EXHIBIT 1(f)
Draft 12/21/01
American Express Credit Corporation
$2,000,000,000
Medium-Term Senior Notes, Series B
AGENCY AGREEMENT
December 21, 2001
The Agents
Ladies and Gentlemen:
American Express Credit Corporation, a Delaware corporation (the
"Company"), proposes to issue and sell from time to time its Medium-Term Senior
Notes, Series B, with maturities of nine months or more from date of issue (the
"Notes") in an aggregate principal amount up to $2,000,000,000 and agrees with
each of you (individually, an "Agent" and collectively, the "Agents") as set
forth in this Agreement.
Subject to the terms and conditions stated herein and to the
reservation by the Company of the right to sell its Notes directly on its own
behalf and to designate or select additional agents pursuant to Section 3
hereof, the Company hereby (i) appoints each of the Agents as an agent of the
Company for the purpose of soliciting and receiving offers to purchase Notes
from the Company and (ii) agrees that whenever the Company determines to sell
Notes directly to any Agent as principal it will enter into a separate agreement
(each, a "Terms Agreement"), oral (and confirmed in writing by facsimile
transmission or otherwise) or in writing, with respect to such information (as
applicable) as specified in Annex I hereto, relating to such sale in accordance
with Section 2(b) hereof.
The Notes will be offered and sold under the Registration Statement (as
hereinafter defined). The Notes will be issued from time to time pursuant to an
Indenture, dated as of September 1, 1987, between the Company and Bank America
National Trust Company (as successor to Security Pacific National Trust Company
(New York)), as trustee, as supplemented by a First Supplemental Indenture,
dated as of November 1, 1987, between the Company and Bank of Montreal Trust
Company, as trustee, a Second Supplemental Indenture, dated as of January 15,
1988, between the Company and Fleet Bank Boston N.A. (as successor to The First
National Bank of Boston), as trustee, a Third Supplemental Indenture, dated as
of April 1, 1988, between the Company and The Chase Manhattan Bank (as successor
to Manufacturers Hanover Trust Company), as trustee, a Fourth Supplemental
Indenture, dated as of May 1, 1988, between the Company and Trust Company Bank,
as trustee, a Fifth Supplemental Indenture, dated as of March 28, 1989, between
the Company and The Bank of New York, as trustee, a Sixth Supplemental
Indenture, dated as of May 1, 1989, between the Company and Bank of Montreal
Trust Company, as trustee, a Seventh Supplemental Indenture, dated as of July
28, 1995, between the Company and The Chase Manhattan Bank, as trustee, and an
Eighth Supplemental Indenture, dated as of December 21, 2001, between the
Company and Bank One Trust Company, N.A., as trustee (the "Trustee") (as so
supplemented or as it may be further supplemented or amended by one or more
indentures supplemental thereto, the "Indenture"), in minimum denominations of
$100,000 and in denominations exceeding such amount in integral multiples of
$1,000. The Notes shall have the maturity ranges and other terms set forth in
the Prospectus (as hereinafter defined) as it may be supplemented from time to
time by an applicable pricing supplement (a "Pricing Supplement"). The Notes
will be issued, and the terms and rights thereof established, from time to time
by the Company in accordance with both the Indenture and the administrative
procedures attached hereto as Annex II as amended from time to time by written
agreement between the Agents and the Company (the "Procedures") and, if
applicable, as specified in a related Terms Agreement.
1. Representation and Warranties of the Company. The Company represents
and warrants to, and agrees with, each Agent that, as of the date hereof and as
of the Closing Date (as defined in Section 2(d) hereof) and each of the times
referred to in Sections 4(n), 4(o), 4(p) and 4(q) hereof (the Closing Date and
each such time being hereinafter sometimes referred to as a "Representation
Date"), as follows:
(a) Registration Statements on Form S-3 (Nos. 33-62797 and
333-38199), which relate to certain debt securities of the Company,
including a Prospectus (as defined below), with respect to the Notes have
been prepared and filed by the Company in conformity with the requirements
of the Securities Act of 1933, as amended (the
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"Act"), the Trust Indenture Act of 1939, as amended (the "Trust Indenture
Act"), and the rules and regulations (the "Rules and Regulations") of the
Securities and Exchange Commission (the "Commission"), and have become
effective. Such Registration Statements have been amended or supplemented
from time to time prior to the date of this agreement; any such amendment
to the Registration Statements was so prepared and filed and has become
effective. Copies of such Registration Statements and Prospectus, and any
amendment or supplement thereto, and all documents incorporated by
reference therein which were filed with the Commission prior to the date of
this agreement have been delivered to you. The Indenture has been qualified
under the Trust Indenture Act. As used in this Agreement, (i) "Registration
Statement" means such registration statements including all exhibits
thereto but excluding any Forms T-1 (as defined below) when they became
effective under the Act, and as from time to time amended or supplemented
thereafter, together with any registration statements filed and made
effective hereafter relating to the Notes; (ii) "Basic Prospectus" means
the first prospectus (including all documents incorporated therein by
reference) included in the Registration Statement; and (iii) "Prospectus"
means the Basic Prospectus, together with any amendments or supplements
(including in each case all documents incorporated therein by reference)
relating to the Notes, as filed with the Commission pursuant to paragraph
(b) of Rule 424 of the Rules and Regulations. The Commission has not issued
any order preventing or suspending the use of the Prospectus and no
proceeding for that purpose has been threatened or instituted by the
Commission.
(b) The Registration Statement and the Prospectus conform, and the
Registration Statement and the Prospectus will conform as of the applicable
Representation Date and at all times during each period specified in
Section 4(d) hereof, in all material respects to the requirements of the
Act, the Securities Exchange Act of 1934, as amended (the "Exchange Act"),
the Trust Indenture Act, and the Rules and Regulations; the Registration
Statement and the Prospectus do not, and will not as of the applicable
Representation Date and at all times during each period specified in
Section 4(d) hereof, contain any untrue statement of a material fact or
omit to state any material fact required to be stated therein or necessary
to made the statements therein not misleading; provided, however, that the
Company makes no representation or warranty as to the information contained
in or omitted from the Registration Statement or the Prospectus in reliance
upon and in conformity with written information furnished to the Company by
any Agent specifically for inclusion therein or to any statements in or
omissions from the Statement of Eligibility and Qualification on Form T-1
of the Trustee under the Trust Indenture Act (a "Form T-1").
(c) Neither the Company nor any of its subsidiaries is in violation of
its corporate charter or by-laws; or in default under any agreement,
indenture or instrument, the effect of which default would be material to
the Company and its subsidiaries taken as a whole; the execution, delivery
and performance of this Agreement, the Indenture and each applicable Terms
Agreement, if any, and compliance by the Company and its subsidiaries with
the provisions of the Notes and the Indenture have been duly authorized by
all necessary corporate action and will not conflict with, or result in a
violation of the corporate charter or by-laws of the Company; or any order,
rule or regulation of any jurisdiction over the Company, its subsidiaries
or its properties, the effect of any of which
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conflict or violation would be material to the Company and its subsidiaries
taken as a whole; and, except as required by the Act, the Exchange Act, the
Trust Indenture Act and applicable state securities laws, no consent,
authorization or order of, or filing or registration with, any court or
governmental agency is required for the execution, delivery and performance
of the transactions contemplated by this Agreement, each applicable Terms
Agreement, if any, or the Indenture, except as has been duly obtained or
made and is in full force and effect.
(d) The issuance and sale of the Notes and the compliance by the
Company and its subsidiaries with all of the provisions of this Agreement
and the Indenture will not conflict with or result in a breach of any of
the provisions of, or constitute a default under, or result in the creation
or imposition of any lien, charge or encumbrance upon any of the property
or assets of, the Company or its subsidiaries pursuant to the terms of any
agreement or instrument to which the Company or its subsidiaries is now, or
on a Representation Date will be, a party, and compliance by the Company
and its subsidiaries with all of the provisions of the agreements, to which
they are respectively subject, in connection with the purchase of
receivables from various subsidiaries of American Express Company, a New
York corporation, ("American Express") (such agreements being herein
referred to as the "Agreements of Sale and Purchase") will not conflict
with or result in a breach of any of the terms or provisions of, or
constitute a default under, or result (except as contemplated thereby) in
the creation or imposition of any lien, charge or encumbrance upon any of
the property or assets of the Company, any of its subsidiaries, American
Express or any subsidiary of American Express which is a party to any of
the Agreements of Sale and Purchase, pursuant to the terms of any agreement
or instrument to which the Company, any of its subsidiaries, American
Express or any subsidiary of American Express which is a party to any of
the Agreements of Sale and Purchase is now or on a Representation Date will
be a party, except in the case of (A) any subsidiary of the Company, to the
extent any such conflict, breach, default or lien, charge or encumbrance
would not be material to the Company and its subsidiaries taken as a whole
or (B) American Express or any subsidiary of American Express which is a
party to any of the Agreements of Sale and Purchase (other than
subsidiaries of the Company), to the extent any such conflict, breach,
default or lien, charge or encumbrance would not be material to American
Express or any such subsidiary, as the case may be.
(e) Subsequent to the respective dates as to which information
contained in the Registration Statement is given, and except as disclosed
in the Registration Statement and the Prospectus, there has not been any
material adverse change in, or any adverse development or event which would
reasonably be expected to materially affect, the business, properties,
condition (financial or otherwise) or results of operations of the Company
and its subsidiaries taken as a whole.
(f) Ernst & Young LLP, who have audited the financial statements of the
Company, as set forth in their reports incorporated by reference in the
Registration Statement and the Prospectus, are independent public
accountants within the meaning of the Act and the Rules and Regulations.
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(g) The Indenture and the Notes have been duly authorized; and the
Indenture constitutes, and the Notes, when duly executed, authenticated,
issued and delivered as contemplated by this Agreement, any Terms Agreement
and by the Indenture will constitute, valid and legally binding obligations
of the Company enforceable in accordance with their respective terms and
entitled to the benefits of the Indenture, except to the extent that
enforceability may be limited by bankruptcy, insolvency, fraudulent
conveyance, reorganization, moratorium and other similar laws relating to
or affecting creditors' rights generally, general equity principles
(regardless of whether considered in a proceeding in equity or at law), and
the Notes and the Indenture conform in all material respects to the
descriptions thereof in the Prospectus.
(h) Each of the Company and its subsidiaries, respectively, has been
duly incorporated, is validly existing and in good standing under the laws
of its jurisdiction of incorporation, is duly qualified to do business and
is in good standing as a foreign corporation in each jurisdiction in which
its ownership of property or the conduct of its business requires such
qualification (except where the failure so to qualify would not be material
to the Company and its subsidiaries taken as a whole), and has the
corporate power and authority necessary to own or hold its respective
properties and to conduct the business in which it is engaged.
(i) Except as described in the Registration Statement and the
Prospectus, there are no actions, suits or proceedings pending or, to the
knowledge of the Company, threatened or contemplated against the Company or
its subsidiaries which might result, individually or in aggregate, in any
material adverse change in the business, properties, condition (financial
or otherwise), or results of operations of the Company and its subsidiaries
taken as a whole or would materially and adversely affect the ability of
the Company to perform its obligations under the Indenture or this
Agreement, or which would be otherwise material in the context of the sale
of the Notes.
(j) All of the outstanding shares of capital stock of the Company have
been duly and validly authorized and issued and are fully paid and
non-assessable and are owned directly by American Express Travel Related
Services Company, Inc. ("TRS") free and clear of all liens and
encumbrances, and all of the outstanding shares of capital stock of the
Company's subsidiaries have been duly and validly issued and are fully paid
and non-assessable and are owned directly, or indirectly, through
wholly-owned subsidiaries, by the Company free and clear of all liens and
encumbrances.
(k) The audited consolidated financial statements and related schedules
of the Company and its subsidiaries incorporated by reference in the
Registration Statement and Prospectus present and will present, as of the
applicable Representation Date and at all times during each period
specified in Section 4(d) hereof, fairly, the financial condition, results
of operations, changes in shareholder's equity and cash flows of the
entities purported to be shown thereby, at the dates and for the periods
indicated, and have been, and will be as of the applicable Representation
Date and at all times during each period specified in Section 4(d) hereof,
prepared in accordance with generally accepted accounting principles
applied on a consistent basis throughout the period or periods involved
(except for changes in accounting principles or the application thereof
with
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which Ernst & Young LLP shall have concurred and which have been disclosed
in the Registration Statement or Prospectus, as applicable) and the
supporting schedules included or incorporated in the Registration Statement
and Prospectus fairly present the information required to be stated
therein. The unaudited consolidated financial statements of the Company, if
any, included in the Prospectus and the Registration Statement and the
related notes do, and will, as of the applicable Representation Date and at
all times during each period specified in Section 4(d), present fairly the
consolidated financial position of the Company, and have been prepared in
accordance with the instructions to the Commission's Quarterly Report on
Form 10-Q.
(l) The documents incorporated by reference in the Registration
Statement or the Prospectus have been, and will be as of the applicable
Representation Date and at all times during each period specified in
Section 4(d) hereof, prepared by the Company in conformity in all material
respects with the applicable requirements of the Act, the Exchange Act and
the Rules and Regulations.
(m) The Agreements of Sale and Purchase conform in all material
respects to the descriptions thereof included in the Registration Statement
and the Prospectus.
2. Solicitations by the Agents of Offers to Purchase; Purchases as
Principal.
(a) Solicitations as Agent. On the basis of the representations and
warranties, and subject to the terms and conditions herein set forth, each Agent
hereby agrees, as an agent of the Company, to use its reasonable best efforts
when requested by the Company to solicit and receive offers to purchase Notes
from the Company upon the terms and conditions set forth in the Prospectus from
time to time as amended or supplemented by an applicable Pricing Supplement or
otherwise. No Agent shall otherwise employ, pay or compensate any other person
to solicit offers to purchase the Notes or to perform any of its functions as
agent without the prior written consent of the Company.
The Company reserves the right, in its sole discretion, to instruct
each Agent to suspend at any time, for any period of time or permanently, the
solicitation of offers to purchase the Notes. As soon as practicable, but in any
event not later than the next Business Day after receipt of such notice from the
Company, each Agent will suspend solicitation of offers to purchase Notes from
the Company until such time as the Company has advised it that such solicitation
may be resumed. For the purpose of the foregoing sentence, "Business Day" shall
mean any day that is not a Saturday or Sunday and that, in the City of New York,
New York and in the State of Delaware (and, with respect to LIBOR Notes (as
defined in the Prospectus), the City of London) is not a day on which banking
institutions are generally authorized or obligated by law to close.
The Company agrees to pay each Agent a commission at the time of
settlement of any sale of a Note by the Company as a result of a solicitation
made by such Agent, at a rate to be agreed upon by the Agents and the Company
between 1 and 75 basis points (as a percentage of the principal amount of Notes
sold by such Agent). The Agents may reallow any portion of the commission
payable to them pursuant hereto to dealers in connection with the offer and sale
of any Notes on an agency basis.
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As Agents, you are authorized to solicit offers to purchase the Notes
only in denominations of $100,000 or any amount in excess thereof that is an
integral multiple of $1,000. Each Agent shall communicate to the Company, orally
or in writing, each reasonable offer received by such Agent to purchase Notes
issued by the Company. The Company shall have the sole right to accept offers to
purchase Notes to be issued by the Company and may reject any proposed purchase
of Notes to be issued by it as a whole or in part. Each Agent shall have the
right, in its discretion reasonably exercised without advising the Company, to
reject any offer received by it to purchase Notes of the Company, as a whole or
in part, and any such rejection by it shall not be deemed a breach of its
agreements contained herein.
(b) Purchases as Principal. Each sale of Notes to any Agent as
principal, for resale to one or more investors or to another broker-dealer
(acting as principal for purposes of resale), shall be made in accordance with
the terms of this Agreement and a Terms Agreement, whether oral (and confirmed
in writing by facsimile transmission or otherwise) or in writing, which will
provide for the sale of such Notes to, and the purchase thereof by, such Agent.
A Terms Agreement may also specify certain provisions relating to the reoffering
of such Notes by such Agent. The commitment of such Agent to purchase Notes of
the Company pursuant to any Terms Agreement shall be deemed to have been made on
the basis of the representations and warranties of the Company herein contained
and shall be subject to the terms and conditions herein set forth. Each Terms
Agreement shall specify the principal amount of Notes of the Company to be
purchased by an Agent pursuant thereto, the price to be paid to the Company for
such Notes, any provisions relating to rights of, and default by, underwriters
acting together with such Agent in the reoffering of the Notes, and the time and
date (each such time and date being referred to herein as a "Time of Delivery")
and place of delivery of and payment for such Notes. Such Terms Agreement shall
also specify any requirements for opinions of counsel, officers' certificates
and letters from the independent public accountants of the Company pursuant to
Section 4 hereof.
An Agent may utilize a selling or dealer group in connection with the
resale of the Notes purchased.
(c) Procedures. Procedural details relating to the issue and delivery
of Notes, the solicitation of offers to purchase, and purchases by any Agent as
principal of Notes, and the payment in each case therefor, shall be as set forth
in the Procedures. Each Agent and the Company agree to perform the respective
duties and obligations specifically provided to be performed by each of them in
the Procedures. The Company will furnish to the Trustee a copy of the Procedures
as from time to time in effect. The Procedures may be amended only by written
agreement of the Company and the Agents.
(d) Delivery. The documents required to be delivered pursuant to
Section 6 hereof on the Closing Date (as defined below) shall be delivered at
the office of Cleary, Gottlieb, Xxxxx & Xxxxxxxx, Xxx Xxxxxxx Xxxxx, Xxx Xxxx,
Xxx Xxxx 00000, at 9:30 a.m., New York City time, on the date of this Agreement,
which date and time of such delivery may be postponed by agreement between the
Agents and the Company but in no event shall be later than the day prior to the
date on which solicitation of offers to purchase Notes is commenced (such time
and date being referred to herein as the "Closing Date").
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3. Additional Agent. Notwithstanding anything to the contrary contained
herein, the Company may authorize any other person, partnership or corporation
(an "Additional Agent") to act as its agent to solicit offers for the purchase
of all or part of the Notes of the Company and the Company shall give the Agents
prompt notice of such authorization; provided, however, any Additional Agent
shall execute this Agreement and become a party hereto and thereafter the term
Agent as used in this Agreement shall mean the Agents and such Additional Agent.
4. Covenants and Agreements of the Company. The Company covenants and
agrees with each Agent:
(a) To deliver promptly to the Agents such number of the following
documents as they may reasonably request during the period in which a
prospectus relating to the Notes is required to be delivered under the Act:
(i) copies of the Registration Statement (excluding exhibits other than the
computation of the ratio of earnings to fixed charges, the Indenture and
this Agreement), (ii) the Basic Prospectus and the Prospectus and (iii) any
documents incorporated by reference in the Registration Statement or
Prospectus;
(b) To prepare a Pricing Supplement with respect to any Notes to be
offered and sold to or through the Agents pursuant to this Agreement and,
after approval of such Pricing Supplement by the Agents, to file such
Pricing Supplement with the Commission pursuant to and in accordance with
Rule 424 (b) under the Act;
(c) To advise each Agent promptly of any proposal to amend or
supplement the Registration Statement or the Prospectus and to afford the
Agents a reasonable opportunity to comment on any such proposed amendment
or supplement (other than any Pricing Supplement that relates to Notes not
purchased through or by such Agent), and if the Company effects any
amendment or supplementation of the Registration Statement or the
Prospectus to which an Agent objects, such Agent shall be relieved of its
obligations under Section 2(a) to solicit offers to purchase the Notes
until such time as the Company shall have filed such further amendments or
supplements such that such Agent is reasonably satisfied with the
Registration Statement and the Prospectus, as then amended or supplemented;
(d) If, during any period in which, in the opinion of Cleary, Gottlieb,
Xxxxx & Xxxxxxxx, counsel for the Agents, a prospectus relating to the
Notes is required to be delivered under the Act, any event occurs as a
result of which in the opinion of the Company or its counsel the Prospectus
would include an untrue statement of a material fact or omit to state any
material fact necessary to make the statements therein, in the light of the
circumstances under which they were made, not misleading, or if it is
necessary at any time to amend the Prospectus to comply with the Act, to
promptly notify the Agents (which notification shall be by telephone and
confirmed in writing) promptly to suspend solicitation of purchases of the
Notes; if the Company shall decide to amend or supplement the Registration
Statement or the Prospectus, to promptly advise the Agents by telephone
(with confirmation in writing) and to promptly prepare and file with the
Commission an amendment or supplement which will correct such statement or
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omission or an amendment which will effect such compliance; the Company
will file no amendment or supplement to the Registration Statement or
Prospectus relating to sales of the Notes involving the Agents to which the
Agents shall reasonably object by notice to the Company after having been
furnished a copy a reasonable time prior to the filing; and the Company
will furnish to the Agents prior to the filing thereof a copy of any such
amendment or supplement.
Notwithstanding the foregoing, if, at the time any such event occurs or
it becomes necessary to amend the Prospectus to comply with the Act, any
Agent shall own any of the Notes with the intention of reselling them, or
the Company has accepted an offer to purchase Notes but the related
settlement has not occurred, the Company will promptly prepare and file
with the Commission an amendment or supplement which will correct such
statement or omission or an amendment which will effect such compliance.
Neither the Agents' consent to, nor their delivery of, any such amendment
or supplement shall constitute a waiver of any of the conditions set forth
in Section 6;
(e) To timely file with the Commission during the period referred to in
(d) above, any amendment or supplement to the Registration Statement or any
Prospectus that may, in the judgment of the Company, the Agents or their
respective counsel, be required by the Act or requested by the Commission;
(f) At or prior to filing with the Commission during the period
referred to in (d) above, (i) any amendment or supplement to the
Registration Statement or Prospectus or (ii) any document which upon filing
is deemed to be incorporated by reference in the Registration Statement or
Prospectus, to furnish a copy thereof to the Agents and to Cleary,
Gottlieb, Xxxxx & Xxxxxxxx, counsel to the Agents;
(g) To advise the Agents immediately (i) when any post-effective
amendment to the Registration Statement relating to or covering the Notes
becomes effective or any subsequent supplement to the Prospectus has been
filed, (ii) of any request or proposed request by the Commission for an
amendment or supplement to the Registration Statement, to the Prospectus or
for additional information, or (iii) of the issuance by the Commission of
any stop order suspending the effectiveness of the Registration Statement
or any order directed to the Prospectus or any document incorporated
therein by reference or the initiation or threat of any stop order
proceeding or of any challenge to the accuracy or adequacy of any document
incorporated by reference in the Prospectus or the suspension of
qualification for sale in any jurisdiction or any proceedings for such
purpose;
(h) If, during the period referred to in (d) above, the Commission
shall threaten or initiate any stop order proceeding in respect of the
Registration Statement, to promptly use its reasonable efforts to prevent
the issuance of any stop order or to obtain the withdrawal of such order as
soon as possible, unless the Company shall, in its sole judgment, determine
that it is in the Company's best interest not to do so;
(i) To file promptly all documents required to be filed with the
Commission pursuant to Section 13(a), 13(c), 14 or 15(d) of the Exchange
Act. In addition, on the
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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 the information
contained in such announcement to each Agent, confirmed in writing and,
subject to the provisions of subsections (b) and (c) of this section 4,
will cause the Prospectus to be amended or supplemented to reflect the
information contained in such announcement. The Company also will furnish
each Agent with copies of all press releases or announcements to the
general public;
(j) To notify immediately each Agent of any downgrading in the rating
of any debt securities of the Company or any proposal to downgrade the
rating of any debt securities of the Company by any "nationally recognized
statistical rating organization" (as defined for purposes of Rule 436(g)
under the Act), or any public announcement that any such organization has
under surveillance or review its rating of any debt securities of the
Company (other than an announcement with positive implications of a
possible upgrading, and no implication of a possible downgrading of such
rating), as soon as the Company learns of such downgrading, proposal to
downgrade or public announcement;
(k) To make generally available to its security holders, in each case
as soon as practicable but in any event not later than 15 months after the
acceptance by the Company of an offer to purchase Notes hereunder, an
earnings statement covering the twelve-month period beginning after the
latest of (i) the effective date of the Registration Statement, (ii) the
effective date of the most recent post-effective amendment to the
Registration Statement to become effective prior to the date of such
acceptance and (iii) the date of the Company's most recent annual report on
Form 10-K filed with the Commission prior to the date of such acceptance
which will satisfy the provisions of Section 11(a) of the Act (and, at the
option of the Company, Rule 158 of the Rules and Regulations);
(l) So long as any of the Notes are outstanding, the Company agrees to
furnish to the Agents upon their request (i) copies of any reports
furnished to the Company's security holders generally (other than reports
made solely to American Express or TRS) and (ii) any reports and financial
statements filed by or on behalf of the Company with the Commission or any
national securities exchange; (m) To use its best efforts to qualify the
Notes for sale under the securities laws of such jurisdictions as the
Agents reasonably designate, to maintain such qualifications in effect so
long as required for the distribution of the Notes and to arrange for the
determination of the legality of the Notes for purchase by institutional
investors, except that the Company shall not be required in connection
therewith to qualify to do business in any jurisdiction where it is not now
so qualified or to take any action which would subject it to general or
unlimited service of process in any jurisdiction where it is not now so
subject;
(n) Each acceptance by the Company of an offer for the purchase of
Notes shall be deemed to be an affirmation that the representations and
warranties of the Company contained in this Agreement and in any
certificate theretofore given to the Agents pursuant hereto are true and
correct at the time of such acceptance, and an
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undertaking that such representations and warranties will be true and
correct at the time of delivery to the purchaser or his or her agent of the
Notes relating to such acceptance as though made at and as of each such
time (and it is understood that such representations and warranties shall
relate to the Registration Statement and the Prospectus, as amended or
supplemented to each such time);
(o) Each time that the Registration Statement or the Prospectus shall
be amended or supplemented (other than by an amendment or supplement
providing solely for a change in the interest rates or maturities of the
Notes or a change in the principal amount of Notes remaining to be sold or
similar changes) or the Company files with the Commission any document
incorporated by reference into the Prospectus, the Company shall,
concurrently with such amendment, supplement or filing, furnish the Agents
with a certificate of the Chairman of the Board of Directors, President or
any Vice President and of the Treasurer or an Assistant Treasurer of the
Company in form satisfactory to the Agents to the effect that the
statements contained in the certificate referred to in Section 6(i) hereof
which was last furnished to the Agents are true and correct at the time of
such amendment, supplement or filing, 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 said Section 6(i),
modified as necessary to relate to the Registration Statement and the
Prospectus as amended and supplemented to the time of delivery of such
certificate;
(p) Each time that the Registration Statement or the Prospectus shall
be amended or supplemented or the Company files with the Commission any
document incorporated by reference into the Prospectus (other than by an
amendment, supplement or filing (i) providing solely for a change in the
interest rates or maturities of the Securities or a change in the principal
amount of Notes remaining to be sold or similar changes or (ii) setting
forth or incorporating by reference financial statements or other
information as of and for any fiscal quarter, unless, in the case of clause
(ii) above, in the reasonable judgment of the Agents or counsel for the
Agents, such financial statements or other information are of such a nature
that an opinion of counsel should be furnished), the Company shall,
concurrently with such amendment, supplement or filing, furnish the Agent
and its counsel with written opinions of Xxxxx X. Xxxxxxx, Esq., Counsel of
the Company, addressed to the Agents and dated the date of delivery of such
opinions, in form satisfactory to the Agents, of the same tenor as the
respective opinions referred to in Section 6(g) hereof, but modified, as
necessary, to relate to the Registration Statement and the Prospectus as
amended or supplemented to the time of delivery of such opinions; provided,
however, that in lieu of such opinions, such Counsel may furnish the Agents
with letters to the effect that the Agents may rely on such prior opinions
to the same extent as though they were dated the date of such letter
authorizing reliance (except that statements in such prior opinions shall
be deemed to relate to the Registration Statement and the Prospectus as
amended or supplemented to the time of delivery of such letters authorizing
reliance);
(q) Each time that the Registration Statement or the Prospectus shall
be amended or supplemented to include additional financial information or
the Company
11
files with the Commission any document incorporated by reference into the
Prospectus which contains additional financial information, the Company
shall cause Ernst & Young LLP to furnish the Agents, concurrently with such
amendment, supplement or filing, a letter, addressed to the Agents and
dated the date of delivery of such letter, in form and substance reasonably
satisfactory to the Agent, of the same tenor as the letter referred to in
Section 6(j) hereof but modified to relate to the Registration Statement
and the Prospectus, as amended and supplemented to the date of such letter,
with such changes as may be necessary to reflect changes in the financial
statements and other information derived from the accounting records of the
Company; provided, however, that if the Registration Statement or the
Prospectus is amended or supplemented solely to include financial
information as of and for a fiscal quarter, Ernst & Young LLP may limit the
scope of such letter to the unaudited financial statements included in such
amendment or supplement unless there is contained therein any other
accounting, financial or statistical information that, in the reasonable
judgment of the Agents or counsel for the Agents, should be covered by such
letter, in which event such letter shall also cover such other information;
and
(r) Between the date on which any Agent agrees to purchase Notes from
the Company as principal for resale and the date of delivery of such Notes,
the Company will not offer or sell, or enter into any agreement to sell,
pledge, or otherwise dispose of, directly or indirectly, or file with the
Commission a registration statement under the Act relating to any of its
debt securities (other than such Notes), other than borrowings under the
Company's revolving credit agreements and lines of credit, the private
placement of securities and issuances of its commercial paper, or publicly
disclose the intention to make any such offer, sale, pledge or disposition
or filing.
5. Fees, Costs, etc. The Company covenants and agrees with each Agent
that, whether or not the transactions contemplated hereunder are consummated or
this Agreement is terminated, the Company will pay or cause to be paid the
following: (i) the fees, disbursements and expenses of the Company's counsel and
accountants and all other expenses in connection with the preparation and
printing of the Prospectus and amendments and supplements thereto and the
mailing and delivering of copies thereof to such Agent; (ii) the cost of
preparation and printing of this Agreement, the Indenture, any Blue Sky and
Legal Investment Memoranda and any other documents in connection with the
offering, purchase, sale and delivery of the Notes; (iii) all expenses in
connection with the qualification of the Notes for offering and sale under state
securities laws as provided in Section 4(m) hereof, including the fees and
disbursements of counsel for the Agents in connection with such qualification
and in connection with any Blue Sky and Legal Investment memoranda; (iv) any
fees charged by securities rating services for rating the Notes; (v) any filing
fees incident to any required review by the National Association of Securities
Dealers, Inc. of the terms of the sale of the Notes; (vi) the cost of preparing
the Notes; (vii) the fees and expenses of the Trustee and the fees and
disbursements of counsel for the Trustee in connection with any Indenture and
the Notes; (viii) the fees and disbursements of Cleary, Gottlieb, Xxxxx &
Xxxxxxxx, as counsel for the Agents, or other counsel reasonably satisfactory to
both the Agents and the Company; (ix) all advertising expenses in connection
with the offering of the Notes incurred with the consent of the Company; and (x)
all other reasonable costs and expenses incident to the performance of the
Company's obligations hereunder which are not otherwise specifically provided
for in this Section.
12
6. Conditions of Obligations. The obligation of any Agent, as an agent
of the Company, to solicit offers to purchase the Notes on the Closing Date and
at any time before which the Company has advised the Agents to suspend
solicitation of offers to purchase Notes pursuant to Section 2(a) or after which
the Company has advised the Agents that the solicitation of offers to purchase
Notes which was suspended pursuant to Section 2(a) may be resumed (the
"Solicitation Time"), the obligation of any Agent to purchase Notes as principal
pursuant to any Terms Agreement, and the obligation of any person who has agreed
to purchase Notes to make payment for and accept delivery of Notes shall in each
case be subject to the following conditions:
(a) That all representations and warranties and other statements of the
Company herein (and, in the case of an obligation of such Agent under a
Terms Agreement, in or incorporated in such Terms Agreement by reference)
are true and correct (i) at and as of the Closing Date; (ii) at and as of
any applicable Representation Date that is prior to such settlement date or
Time of Delivery, as the case may be; (iii) at and as of any such
settlement date or Time of Delivery referred to in Section 2(b), as the
case may be; and (iv) during any Solicitation Time.
(b) That the Company shall have performed all of its obligations
hereunder theretofore in each case to be performed.
(c) No stop order suspending the effectiveness of the Registration
Statement nor any order directed to any document incorporated by reference
in any Prospectus shall have been issued and to the knowledge of the
Company or the Agents, no stop order proceeding shall have been initiated
or threatened by the Commission; any request of the Commission for
inclusion of additional information in the Registration Statement or any
Prospectus or otherwise shall have been complied with to the reasonable
satisfaction of the Agents or counsel for the Agents; and the Company shall
not have filed with the Commission any amendment or supplement to the
Registration Statement or any Prospectus which have not been reviewed by
the Agent.
(d) No order suspending the sale of the Notes in any jurisdiction
designated by the Agents pursuant to Section 4(m) hereof shall have been
issued, and no proceeding for that purpose shall have been initiated or
threatened.
(e) No Agent shall have discovered and disclosed to the Company that
the Registration Statement or any Prospectus contains an untrue statement
of a fact which, in the opinion of counsel for such Agent, is material or
omits to state a fact which, in the opinion of such counsel, is material
and is required to be stated therein or is necessary to make the statements
therein not misleading.
(f) Except as contemplated in the Prospectus, subsequent to the
respective dates as of which information is given in the Registration
Statement and the Prospectus, there shall not have been any material
change, on a consolidated basis, in the shareholder's equity, short-term
debt, long-term debt, ratio of earnings to fixed charges, total assets,
total revenue or total net income of the Company and its subsidiaries, in
the condition (financial or other) or in the earnings of the Company, its
subsidiaries, or the
13
affairs, or business of the Company and its subsidiaries
whether or not arising in the ordinary course of business, or any change in
the rating assigned by any nationally recognized securities rating agency
to any debt securities of the Company, which, in the reasonable judgment of
the Agents, makes it impractical or inadvisable to offer or deliver the
Notes on the terms and in the manner contemplated in the Prospectus.
(g) At the Closing Date and the Time of Delivery, the Agents shall have
received the opinion, addressed to the Agents and dated the Closing Date,
of Xxxxx X. Xxxxxxx, Esq., Counsel of the Company, in form and substance
satisfactory to the Agents and their counsel, to the effect that:
(i) The Company has been duly incorporated and is validly existing
and in good standing under the laws of Delaware and has all corporate
power and authority necessary to own its properties and conduct the
business in which it is engaged as described in the Prospectus; the
Company is duly qualified to do business as a foreign corporation in
good standing in all jurisdictions in which it owns or leases
substantial properties or in which the conduct of its business requires
such qualification and the failure so to qualify would have a material
adverse effect on the Company; and except as may be disclosed in the
Registration Statement, all outstanding shares of capital stock of the
Company are owned by a wholly owned subsidiary of American Express free
and clear of any lien, pledge and encumbrance or, to the best of such
counsel's knowledge, any claim of any third party;
(ii) Such counsel has no reason to believe that either the
Registration Statement or the Prospectus or any amendment or supplement
thereto contains any untrue statement of a material fact or omits to
state a material fact required to be stated therein or necessary to
make the statements therein not misleading (except that such counsel
need express no opinion as to the financial statements or schedules or
other data of a financial or related statistical nature);
(iii) Such counsel does not know of any litigation or governmental
proceeding pending or threatened against the Company or its
subsidiaries which would affect the subject matter of this Agreement or
the Indenture or is required to be disclosed in the Registration
Statement or Prospectus which is not disclosed and correctly summarized
therein;
(iv) Such counsel does not know of any contracts or other documents
which are required to be filed as exhibits to the Registration
Statement or incorporated by reference in the Prospectus by the Act,
the Exchange Act or the Trust Indenture Act or the Rules and
Regulations, which have not been filed as exhibits to the Registration
Statement or incorporated therein by reference as permitted by the
Rules and Regulations;
(v) To the best of such counsel's knowledge, neither the Company
nor its subsidiaries is in violation of their corporate charter or
by-laws; or in default
14
under any agreement, indenture or instrument, the effect of which
default would be material to the Company;
(vi) Neither the issuance or sale of the Notes nor the execution,
delivery and performance of this Agreement and the Indenture by the
Company and the consummation of any other transactions contemplated by
this Agreement or the Indenture will conflict with, or result in a
breach or violation of, or result in the creation or imposition of any
lien, charge or encumbrance upon any of the assets of the Company or
its subsidiaries pursuant to the terms of, or constitute a default
under, any agreement, indenture or instrument known to such counsel to
which the Company or its subsidiaries is a party or by which it or its
properties is bound, or result in a violation of the corporate charter
or by-laws of the Company or its subsidiaries or any order, rule or
regulation (applicable to the Company, or its subsidiaries or their
respective properties) of any court or governmental agency having
jurisdiction over the Company, or its subsidiaries or their respective
properties; except as required by the Act, the Trust Indenture Act and
applicable state securities laws, no consent, authorization or order
of, or filing or registration with, any court or governmental agency is
required for the execution, delivery and performance of this Agreement
and the Indenture, except as has been duly obtained or made and is in
full force and effect;
(vii) The Indenture has been duly authorized, executed and
delivered by the Company and duly qualified under the Trust Indenture
Act; the Indenture constitutes a legal, valid and binding instrument
enforceable against the Company in accordance with its terms subject to
applicable bankruptcy, insolvency, fraudulent conveyance,
reorganization, moratorium and other similar laws relating to or
affecting creditors' rights generally and to general principles of
equity (regardless of whether such enforceability is considered in a
proceeding in equity or at law) and an implied covenant of good faith
and fair dealing;
(viii) The Notes have been duly authorized by all necessary
corporate action and, when executed by the proper officers of the
Company and authenticated as specified in the Indenture and delivered
against payment therefor in accordance with this Agreement, will be
legal, valid and binding obligations of the Company, entitled to the
benefits of the Indenture and enforceable in accordance with their
terms subject to applicable bankruptcy, insolvency, fraudulent
conveyance, reorganization, moratorium and other similar laws affecting
creditors' rights generally and to general principles of equity
(regardless of whether such enforceability is considered in a
proceeding in equity or at law) and an implied covenant of good faith
and fair dealing;
(ix) The Indenture and Notes conform in all material respects to
the statements concerning each of them in the Prospectus;
(x) The Registration Statement, and any amendment or supplement
filed by the Company, has become effective under the Act, the
Prospectus was filed with the Commission pursuant to Rule 424(b) and,
to the best knowledge of
15
such counsel, no stop order suspending its effectiveness has been
issued and no proceeding for that purpose is pending or threatened by
the Commission;
(xi) The Registration Statement, the Prospectus and each amendment
or supplement thereto comply as to form in all material respects with
the applicable requirements of the Act, the Exchange Act, the Trust
Indenture Act and the Rules and Regulations (except that no opinion
need be expressed as to the financial statements or schedules or other
data of a financial or related statistical nature, or to the Forms
T-1);
(xii) The statements made in the Prospectus under the caption
"Description of Debt Securities" and "Description of Notes", insofar as
they purport to summarize the provisions of the Notes and the
Indenture, fairly present the information called for with respect
thereto by Form S-3;
(xiii) The statements made in the Prospectus under the caption
"Certain Federal Income Tax Considerations" insofar as such statements
purport to summarize certain federal income tax laws of the United
States, constitute a fair summary of the principal United States
federal income tax consequences of an investment in the Notes;
(xiv) Neither the issuance or sale of the Notes nor the execution,
delivery and performance of this Agreement or the Indenture by the
Company and the consummation of any other transaction contemplated by
this Agreement or the Indenture will conflict with, or result in a
breach or violation of the Agreements of Sale and Purchase; and
(xv) This Agreement has been duly authorized, executed and
delivered by the Company;
(h) There shall not have occurred: (i) a suspension or material
limitation in trading in securities generally on the New York Stock
Exchange or the establishment of minimum prices on such exchange or any
suspension of trading of any securities of the Company on any exchange or
in the over-the-counter market; (ii) the engagement by the United States in
hostilities which have resulted in the declaration of a national emergency
or war; (iii) any banking moratorium declared by U.S. Federal or New York
authorities or a material disruption in commercial banking or securities
settlement or clearance services in the United States; (iv) the occurrence
of any other calamity or crisis or any material adverse change in the
existing financial, political or economic conditions in the United States
or elsewhere; or (v) any downgrading in the rating accorded the Notes or
any other debt securities of the Company by any "nationally recognized
statistical rating organization", as that term is defined by the Commission
for purposes of Rule 436(g)(2) under the Act, or any public announcement
that any such organization has under surveillance or review its rating of
any debt securities of the Company (other than an announcement with
positive implications of a possible upgrading, and no implication of a
possible downgrading, of such rating), if the effect thereof in the
judgment of such Agent makes it impracticable or inadvisable to proceed
with the solicitation of offers to
16
purchase Notes or the purchase of Notes from the Company as principal
pursuant to the applicable Terms Agreement, as the case may be;
(i) The Company shall have furnished or caused to be furnished to such
Agent certificates of officers of the Company dated the Closing Date, dated
the Time of Delivery, dated the date the Company has advised the Agents
that the solicitation of offers to purchase Notes which was suspended
pursuant to Section 2(a) may be resumed, and dated the applicable dates
referred to in Section 4(o) in such form and executed by such officers of
the Company as shall be satisfactory to such Agent, as to the accuracy of
the representations and warranties of the Company herein at and as of the
Closing Date or such applicable date, as the case may be, as to the
performance by the Company of all of its obligations hereunder to be
performed at or prior to the Closing Date or such applicable date, as the
case may be, as to the matters set forth in subsections (c) and (f) of this
Section 6, and as to such other matters as such Agent may reasonably
request;
(j) The Company shall have furnished to the Agents on the Closing Date
or the Time of Delivery, as the case may be, a letter of Ernst & Young LLP
addressed to the Agents and dated such applicable date, to the effect set
forth in Exhibit B hereto;
(k) The Agents shall have received from Cleary, Gottlieb, Xxxxx &
Xxxxxxxx, counsel for the Agents, or other counsel reasonably satisfactory
to both the Agents and the Company, such opinion or opinions, dated the
Closing Date or the Time of Delivery (if required by the applicable Terms
Agreement), with respect to the issuance and sale of the Notes, the
Prospectus 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; and
(l) Prior to the Closing Date or the Time of Delivery, as the case may
be, the Company shall have furnished to the Agents such further
information, certificates and documents as the Agents or counsel to the
Agents may reasonably request.
All opinions, letters, evidence and certificates mentioned above or
elsewhere in this Agreement shall be deemed to be in compliance with the
provisions hereof only if they are in the form and substance satisfactory to
counsel for the Agents.
7. Indemnification and Contribution.
(a) The Company agrees to indemnify and hold harmless each Agent
against any losses, claims, damages or liabilities, joint or several, as
incurred, to which such Agent may become subject insofar as such losses, claims,
damages or liabilities (or actions in respect thereof) arise out of or are based
upon an untrue statement or alleged untrue statement of a material fact
contained in the Registration Statement when it became effective, or in the
Registration Statement, the Prospectus, or any amendment or supplement thereto,
or arise out of or are based upon the omission or alleged omission to state
therein a material fact required to be stated therein or necessary to make the
statements therein not misleading, and will reimburse such Agent for any legal
or other expenses reasonably incurred by it in connection with investigating or
defending against any such losses, claims, damages or liabilities; provided,
however, that the Company shall not be liable in any such case to the extent
that any such loss,
17
claim, damage or liability arises out of or is based upon (i) an untrue
statement or alleged untrue statement or omission or alleged omission therein,
in reliance upon and in conformity with written information furnished to the
Company by any Agent expressly for use in the preparation thereof, (ii) that
part of the Registration Statement which shall constitute the Form T-1 of the
Trustee, or (iii) such indemnity with respect to a preliminary prospectus
supplement or other prospectus shall not inure to the benefit of any Agent (or
any person controlling such Agent) from whom the person asserting such loss,
claim, damage or liability purchased the Notes which are the subject thereof if
it shall be established by the Company that such person was not sent or provided
by such Agent a copy of the Prospectus prepared by the Company for use in
connection with the confirmation of the sale of Notes to such person in any case
where delivery of a prospectus is required by the Act and the untrue statements
or omissions of a material fact contained in such preliminary prospectus
supplement or other prospectus were corrected in the Prospectus prepared by the
Company for use in connection with the Notes, unless such failure to deliver the
Prospectus prepared by the Company for use in connection with the Notes was a
result of noncompliance by the Company with Section 4(a) hereof.
(b) Each Agent will severally and not jointly indemnify and hold
harmless the Company against any losses, claims, damages or liabilities, as
incurred, to which the Company may become subject, insofar as such losses,
claims, damages or liabilities (or actions in respect thereof) arise out of or
are based upon an untrue statement or alleged untrue statement of a material
fact contained in the Registration Statement when it became effective, or in the
Registration Statement, the Prospectus, or any amendment or supplement thereto,
or arise out of or are based upon the omission or alleged omission to state
therein a material fact required to be stated therein or necessary to make the
statements therein not misleading, in each case to the extent, but only to the
extent that such untrue statement or alleged untrue statement or omission or
alleged omission was made therein in reliance upon and in conformity with
written information furnished to the Company by or on behalf of each Agent
specifically for use in the preparation thereof, and will reimburse the Company
for any legal or other expenses reasonably incurred by the Company in connection
with investigating or defending against any such loss, claim, damage, liability
or action.
(c) Promptly after receipt by an indemnified party under subsection (a)
or (b) above of notice of the commencement of any action, such indemnified party
shall, if a claim in respect thereof is to be made against the indemnifying
party under such subsection, notify the indemnifying party in writing of the
commencement thereof, but the omission so to notify the indemnifying party shall
not relieve it from any liability which it may have to any indemnified party
otherwise than under such subsection. In case any such action shall be brought
against any indemnified party and it shall notify the indemnity party of the
commencement thereof, the indemnifying party shall be entitled to participate
therein and, to the extent that it shall wish, jointly with any other
indemnifying party similarly notified, to assume the defense thereof, with
counsel satisfactory to such indemnified party and after notice from the
indemnifying party to such indemnified party of its election so to assume the
defense thereof, the indemnifying party shall not be liable to such indemnified
party under such subsection for any legal or other expenses subsequently
incurred by such indemnified party in connection with the defense thereof other
than reasonable costs of investigation; provided, however, that each Agent shall
have the right to employ counsel to represent it with respect to any liability
arising out of any claim in respect of which indemnity may be sought by such
Agent against the Company under this
18
Section if, in the reasonable judgment of such Agent, it is advisable for such
Agent to be represented by separate counsel, and in that event the fees and
expenses of such counsel shall be paid by the Company.
(d) If the indemnification provided for in this Section 7 is
unavailable to or insufficient to hold harmless an indemnified party under
subsection (a) or (b) above in respect of any losses, claims, damages or
liabilities (or actions in respect thereof) referred to therein, then each
indemnifying party shall contribute to the amount paid or payable by such
indemnified party as a result of such losses, claims, damages or liabilities (or
actions in respect thereof) (i) in such proportion as is appropriate to reflect
the relative benefits received by the Company on the one hand and each Agent on
the other from the offering of the Notes, or (ii) if the allocation provided by
clause (i) above is not permitted by applicable law, in such proportion as is
appropriate to reflect not only such relative benefits referred to in clause (i)
above but also the relative fault of the Company on the one hand and each Agent
on the other in connection with the statements or omissions which resulted in
such losses, claims, damages or liabilities (or actions in respect thereof), as
well as any other relevant equitable considerations. The relative benefits
received by the Company on the one hand and each Agent on the other shall be
deemed to be in the same proportion as the total net proceeds from the sale of
Notes (before deducting expenses) received by the Company bear to the total
commissions or discounts (before deducting expenses) received by such Agent in
connection with the sales of the Notes by the Company for which such Agent
received a commission hereunder or any applicable Terms Agreement. The relative
fault shall be determined by reference to, among other things, whether the
untrue or alleged untrue statement of a material fact or the omission or alleged
omission to state a material fact required to be stated therein or necessary in
order to make the statements therein not misleading relates to information
supplied by the Company on the one hand or by any Agent on the other and the
parties' relative intent, knowledge, access to information and opportunity to
correct or prevent such statement or omission. The Company and each Agent agree
that it would not be just and equitable if contribution pursuant to this
subsection (d) were to be 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 subsection (d). The amount paid or payable by an
indemnified party as a result of the losses, claims, damages or liabilities (or
actions in respect thereof) referred to above in this subsection (d) shall be
deemed to include any legal or other expenses reasonably incurred by such
indemnified party in connection with investigating or defending any such action
or claim (which shall be limited as provided in subsection (c) above if the
indemnifying party has assumed the defense of any such action in accordance with
the provisions thereof) which is the subject of this subsection (d).
Notwithstanding the provisions of this subsection (d), no Agent shall be
required to contribute any amount in excess of the total amount of commissions
or discounts received by it hereunder. No person guilty of fraudulent
misrepresentation (within the meaning of Section 11(f) of the Securities Act)
shall be entitled to contribution from any person who was not guilty of such
fraudulent misrepresentation. The obligations of each of the Agents under this
subsection (d) to contribute are several in proportion to the respective
purchases made by or through it to which such loss, claim, damage or liability
(or action in respect thereof) relates and are not joint. Promptly after receipt
by an indemnified party under this subsection (d) of notice of the commencement
of any action against such party in respect of which a claim for contribution
may be made against an indemnifying party under this subsection (d), such
indemnified party shall notify the indemnifying party in writing of the
commencement thereof if the notice specified in subsection (c) above has not
been given with respect to such action; but
19
the omission so to notify the indemnifying party shall not relieve it from any
liability which it may have to any indemnified party otherwise than under this
subsection (d). No indemnifying party shall, without the prior written consent
of the indemnified party, effect any settlement of any pending or threatened
action in respect of which any indemnified party is or could have been a party
and indemnity could have been sought hereunder by such indemnified party unless
such settlement (i) includes an unconditional release of such indemnified party
from all liability on any claims that are the subject matter of such action 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 an indemnified party.
(e) The obligations of the Company under this Section 7 shall be in
addition to any liability which the Company may otherwise have and shall extend,
upon the same terms and conditions, to each person, if any, who controls any
Agent within the meaning of either the Act or the Exchange Act; and the
obligations of each Agent under this Section 7 shall be in addition to any
liability which such Agent may otherwise have and shall extend, upon the same
terms and conditions, to each officer and director of the Company and to each
person, if any, who controls the Company within the meaning of either the Act or
the Exchange Act.
8. Status of Each Agent. Each Agent, in soliciting offers to purchase
Notes from the Company and in performing the other obligations of such Agent
hereunder (other than in respect of any Terms Agreement), is acting solely as
agent for the Company and not as principal. Each Agent will make reasonable
efforts to assist the Company in obtaining performance by each purchaser whose
offer to purchase Notes from the Company was solicited by such Agent and has
been accepted by the Company, but such Agent shall not have any liability to the
Company in the event such purchase is not consummated for any reason. Under no
circumstances will an Agent be obligated to purchase any Notes for its own
account except pursuant to, and subject to the conditions of, a Terms Agreement.
The Company agrees that, if the Company shall default on its obligation to
deliver Notes to a purchaser whose offer it has accepted, the Company shall (i)
hold each Agent harmless against any loss, claim or damage arising from or as a
result of such default by the Company and (ii) in particular, pay to the Agent
that solicited such offer any commission to which it would be entitled in
connection with such sale.
9. Survival of Certain Representations and Obligations. The respective
indemnities, agreements, representations, warranties and other statements by any
Agent and the Company or its officers set forth in or made pursuant to this
Agreement shall remain in full force and effect, regardless of any investigation
(or any statement as to the results thereof) made by or on behalf of any Agent
or any controlling person of such Agent or the Company, or any officer or
director or any controlling person of the Company, and shall survive each
delivery of and payment for any of the Notes.
10. Termination. The provisions of this Agreement relating to the
solicitation of offers to purchase Notes from the Company may be suspended or
terminated at any time by the Company as to any Agent or by any Agent insofar as
this Agreement relates to such Agent upon the giving of written notice of such
suspension or termination to any Agent or to the Company, as the case may be. In
the event of such suspension or termination with respect to any Agents, (x) this
Agreement shall remain in full force and effect with respect to the Agent as to
which such suspension or termination has not occurred and (y) the Company shall
not have any liability to such Agent and such Agent shall not have any
20
liability to the Company, except as provided in any Terms Agreements and in the
third paragraph of Section 2(a), Section 5, Section 7, Section 8 and Section 9
and except that (i) so long as such Agent owns Notes purchased directly from the
Company with a view to reselling such Notes (but in no event longer than nine
months after the sale of such Notes), the Company shall continue to have the
obligations provided in subsections (a), (c), (d) and (e) of Section 4 and (ii),
until the later of the date of the last settlement of a purchase of Notes
resulting from a solicitation made by the Agent prior to such suspension or
termination and the last Time of Delivery with respect to any Terms Agreement to
which the Agent is a party, the Company and such Agent shall continue to have
the respective obligations provided in the Procedures and the Company shall
continue to have the obligations provided in subsections (a) through (l) of
Section 4.
11. Notices. Except as otherwise specifically provided herein or in the
Procedures, all statements, requests, notices and advices hereunder shall be in
writing, or by telephone if promptly confirmed in writing, and shall be
sufficient in all respects when delivered or sent by facsimile transmission or
registered mail to:
in the case of notices to the Agents:
21
and, in the case of notices to the Company:
000 Xxxxx Xxxxxx Xxxxxx
Xxxxxxxxxx, Xxxxxxxx 00000
Facsimile: (000) 000-0000
Attention: President
with a copy to:
American Express Travel Related Services Company, Inc.
000 Xxxxx Xxxxxx
World Xxxxxxxxx Xxxxxx
Xxx Xxxx, Xxx Xxxx 00000
Facsimile: (000) 000-0000
Attention: TRS Treasury
12. Successors. This Agreement and any Terms Agreement shall be,
binding upon, and inure solely to the benefit of, each Agent and the Company,
and to the extent provided in Section 7, Section 8 and Section 9 hereof, the
officers and directors of the Company and any person who controls any Agent or
the Company, and their respective personal representatives, successors and
assigns (through consolidation, merger, sale, conveyance or otherwise), and no
other person shall acquire or have any right under or by virtue of this
Agreement or any Terms Agreement. No purchaser of any of the Notes through or
from any Agent hereunder shall be deemed a successor or assign by reason of such
purchase; provided, however, that such purchaser shall be entitled to the
benefits of this Agreement to the extent provided in Sections 4(k) and 6 hereof.
13. Timing. Time shall be of the essence in this Agreement and any
Terms Agreement.
14. Applicable Law. This Agreement and any Terms Agreement shall be
governed by, and construed in accordance with, the laws of the State of New
York. The Company and the Agents submit to the non-exclusive jurisdiction of the
Federal and state courts of the Borough of Manhattan in the City of New York in
any suit or proceeding arising out of or relating to this Agreement or any Terms
Agreement or the transactions contemplated hereby or thereby.
15. Counterparts. This Agreement and any Terms Agreement may be
executed by any one or more of the parties hereto and thereto in any number of
counterparts, each of which shall be an original, but all of such respective
counterparts shall together constitute one and the same instrument.
22
If the foregoing is in accordance with your understanding,
please sign and return to us counterparts hereof, whereupon this letter and your
acceptance shall constitute a binding agreement between you and the Company.
AMERICAN EXPRESS CREDIT CORPORATION
By:
-----------------------------------------
Title:
-----------------------------------------
23
Accepted:
The Agents
24
Annex I
AMERICAN EXPRESS
CREDIT CORPORATION
Medium-Term Senior Notes, Series B
TERMS AGREEMENT
[The Agents]
Ladies and Gentlemen:
American Express Credit Corporation (the "Company") proposes,
subject to the terms and conditions stated herein and in the Agency Agreement,
dated December 21, 2001 (the "Agency Agreement"), between the Company on the one
hand and the Agents, on the other, to issue and sell to the Company's
Medium-Term Senior Notes,
1
Series B specified in the Schedule hereto (the "Purchased Notes"). Each of the
provisions of the Agency Agreement not specifically related to the solicitation
by [Agents] as agents of the Company, of offers to purchase Notes is
incorporated by reference herein in its entirety and shall be deemed to be part
of this Agreement to the same extent as if such provisions had been set forth in
full herein. Nothing contained herein or in the Agency Agreement shall make any
party hereto an agent of the Company or make such party subject to the
provisions of the Agency Agreement relating to the solicitation of offers to
purchase Notes from the Company, solely by virtue of its execution of this Terms
Agreement. Each of the representations and warranties set forth therein shall be
deemed to have been made at and as of the date of this Terms Agreement, except
that each representation and warranty in Section 1 of the Agency Agreement which
makes reference to the Prospectus shall be deemed to be a representation and
warranty as of the date of the Agency Agreement in relation to the Prospectus
(as therein defined), and also a representation and warranty as of the date of
this Terms Agreement in relation to the Prospectus as amended and supplemented
to relate to the Purchased Notes.
The Company has prepared, or has caused to have been prepared,
an amendment to the Prospectus, or a pricing supplement to the Prospectus, as
the case may be, relating to the Purchased Notes, in the form heretofore
delivered to you.
Subject to the terms and conditions set forth herein and in
the Agency Agreement incorporated herein by reference, the Company agrees to
issue and sell to [Agents] and [Agents] agree to purchase from the Company, the
Purchased Notes, at the time and place, in the principal amount and at the
purchase price set forth in the Schedule hereto.
2
If the foregoing is in accordance with your understanding,
please sign and return to us counterparts hereof, and upon acceptance hereof by
you this letter, including those provisions of the Agency Agreement incorporated
herein by reference, shall constitute a binding agreement between you and the
Company.
AMERICAN EXPRESS CREDIT CORPORATION
By:
-----------------------------
Title:
----------------------------
Accepted:
The Agents
3
Schedule to Annex I
Title of Purchased Notes:
Medium-Term Senior Notes, Series B
Aggregate Principal Amount:
[Price to Public:]
Purchase Price by [The Agents]:
% of the principal amount of the Purchased Notes,
plus accrued interest from to [and
accrued amortization, if any, from to]
Method of and Specified Funds for Payment of Purchase Price:
[By certified or official bank check or checks, payable to
the order of the Company, in immediately available funds
[By wire transfer to a bank account specified by the Company
in immediately available funds]
Specified Currency (If other than U.S. Dollars):
Indenture:
Indenture dated as of September 1, 1987, as supplemented by an
Eighth Supplemental Indenture dated as of December 21, 2001
between the Company and Bank One Trust Company, N.A.
Time of Delivery:
Closing Location:
Indexed Principal Note:
Fixed or Floating or Indexed Rate:
Amortizing Note:
Maturity:
4
Optional Redemption On or After:
Terms of Optional Redemption:
Optional Repayment On or After:
Terms of Optional Repayment:
[Initial] Interest Rate:
[ %]
Interest Payment Dates:
[months and dates]
For Floating Rate Notes Only:
a) Interest Rate Basis:
[LIBOR]
[EURIBOR]
[Treasury Rate]
[Commercial Paper Rate]
[Federal Funds Effective Rate]
[CD Rate]
[Prime Rate]
[Other (specify)]
b) Index Maturity:
[daily] [7 days/weekly] [30 days/1 month] [90 days/3 months]
[180 days/6 months] [1 year][Other (specify)]
c) Spread (if any):
d) Spread Multiplier (if any): %
e) Calculation Agent:
f) Maximum Interest Rate (if any): %
g) Minimum Interest Rate (if any): %
h) Interest Reset Dates:
[months and dates]
i) Interest Rate Reset Period:
5
[daily][weekly][monthly]
[quarterly][semi-annually][annually]
j) Interest Payment Period:
[monthly][quarterly][semi-annually][annually]
Documents to be Delivered:
The following documents referred to in the Agency Agreement
shall be delivered as a condition to the Closing:
[(1) The opinion or opinions referred to in Section 6(g).]
[(2) The officers' certificate referred to in Section 6(i).]
[(3) The letter of the Company's independent public
accountants referred to in Section 6(j).]
[(4) The opinion or opinions referred to in Section 6(k).]
Syndicate Provisions:
[Set forth any provisions relating to underwriters' default and step-up of
amounts to be purchased by underwriters acting with the Agents.]
6
Annex II
AMERICAN EXPRESS
CREDIT CORPORATION
Medium-Term Senior Notes, Series B
ADMINISTRATIVE PROCEDURE
Medium-Term Senior Notes, Series B, with maturities of nine
months or more from their dates of issue (the "Notes"), are to be offered from
time to time by American Express Credit Corporation, a Delaware corporation (the
"Company") through [the Agents] as agents of the Company (in such capacity,
together the "Agents" and individually, an "Agent"). Each Agent has agreed to
use its reasonable best efforts to solicit offers to purchase Notes directly
from the Company (an Agent in relation to a purchase of a particular Note by a
purchaser solicited by such Agent, being herein referred to as the "Selling
Agent") and may also purchase Notes from the Company as principal. The Notes
are being offered pursuant to an Agency Agreement, dated December 21, 2001
(the "Agency Agreement") between the Company and the Agents, to which this
Administrative Procedure is attached as Annex II. Each sale of Notes to any
Agent as principal shall be in accordance with the terms of the Agency
Agreement and a Terms Agreement and to the extent any of the provisions of
this Administrative Procedure may vary from the provisions of any Terms
Agreement, the provisions of such Terms Agreement shall control.
The Notes will be issued pursuant to the terms of an Indenture
dated as of September 1, 1987, between the Company and Bank One Trust Company
N.A., as successor trustee (such trustee or any successor trustee, the "Trustee"
and such indenture as amended or supplemented from time to time, the
"Indenture"). The Trustee will make payments of principal and interest and take
certain actions for and on behalf of the Company in connection with the Notes.
In the case of purchases of Notes of the Company by any Agent,
as principal, the relevant terms and settlement details related thereto,
including the Time of Delivery referred to in Section 2(b) of the Agency
Agreement, will be set forth in a Terms Agreement entered into between such
Agent and the Company pursuant to the Agency Agreement.
Each Note will be represented by either a Global Note (as
defined hereinafter) or certificates delivered to the holder thereof or a Person
designated by such holder ("Certificated Notes"). An owner of a Global Note will
not be entitled to receive a certificate representing such Note.
Administrative procedures and specific terms of the offering
are explained below. Administrative and record-keeping responsibilities will be
handled for the Company by the
1
Trustee. The Trustee will advise each Agent in writing of those persons handling
administrative responsibilities with whom each Agent is to communicate regarding
offers to purchase Notes and the details of their delivery. Global Notes will be
issued in accordance with the administrative procedures set forth in Part I
hereof, as may be adjusted in accordance with changes in the Depositary'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 Indentures, the Notes or the Prospectus
Supplement relating to the Notes shall be used herein as therein defined. To the
extent the procedures set forth below conflict with the provisions of the Notes,
the Indentures, the Depositary's operating requirements or the Agency Agreement,
the relevant provisions of the Notes, the Indentures, the Depositary's operating
requirements and the Agency Agreement shall control.
All times referred to herein shall be New York City times.
PART I
Administrative Procedures for Global Notes
Each Note will be represented by a Global Note (as defined
hereinafter) registered in the name of a nominee of the Depositary Trust Company
or any successor depositary selected by the Company (the "Depositary") and
recorded in the book-entry system maintained by the Depositary. In connection
with the qualification of Global Notes for eligibility in the book-entry system
maintained by the Depositary, the Trustee will perform the custodian, document
control and administrative functions described below, in accordance with its
respective obligations under a Letter of Representation dated as of the date
hereof from the Company to the Depositary and a Note Certificate Agreement
between the Trustee and the Depositary (the "Certificate Agreement"), and its
obligations as a participant in the Depositary, including the Depositary's
Same-Day Funds Settlement system ("SDFS").
Issuance: On any date of Settlement (as defined under "Settlement"
below) for one or more Fixed Rate Notes, the Company will
issue a single note certificate in fully registered form
without coupons (a "Global Note") representing up to
$400,000,000 principal amount of all of such Notes that
have the same Original Issue Date, Interest Rate, Interest
Payment Date, Initial Redemption Date and Redemption Terms
(if any) and Stated Maturity. Similarly, on any Settlement
date for one or more Floating Rate Notes, the Company will
issue a single Global Note representing all of such Notes
that have the same Original Issue Date, Initial Interest
Rate, Interest Rate Basis, Interest Payment Period,
Interest Determination Date, Index Maturity, Spread (if
any), Minimum Interest Rate (if any), Maximum Interest
Rate (if any), Stated Maturity, Spread Multiplier (if
any), Interest Rate Reset Period, Interest Reset Dates,
Initial Redemption Date and Redemption Terms (if any) and
Interest Payment Dates. Each Global Note will be dated as
of the date of issue. Each Global Note will bear an
Original Issue Date, which will be (i) with respect to an
original
2
Global Note (or any portion thereof), its original issuance
date and (ii) with respect to any Global Note (or portion
thereof) issued in lieu of a destroyed, lost or stolen
Global Note, the most recent Interest Payment Date to which
interest has been paid or duly provided for on the
predecessor Global Note or Notes (or if no such payment or
provision has been made, the Original Issue Date of the
predecessor Global Note), regardless of the date of issue of
such subsequently issued Global Note. No Global Note will
represent both Fixed Rate Notes and Floating Rate Notes.
Identification The Company will arrange, on or prior to the commencement
Numbers: of a program for the offering of Global Notes, with the
CUSIP Service Bureau of Standard & Poor's Corporation (the
"CUSIP Service Bureau") for the reservation of a series of
CUSIP numbers (including tranche numbers), consisting of
approximately 900 CUSIP numbers and relating to Global Notes
representing the Notes. The Company has obtained from the
CUSIP Service Bureau a written list of such series of
reserved CUSIP numbers and will deliver such list to the
Trustee and the Depositary. The Trustee will assign CUSIP
numbers to Global Notes as described below under Settlement
Procedure "B." The Depositary will notify the CUSIP Service
Bureau periodically of the CUSIP numbers that the Trustee
has assigned to Global Notes. The Trustee will notify the
Company at any time when fewer than 100 of the reserved
CUSIP numbers remain unassigned to Global Notes. At any time
when fewer than 100 previously delivered CUSIP numbers in
respect to the Company remain unassigned to Global Notes,
the Company will deliver to the Depositary and the Trustee a
new list of 900 CUSIP numbers reserved for future assignment
to the Global Notes.
Registration: Global Notes will be issued only in fully registered form
without coupons. Each Global Note will be registered in
the name of Cede & Co., as nominee for the Depositary, on
the securities register for the Global Notes (the
"Securities Register"). The beneficial owner of a Global
Note (or one or more indirect participants in the
Depositary designated by such owner) will designate one or
more participants in the Depositary (with respect to such
Global Note, the "Participants") to act as agent or agents
for such owner in connection with the book-entry system
maintained by the Depositary, and the Depositary 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 Global Note in
the account of such Participants. The ownership interest
of such beneficial owner (or such participants) in such
Global Note will be recorded through the records of such
Participants or through the separate records of such
Participants and one or more indirect participants in the
Depositary.
3
Transfers: Transfers of a Global Note will be accomplished by book
entries made by the Depositary and, in turn, by Participants
(and in certain cases, one or more indirect participants in
the Depositary) acting on behalf of beneficial transferors
and transferees of such Global Note.
Exchange: The Company, or the Trustee, at the Company's request, may
deliver to the Depositary and the CUSIP Service Bureau at
any time a written notice of consolidation specifying (i)
the CUSIP numbers of two or more outstanding Global Notes
that represent (A) Fixed Rate Notes having the same Interest
Rate, Initial Redemption Date and Redemption Terms (if any)
and Stated Maturity and for which interest has been paid to
the same date or (B) Floating Rate Notes having the same
Interest Rate Basis, Interest Payment Period, Interest
Determination Date, Index Maturity, Spread (if any), Minimum
Interest Rate (if any), Maximum Interest Rate (if any),
Stated Maturity, Spread Multiplier (if any), Interest Rate
Reset Period, Interest Reset Date, Redemption Date and
Redemption Terms (if any) and Interest Payment Dates 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 Global Notes, on which such Global
Notes shall be exchanged for a single replacement Global
Note and (iii) a new CUSIP number to be assigned to such
replacement Global Note. Upon receipt of such a notice, the
Depositary 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 Company 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 Notes
to be exchanged will no longer be valid. On the specified
exchange date, the Trustee will exchange such Global Notes
for a single Global Note bearing the new CUSIP number and a
new Original Issue Date, and the CUSIP numbers of the
exchanged Global Notes will, in accordance with CUSIP
Service Bureau procedures, be canceled and not immediately
reassigned.
Upon such exchange, the Trustee will xxxx the predecessor
Global Note "canceled," make appropriate entries in the
Trustee's records and destroy such canceled Global Notes in
accordance with the terms of the applicable Indenture and
deliver a certificate of destruction to the Company.
Notwithstanding the foregoing, if the Global Notes to be
exchanged exceed $400,000,000 in aggregate principal amount,
one Global Note will be authenticated and issued to represent
each $400,000,000 of principal amount of the exchanged Global
Notes and an additional Global Note will be authenticated and
issued to represent any
4
remaining principal amount of such Global Notes (see
"Denominations" below).
Maturities: Each Global Note will mature on a Business Day not less than
nine months after the Settlement date for such Global Note
(the "Maturity Date"). A Floating Rate Global Note will
mature only on an Interest Payment Date for such Note.
Price to Public: Each Global Note will be issued at 100% of its principal
amount unless otherwise agreed to by the Company.
Denominations: Global Notes will be issued in principal amounts of
$100,000 or any amount in excess thereof that is an
integral multiple of $1,000. If Global Notes are
denominated in a specified currency other than U.S.
dollars, the denominations of such Notes will be
determined pursuant to the provisions of the applicable
Pricing Supplement. Global Notes will be denominated in
principal amounts not in excess of $400,000,000 (or the
equivalent thereof). If one or more Global Notes having an
aggregate principal amount in excess of $400,000,000 (or
the equivalent thereof) would, but for the preceding
sentence, be represented by a single Global Note, then one
Global Note will be authenticated and issued to represent
each $400,000,000 principal amount (or the equivalent
thereof) of such Global Note or Notes and an additional
Global Note will be authenticated and issued to represent
any remaining principal amount of such Global Note or
Notes. In such a case, each of the Global Notes
representing such Global Note or Notes shall be assigned
the same CUSIP number. The Notes may not be resold or
exchanged for denominations smaller than $100,000.
Notice of The Trustee will give notice to the Depositary prior to each
Redemption Dates: Redemption Date (as specified in the Global Note) if any at
the time and in the manner set forth in the applicable
Letter of Representations.
Interest: General. Unless otherwise indicated in the applicable
Pricing Supplement, interest, if any, on each Global Note
will accrue from the Original Issue Date (or such other
date on which interest otherwise begins to accrue (if
different than the Original Issue Date)) of the Global
Note 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 Note, and will be
calculated and paid in the manner and on the Interest
Payment Dates described in such Global Note and in the
Prospectus (as defined in the Agency Agreement), as
supplemented by the applicable Pricing Supplement. Unless
otherwise specified, each payment of interest on a Global
Note will include interest accrued to but excluding the
Interest Payment Date; provided, that in the case of
Floating Rate Global Notes
5
that reset daily or weekly, interest payments will include
interest accrued to but excluding the next preceding Regular
Record Date, except that at stated Maturity, the interest
payable will include interest accrued to, but excluding, the
Maturity. Interest payable at the Maturity of a Global Note
will be payable to the Person to whom the principal of such
Global 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 Note in the
appropriate (daily or weekly) bond report published by
Standard & Poor's Corporation. The Regular Record Date with
respect to any Interest Payment Date for a Floating Rate
Global Note, Fixed Rate Global Note or Indexed Rate Global
Note shall be the date (whether or not a Business Day)
fifteen calendar days immediately preceding such Interest
Payment Date.
Payments of Payment of Interest Only. Promptly after each Regular Record
Principal and Date, the Trustee for each Global Note will deliver to the
Interest: Company and the Depositary a written notice setting forth,
by CUSIP number, the amount of interest to be paid on each
Global Note on the following Interest Payment Date (other
than an Interest Payment Date coinciding with Maturity) and
the total of such amounts. The Depositary will confirm the
amount payable on each Global Note 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 for the Notes represented by
such Global Note the total amount of interest due on such
Interest Payment Date (other than at Maturity), and such
Trustee will pay such amount to the Depositary, at the times
and in the manner set forth below under "Manner of Payment."
If any Interest Payment Date for a Global 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 as a result of such delayed payment. In the case of a
Floating Rate Global Note that is a LIBOR Note or a EURIBOR
Note, if postponement to the next business day would cause
the interest payment date to be in the next succeeding
calendar month, the Interest Payment Date will instead be
the immediately preceding Business Day.
Payments at Maturity or Upon Redemption. On or about the
first Business Day of each month, the Trustee will deliver
to the Company and the Depositary a written list of
principal and interest to be paid on each Global Note
maturing either at Maturity or on a Redemption Date in the
following month. The Trustee for each Global Note, the
Company and the Depositary will confirm the amounts of such
principal and interest payments with respect to each such
Global Note on or about the fifth Business Day preceding the
Maturity Date or Redemption Date of such
6
Global Note. On or before such Maturity or Redemption, the
Company will pay to the Trustee for the Notes represented by
such Global Note the principal amount or redemption price of
such Global Note, together with interest due at such
Maturity or redemption in the manner set forth below under
"Manner of Payment." The Trustee will pay such amount to the
Depositary at the times and in the manner set forth below
under "Manner of Payment." If any Maturity of a Global 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 Date or Redemption Date. Promptly after
payment to the Depositary of the principal and interest or
redemption price due on the Maturity Date or Redemption Date
of such Global Note, the Trustee for such Global Note will
cancel and destroy such Global Note in accordance with the
applicable Indenture and, if requested, deliver a
certificate of destruction to the Company.
Manner of Payment. The total amount of any principal and
interest or redemption price due on Global Notes on any
Interest Payment Date or at Maturity or upon redemption or
repayment shall be paid by the Company to the Trustee for
the Notes represented by such Global Note in immediately
available funds no later than 9:30 A.M. on such date. The
Company will make such payment on such Global Notes by
instructing the Trustee to withdraw funds from an account
maintained by the Company with the Trustee for the Notes
represented by such Global Notes. The Company will confirm
any such instructions in writing to such Trustee. Prior to
10 A.M. 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 the Depositary) to an account at the
Federal Reserve previously specified by the Depositary, in
funds available for immediate use by the Depositary, each
payment of principal (together with interest thereon) due on
a Global Note on such Maturity Date or Redemption Date. On
each Interest Payment Date (other than at Maturity),
interest payments shall be made to the Depositary, in same
day funds, in accordance with existing arrangements between
the Trustee and the Depositary. On each such date, the
Depositary will pay, in accordance with its SDFS operating
procedures then in effect, such amounts in funds available
for immediate use to the respective Participants in whose
names the Global Notes are recorded in the book-entry system
maintained by the Depositary. None of the Company (as issuer
or as paying agent) or the Trustee shall have any direct
responsibility or liability for the payment by the
Depositary to such Participants of the principal of and
interest on the Global Notes.
If an issue of Global Notes is denominated in a currency
other than the U.S. dollar, the Company will make payments
of principal and any
7
interest in the currency in which the Global Notes are
denominated (the "foreign currency") or in U.S. dollars. The
Depositary has elected to have all such payments of
principal and interest in U.S. dollars unless notified by
any of its Participants through which an interest in the
Global Notes is held that it elects, in accordance with and
to the extent permitted by the applicable Terms Agreement
and the Global Note, to receive such payment of principal or
interest in the foreign currency. On or prior to the third
Business Day after the record date for payment of interest
and twelve days prior to the date for payment of principal,
such Participant shall notify the Depositary of (i) its
election to receive all, or the specified portion, of such
payment in the foreign currency and (ii) its instructions
for wire transfer of such payment to a foreign currency
account.
The Depositary will notify the Trustee on or prior to the
fifth Business Day after the record date for payment of
interest and ten days prior to the date for payment of
principal of the portion of such payment to be received in
the foreign currency and the applicable wire transfer
instructions, and the Trustee shall use such instructions to
pay the Participants directly. If the Depositary does not so
notify the Trustee, it is understood that only U.S. dollar
payments are to be made. The Trustee shall notify the
Depositary on or prior to the second Business Day prior to
payment date of the conversion rate to be used and the
resulting U.S. dollar amount to be paid per $1,000 face
amount. In the event that the Trustee's quotation to convert
the foreign currency into U.S. dollars is not available, the
Trustee shall notify the Depositary's Dividend Department
that the entire payment is to be made in the foreign
currency. In such event, the Depositary will ask its
Participants for payment instructions and forward such
instructions to the Trustee and the Trustee shall use such
instructions to pay the Participants directly.
Withholding Taxes: The amount of any taxes required under applicable law
to be withheld for any interest, principal or redemption
payment on a Global Note will be determined and withheld by
the Participant, indirect participant in the Depositary or
other Person responsible for forwarding payments and
materials directly to the beneficial owner of such Global
Note.
Procedure for The Company and the Agents will from time to time establish
Rate Setting the aggregate principal amount of, the issuance price of,
and Posting: and the interest rates to be borne by, Global Notes that may
be sold as a result of the solicitation of offers by the
Agents. If the Company decides to establish prices of, and
rates borne by, any Global Notes to be sold (the
establishment of such prices and rates to be referred to
herein as "posting") or if the Company decides to change
prices or rates previously posted by it, it will promptly
advise the Agents of the prices and rates to
8
be posted.
Acceptance and Unless otherwise instructed by the Company, each Agent will
Rejection of advise the Company promptly by telephone of all offers to
Offers: purchase Global Notes received by such Agent, other than
those rejected by it in whole or in part in its discretion.
Unless otherwise agreed by the Company and each of the
Agents, the Company has the sole right to accept offers to
purchase Global Notes and may reject any such offer in whole
or in part. The Company will promptly notify the Selling
Agent who presented such offer of its acceptance or
rejection of an offer to purchase Global Notes. Each Agent
shall have the right, in its discretion without advising the
Company, to reject any offer received by it to purchase
Global Notes in whole or in part.
Preparation If any order to purchase a Global Note is accepted by or on
of Pricing behalf of the Company, the Company will prepare a Pricing
Supplement: Supplement reflecting the terms of such Global Note, will
file one copy thereof by electronic submission with the
Commission in accordance with the applicable paragraph of
Rule 424(b) under the Act, will deliver such number of
copies thereof to the Agents as the Agents shall request and
will, on the Agents' behalf, file three copies of such
Pricing Supplement with the NASD. The Agents will cause a
Prospectus and such Pricing Supplement to be delivered to
the purchaser of such Global Note.
In each instance that a Pricing Supplement is prepared,
the Agents will affix the Pricing Supplements to
Prospectuses prior to their use. Outdated Pricing
Supplements and the Prospectuses to which they are
attached (other than those retained for files),
will be destroyed.
Copies of the appropriate number of Pricing Supplement
shall be delivered to the Agents at the addresses set
forth for each of the Agents in the Agency Agreement
by 11:00 A.M., on the Business Day following the
acceptance of an offer by or on behalf of the Company.
Suspension of Subject to the Company's representations, warranties and
Solicitation; covenants contained in the Agency Agreement, the Company may
Amendment or instruct the Agents to suspend at any time, for any period
Supplement: of time or permanently, the solicitation of offers to
purchase Global Notes. As soon as practicable, but in any
event not later than one Business Day after receipt of such
notice, the Agents will suspend solicitation until such time
as the Company has advised the Agents that solicitation of
offers to purchase Global Notes may be rescinded. Except as
otherwise provided for in the Agency Agreement, the Company
have discretion regarding whether to amend or supplement the
Prospectus. If the Company proposes so to
9
amend or supplement, it will promptly advise the Agents and
will furnish each Agent such proposed amendment or
supplement.
In the event that at the time the Company suspends
solicitation of offers to purchase Global Notes there shall
be any orders for delayed Settlement outstanding, the
Company, consistent with its obligations under the Agency
Agreement, promptly will advise the Agents through the
Trustee whether such orders may be settled and whether
copies of the Prospectus as in effect at the time of the
suspension may he delivered in connection with the
Settlement of such orders. The Company will have the sole
responsibility for such decision and for any arrangements
which may be made in the event that the Company determines
that such orders may not be settled or that copies of such
Prospectus may not be so delivered.
Delivery of With respect to each Company offering sold pursuant to the
Prospectus: Agency Agreement, each Agent (or, in the case of a sale made
directly by the Company, the Company) shall send a copy of
the Prospectus as the same may be supplemented or amended to
the customer or its agent prior to or together with the
earlier of (a) delivery of the written confirmation of sale
sent to such customer or agent or (b) the Settlement date.
Confirmation: For each offer to purchase a Global Note solicited by any
Agent and accepted by the Company, such Agent will issue a
confirmation to the purchaser, and deliver a separate
confirmation to the Company, setting forth the appropriate
details for Settlement set forth below and delivery and
payment instructions.
Settlement: The receipt by the Trustee of immediately available funds in
payment for a Note and issuance of the Global Note
representing such Note shall constitute "Settlement" with
respect to such Note. All orders accepted by the Company
will be settled on the third Business Day thereafter
pursuant to the timetable for Settlement set forth below
unless the Company and the purchaser agree otherwise.
Settlement For each offer to purchase a Global Note sold by the Company
Procedures: through an Agent, except pursuant to the terms of the Agency
Agreement shall be as follows:
A. Agent will advise the Company (unless provided by the
purchaser directly to the Company) by telephone,
facsimile transmission or by other mutually agreeable
methods of the following Settlement information:
(1) Name of the purchaser;
(2) Address of the purchaser and, if different, the
address of the
10
purchaser for principal and interest payments;
(3) Taxpayer identification number of the purchaser
(if available);
(4) Principal amount of the purchase;
(5) Date of the purchase;
(6) Date of Note;
(7) Interest Rate:
(a) Fixed Rate Notes:
(i) interest rate
(b) Floating Rate Notes:
(ii) interest rate basis
(iii) initial interest rate spread or
spread multiplier, if any
(iv) interest rate reset periods and
interest reset dates
(v) interest payment periods and interest
payment dates
(vi) index maturity
(vii) maximum and minimum interest rates,
if any;
(8) Issue price of Note
(9) Settlement date;
(10) Specified currency;
(11) Stated Maturity Date;
(12) Agent's commission, determined as provided in
Section 2(a) of the Agency Agreement between
the Company and such Agent;
(13) Wire transfer information for payment of
interest;
(14) If applicable, the date on or after which the
Global Note is redeemable at the option of
the Company; and
(15) Any other terms necessary to describe the
Global Note.
The Company will advise the Trustee by telephone (confirmed
in writing at any time on the same date), written
telecommunication or electronic transmission of the
information set forth in Settlement Procedure "A"
11
above. Each such communication by the Company shall
constitute a representation and warranty by the Company to
the Trustee for such Note and the 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 and
(ii) such Note, and the Global Note representing such Note,
will conform with the terms of the Indenture for such Note.
The Trustee will then assign a CUSIP number to the Global
Note representing such Global Note and notify the Agent and
the Company by telephone (confirmed in writing at any time
on the same date), written telecommunication or electronic
transmission of such CUSIP number as soon as practicable.
Before accepting any offer to purchase a 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 the Global Note representing such Note.
After receiving from such Agent the details for each offer
to purchase a Note, the Company will, after recording the
details and any necessary calculations, provide appropriate
documentation to the Trustee by telex, telescope or other
means acceptable to the Trustee, including the information
provided by such Agent necessary to allow the Trustee to
comply with the Settlement Procedures as set forth herein.
B. The Trustee will enter a pending deposit message
through the Depositary's Participant Terminal Systen-4
providing the following Settlement information to the
Depositary, such Agent, Standard & Poor's Corporation
and Interactive Data Corporation pursuant to which such
Note is to be issued:
1. The information set forth in Settlement Procedure
"A."
2. Identification as a Fixed Rate Note or a Floating
Rate Note.
3. Initial Interest Payment Date for such 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. Frequency of interest payments (monthly,
quarterly, semiannually or annually).
5. CUSIP number of the Global Note representing such
Note.
6. The participant account numbers maintained by the
Depositary on behalf of the Trustee and the Agent.
12
7. Whether such Global Note will represent any other
Note (to the extent known at such time).
C. To the extent the Company has not already done so, the
Company will deliver to the Trustee for such Notes a
Global Note in a form that has been approved by the
Company, the Agent and the Trustee.
D. The Trustee will complete the Global Note, stamp the
appropriate legend, as instructed by the Depositary, if
not already set forth thereon, and authenticate the
Global Note.
E. The Depositary will credit such Note to the Trustee's
participant account at the Depositary.
F. The Trustee will enter an SDFS deliver order through
the Depositary's Participant Terminal System
instructing the Depositary to (i) debit such Note to
the Trustee's participant account and credit such Note
to such Agent's participant account and (ii) debit such
Agent's settlement account and credit the Trustee's
settlement account for an amount equal to the price of
such Note. The entry of such a deliver order shall
constitute a representation and warranty by the Trustee
to the Depositary that (i) the Global Note representing
such Note has been issued and authenticated and (ii)
the Trustee is holding such Global Note pursuant to the
Certificate Agreement.
G. Unless the Agent is purchasing such Note as Principal,
the Agent will enter an SDFS deliver order through the
Depositary's Participant Terminal System, with respect
to each Note represented by the Global Note to be
issued, instructing the Depositary (i) to debit such
Note to such Agent's participant account and credit
such Note to the participant accounts of the
Participants with respect to such Note and (ii) to
debit the settlement accounts of such Participants and
credit the settlement account of such Agent for an
amount equal to the price of such Note.
H. Transfers of funds in accordance with SDFS deliver
order described in Settlement Procedures "G" and "H"
will be settled in accordance with SDFS operating
procedures in effect on the Settlement date.
I. The Trustee will, upon receipt of funds from the Agent
in accordance with Settlement Procedure "G", not
earlier than 2:00 p.m., credit to an account of the
Company maintained at the Trustee funds available for
immediate use in the amount transferred to the Trustee
in accordance with Settlement Procedure "G."
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J. The Trustee will hold the Global Note pursuant to the
Certificate Agreement.
K. Monthly, the Trustee will send to the Company a
statement setting forth the principal amount of
Registered Notes Outstanding as of the date of such
statement and setting forth a brief description of any
sales of which the Company has advised such the Trustee
but which have not yet been settled.
Such Agent will deliver to the purchaser a copy of the most
recent Prospectus applicable to the Note with or prior to
any offer of Notes and the confirmation and payment by the
purchaser of the Note.
Unless the Agent is purchasing such Note as Principal, the
Agent will confirm the purchase of such Note to the
purchaser either by transmitting to the Participants with
respect to such Note a confirmation order or orders through
the Depositary's institutional delivery system or by mailing
a written confirmation to such purchaser.
Settlement For orders of Notes solicited by an Agent, as agent, and
Procedures accepted by the Company for Settlement on the first
Timetable: Business Day after the sale date, Settlement Procedures
"A" through "K" set forth above shall be completed as
soon as possible but not later than the respective
times 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 date
E 9:00 A.M. on Settlement date
F 10:00 A.M. on Settlement date
G-H 2:00 P.M. on Settlement date
I 4:45 P.M. on Settlement date
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,
14
Settlement Procedures "A", "B" and "C" shall be completed as
soon as practicable but no later than 11:00 A.M., 12:00 Noon
and 2:00 P.M., as the case may be, on the first Business Day
after the sale date. If the initial interest rate for a
Floating Rate Global Note has not been determined at the
time that Settlement Procedure "A" is completed, Settlement
Procedures "B" and "C" shall be completed as soon as such
rate has been determined but no later than 11:00 A.M., 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 the
SDFS operating procedures in effect on the Settlement date.
If Settlement of a Note is rescheduled or canceled, the
Trustee after receiving notice from the Company or the
Agent, will deliver to the Depositary, through the
Depositary's Participant Terminal System, a cancellation
message to such effect by no later than 2:00 P.M. on the
Business Day immediately preceding the scheduled Settlement
date.
Failure to Settle: If the Trustee fails to enter an SDFS deliver order with
respect to a Global Note pursuant to Settlement Procedure
"G", the Trustee after receiving notice from the Company or
the Agent, may deliver to the Depositary, through the
Depositary's Participant Terminal System, as soon as
practicable, a withdrawal message instructing the Depositary
to debit such Global Note to the Trustee's participant
account. The Depositary will process the withdrawal message,
provided that the Trustee's participant account contains a
principal amount of the Global Note representing such Note
that is at least equal to the principal amount to be
debited. If a withdrawal message is processed with respect
to all the Notes represented by a Global Note, the Trustee
for the Notes represented by such Global Note will xxxx such
Global Note "canceled", and make appropriate entries in the
Trustee's records. The CUSIP number assigned to such Global
Note 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 Notes represented by a Global Note, the
Trustee will exchange such Global Note for two Global Notes,
one of which shall represent such Note or Notes and shall be
canceled immediately after issuance and the other of which
shall represent the other Notes previously represented by
the surrendered Global Note and shall bear the CUSIP number
of the surrendered Global Note.
Notwithstanding the foregoing, upon any failure to settle
with respect to a Note, the Depositary may take any actions
in accordance with its SDFS operating procedures then in
effect. In the event of a failure to settle with respect to
one or more, but not all, of the Notes to have been
represented
15
by a Global Note, the Trustee will provide, in accordance
with Settlement Procedures "G" and "F", for the
authentication and issuance of a Global Note representing
the other Notes which have not failed to settle, to have
been represented by such Global Note and will make
appropriate entries in its records.
Redemption: Except as otherwise indicated in an applicable Pricing
Supplement or on a Global Note, the Global Notes are not
redeemable prior to maturity. If so indicated in an
applicable Pricing Supplement or on a Global Note, such
Global Note may be redeemed in whole, but not in part, on
any Interest Payment Date commencing on or after the date
set forth on such Global Note, which shall be at least 6
months after the date of original issue of such Global Note,
upon not less than 5 business days prior written notice to
the registered holder thereof, at 100% of the principal
amount thereof plus accrued interest to the date of
redemption (the "Redemption Date").
Procedures Company Notice to Trustee regarding Exercise of Optional
upon Company's Redemption. At least 45 days prior to the date on which it
Exercise of intends to redeem a Global Note, the Company will notify the
Optional Trustee for such Global Note that it is exercising such
option with respect to such Global Note on such date and the
redemption price of such Global Notes.
Trustee Notice to the Depositary regarding Company's
Exercise of Optional Redemption. Notice to redeem the Global
Notes will be mailed, first class postage prepaid, by the
Trustee to the Depositary, or its nominee as of the close of
business on the date that is five business days preceding
the date on which such notice is given. Such notice shall
specify (i) the principal amount of the Global Notes to be
redeemed, (ii) the date upon which the Global Notes shall be
redeemed, and (iii) that interest on the principal amount
redeemed shall cease to accrue on the Redemption Date.
Deposit of Redemption Price. On or before any Redemption
Date, the Company shall deposit with the Trustee an amount
of money sufficient to pay the redemption price, plus
interest accrued to such Redemption Date, for all the Global
Notes or portions thereof which are to be repaid on such
Redemption Date. The Trustee will use such money to repay
such Global Notes pursuant to the terms set forth in such
Global Notes.
Payments of Trustee Notice to Company of Option to be Repaid. Upon
Principal and receipt of notice of exercise of the option for repayment
Interest Upon and the Global Notes so to be repaid as set forth in such
Exercise of Notes, the Trustee for shall give notice to the Company not
Optional Repayment: less than 20 days prior to each Optional Repayment Date of
such Optional Repayment Date and of the principal amount of
16
Global 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 the Trustee
an amount of money sufficient to pay the optional repayment
price, and accrued interest thereon to such date, of all the
Global Notes or portions thereof which are to be repaid on
such date. The Trustee will use such money to repay such
Global Notes pursuant to the terms set forth in such Global
Notes.
Trustees Not to Nothing herein shall be deemed to require either the
Risk Funds: Trustee to risk or expend its own funds in connection with
any payment to the Company, the Depositary, the Agents or
the purchaser, it being understood by all parties that
payments made by either the Trustee to the Company, the
Depositary, the Agents or the purchaser shall be made only
to the extent that funds are provided to the Trustee for
such purpose.
Authenticity The Company will cause the Trustee to furnish the Agents
Signatures: from time to time with the specimen signatures of each of
the Trustee's officers, employees or agents who have
been authorized by the Trustee to authenticate Global Notes,
but the Agents will have no 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 Global Note.
Payment The Agents shall forward to the Company, on a monthly basis,
of Expenses: a statement of the out-of-pocket expenses incurred by the
Agents during that month that are reimbursable to them
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 offering the
Global Notes. Reasonable advertising expenses will be paid
by the Company.
PART II
Administrative Procedures for Certificated Notes
The Trustee will serve as registrar and transfer agent in connection
with the Certificated Notes.
Price to Public: Each Certificated Note will be issued at 100% of principal amount, unless
otherwise agreed to by the Company.
17
Date of Issuance: Each Certificated Note will be dated and issued as of the date of its
authentication by the Trustee.
Maturities: Each Certificated Note will mature on a Business Day selected by the
purchaser and agreed upon by the Company, such date being at least nine
months from the date of issuance. Each Certificated Floating Rate Note will
mature on an Interest Payment Date.
Registration: Certificated Notes will be issued only in fully registered form without
coupons.
Currency: The specified currency for a Certificated Note shall be U.S. dollars unless
another currency is specified in the applicable Pricing Supplement.
Denominations: The Certificated Notes will be issued and payable in U.S. dollars (or in
the other specified currency) in the denomination of $100,000 and any
larger denomination which is an integral multiple of $1,000. The
Certificated Notes may not be resold or exchanged for denominations smaller
than $100,000.
Interest: General. Unless otherwise indicated in the applicable Pricing Supplement,
interest, if any, on each Certificated Note will accrue from the Original
Issue Date (or such other date on which interest otherwise begins to accrue
(if different from the Original Issue Date)) of such Certificated Note for
the first interest period or the last date to which interest has been paid,
if any, for each subsequent interest period, on such Certificated Note, and
will be calculated and paid in the manner and on the dates described in
such Certificated 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 and including the next preceding Regular Record
Date (as defined below), except that at Stated Maturity, the interest
payable will include interest accrued to, but excluding, the stated
Maturity date.
18
Regular Record Dates. The Regular Record Dates with respect to any Interest
Payment Date for a Fixed Rate Certificated Note, Floating Rate Certificated Note
or Indexed Rate Certificated Note shall be the date (whether or not a Business
Day) fifteen calendar days immediately preceding such Interest Payment Date.
Payments of Interest: The Trustee will pay the principal amount of each Certificated Note at
Maturity or upon redemption upon presentation and surrender of such
Certificated Note to the Trustee. Such payment, together with payment of
interest due at Maturity or upon redemption of such Certificated Note, will
be made in funds available for immediate use by the Trustee and in turn by
the holder of such Certificated Note. Certificated Notes presented to the
Trustee at Maturity or upon redemption for payment will be canceled and
destroyed by the Trustee, and a certificate of destruction will be
delivered to the Company. All interest payments on a Certificated Note
(other than interest due at Maturity or upon redemption) will be made by
check drawn on the Trustee (or another person appointed by the Trustee) and
mailed by the Trustee to the person entitled thereto as provided in such
Certificated Note and the applicable Indenture; provided, however, that any
holder of $10,000,000 or more of Certificated Notes having the same
Interest Payment Dates will, upon written request prior to the Regular
Record Date in respect of an Interest Payment Date, be entitled to receive
payment by wire transfer of immediately available funds. Following each
Regular Record Date, the Trustee will furnish the Company with a list of
interest payments to be made on the following Interest Payment Date for
each Certificated Note and in total for all Certificated Notes. Interest
at Maturity or upon redemption will be payable to the person to whom the
payment of principal is payable. The Trustee will provide monthly to the
Company lists of principal and interest, to the extent ascertainable, to be
paid on Certificated Notes maturing or to be redeemed in the next month.
Withholding Taxes. The amount of any taxes required under applicable law
to be withheld from any interest payment on a Certificated Note will be
determined and withheld by the Trustee. The Company will be responsible
for withholding taxes on interest paid on Certificated Notes as required by
applicable law
19
If any Interest Payment Date for or 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 account of such
delayed payment. In the case of a Floating Rate Certificated Note that is a
LIBOR Note or a EURIBOR Note, if postponement to the next Business Day would
cause the Interest Payment Date to be in the next succeeding calendar month,
the Interest Payment Date will instead be the immediately preceding Business
Day.
Preparation of If any order to purchase a Certificated Note is accepted by or on behalf of
Pricing Supplement: the Company, the Company will prepare a Pricing Supplement reflecting the
terms of such Certificated Note, will file one copy thereof by electronic
submission with the Commission in accordance with the applicable paragraph
of Rule 424(b) under the Act, will deliver such number of copies thereof to
the Agents as the Agents shall request and will, on the Agents' behalf, file
three copies of the Pricing Supplement with the National Association of
Securities Dealers, Inc. (the "NASD"). The Agents will cause a Prospectus
and Pricing Supplement to be delivered to the purchaser of such Certificated
Note.
Copies of the appropriate number of Pricing Supplements shall be delivered
to the Agents at the addresses set forth for each of the Agents in the
Agency Agreement by 11:00 A.M. on the Business Day following the acceptance
of an offer by or on behalf of the Company.
In each instance that a Pricing Supplement is prepared, the Agents will
affix the Pricing Supplement to a Prospectus prior to its use. Outdated
Pricing Supplements and the Prospectuses to which they are attached (other
than those retained for files), will be destroyed.
20
Acceptance and The Company shall have the right to accept offers to purchase its
Rejection of Offers: Certificated Notes in its sole discretion and may reject any such offer in
whole or in part. The Company will promptly notify the Selling Agent of its
acceptance or rejection of an offer to purchase its Certificated Notes. Each
Agent shall have the right, in its discretion reasonably exercised without
advising the Company, to reject any offer in whole or in part. Each Agent
shall promptly communicate to the Company, orally or in writing, each
reasonable offer to purchase Certificated Notes from the Company received by
such Agent, other than those rejected by such Agent in the reasonable
exercise of its discretion.
Settlement: The receipt of immediately available funds in U.S. Dollars (or in the other
specified currency) by the Company in payment for a Certificated Note and
the authentication and issuance of such Certificated Note shall, with
respect to such Certificated Note, constitute "Settlement". All offers
accepted by the Company will be settled from one to three Business Days from
the date of acceptance by the Company pursuant to the timetable for
Settlement set forth below unless the Company and the purchaser agree to
Settlement on a later date, provided, however, that the Company will so
notify the Trustee of any such later date on or before the Business Day
immediately prior to the Settlement date.
Settlement Procedures: In the event of a purchase of Certificated Notes by an Agent, as
principal, appropriate Settlement details will be set forth in the
applicable Terms Agreement to be entered into between such Agent and the
Company pursuant to the Agency Agreement. Settlement Procedures with regard
to each Certificated Note sold by the Company or through each Agent shall be
as follows:
A. The Selling Agent will advise the Company (unless provided by the
purchaser directly to the Company) by telephone, telex or facsimile, of
the following Settlement information:
(1) Exact name in which the Certificated Note is to be registered
("Registered Owner").
(2) Exact address of the Registered Owner and address for payment
of principal and interest, if any.
21
(3) Taxpayer identification number of the Registered Owner.
(4) Principal amount of the
Certificated Note (and, if
multiple Certificated Notes are
to be issued, denominations
thereof).
(5) Settlement Date.
(6) Stated Maturity.
(7) Price.
(8) Trade Date.
(9) Interest rate:
(a) Fixed Rate Notes:
i) Interest Rate
(b) Floating Rate Notes:
i) Interest Rate Basis
ii) Initial Interest Rate
iii) Spread and/or Spread Multiplier, if any
iv) Interest Reset Periods and Interest Reset Dates
v) Interest Payment Periods and Interest Payment Dates
vi) Index Maturity
vii) Maximum and Minimum Interest Rates, if any
viii)Interest Determination Dates
ix) Regular Record Dates
(10) The date on or after which
the Certificated Notes are
redeemable at the option
of the Company, and
additional redemption
provisions, if any.
(11) Wire transfer information for payment of interest.
(12) Interest Payment Date and the Interest Payment Period.
(13) Agents' commission.
22
B. The Company will confirm the
information set forth in Settlement
Procedure "A" above and the name of
the Selling Agent to the Trustee by
telephone, telex or facsimile, and
the Trustee will assign a CUSIP
number to the transaction. If the
Company rejects an offer, the Company
will promptly notify the Selling
Agent and the Trustee by telephone.
C. The Trustee will complete the Certificated Note and will authenticate
such Certificated Note.
D. The Trustee will deliver the Certificated Note to the Selling Agent.
E. The Selling Agent will cause to be wire transferred to a bank account
designated by the Company immediately available funds in U.S. dollars
(or in the other specified currency) in the amount of the principal
amount of the Certificated Note.
F. The Selling Agent will deliver the
Certificated Note to the purchaser
against payment in immediately
available funds in the amount of the
principal amount of the Certificated
Note. The Selling Agent will deliver
to the purchaser a copy of the most
recent Prospectus applicable to the
Certificated Note with or prior to
any written offer of Certificated
Notes, delivery of the Certificated
Note and the confirmation and payment
by the purchaser for the Certificated
Note.
Settlement Procedures For offers accepted by the Company, Settlement Procedures "A" through "F"
Timetables: set forth above shall be completed on or before the respective times set
forth below:
Settlement
Procedure Time (New York)
A 5 PM on date of order
B 3 PM on the Business Day prior
to Settlement date
C-D 12 noon on the Settlement date
E 2:15 PM on the Settlement date
F 3 PM on the Settlement date
23
Failure In the event that a purchaser of a Certificated Note shall either
to Settle: fail to accept delivery of or make payment for the Certificated Note on the
date fixed by the Company for Settlement, the Selling Agent will immediately
notify the Trustee and the Company by telephone, confirmed in writing, of
such failure and return the Certificated Note to the Trustee. Upon the
Trustee's receipt of the Certificated Note from such Selling Agent, the
Company will promptly return to such Selling Agent an amount of immediately
available funds in U.S. dollars (or in the other specified currency) equal
to any amount previously transferred to the Company in respect of the
Certificated Note pursuant to advances made by such Selling Agent. Such
returns will be made on the Settlement date, if possible, and in any event
not later than 12 noon on the Business Day following the Settlement date.
The Company will reimburse such Selling Agent on an equitable basis for its
loss of the use of the funds during the period when the funds were credited
to the account of the Company. Upon receipt of the Note in respect of which
the default occurred, the Trustee will xxxx the Note "canceled", make
appropriate entries in its records and deliver the Certificated Note to the
Company with an appropriate debit advice. Subject to the Agency Agreement,
the Selling Agent will not be entitled to any commission with respect to any
Certificated Note which the purchaser does not accept or make payment for.
Redemption: Except as otherwise specified in an applicable Pricing Supplement or in the
applicable Certificated Note, the Notes will not be redeemable prior to
their Stated Maturity. If so specified in an applicable Pricing Supplement
or in the applicable Certificated Note, such Certificated Note will be
subject to redemption by the Company, on any Interest Payment Date
commencing on or after the date set forth on the Certificated Note, which
shall be at least six months after the date of original issue of such
Certificated Note, in whole but not in part, at the option of the Company,
at the redemption price set forth on the Certificated Note, together with
interest accrued thereon to the date of redemption.
Procedures upon Company's Exercise Company Notice to Trustee regarding Exercise of Optional
Company's Exercise of Redemption. At of Optional Redemption: least 45 days prior to the date on
Optional Redemption. which it intends to redeem a Certificated Note, the Company will notify the
Trustee for such Certificated Note that it is exercising such option with
respect to such Certificated Note on such date.
24
Trustee Notice to Holders regarding 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.
Payments of Principal Trustee Notice to Company of Option to be Repaid. Upon receipt of notice
and Interest Upon of exercise of the option for repayment and the Certificated Notes to be repaid as set
Exercise of Optional forth in such Certificated Notes, the Trustee for such Certificated Notes
Repayment shall 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 Certificated Notes to be repaid.
Payment at Maturity: Upon presentation of each Certificated Note at Stated Maturity or upon
redemption, the Trustee (or any duly appointed paying agent) will pay the
principal amount thereof, together with accrued interest. Such payment shall
be made in immediately available funds in U.S. dollars (or such other
specified currency), provided that the Certificated Note is presented to the
Trustee (or any such paying agent) in time for the Trustee (or such paying
agent) to make payments in such funds in accordance with its normal
procedures. The Company will provide the Trustee (and any such paying agent)
with funds available for immediate use for such purpose. Certificated Notes
presented at Stated Maturity or upon redemption will be canceled by the
Trustee.
25
Procedures for Rate The Company and the Agents will discuss from time to time the rates to be
Setting and Posting: borne by the Certificated Notes that may be sold as a result of the
solicitation of offers by the Agents. Once any Agent has recorded any
indication of interest in Certificated Notes upon certain terms, and
communicated with the Company, if the Company accepts an offer to purchase
Certificated Notes upon such terms, it will supply an appropriate number of
copies of the Prospectus, as then amended or supplemented, to the Agent who
presented such offer. See "Delivery of Prospectus." No Settlements with
respect to Certificated Notes upon such terms may occur prior to such
delivery and the Agents will not, prior to such delivery, mail confirmations
to customers who have offered to purchase Certificated Notes upon such
terms. After such delivery, sales, mailing of confirmations and Settlements
may occur with respect to Certificated Notes upon such terms, subject to the
provisions of "Delivery of Prospectus" below.
If the Company decides to post rates and a decision has been reached to
change interest rates, the Company will promptly notify each Agent. Each
Agent will forthwith suspend solicitation of purchases. At that time, the
Agents will recommend and the Company will establish rates to be so
"posted." Following establishment of posted rates and prior to the delivery
described in the following sentence, the Agents may only record indications
of interest in purchasing Certificated Notes at the posted rates. Once any
Agent has recorded any indication of interest in Certificated Notes at the
posted rates and communicated with the appropriate Officer of the Company,
if the Company plans to accept an offer at the posted rate, it will supply
an appropriate number of copies of the Prospectus, as then amended or
supplemented, to the Agent who presented such offer. See "Delivery of
Prospectus." No Settlements at the posted rates may occur prior to such
delivery and the Agents will not, prior to such delivery, mail confirmations
to customers who have offered to purchase Certificated Notes at the posted
rates. After such delivery, sales, mailing of confirmations and Settlements
may resume, subject to the provisions of "Delivery of Prospectus" below.
Suspension of In the event that at the time the Agents, at the direction of the Company,
Solicitation: suspend solicitation of offers to purchase from the Company there shall be
any orders outstanding which have not been settled, the Company will
promptly advise the Agents through the Trustee whether such orders may be
settled and
26
whether copies of the Prospectus as theretofore amended and/or supplemented
as in effect at the time of the suspension 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 which may be made
in the event that the Company determine that such orders may not be settled
or that copies of such Prospectus may not be so delivered.
Delivery of Prospectus: A copy of the Prospectus as most recently amended or supplemented on the
date of delivery thereof must be delivered by an Agent (or, in the case of a
sale made directly by the Company, by the Company) to a purchaser prior to
or together with the earlier of the delivery of (i) the written confirmation
of a sale sent to a purchaser or his agent and (ii) any Certificated Note
purchased by such purchaser. The Company will use its best efforts to ensure
that the Agents receive copies of the Prospectus and each amendment or
supplement thereto in such quantities and within such time limits as will
enable an Agent to deliver such confirmation or Certificated Note to a
purchaser as contemplated by these procedures and in compliance with the
preceding sentence. If, since the date of acceptance of a purchaser's offer,
the Prospectus shall have been supplemented solely to reflect any sale of
Certificated Notes on terms different from those agreed to between the
Company and such purchaser or a change in posted rates not applicable to
such purchaser, such purchaser shall not receive the Prospectus as
supplemented by such new supplement, but shall receive the Prospectus as
supplemented to reflect the terms of the Certificated Notes being purchased
by such purchaser and otherwise as most recently amended or supplemented on
the date of delivery of the Prospectus. The Trustee will make all such
deliveries with respect to all Certificated Notes sold directly by the
Company.
Confirmation: For each order to purchase a Certificated Note solicited by the Agent and
accepted by or on behalf of the Company, the 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.
Trustees Not to Risk Nothing herein shall be deemed to require either the Trustee to risk or
Funds: 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 either the Trustee to the Company, the Agents or the purchaser shall
be made only to the
27
extent that funds are provided to the Trustee for such purpose.
Authenticity of The Company will cause the Trustee to furnish the Agents from time to time
Signatures: with the specimen signatures of each of the Trustee's officers, employees
and agents who have been authorized by the Trustee to authenticate
Certificated Notes, but the Agents will have no 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 Expenses: The Agents shall forward to the Company, on a monthly basis, a
statement of the out-of-pocket expenses incurred by the Agents during that
month that are reimbursable to them pursuant to the terms of the Agency
Agreement. The Company will remit payment to the Agents currently on a
monthly basis.
Advertising The Company will determine with the Agents the amount of advertising
Costs: that may be appropriate in offering the Certificated Notes. Reasonable
advertising expenses will be paid by the Company.
28
EXHIBIT A
Addressed to the Company's
Board of Directors and the Agents
Ladies and Gentlemen:
We have audited the consolidated balance sheets of
American Express Credit
Corporation (the "Company") and subsidiaries as of December 31, 2000 and 1999
and the consolidated statements of income, shareholders' equity and changes in
financial position for each of the three years in the period ended December 31,
2000, and the related financial statement schedule, all included in the
Registration Statements (Nos. 33-62797 and 333-38199) on Forms S-3 filed by the
Company under the Securities Act of 1933 (the "Act"); our reports with respect
thereto also are included in such Registration Statements.
In connection with the Registration Statements:
1. We are independent auditors with respect to the Company within the meaning
of the Act.
2. In our opinion, the consolidated financial statements and financial
statement schedule audited by us and included in the Registration
Statements comply as to form in all material respects with the applicable
accounting requirements of the Act and the related published rules and
regulations thereunder.
3. We have not audited any financial statements of the Company as of any date
or for any period subsequent to December 31, 2000. The purpose (and
therefore the scope) of our audit for the year ended December 31, 2000 was
to enable us to express our opinion on the consolidated financial
statements at December 31, 2000 and for the year then ended, but not on the
financial statements for any interim period within such year. Therefore, we
are unable to express and do not express an opinion on: the unaudited
condensed consolidated balance sheet at [most recent quarter end]; the
unaudited condensed consolidated statements of income and changes in
financial position for the [three/six/nine]-months ended [most recent
quarter end], 2001 and 2000, included in the Registration Statements, or
the financial position, results of operations or changes in financial
position as or any date or for any period subsequent to December 31, 2000.
4. For purposes of this letter, we have read the 2001 minutes of meetings of
the shareholders and the Board of Directors of the Company and its
subsidiaries as set forth in the minute books through [cut-off date],
officials of the Company having advised us that the minutes of all such
meetings through that date were set forth therein, and have carried out
other procedures to [cut-off date] as follows (our work did not extend to
the period from [cut-off date to MTN commencement date].
a. With respect to the [three/six/nine]-month periods ended [most recent
quarter end], 2001 and 2000, we have:
(1) performed the procedures specified by the American
Institute of Certified Public Accountants for a review of interim
financial information as described in SAS 71, Interim Financial
Information, on the unaudited condensed consolidated balance
sheet at ended [most recent quarter end], 2001 and unaudited
condensed consolidated statements of income and changes in
financial position for the [three/six/nine]-month periods ended
[most recent quarter end], 2001 and 2000, included in the
Registration Statements; and
(2) inquired of certain officials of the Company who have
responsibility for financial and accounting matters as to whether
the unaudited condensed consolidated financial statements
referred to in a. (1) above comply as to form in all material
respects with the applicable accounting requirements of the Act
and the related published rules and regulations.
The foregoing procedures do not constitute an audit conducted in accordance with
generally accepted auditing standards. Also, they would not necessarily reveal
matters of significance with respect to the comments in the following paragraph.
Accordingly, we make no representations as to the sufficiency of the foregoing
procedures for your purposes.
5. Nothing came to our attention as a result of the foregoing procedures that
caused us to believe that:
a. any material modifications should be made to the unaudited condensed
consolidated financial statements described in 4.a.(l) above, included
in the Registration Statements, for them to be in conformity with
generally accepted accounting principles; or
b. the unaudited condensed consolidated financial statements described in
4.a.(1) above do not comply as to form in all material respects with
the applicable accounting requirements of the Act and the related
published rules and regulations.
6. Company officials have advised us that no consolidated financial statements
as of any date or for any period subsequent to [most recent quarter end]
are available; accordingly, the procedures carried out by us with respect
to changes in financial statement items after [most recent quarter end]
have, of necessity, been even more limited than those with respect to the
periods referred to in 4. above. We have inquired of certain officials of
the Company who have responsibility for financial and accounting matters as
to whether: (i) there was any change at [cut-off date] in the capital
stock, increase in long-term debt or any decrease in consolidated net
current assets or shareholders' equity of the consolidated companies as
compared with the amounts shown on the [last day of most recent quarter]
unaudited condensed consolidated balance sheet included in the Registration
Statements, or (ii) for the period from [first day after most recent
quarter end] to [the cut-off date], there was any decrease, as compared
with the corresponding period in the preceding year, in consolidated net
sales or in the total or per share amounts of consolidated net income.
2
On the basis of these inquiries and our reading of the minutes as described
in 4. above, nothing came to our attention that caused us to believe that
there was any such change, increase or decrease.
7. At your request, we have also read the items identified by you on the
attached copies of selected pages of the [Prospectus Supplement, Form 10-K,
Form 10-Q and/or 8-K] and have performed the following procedures, which
were applied as indicated with respect to the symbols explained below:
A. We compared the dollar amounts or percentages to the amounts in
the audited financial statements described in the introductory
paragraph of this letter and found them to be in agreement.
B. We compared the dollar and other amounts not derived directly
from audited or unaudited financial statements to the Company's
accounting records and found them to be in agreement.
C. We compared the dollar and other amounts not derived directly
from audited or unaudited financial statements, or that could not
be compared directly to the Company's accounting records, to
amounts in analyses prepared by the Company from its accounting
records and found them to be in agreement.
D. We proved the arithmetic accuracy of the percentages or other
amounts based on the data in the above mentioned financial
statements, accounting records and analysis.
8. Our audits of the consolidated financial statements for the periods
referred to in the introductory paragraph of this letter were comprised of
audit tests and procedures deemed necessary for the purpose of expressing
an opinion on such financial statements taken as a whole. For neither the
periods referred to therein nor any other period did we perform audits
tests for the purpose of expressing an opinion on individual balances of
accounts or summaries of selected transactions such as those enumerated
above and, accordingly, we do not express an opinion thereon.
9. It should be understood that we make no representation as to questions of
legal interpretation or as to the sufficiency for your purposes of the
procedures enumerated in the paragraph 7 above; also, such procedures would
not necessarily reveal any material misstatement of such information.
Further, we have addressed ourselves solely to the foregoing data as set
forth in the Registration Statements and make no representations as to the
adequacy of disclosure or as to whether any material facts have been
omitted.
12. This letter is solely for the information of the addressees and to assist
the underwriters in conducting and documenting their investigation of the
affairs of the Company in connection with the offering of the securities
covered by the Registration Statements, and is not to be used, circulated,
quoted or otherwise referred to within or without the underwriting group
for any other purpose, including, but not limited to, the registration
purchase, or sale or securities, nor is it to be filed with or referred to
in whole or in part in the Registration Statements or any other document,
except that reference may be made to
3
it in the underwriting agreement or any list of closing documents
pertaining to the offering of the securities covered by the Registration
Statements.
Very truly yours,
4
