which
shall be authorized by the Company from time to time or in excess of the
aggregate initial offering price of Notes registered pursuant to the
Registration Statement. The Agent shall not have any responsibility for
maintaining records with respect to the aggregate initial offering price of
Notes sold, or of otherwise monitoring the availability of Notes for sale,
under the Registration Statement.
(c) Purchases as Principal. The Agent shall not have any obligation to
purchase Notes from the Company as principal. However, absent an agreement
between the Agent and the Company that the Agent shall be acting solely as an
agent for the Company, the Agent shall be deemed to be acting as principal in
connection with any offering of Notes hereunder. Accordingly, the Agent may
agree from time to time to purchase Notes from the Company as principal for
resale to investors and other purchasers determined by the Agent. Any purchase
of Notes from the Company by the Agent as principal shall be made in accordance
with Section 3(a) hereof.
3
(d) Solicitations as Agent. If agreed upon between the Agent and the
Company, the Agent, acting solely as an agent for the Company and not as
principal, will solicit offers for the purchase of Notes. The 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 the
Agent. The 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. The Agent shall make reasonable efforts to assist the Company in
obtaining performance by each purchaser whose offer for the purchase of Notes
has been solicited by it on an agency basis and accepted by the Company. The
Agent shall not have any liability to the Company in the event that any such
purchase is not consummated for any reason. If the Company shall default on its
obligation to deliver Notes to a purchaser whose offer has been solicited by
the Agent on an agency basis and accepted by the Company, the Company shall (i)
hold the Agent harmless against any loss, claim or damage arising from or as a
result of such default by the Company and (ii) pay to the Agent any commission
to which it would otherwise be entitled absent such default.
(e) Reliance. The Company and the Agent agree that any Notes purchased
from the Company by the Agent as principal shall be purchased, and any Notes
the placement of which the Agent arranges as an agent of the Company shall be
placed by the Agent, in reliance on the representations, warranties, covenants
and agreements of the Company contained herein and on the terms and conditions
and in the manner provided herein.
SECTION 2. Representations and Warranties.
(a) The Company represents and warrants to the Agent as of the date
hereof, as of the date of each acceptance by the Company of an offer for the
purchase of Notes (whether to the Agent as principal or through the Agent as
agent), as of the date of each delivery of Notes (whether to the Agent as
principal or through the Agent as agent) (the date of each such delivery to the
Agent as principal is referred to herein as a "Settlement Date"), and as of any
time that the Registration Statement or the Prospectus shall be amended or
supplemented (each of the times referenced above is referred to herein as a
"Representation Date"), as follows:
(i) Due Incorporation, Good Standing and Due Qualification of
the Company. The Company has been duly organized and is validly
existing as a corporation in good standing under the laws of the state
of its incorporation with corporate power and authority to own, lease
and operate its properties and to conduct its business as described in
the Prospectus and to enter into this Agreement and consummate the
transactions contemplated in the Prospectus; and the Company is duly
qualified as a foreign corporation to transact business and is in good
standing in each jurisdiction in which such qualification is required,
whether by reason of the ownership or leasing of property or the
conduct of business, except where the failure to so qualify or be in
good standing would not result in a material adverse change in the
condition, financial or otherwise, or in the earnings, business
affairs or business prospects of the Company and its subsidiaries
considered as one enterprise (a "Material Adverse Effect").
4
(ii) Due Incorporation, Good Standing and Due Qualification
of Material Subsidiaries. Each Material Subsidiary (as defined below)
has been duly organized and is validly existing as a corporation in
good standing under the laws of the jurisdiction of its incorporation,
has corporate power and authority to own, lease and operate its
properties and conduct its business as described in the Prospectus and
is duly qualified as a foreign corporation to transact business and is
in good standing in each jurisdiction in which such qualification is
required, whether by reason of the ownership or leasing of property or
the conduct of business, except where the failure to so qualify or be
in good standing would not result in a Material Adverse Effect; except
as stated in the Prospectus, all of the issued and outstanding shares
of capital stock of each Material Subsidiary has been duly authorized
and is validly issued, fully paid and non-assessable and is owned by
the Company, directly or through subsidiaries, free and clear of any
security interest, mortgage, pledge, lien, encumbrance, claim or
equity; and none of the outstanding shares of capital stock of any
Material Subsidiary was issued in violation of preemptive or other
similar rights of any securityholder of such Material Subsidiary. The
following subsidiaries of the Company shall be "Material
Subsidiaries": Citrus Corp., Enron North America Corp., Florida Gas
Transmission Company, Houston Pipe Line Company, Northern Natural Gas
Company, Portland General Electric Company, Transwestern Pipeline
Company and Enron Broadband Services, Inc. and each other subsidiary
deemed material by the Company prior to any acceptance of an offer to
purchase Notes.
(iii) Registration Statement and Prospectus. The Company
meets the requirements for use of Form S-3 under the 1933 Act; the
Registration Statement (or any Rule 462(b) Registration Statement) has
become effective under the 1933 Act and no stop order suspending the
effectiveness of the Registration Statement (or any Rule 462(b)
Registration Statement) has been issued under the 1933 Act and no
proceedings for that purpose have been instituted or are pending or,
to the knowledge of the Company, are contemplated by the Commission,
and any request on the part of the Commission for additional
information has been complied with; the Indenture has been duly
qualified under the 1939 Act; at the respective times that the
Registration Statement (including any Rule 462(b) Registration
Statement) and any post-effective amendment thereto (including the
filing of the Company's most recent Annual Report on Form 10-K with
the Commission (the "Annual Report on Form 10-K")) became effective
and at each Representation Date, the Registration Statement (including
any Rule 462(b) Registration Statement) and any amendments thereto
complied and will comply in all material respects with the
requirements of the 1933 Act and the 1933 Act Regulations and the 1939
Act and the rules and regulations of the Commission under the 1939 Act
(the "1939 Act Regulations") and did not and will not contain an
untrue statement of a material fact or omit to state a material fact
required to be stated therein or necessary to make the statements
therein not misleading; each preliminary prospectus and prospectus
filed as part of the Registration Statement as originally filed or as
part of any amendment thereto, or filed pursuant to Rule 424 under the
1933 Act, complied when so filed in all material respects with the
1933 Act Regulations; each preliminary prospectus and the Prospectus
delivered to the Agent for use in connection with the offering of Notes
are identical to any electronically transmitted copies thereof filed
with the Commission pursuant to XXXXX, except to the extent permitted
by Regulation S-T; and at the date hereof, at the date of the
Prospectus and each amendment or supplement thereto and at
5
each Representation Date, neither the Prospectus nor any amendment or
supplement thereto included or will include an untrue statement of a
material fact or omitted or will 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 representations and warranties in this subsection
shall not apply to statements in or omissions from the Registration
Statement or the Prospectus made in reliance upon and in conformity
with information furnished to the Company in writing by the Agent
expressly for use in the Registration Statement or the Prospectus.
(iv) Incorporated Documents. The documents incorporated or
deemed to be incorporated by reference in the Prospectus, at the time
they were or hereafter are filed with the Commission, complied and
will comply in all material respects with the requirements of the 1934
Act and the rules and regulations of the Commission under the 1934 Act
(the "1934 Act Regulations") and, when read together with the other
information in the Prospectus, at the date hereof, at the date of the
Prospectus and at each Representation Date, did not and will not
include an 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.
(v) Independent Accountants. The accountants who certified
the financial statements and any supporting schedules thereto included
in the Registration Statement and the Prospectus are independent
public accountants as required by the 1933 Act and the 1933 Act
Regulations.
(vi) Financial Statements. The consolidated financial
statements of the Company included in the Registration Statement and
the Prospectus, together with the related schedules and notes, as well
as those financial statements, schedules and notes of any other entity
included in the Registration Statement and the Prospectus, present
fairly the consolidated financial position of the Company and its
subsidiaries, or such other entity, as the case may be, at the dates
indicated and the consolidated statement of operations, stockholders'
equity and cash flows of the Company and its subsidiaries, or such
other entity, as the case may be, for the periods specified; such
financial statements have been prepared in conformity with generally
accepted accounting principles ("GAAP") applied on a consistent basis
throughout the periods involved; the supporting schedules, if any,
included in the Registration Statement and the Prospectus present
fairly in accordance with GAAP the information required to be stated
therein; the selected financial data and the summary financial
information included in the Registration Statement and the Prospectus
present fairly the information shown therein and have been compiled on
a basis consistent with that of the audited financial statements
included in the Registration Statement and the Prospectus; 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.
6
(vii) No Material Changes. Since the respective dates as of
which information is given in the Registration Statement and the
Prospectus, except as otherwise stated therein, there has been no
event or occurrence that would result in a Material Adverse Effect.
(viii) Authorization, etc. of this Agreement, the Indenture
and the Notes. This Agreement has been duly authorized, executed and
delivered by the Company; the Indenture has been duly authorized,
executed and delivered by the Company and will be a valid and legally
binding agreement of the Company, enforceable against the Company in
accordance with its terms, except as enforcement thereof may be
limited by bankruptcy, insolvency, reorganization, moratorium or other
similar laws affecting the enforcement of creditors' rights generally
or by general equitable principles (regardless of whether enforcement
is considered in a proceeding in equity or at law), and except further
as enforcement thereof may be limited by requirements that a claim
with respect to any debt securities issued under the Indenture that
are payable in a foreign or composite currency (or a foreign or
composite currency judgment in respect of such claim) be converted
into U.S. dollars at a rate of exchange prevailing on a date
determined pursuant to applicable law or by governmental authority to
limit, delay or prohibit the making of payments outside the United
States; the Notes have been duly authorized by the Company for offer,
sale, issuance and delivery pursuant to this Agreement and, when
issued, authenticated and delivered in the manner provided for in the
Indenture and delivered against payment of the consideration therefor,
will constitute valid and legally binding obligations of the Company,
enforceable against the Company in accordance with their terms, except
as enforcement thereof may be limited by bankruptcy, insolvency,
reorganization, moratorium or other similar laws affecting the
enforcement of creditors' rights generally or by general equitable
principles (regardless of whether enforcement is considered in a
proceeding in equity or at law), and except further as enforcement
thereof may be limited by requirements that a claim with respect to
any Notes payable in a foreign or composite currency (or a foreign or
composite currency judgment in respect of such claim) be converted
into U.S. dollars at a rate or exchange prevailing on a date
determined pursuant to applicable law or by governmental authority to
limit, delay or prohibit the making of payments outside the United
States; the Notes will be substantially in a form previously certified
to the Agent and contemplated by the Indenture; and each holder of
Notes will be entitled to the benefits of the Indenture.
(ix) Descriptions of the Indenture and the Notes. The
Indenture and the Notes conform and will conform in all material
respects to the statements relating thereto contained in the
Prospectus and are substantially in the form filed or incorporated by
reference, as the case may be, as an exhibit to the Registration
Statement.
(x) Absence of Defaults and Conflicts. Neither the Company
nor any of its subsidiaries is in violation of the provisions of its
charter or by-laws or in default in the performance or observance of
any obligation, agreement, covenant or condition contained in any
contract, indenture, mortgage, deed of trust, loan or credit
agreement, note, lease or other agreement or instrument to which the
Company or any of its subsidiaries is a party or by which it or any of
them may be bound or to which any of the property or
7
assets of the Company or any of its subsidiaries is subject
(collectively, "Agreements and Instruments"), except for such defaults
that would not result in a Material Adverse Effect; and the execution,
delivery and performance of this Agreement, the Indenture, the Notes
and any other agreement or instrument entered into or issued or to be
entered into or issued by the Company in connection with the
transactions contemplated by the Prospectus, the consummation of the
transactions contemplated in the Prospectus (including the issuance
and sale of the Notes and the use of proceeds therefrom as described
in the Prospectus) and the compliance by the Company with its
obligations hereunder and under the Indenture, the Notes and such
other agreements or instruments have been duly authorized by all
necessary corporate action and do not and will not, whether with or
without the giving of notice or the passage of time or both, conflict
with or constitute a breach of, or default or event or condition which
gives the holder of any note, debenture or other evidence of
indebtedness (or any person acting on such holder's behalf) the right
to require the repurchase, redemption or repayment of all or a portion
of such indebtedness by the Company or any of its subsidiaries (a
"Repayment Event") under, or result in the creation or imposition of
any lien, charge or encumbrance upon any assets, properties or
operations of the Company or any of its subsidiaries pursuant to, any
Agreements and Instruments, except for such liens, charges,
encumbrances or violations that would not result in a Material Adverse
Effect, nor will such action result in any violation of the provisions
of the charter or by-laws of the Company or any of its subsidiaries or
any applicable law, statute, rule, regulation, judgment, order, writ
or decree of any government, government instrumentality or court,
domestic or foreign, having jurisdiction over the Company or any of
its subsidiaries or any of their assets, properties or operations.
(xi) Absence of Proceedings. There is no action, suit,
proceeding, inquiry or investigation before or brought by any court or
governmental agency or body, domestic or foreign, now pending, or to
the knowledge of the Company threatened, against or affecting the
Company or any of its subsidiaries which is required to be disclosed
in the Registration Statement and the Prospectus (other than as stated
therein), or which may reasonably be expected to result in a Material
Adverse Effect, or which may reasonably be expected to materially and
adversely affect the assets, properties or operations thereof, the
performance by the Company of its obligations under this Agreement,
the Indenture and the Notes or the consummation of the transactions
contemplated in the Prospectus.
(xii) Title to Property. The Company and its subsidiaries
have good and marketable title to all real property owned by the
Company and its subsidiaries and good title to all other properties
owned by them, in each case, free and clear of all mortgages, pledges,
liens, security interests, claims, restrictions or encumbrances of any
kind, except (A) as otherwise stated in the Registration Statement and
the Prospectus or (B) those that do not adversely affect the value of
such property or interfere with the use made and proposed to be made
of such property by the Company or any of its subsidiaries, in either
case in a manner that would result in a Material Adverse Effect; and
all of the leases and subleases material to the business of the
Company and its subsidiaries considered as one enterprise, and under
which the Company or any of its subsidiaries holds properties
described in the Prospectus, are in full force and effect, and neither
the Company nor any of its subsidiaries has received any notice of any
material claim of any sort that has been
8
asserted by anyone adverse to the rights of the Company or any of its
subsidiaries under any of such leases or subleases, or affecting or
questioning the rights of the Company or such subsidiary of the
continued possession of the leased or subleased premises under any
such lease or sublease, except for those that would not have a
Material Adverse Effect.
(xiii) Environmental Laws. Except as otherwise stated in the
Registration Statement and the Prospectus and except as would not,
singly or in the aggregate, result in a Material Adverse Effect, (A)
neither the Company nor any of its subsidiaries is in violation of any
federal, state, local or foreign statute, law, rule, regulation,
ordinance, code, policy or rule of common law or any judicial or
administrative interpretation thereof including any judicial or
administrative order, consent, decree or judgment, relating to
pollution or protection of human health, the environment (including,
without limitation, ambient air, surface water, groundwater, land
surface or subsurface strata) or wildlife, including, without
limitation, laws and regulations relating to the release or threatened
release of chemicals, pollutants, contaminants, wastes, toxic
substances, hazardous substances, petroleum or petroleum products
(collectively, "Hazardous Materials") or to the manufacture,
processing, distribution, use, treatment, storage, disposal, transport
or handling of Hazardous Materials (collectively, "Environmental
Laws"), (B) the Company and its subsidiaries have all permits,
authorizations and approvals required under any applicable
Environmental Laws and are each in compliance with their requirements,
(C) there are no pending or threatened administrative, regulatory or
judicial actions, suits, demands, demand letters, claims, liens,
notices of noncompliance or violation, investigation or proceedings
relating to any Environmental Law against the Company or any of its
subsidiaries and (D) there are no events or circumstances that may
reasonably be expected to form the basis of an order for clean-up or
remediation, or an action, suit or proceeding by any private party or
governmental body or agency, against or affecting the Company or any
of its subsidiaries relating to Hazardous Materials or any
Environmental Laws.
(xiv) No Filings, Regulatory Approvals, etc. No filing with,
or approval, authorization, consent, license, registration,
qualification, order or decree of, any court or governmental authority
or agency, domestic or foreign, is necessary or required for the due
authorization, execution and delivery by the Company of this
Agreement, the Indenture and the Notes or for the performance by the
Company of the transactions contemplated in this Agreement, the
Indenture or the Prospectus, except such as have been previously made,
obtained or rendered, as applicable.
(xv) Investment Company Act. The Company is not, and upon the
issuance and sale of the Notes as herein contemplated and the
application of the net proceeds therefrom as described in the
Prospectus will not be, an "investment company" within the meaning of
the Investment Company Act of 1940, as amended (the "1940 Act").
(xvi) Commodity Exchange Act. The Notes, upon issuance, will
be excluded or exempted under, or beyond the purview of, the Commodity
Exchange Act, as amended (the "Commodity Exchange Act"), and the rules
and regulations of the Commodity
9
Futures Trading Commission under the Commodity Exchange Act (the
"Commodity Exchange Act Regulations").
(b) Additional Certifications. Any certificate signed by any officer
of the Company or any of its subsidiaries and delivered to the Agent or to
counsel for the Agent in connection with an offering of Notes to the Agent as
principal or through the Agent as agent shall be deemed a representation and
warranty by the Company to the Agent as to the matters covered thereby on the
date of such certificate and, unless subsequently amended or supplemented, at
each Representation Date subsequent thereto.
SECTION 3. Purchases as Principal; Solicitations as Agent.
(a) Purchases as Principal. Notes purchased from the Company by the
Agent, as principal shall be made in accordance with terms agreed upon between
the Agent and the Company (which terms shall, to the extent deemed appropriate,
include those terms specified in Exhibit A hereto). The Agent's commitment to
purchase Notes as principal 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. Unless the context
otherwise requires, references herein to "this Agreement" shall include the
applicable agreement of the Agent to purchase Notes from the Company as
principal. The Agent may engage the services of any broker or dealer in
connection with the resale of the Notes purchased by them as principal and may
allow all or any portion of the discount received from the Company in
connection with such purchases to such brokers or dealers. At the time of each
purchase of Notes from the Company by the Agent as principal, the Agent shall
specify the requirements for the officers' certificate, opinion of counsel and
comfort letter pursuant to Sections 7(b), 7(c) and 7(d) hereof.
(b) Solicitations as Agent. On the basis of the representations and
warranties herein contained, but subject to the terms and conditions herein set
forth, when agreed by the Company and the Agent, the Agent, as an agent of the
Company, will use its reasonable efforts to solicit offers for the purchase of
Notes upon the terms set forth herein and in the Prospectus. The Agent is not
authorized to appoint sub-Agents with respect to Notes sold through it as
agent. All Notes sold through the Agent as agent will be sold at 100% of their
principal amount unless otherwise agreed upon between the Company and the
Agent.
The Company reserves the right, in its sole discretion, to suspend
solicitation of offers for the purchase of Notes through the Agent, as an agent
of the Company, commencing at any time for any period of time or permanently.
As soon as practicable after receipt of instructions from the Company, the
Agent will suspend solicitation of offers for the purchase of Notes from the
Company until such time as the Company has advised the Agent that such
solicitation may be resumed.
The Company agrees to pay the Agent a commission, in the form of a
discount, equal to the applicable percentage of the principal amount of each
Note sold by the Company as a result of a solicitation made by the Agent, as an
agent of the Company, as set forth in Schedule A hereto.
10
(c) Administrative Procedures. The purchase price, interest rate or
formula, maturity date and other terms of the Notes specified in Exhibit A
hereto (as applicable) shall be agreed upon between the Company and the Agent
and specified in a pricing supplement to the Prospectus (each, a "Pricing
Supplement") to be prepared by the Company in connection with each sale of
Notes. Except as otherwise specified in the applicable Pricing Supplement, the
Notes will be issued in denominations of U.S. $1,000 or any larger amount that
is an integral multiple of U.S. $1,000. Administrative procedures with respect
to the issuance and sale of the Notes (the "Procedures") shall be agreed upon
from time to time among the Company, the Agent and the Trustee. The Agent and
the Company agree to perform, and the Company agrees to cause the Trustee to
agree to perform, their respective duties and obligations specifically provided
to be performed by them in the Procedures.
SECTION 4. Covenants of the Company.
The Company covenants and agrees with the Agent as follows:
(a) Notice of Certain Events. The Company will notify the Agent
immediately, and confirm such notice in writing, of (i) the effectiveness of
any post-effective amendment to the Registration Statement or the filing of any
amendment or supplement to the Prospectus (other than any amendment or
supplement thereto providing solely for the determination of the variable terms
of the Notes or relating solely to the offering of securities other than the
Notes), (ii) the receipt of any comments from the Commission, (iii) any request
by the Commission for any amendment to the Registration Statement or any
amendment or supplement to the Prospectus or for additional information, (iv)
the issuance by the Commission of any stop order suspending the effectiveness
of the Registration Statement, or of any order preventing or suspending the use
of any preliminary prospectus, or of the initiation of any proceedings for that
purpose or (v) any change in the rating assigned by any nationally recognized
statistical rating organization to the Program or any debt securities
(including the Notes) of the Company, or the public announcement by any
nationally recognized statistical rating organization that it has under
surveillance or review, with possible negative implications, its rating of the
Program or any such debt securities, or the withdrawal by any nationally
recognized statistical rating organization of its rating of the Program or any
such debt securities. The Company will make every reasonable effort to prevent
the issuance of any stop order and, if any stop order is issued, to obtain the
lifting thereof at the earliest possible moment.
(b) Filing or Use of Amendments. Except as otherwise provided in
subsection (m) of this Section 4, the Company will give the Agent advance
notice of its intention to file or prepare any additional registration
statement with respect to the registration of additional Notes, any amendment
to the Registration Statement (including any filing under Rule 462(b) of the
1933 Act Regulations) or any amendment or supplement to the prospectus included
in the Registration Statement at the time it became effective or to the
Prospectus (other than an amendment or supplement thereto providing solely for
the determination of the variable terms of the Notes or relating solely to the
offering of securities other than the Notes), whether pursuant to the 1933 Act,
the 1934 Act or otherwise, will furnish to the Agent copies of any such
document a reasonable amount of time prior to such proposed filing or use, as
the case may be, and will not file any such document to which the Agent or
counsel for the Agent shall reasonably object.
11
(c) Delivery of the Registration Statement. The Company has furnished
to the Agent and to counsel for the Agent, without charge, conformed copies of
the Registration Statement as originally filed and of each amendment thereto
(including exhibits filed therewith or incorporated by reference therein and
documents incorporated or deemed to be incorporated by reference therein) and
conformed copies of all consents and certificates of experts. The Registration
Statement and each amendment thereto furnished to the Agent will be identical
to any electronically transmitted copies thereof filed with the Commission
pursuant to XXXXX, except to the extent permitted by Regulation S-T.
(d) Delivery of the Prospectus. The Company will deliver to the Agent,
without charge, as many copies of each preliminary prospectus as the Agent may
reasonably request, and the Company hereby consents to the use of such copies
for purposes permitted by the 1933 Act. The Company will furnish to the Agent,
without charge, such number of copies of the Prospectus (as amended or
supplemented) as the Agent may reasonably request. The Prospectus and any
amendments or supplements thereto furnished to the Agent will be identical to
any electronically transmitted copies thereof filed with the Commission
pursuant to XXXXX, except to the extent permitted by Regulation S-T.
(e) Preparation of Pricing Supplements. The Company will prepare, with
respect to any Notes to be sold to or through the Agent pursuant to this
Agreement, a Pricing Supplement with respect to such Notes in a form previously
approved by the Agent. The Company will deliver such Pricing Supplement no
later than 11:00 a.m., New York City time, on the business day following the
date of the Company's acceptance of the offer for the purchase of such Notes
and will file such Pricing Supplement pursuant to Rule 424(b)(3) under the 1933
Act not later than the close of business of the Commission on the fifth
business day after the date on which such Pricing Supplement is first used.
(f) Revisions of Prospectus -- Material Changes. Except as otherwise
provided in subsection (m) of this Section 4, if at any time during the term of
this Agreement any event shall occur or condition shall exist as a result of
which it is necessary, in the opinion of counsel for the Agent or counsel for
the Company, to amend the Registration Statement in order that the Registration
Statement will not contain an untrue statement of a material fact or omit to
state a material fact required to be stated therein or necessary to make the
statements therein not misleading or to amend or supplement the Prospectus in
order that the Prospectus will not include an untrue statement of a material
fact or omit to state a material fact necessary in order to make the statements
therein not misleading in the light of the circumstances existing at the time
the Prospectus is delivered to a purchaser, or if it shall be necessary, in the
opinion of either such counsel, to amend the Registration Statement or amend or
supplement the Prospectus in order to comply with the requirements of the 1933
Act or the 1933 Act Regulations, the Company shall give immediate notice,
confirmed in writing, to the Agent to cease the solicitation of offers for the
purchase of Notes in its capacity as agent and to cease sales of any Notes it
may then own as principal, and the Company will promptly prepare and file with
the Commission, subject to Section 4(b) hereof, such amendment or supplement as
may be necessary to correct such statement or omission or to make the
Registration Statement and Prospectus comply with such requirements, and the
Company will furnish to the Agent, without charge, such number of copies of
such amendment or supplement as the Agent may reasonably request. In addition,
the
12
Company will comply with the 1933 Act, the 1933 Act Regulations, the 1934 Act
and the 1934 Act Regulations so as to permit the completion of the distribution
of each offering of Notes.
(g) Prospectus Revisions -- Periodic Financial Information. Except as
otherwise provided in subsection (m) of this Section 4, on or prior to the date
on which there shall be released to the general public interim financial
statement information related to the Company with respect to each of the first
three quarters of any fiscal year or preliminary financial statement
information with respect to any fiscal year, the Company shall furnish such
information to the Agent, confirmed in writing, and shall cause the Prospectus
to be amended or supplemented to include financial information with respect
thereto and corresponding information for the comparable period of the
preceding fiscal year, as well as such other information and explanations as
shall be necessary for an understanding thereof or as shall be required by the
1933 Act or the 1933 Act Regulations.
(h) Prospectus Revisions -- Audited Financial Information. Except as
otherwise provided in subsection (m) of this Section 4, on or prior to the date
on which there shall be released to the general public financial information
included in or derived from the audited consolidated financial statements of
the Company for the preceding fiscal year, the Company shall furnish such
information to the Agent, confirmed in writing, and shall cause the Prospectus
to be amended or supplemented to include such audited consolidated financial
statements and the report or reports, and consent or consents to such
inclusion, of the independent accountants with respect thereto, as well as such
other information and explanations as shall be necessary for an understanding
of such consolidated financial statements or as shall be required by the 1933
Act or the 1933 Act Regulations.
(i) Earnings Statements. The Company will timely file such reports
pursuant to the 1934 Act as are necessary in order to make generally available
to its securityholders as soon as practicable an earnings statement for the
purposes of, and to provide the benefits contemplated by, the last paragraph of
Section 11(a) of the 1933 Act.
(j) Reporting Requirements. The Company, during the period when the
Prospectus is required to be delivered under the 1933 Act or the 1934 Act, will
file all documents required to be filed with the Commission pursuant to the
1934 Act within the time periods prescribed by the 1934 Act and the 1934 Act
Regulations.
(k) Restriction on Offers and Sales of Securities. Unless otherwise
agreed upon between the Agent acting as principal and the Company, between the
date of the agreement by the Agent to purchase the related Notes from the
Company and the Settlement Date with respect thereto, the Company will not,
without the prior written consent of the Agent, issue, sell, offer or contract
to sell, grant any option for the sale of, or otherwise dispose of, any debt
securities of the Company (other than the Notes that are to be sold pursuant to
such agreement or commercial paper in the ordinary course of business). For
such purposes, debt securities of the Company shall not include guarantees of
the trading obligations of subsidiaries in the ordinary course of business and
consistent with past practices.
(l) Use of Proceeds. The Company will use the net proceeds received by
it from the issuance and sale of the Notes in the manner specified in the
Prospectus.
13
(m) Suspension of Certain Obligations. The Company shall not be
required to comply with the provisions of subsections (b), (f), (g) or (h) of
this Section 4 during any period from the time (i) the Agent shall have
suspended solicitation of offers for the purchase of Notes in its capacity as
agent pursuant to a request from the Company and (ii) the Agent shall not then
hold any Notes purchased from the Company as principal, as the case may be,
until the time the Company shall determine that solicitation of offers for the
purchase of Notes should be resumed or the Agent shall subsequently purchase
Notes from the Company as principal.
(n) Ratings. The Company will obtain a rating for the Notes from
Xxxxx'x Investors Service, Inc. and Standard & Poor's Ratings Services prior to
the issuance of such Notes.
SECTION 5. Conditions of Agent's Obligations.
The obligations of the Agent to purchase Notes from the Company as
principal and to solicit offers for the purchase of Notes as an agent of the
Company, and the obligations of any purchasers of Notes sold through the Agent
as an agent of the Company, will be subject to the accuracy of the
representations and warranties on the part of the Company herein contained or
contained in any certificate of an officer of the Company or any of its
subsidiaries delivered pursuant to the provisions hereof, to the performance
and observance by the Company of its covenants and other obligations hereunder,
and to the following additional conditions precedent:
(a) Effectiveness of Registration Statement. The Registration
Statement (including any Rule 462(b) Registration Statement) has become
effective under the 1933 Act and no stop order suspending the effectiveness of
the Registration Statement shall have been issued under the 1933 Act and no
proceedings for that purpose shall have been instituted or shall be pending or
threatened by the Commission, and any request on the part of the Commission for
additional information shall have been complied with to the reasonable
satisfaction of counsel to the Agent.
(b) Legal Opinions. On the date hereof, the Agent shall have received
the following legal pinions, dated as of the date hereof and in form and
substance satisfactory to the Agent:
(1) Opinion of Counsel for the Company. The favorable
opinion of General Counsel of the Company substantially in
the form attached hereto as Exhibit B.
(2) Opinions of Counsel for the Agent. The favorable
opinion of Xxxxxxxxx & Xxxxxxxxx, L.L.P., counsel for the
Agent, substantially in the form attached hereto as Exhibit C.
(c) Officer's Certificate. On the date hereof, there shall not have
been, since the respective dates as of which information is given in the
Prospectus, any Material Adverse Effect, whether or not arising in the ordinary
course of business, and the Agent shall have received a certificate of the
President or any Vice President of the Company and any one of the Chief
Financial Officer, the Chief Accounting Officer or the Treasurer of the
Company, dated as of the date hereof, to the effect that (i) there has been no
such Material Adverse Effect, (ii) the representations and warranties of the
Company herein contained are true and correct with the same force and effect as
though expressly made at and as of the date of such certificate, (iii) the
Company has complied with all agreements and satisfied all conditions on its
part to be performed or satisfied at or prior to the date of such certificate,
and (iv) no stop order suspending
14
the effectiveness of the Registration Statement has been issued and no
proceedings for that purpose have been instituted, are pending or, to the best
of such officer's knowledge, are threatened by the Commission.
(d) Comfort Letter of Xxxxxx Xxxxxxxx LLP. On the date hereof, the
Agent shall have received a letter from Xxxxxx Xxxxxxxx LLP, dated as of the
date hereof and in form and substance satisfactory to the Agent.
(e) Additional Documents. On the date hereof, counsel to the Agent
shall have been furnished with such documents and opinions as such counsel may
reasonably require for the purpose of enabling such counsel to pass upon the
issuance and sale of Notes as herein contemplated and related proceedings, or
in order to evidence the accuracy of any of the representations and warranties,
or the fulfillment of any of the conditions, herein contained; and all
proceedings taken by the Company in connection with the issuance and sale of
Notes as herein contemplated shall be satisfactory in form and substance to the
Agent and to counsel to the Agent.
(f) Ratings. The Notes shall be rated at a rating satisfactory to the
Agent.
If any condition specified in this Section 5 shall not have been
fulfilled when and as required to be fulfilled, this Agreement may be
terminated by the Agent by notice to the Company at any time and any such
termination shall be without liability of any party to any other party except
as provided in Section 10 hereof and except that Sections 8, 9, 11, 14 and 15
hereof shall survive any such termination and remain in full force and effect.
SECTION 6. Delivery of and Payment for Notes Sold through an Agent as Agent.
Delivery of Notes sold through the Agent as an agent of the Company
shall be made by the Company to the Agent for the account of any purchaser only
against payment therefor in immediately available funds. In the event that a
purchaser shall fail either to accept delivery of or to make payment for a Note
on the date fixed for settlement, the Agent shall promptly notify the Company
and deliver such Note to the Company and, if the Agent has theretofore paid the
Company for such Note, the Company will promptly return such funds to the
Agent. If such failure has occurred for any reason other than default by the
Agent in the performance of its obligations hereunder, the Company will
reimburse the Agent on an equitable basis for its loss of the use of the funds
for the period such funds were credited to the Company's account.
SECTION 7. Additional Covenants of the Company.
The Company further covenants and agrees with the Agent as follows:
(a) Reaffirmation of Representations and Warranties. Each acceptance
by the Company of an offer for the purchase of Notes (whether to the Agent as
principal or through the Agent as agent), and each delivery of Notes (whether
to the Agent as principal or through the Agent as agent), shall be deemed to be
an affirmation that the representations and warranties of the Company herein
contained and contained in any certificate theretofore delivered to the Agent
pursuant hereto are true and correct at the time of such acceptance, and an
undertaking that such representations and warranties will be true and correct
at the time of delivery to the Agent or to
15
the purchaser or its agent, as the case may be, of the Notes relating to such
acceptance as though made at and as of each such time (it being understood that
such representations and warranties shall relate to the Registration Statement
and Prospectus as amended and supplemented to each such time).
(b) Subsequent Delivery of Certificates. Each time that (i) the
Registration Statement or the Prospectus shall be amended or supplemented
(other than by an amendment or supplement providing solely for the
determination of the variable terms of the Notes or relating solely to the
offering of securities other than the Notes), (ii) (if required in connection
with the purchase of Notes from the Company by the Agent as principal) the
Company sells Notes to the Agent as principal or (iii) the Company sells Notes
in a form not previously certified to the Agent by the Company, the Company
shall furnish or cause to be furnished to the Agent, forthwith a certificate
dated the date of filing with the Commission or the date of effectiveness of
such amendment or supplement, as applicable, or the date of such sale, as the
case may be, in form satisfactory to the Agent, to the effect that the
statements contained in the certificate referred to in Section 5(c) hereof
which were last furnished to the Agent are true and correct at the time of the
filing or effectiveness of such amendment or supplement, as applicable, or the
time of such sale, as the case may be, as though made at and as of such time
(except that such statements shall be deemed to relate to the Registration
Statement and the Prospectus as amended and supplemented to such time) or, in
lieu of such certificate, a certificate of the same tenor as the certificate
referred to in Section 5(c) hereof, modified as necessary to relate to the
Registration Statement and the Prospectus as amended and supplemented to the
time of delivery of such certificate (it being understood that, in the case of
clause (ii) above, any such certificate shall also include a certification that
there has been no Material Adverse Effect, whether or not arising in the
ordinary course of business, since the date of the agreement by the Agent to
purchase Notes from the Company as principal).
(c) Subsequent Delivery of Legal Opinions. Each time that (i) the
Registration Statement or the Prospectus shall be amended or supplemented
(other than by an amendment or supplement providing solely for the
determination of the variable terms of the Notes or relating solely to the
offering of securities other than the Notes), (ii) (if required in connection
with the purchase of Notes from the Company by the Agent as principal) the
Company sells Notes to the Agent as principal or (iii) the Company sells Notes
in a form not previously certified to the Agent by the Company, the Company
shall furnish or cause to be furnished forthwith to the Agent and to counsel to
the Agent the written opinion of General Counsel of the Company, or other
counsel satisfactory to the Agent, and, at least once annually, counsel for the
Agent, dated the date of filing with the Commission or the date of
effectiveness of such amendment or supplement, as applicable, or the date of
such sale, as the case may be, in form and substance satisfactory to the Agent,
of the same tenor as the opinion referred to in Section 5(b) hereof, but
modified, as necessary, to relate to the Registration Statement and the
Prospectus as amended and supplemented to the time of delivery of such opinion
or, in lieu of such opinion, counsel last furnishing such opinion to the Agent
shall furnish the Agent with a letter substantially to the effect that the
Agent may rely on such last opinion to the same extent as though it was dated
the date of such letter authorizing reliance (except that statements in such
last opinion shall 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).
16
(d) Subsequent Delivery of Comfort Letters. Each time that (i) the
Registration Statement or the Prospectus shall be amended or supplemented to
include additional financial information (other than by an amendment or
supplement relating solely to the issuance and/or offering of securities other
than the Notes) or (ii) (if required in connection with the purchase of Notes
from the Company by the Agent as principal) the Company sells Notes to the
Agent as principal, the Company shall cause Xxxxxx Xxxxxxxx LLP forthwith to
furnish to the Agent a letter, dated the date of filing with the Commission or
the date of effectiveness of such amendment or supplement, as applicable, or
the date of such sale, as the case may be, in form satisfactory to the Agent,
of the same tenor as the letter referred to in Section 5(d) hereof but modified
to relate to the Registration Statement and Prospectus as amended and
supplemented to the date of such letter.
SECTION 8. Indemnification.
(a) Indemnification of the Agent. The Company agrees to indemnify and
hold harmless the Agent and each person, if any, who controls the Agent within
the meaning of Section 15 of the 1933 Act or Section 20 of the 1934 Act as
follows:
(i) against any and all loss, liability, claim, damage and
expense whatsoever, as incurred, arising out of an untrue statement or
alleged untrue statement of a material fact contained in the
Registration Statement (or any amendment thereto), or the omission or
alleged omission therefrom of a material fact required to be stated
therein or necessary to make the statements therein not misleading, or
arising out of an untrue statement or alleged untrue statement of a
material fact included in any preliminary prospectus or the Prospectus
(or any amendment or supplement thereto), or the omission or alleged
omission therefrom of a material fact necessary in order to make the
statements therein, in the light of the circumstances under which they
were made, not misleading;
(ii) against any and all loss, liability, claim, damage and
expense whatsoever, as incurred, to the extent of the aggregate amount
paid in settlement of any litigation, or any investigation or
proceeding by any governmental agency or body, commenced or
threatened, or any claim whatsoever based upon any such untrue
statement or omission, or any such alleged untrue statement or
omission, provided that (subject to Section 8(d) hereof) any such
settlement is effected with the written consent of the Company; and
(iii) against any and all expense whatsoever, as incurred
(including the fees and disbursements of counsel chosen by the Agent),
reasonably incurred in investigating, preparing or defending against
any litigation, or any investigation or proceeding by any governmental
agency or body, commenced or threatened, or any claim whatsoever based
upon any such untrue statement or omission, or any such alleged untrue
statement or omission, to the extent that any such expense is not paid
under subparagraph (i) or (ii) above;
provided, however, that this indemnity does not apply to (i) any untrue
statement or alleged untrue statement contained in or omission or alleged
omission from a preliminary prospectus delivered to the person asserting the
loss, liability, claim, damage or expense if the Company shall sustain the
burden of proving that such person was not sent or given a copy of the
17
Prospectus (or any amendment or supplement thereto) at or prior to the written
confirmation of the sale of the related Notes to such person and the untrue
statement contained in or omission from such preliminary prospectus was
corrected in the Prospectus (or any amendment or supplement thereto) and the
Company furnished copies thereof to the Agent a reasonable amount of time in
advance of the delivery of the written confirmation and (ii) any loss,
liability, claim, damage or expense to the extent arising out of an untrue
statement or omission or alleged untrue statement or omission made in reliance
upon and in conformity with written information furnished to the Company by the
Agent expressly for use in the Registration Statement (or any amendment
thereto) or any preliminary prospectus or the Prospectus (or any amendment or
supplement thereto).
(b) Indemnification of Company, Directors and Officers. The
Agent agrees to indemnify and hold harmless the Company, its directors, each of
its officers who signed the Registration Statement and each person, if any, who
controls the Company within the meaning of Section 15 of the 1933 Act or
Section 20 of the 1934 Act against any and all loss, liability, claim, damage
and expense described in the indemnity contained in Section 8(a) hereof, as
incurred, but only with respect to untrue statements or omissions, or alleged
untrue statements or omissions, made in the Registration Statement (or any
amendment thereto) or any preliminary prospectus or the Prospectus (or any
amendment or supplement thereto) in reliance upon and in conformity with
written information furnished to the Company by the Agent expressly for use in
the Registration Statement (or any amendment thereto) or such preliminary
prospectus or the Prospectus (or any amendment or supplement thereto).
(c) Actions Against Parties; Notification. Each indemnified
party shall give notice as promptly as reasonably practicable to each
indemnifying party of any action commenced against it in respect of which
indemnity may be sought hereunder, but failure to so notify an indemnifying
party shall not relieve such indemnifying party from any liability hereunder to
the extent it is not materially prejudiced as a result thereof and in any event
shall not relieve it from any liability which it may have otherwise than on
account of this indemnity agreement. In the case of parties indemnified
pursuant to Section 8(a) hereof, counsel to the indemnified parties shall be
selected by the Agent and, in the case of parties indemnified pursuant to
Section 8(b) hereof, counsel to the indemnified parties shall be selected by
the Company; provided that if it so elects within a reasonable time after
receipt of such notice, an indemnifying party, jointly with any other
indemnifying parties receiving such notice, may assume the defense of such
action with counsel chosen by it and approved by the indemnified parties
defendant in such action, unless such indemnified parties reasonably object to
such assumption on the ground that there may be legal defenses available to
them that are different from or in addition to those available to such
indemnifying party. If an indemnifying party assumes the defense of such action
in accordance with the preceding sentence, the indemnifying parties shall not
be liable for any fees and expenses of counsel for the indemnified parties
incurred thereafter in connection with such action. An indemnifying party may
participate at its own expense in the defense of any such action; provided,
however, that counsel to the indemnifying party shall not (except with the
consent of the indemnified party) also be counsel to the indemnified party. In
no event shall the indemnifying parties be liable for fees and expenses of more
than one counsel (in addition to any local counsel) separate from their own
counsel for all indemnified parties in connection with any one action or
separate but similar or
18
related actions in the same jurisdiction arising out of the same general
allegations or circumstances.
No indemnifying party shall, without the prior written consent of the
indemnified parties, settle or compromise or consent to the entry of any
judgment with respect to any litigation, or any investigation or proceeding by
any governmental agency or body, commenced or threatened, or any claim
whatsoever in respect of which indemnification or contribution could be sought
under this Section 8 or 9 hereof (whether or not the indemnified parties are
actual or potential parties thereto), unless such settlement, compromise or
consent (i) includes an unconditional release of each indemnified party from
all liability arising out of such litigation, investigation, proceeding or
claim and (ii) does not include a statement as to or an admission of fault,
culpability or a failure to act by or on behalf of any indemnified party.
(d) Settlement without Consent if Failure to Reimburse. If at
any time an indemnified party shall have requested an indemnifying party to
reimburse the indemnified party for fees and expenses of counsel, such
indemnifying party agrees that it shall be liable for any settlement of the
nature contemplated by Section 8(a)(ii) effected without its written consent if
(i) such settlement is entered into more than 45 days after receipt by such
indemnifying party of the aforesaid request, (ii) such indemnifying party shall
have received notice of the terms of such settlement at least 30 days prior to
such settlement being entered into and (iii) such indemnifying party shall not
have reimbursed such indemnified party in accordance with such request prior to
the date of such settlement. Notwithstanding the immediately preceding
sentence, if at any time an indemnified party shall have requested an
indemnifying party to reimburse the indemnified party for fees and expenses of
counsel, an indemnifying party shall not be liable for any settlement of the
nature contemplated by Section 8(a)(ii) effected without its consent if such
indemnifying party (i) reimburses such indemnified party in accordance with
such request to the extent it considers such request to be reasonable and (ii)
provides written notice to the indemnified party substantiating the unpaid
balance as unreasonable, in each prior to the date of such settlement.
SECTION 9. Contribution.
If the indemnification provided for in Section 8 hereof is for any
reason unavailable to or insufficient to hold harmless an indemnified party in
respect of any losses, liabilities, claims, damages or expenses referred to
therein, then each indemnifying party shall contribute to the aggregate amount
of such losses, liabilities, claims, damages and expenses incurred by such
indemnified party, as incurred, (i) in such proportion as is appropriate to
reflect the relative benefits received by the Company, on the one hand, and the
Agent, on the other hand, from the offering of the Notes that were the subject
of the claim for indemnification or (ii) if the allocation provided by clause
(i) is not permitted by applicable law, in such proportion as is appropriate to
reflect not only the relative benefits referred to in clause (i) above but also
the relative fault of the Company, on the one hand, and the Agent, on the other
hand, in connection with the statements or omissions which resulted in such
losses, liabilities, claims, damages or expenses, as well as any other relevant
equitable considerations.
The relative benefits received by the Company, on the one hand, and
the Agent, on the other hand, in connection with the offering of the Notes that
were the subject of the claim for
19
indemnification shall be deemed to be in the same respective proportions as the
total net proceeds from the offering of such Notes (before deducting expenses)
received by the Company and the total discount or commission received by the
Agent bears to the aggregate initial offering price of such Notes.
The relative fault of the Company, on the one hand, and the Agent, on
the other hand, shall be determined by reference to, among other things,
whether any untrue or alleged untrue statement of a material fact or omission
or alleged omission to state a material fact relates to information supplied by
the Company or by the Agent and the parties' relative intent, knowledge, access
to information and opportunity to correct or prevent such statement or
omission.
The Company and the Agent agree that it would not be just and
equitable if contribution pursuant to this Section 9 were determined by pro
rata allocation or by any other method of allocation which does not take
account of the equitable considerations referred to above in this Section 9.
The aggregate amount of losses, liabilities, claims, damages and expenses
incurred by an indemnified party and referred to above in this Section 9 shall
be deemed to include any legal or other expenses reasonably incurred by such
indemnified party in investigating, preparing or defending against any
litigation, or any investigation or proceeding by any governmental agency or
body, commenced or threatened, or any claim whatsoever based upon any
applicable untrue or alleged untrue statement or omission or alleged omission.
Notwithstanding the provisions of this Section 9, (i) the Agent shall
not be required to contribute any amount in excess of the amount by which the
total discount or commission received by it in connection with the offering of
the Notes that were the subject of the claim for indemnification exceeds the
amount of any damages which the Agent has otherwise been required to pay by
reason of any applicable untrue or alleged untrue statement or omission or
alleged omission and (ii) no person guilty of fraudulent misrepresentation
(within the meaning of Section 11(f) of the 0000 Xxx) shall be entitled to
contribution from any person who was not guilty of such fraudulent
misrepresentation.
For purposes of this Section 9, each person, if any, who controls the
Agent within the meaning of Section 15 of the 1933 Act or Section 20 of the
1934 Act shall have the same rights to contribution as the Agent, and each
director of the Company, each officer of the Company and each person, if any,
who controls the Company within the meaning of Section 15 of the 1933 Act or
Section 20 of the 1934 Act shall have the same rights to contribution as the
Company.
SECTION 10. Payment of Expenses.
The Company will pay all expenses incident to the performance of its
obligations under this Agreement, including:
(a) The preparation, filing, printing and delivery of the Registration
Statement as originally filed and all amendments thereto and any preliminary
prospectus, the Prospectus and any amendments or supplements thereto;
(b) The preparation, printing and delivery of this Agreement and the
Indenture;
20
(c) The preparation, issuance and delivery of the Notes, including any
fees and expenses relating to the eligibility and issuance of Notes in
book-entry form and the cost of obtaining CUSIP or other identification numbers
for the Notes;
(d) The fees and disbursements of the Company's accountants, counsel
and other advisors or Agent (including any calculation agent or exchange rate
agent) and of the Trustee and its counsel;
(e) The reasonable fees and disbursements of counsel to the Agent
incurred in connection with the establishment of the Program and incurred from
time to time in connection with the transactions contemplated hereby;
(f) The fees charged by nationally recognized statistical rating
organizations for the rating of the Program and the Notes;
(g) The fees and expenses incurred in connection with any listing of
Notes on a securities exchange;
(h) The filing fees incident to, and the reasonable fees and
disbursements of counsel to the Agent in connection with, the review, if any,
by the National Association of Securities Dealers, Inc. (the "NASD"); and
(i) Any advertising and other out-of-pocket expenses of the Agent
incurred with the approval of the Company.
SECTION 11. Representations, Warranties and Agreements to Survive Delivery.
All representations, warranties and agreements contained in this
Agreement or in certificates of officers of the Company or any of its
subsidiaries submitted pursuant hereto or thereto shall remain operative and in
full force and effect, regardless of any investigation made by or on behalf of
the Agent or any controlling person of the Agent, or by or on behalf of the
Company, and shall survive each delivery of and payment for the Notes.
SECTION 12. Termination.
(a) Termination of this Agreement. This Agreement (excluding any
agreement by the Agent to purchase Notes from the Company as principal) may be
terminated for any reason, at any time by either the Company or the Agent upon
the giving of 30 days' prior written notice of such termination to the other
party hereto.
(b) Termination of Agreement to Purchase Notes as Principal. The Agent
may terminate any agreement by it to purchase Notes from the Company as
principal, immediately upon notice to the Company, at any time prior to the
Settlement Date relating thereto, if (i) there has been, since the date of such
agreement or since the respective dates as of which information is given in the
Prospectus, any Material Adverse Effect, whether or not arising in the ordinary
course of business, or (ii) there has occurred any material adverse change in
the financial markets in the United States or, if such Notes are denominated
and/or payable in, or indexed to, one or more foreign currencies, in the
international financial markets, or any outbreak of hostilities or
21
escalation thereof or other calamity or crisis or any change or development or
event involving a prospective change in national or international political,
financial or economic conditions, in each case the effect of which is such as
to make it, in the judgment of the Agent, impracticable to market such Notes or
enforce contracts for the sale of such Notes, or (iii) trading in any
securities of the Company has been suspended or materially limited by the
Commission or a national securities exchange, or if trading generally on the
New York Stock Exchange or the American Stock Exchange or in the Nasdaq
National Market has been suspended or materially limited, or minimum or maximum
prices for trading have been fixed, or maximum ranges for prices have been
required, by either of said exchanges or by such system or by order of the
Commission, the NASD or any other governmental authority, or (iv) a banking
moratorium has been declared by either Federal or New York authorities or by
the relevant authorities in the country or countries of origin of any foreign
currency in which such Notes are denominated and/or payable, or (v) the rating
assigned by any nationally recognized statistical rating organization to the
Program or any debt securities (including the Notes) of the Company as of the
date of such agreement has been lowered or withdrawn since that date or if any
such rating organization has publicly announced that it has under surveillance
or review its rating of the Program or any such debt securities, or (vi) there
has come to the attention of the Agent any facts that would cause the Agent to
believe that the Prospectus, at the time it was required to be delivered to a
purchaser of such Notes, included 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 existing at the time of such
delivery, not misleading.
(c) General. In the event of any such termination, neither party will
have any liability to the other party hereto, except that (i) the Agent shall
be entitled to any commissions earned on Notes actually sold in accordance with
the third paragraph of Section 3(b) hereof, (ii) if at the time of termination
(a) the 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 Sections 4 and 7 hereof
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(i) hereof, the provisions
of Section 10 hereof, the indemnity and contribution agreements set forth in
Sections 8 and 9 hereof, and the provisions of Sections 11, 14 and 15 hereof
shall remain in effect.
SECTION 13. Notices.
Unless otherwise provided herein, all notices required under the terms
and provisions hereof shall be in writing, either delivered by hand, by mail or
by telex, telecopier or telegram, and any such notice shall be effective when
received at the address specified below.
If to the Company:
Enron Corp.
0000 Xxxxx Xxxxxx
Xxxxxxx, Xxxxx 00000
Attention: Treasurer
Telecopy No.: (000) 000-0000
22
If to the Agent:
[Agent Name and Address]
Attention:
Telecopy No.:
or at such other address as such party may designate from time to time by
notice duly given in accordance with the terms of this Section 13.
SECTION 14. Parties.
This Agreement shall inure to the benefit of and be binding upon the
Agent and the Company and their respective successors. Nothing expressed or
mentioned in this Agreement is intended or shall be construed to give any
person, firm or corporation, other than the parties hereto and their respective
successors and the controlling persons, officers and directors referred to in
Sections 8 and 9 hereof and their heirs and legal representatives, any legal or
equitable right, remedy or claim under or in respect of this Agreement or any
provision herein contained. This Agreement and all conditions and provisions
hereof are intended to be for the sole and exclusive benefit of the parties
hereto and their respective successors, and said controlling persons, officers
and directors and their heirs and legal representatives, and for the benefit of
no other person, firm or corporation. No purchaser of Notes shall be deemed to
be a successor by reason merely of such purchase.
SECTION 15. GOVERNING LAW.
THIS AGREEMENT AND ALL THE RIGHTS AND OBLIGATIONS OF THE PARTIES SHALL
BE GOVERNED BY AND CONSTRUED IN ACCORDANCE WITH THE LAWS OF THE STATE OF NEW
YORK WITHOUT REGARD TO CONFLICT OF LAW PRINCIPLES.
SECTION 16. Effect of Headings.
The Article and Section headings herein are for convenience only and
shall not affect the construction hereof.
SECTION 17. Counterparts.
This Agreement may be executed in one or more counterparts and, if
executed in more than one counterpart, the executed counterparts hereof shall
constitute a single instrument.
23
If the foregoing is in accordance with the Agent's understanding of
our agreement, please sign and return to the Company a counterpart hereof,
whereupon this Distribution Agreement, along with all counterparts, will become
a binding agreement between the Agent and the Company in accordance with its
terms.
Very truly yours,
ENRON CORP.
By:
----------------------------------------
Name:
Title:
CONFIRMED AND ACCEPTED,
By the Agent named below as of the date first above written:
[NAME OF AGENT]
By:
----------------------------
Name:
Title:
24
SCHEDULE A
As compensation for the services of the Agent hereunder, the Company
shall pay the Agent, on a discount basis, a commission for the sale of each
Note equal to the principal amount of such Note multiplied by the appropriate
percentage set forth below:
PERCENT OF
PRINCIPAL AMOUNT
[To be agreed upon with Agent]
25
EXHIBIT A
PRICING TERMS
Principal Amount: $_______
(or principal amount of foreign or composite currency)
Interest Rate or Formula:
If Fixed Rate Note,
Interest Rate:
Interest Payment Dates:
If Floating Rate Note,
Interest Rate Basis(es):
If LIBOR,
LIBOR Reuters Page:
LIBOR Telerate Page:
Designated LIBOR Currency:
If CMT Rate,
Designated CMT Telerate Page:
If Telerate Page 7052:
Weekly Average
Monthly Average
Index Maturity:
Spread and/or Spread Multiplier, if any:
Initial Interest Rate, if any:
Interest Reset Dates:
Interest Payment Dates:
Maximum Interest Rate, if any:
Minimum Interest Rate, if any:
Fixed Rate Commencement Date, if any:
Fixed Interest Rate, if any:
Day Count Convention:
Calculation Agent:
Redemption Provisions:
Initial Redemption Date:
Initial Redemption Percentage:
Annual Redemption Percentage Reduction, if any:
Repayment Provisions:
Optional Repayment Date(s):
Original Issue Date:
Stated Maturity Date:
Specified Currency:
Exchange Rate Agent:
Authorized Denomination:
Purchase Price: ___%, plus accrued interest, if any, from ___________
Price to Public: ___%, plus accrued interest, if any, from __________
Issue Price:
Settlement Date and Time:
Additional/Other Terms:
Also, in connection with the purchase of Notes from the Company by the Agent as
principal, agreement as to whether the following will be required:
26
Officers' Certificate pursuant to Section 7(b) of the Distribution
Agreement.
Legal Opinion pursuant to Section 7(c) of the Distribution Agreement.
Comfort Letter pursuant to Section 7(d) of the Distribution Agreement.
