EXHIBIT 1.3
Providian Financial Corporation
$1,000,000,000
Medium-Term Notes, Series A
Due 9 Months or More from Date of Issue
Distribution Agreement
----------------------
May 14, 1999
Chase Securities Inc.
000 Xxxx Xxxxxx, 0xx Xxxxx
Xxx Xxxx, XX 00000
Credit Suisse First Boston Corporation
Xxxxxx Xxxxxxx Xxxxxx
Xxx Xxxx, XX 00000
Xxxxxxx, Xxxxx & Co.
00 Xxxxx Xxxxxx
Xxx Xxxx, XX 00000
Xxxxxx Brothers Inc.
0 Xxxxx Xxxxxxxxx Xxxxxx, 00xx Xxxxx
Xxx Xxxx, XX 00000
Dear Sirs:
Providian Financial Corporation, a Delaware corporation (the
"Company"), proposes to issue and sell its Medium-Term Notes, Series A Due 9
Months or More from Date of Issue (the "Securities") in an aggregate principal
amount of up to $1,000,000,000 or its equivalent in foreign currencies or
currency units and agrees with Chase Securities Inc., Credit Suisse First Boston
Corporation, Xxxxxxx, Xxxxx & Co. and Xxxxxx Brothers Inc. (each individually an
"Agent", and collectively the "Agents") as set forth in this Distribution
Agreement (the "Agreement"). Subject to the terms and conditions stated herein,
the Company
hereby (i) appoints each of the Agents as an agent of the Company for the
purpose of soliciting offers to purchase the Securities from the Company and
(ii) agrees that, except as otherwise contemplated herein, whenever it
determines to sell Securities directly to any of the Agents as principal for
resale to others, it will enter into a separate agreement, which may be a
written agreement, substantially in the form of Annex I hereto or an oral
agreement confirmed in writing by such Agent (each a "Terms Agreement") relating
to such sale in accordance with Section 2(b) hereof. The Company may sell
Securities directly to purchasers on its own behalf and accept offers to
purchase Securities through or from a person other than an Agent, whether
pursuant to the assumption by such person of the rights and duties of an Agent
hereunder (which assumption may be evidenced by the execution by such person of
a counterpart signature page to this Agreement) or otherwise. In addition, the
Company may from time to time authorize the issuance of additional Securities
and such additional Securities may be sold through or to the Agents pursuant to
the terms of this Agreement, all as though the issuance of such Securities were
authorized on the date hereof.
The terms and rights of the Securities shall be as specified in or
established pursuant to the senior indenture, dated as of May 1, 1999 (the
"Senior Indenture"), between the Company and The First National Bank of Chicago,
as trustee (the "Senior Trustee") and/or the subordinated indenture, dated as of
May 1, 1999 (the "Subordinated Indenture," and together with the Senior
Indenture, the "Indentures"), between the Company and Chase Manhattan Bank and
Trust Company, National Association, as trustee (the "Subordinated Trustee," and
together with the Senior Trustee, the "Trustees"). The Securities shall have
the maturity ranges, annual interest rates, redemption provisions and other
terms set forth in the Prospectus referred to below as it may be supplemented
from time to time. The Securities will be issued, and the terms thereof
established, from time to time by the Company in accordance with the Indentures
and the Administrative Procedure attached hereto as Xxxxx XX or as otherwise
agreed upon and, if applicable, will be specified in a related Terms Agreement.
1. The Company represents and warrants to, and agrees with, you as
of the date hereof, as of the date of each acceptance by the Company of an offer
to purchase the Securities (whether through you as agent or to you as
principal), as of the date of delivery of Securities (whether through you as
agent or to you as principal) (the date of each such delivery to you is referred
to herein as the "Time of Delivery"), and as of any other time that the
Registration Statement or the Prospectus shall be amended or supplemented (each
of the times referenced above is referred to herein as a "Representation Date"),
as follows:
(a) A registration statement on Form S-3 (Registration No. 333-55937)
in respect of the Securities has been filed with the Securities and Exchange
Commission (the "Commission") in the form heretofore delivered or to be
delivered to you, including all documents incorporated by reference in the
prospectus included therein (except for any statements in such documents which
are deemed under Rule 412 under the Securities Act of 1933, as amended (the
"Act"), not to be incorporated by reference in such prospectus), and such
registration statement in such form has been declared effective by the
Commission and no stop order suspending the effectiveness of such registration
statement has been issued and no proceeding for that purpose has been initiated
or threatened by the Commission (any preliminary prospectus included in such
registration statement being hereinafter called a "Preliminary Prospectus"; the
various parts of such registration statement, including all exhibits thereto but
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excluding Form T-1, each as amended at the time such part became effective,
being hereinafter collectively called the "Registration Statement", provided
that, if the Company files a related registration statement with the Commission
pursuant to Rule 462(b) under the Act (a "Rule 462(b) Registration Statement"),
all references to "Registration Statement" shall also be deemed to include the
Rule 462(b) Registration Statement; the prospectus (including, if applicable,
any prospectus supplement) relating to the Securities, in the form in which it
has most recently been filed, or transmitted for filing, with the Commission on
or prior to the date of this Agreement, being hereinafter called the
"Prospectus"; any reference herein to the Registration Statement, any
Preliminary Prospectus or the Prospectus shall be deemed to refer to and include
the documents incorporated by reference therein pursuant to the applicable form
under the Act as of the date of such Registration Statement, Preliminary
Prospectus or Prospectus, as the case may be; any reference to any amendment or
supplement to the Registration Statement, any Preliminary Prospectus or the
Prospectus shall be deemed to refer to and include any documents filed after the
date of such Registration Statement, Preliminary Prospectus or Prospectus, as
the case may be, under the Securities Exchange Act of 1934, as amended (the
"Exchange Act"), and incorporated therein by reference; and any reference to the
Prospectus as amended or supplemented shall be deemed to refer to the Prospectus
as each time amended or supplemented (including any applicable supplement to the
Prospectus that sets forth the terms of a particular issue of the Securities (a
"Pricing Supplement")) to relate to Securities sold pursuant to this Agreement,
in the form in which it is filed with, or transmitted for filing to, the
Commission pursuant to Rule 424 under the Act, including any documents
incorporated therein by reference as of the date of such filing or mailing).
For purposes of this Agreement, all references to the Registration Statement,
Preliminary Prospectus or Prospectus or any amendment or supplement thereto
shall be deemed to include any copy filed with the Commission pursuant to its
Electronic Data Gathering and Analysis Retrieval System ("XXXXX").
(b) The documents incorporated by reference in the Registration
Statement and Prospectus, when they became effective or were filed with the
Commission, as the case may be, conformed in all material respects to the
requirements of the Act or the Exchange Act, as applicable, and the rules and
regulations of the Commission thereunder, and none of such documents contained,
in the case of a registration statement which became effective under the Act, an
untrue statement of a material fact or omitted to state a material fact required
to be stated therein or necessary to make the statements therein not misleading,
and, in the case of other documents which were filed under the Act or the
Exchange Act with the Commission, an untrue statement of a material fact or
omitted to state a material fact necessary in order to make the statements
therein, in the light of the circumstances under which they were made, not
misleading, in each case after excluding any statement in any such document
which does not constitute part of the Registration Statement or the Prospectus
pursuant to Rule 412 under the Act; and any further documents so filed and
incorporated by reference in the Registration Statement or Prospectus, when such
documents become effective or are filed with the Commission, as the case may be,
will conform in all material respects to the requirements of the Act or the
Exchange Act, as applicable, and the rules and regulations of the Commission
thereunder and will not contain, in the case of a registration statement which
becomes effective under the Act, an untrue statement of a material fact or omit
to state a material fact required to be stated therein or necessary to make the
statements therein not misleading and, in the case of other documents which are
filed under the Act or the Exchange Act, an untrue statement of a material fact
or omit to state a material fact necessary to make the statements therein, in
the light of the
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circumstances under which they are made, not misleading; provided, however, that
this representation and warranty shall not apply to any statements or omissions
made in reliance upon and in conformity with information furnished in writing to
the Company by an Agent expressly for use in the Prospectus as amended or
supplemented to relate to a particular issuance of Securities.
(c) The Registration Statement and the Prospectus conform, and any
amendments or supplements thereto will conform, in all material respects to the
applicable requirements of the Act and the Trust Indenture Act of 1939, as
amended (the "Trust Indenture Act"), and the rules and regulations of the
Commission thereunder, and do not as of the date hereof and will not as of each
Representation Date, contain an untrue statement of a material fact or omit to
state a material fact required to be stated therein or necessary to make the
statements therein not misleading; provided, however, that this representation
and warranty shall not apply to any statements or omissions made in reliance
upon and in conformity with information furnished in writing to the Company by
an Agent expressly for use in the Prospectus as amended or supplemented to
relate to a particular issuance of Securities. Each Preliminary Prospectus and
the Prospectus delivered to you in connection with the offering of the
Securities are identical to any electronically filed copies thereof filed with
the Commission pursuant to XXXXX, except to the extent permitted by Regulations
S-T.
(d) Since the respective dates as of which information is given in
the Registration Statement and Prospectus, (i) there has not been any material
adverse change in or affecting the condition, financial or otherwise, business
affairs, or business prospects of the Company and its subsidiaries, taken as a
whole, otherwise than as set forth or contemplated in the Prospectus and (ii)
there have been no material transactions entered into by the Company or any of
its subsidiaries other than those in the ordinary course of business and other
than those which have been and are required to be disclosed in the Prospectus.
(e) Each of the Company and each Significant Subsidiary (as such term
is defined in Rule 1-02 of Regulation S-X promulgated under the Act) of the
Company (each, a "Significant Subsidiary") has been duly incorporated and is
validly existing as a corporation in good standing under the laws of its
jurisdiction of incorporation, with corporate power and authority to own its
properties and conduct its business as described in the Prospectus and has been
duly qualified as a foreign corporation for the transaction of business and is
in good standing under the laws of each other jurisdiction in which it owns or
leases substantial property, except to the extent that the failure to be so
qualified or to be in good standing would not have a material adverse effect on
the Company and its subsidiaries taken as a whole.
(f) The Company has an authorized capitalization as set forth in the
Prospectus, and all of the issued shares of capital stock of the Company and
each Significant Subsidiary have been duly and validly authorized and issued and
are fully paid and non-assessable, and, subject to the effect of any
transactions after the date hereof permitted by Section 1008 of the Senior
Indenture, all such shares of each Significant Subsidiary are owned directly or
indirectly by the Company, free and clear of all liens, encumbrances, security
interests or claims.
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(g) This Agreement and any Terms Agreement have been duly authorized,
executed and delivered by the Company; the Securities have been duly authorized,
and, when executed, authenticated and delivered pursuant to this Agreement, any
Terms Agreement and the applicable Indenture, such Securities will have been
duly executed, authenticated, issued and delivered and will constitute valid and
legally binding obligations of the Company enforceable in accordance with their
terms, subject, as to enforcement, to bankruptcy, insolvency, reorganization and
other laws of general applicability relating to or affecting creditors' rights
and to general equity principles and entitled to the benefits provided by such
Indenture; the Indentures have been duly authorized and qualified under the
Trust Indenture Act and constitute valid and legally binding instruments,
enforceable in accordance with their terms, subject, as to enforcement, to
bankruptcy, insolvency, reorganization and other laws of general applicability
relating to or affecting creditors' rights and to general equity principles; and
the Indentures conform and the Securities will conform to the descriptions
thereof in the Prospectus as amended or supplemented to relate to the
Securities.
(h) Neither the Company nor any Significant Subsidiary is in
violation of its charter or by-laws or in default in the performance or
observance of any obligation, agreement, covenant, or condition contained in any
contract, indenture, mortgage, deed of trust, loan agreement, credit agreement,
note, lease or other agreement or instrument to which the Company or such
Significant Subsidiary is a party or by which any of them may be bound or to
which the property or assets of the Company or such Significant Subsidiary is
subject which is reasonably likely to have a material adverse effect on the
condition (financial or other) or business, or materially affect the property or
assets, of the Company and its subsidiaries taken as a whole. The issue and sale
of the Securities and the compliance by the Company with all of the provisions
of the Securities, the Indentures, this Agreement and any Terms Agreement, and
the consummation of the transactions herein and therein contemplated will not
conflict with or result in a breach of any of the terms or provisions of, or
constitute a default under, any contract, indenture, mortgage, deed of trust,
loan agreement, credit agreement, note, lease or other agreement or instrument
to which the Company is a party or by which the Company is bound or to which any
of the property or assets of the Company is subject, nor will such action result
in any violation of the provisions of the Certificate of Incorporation, as
amended, or By-Laws of the Company or any statute or any order, rule or
regulation of any court or governmental agency or body having jurisdiction over
the Company or any of its properties; and no filing consent, approval,
authorization, order, registration or qualification of or with any court or
governmental agency or body is required for the solicitation of offers to
purchase Securities and the issue and sale of the Securities or the consummation
by the Company of the other transactions contemplated by this Agreement, any
Terms Agreement or the Indentures, except such as have been, or will have been
prior to the Closing Date (as defined in Section 3 hereof), obtained under the
Act or the Trust Indenture Act and such consents, approvals, authorizations,
registrations or qualifications as may be required under state securities or
Blue Sky laws in connection with the solicitation by you of offers to purchase
the Securities from the Company and with purchases of the Securities by you as
principals, as the case may be, both in the manner contemplated hereby.
(i) Except as set forth in the Prospectus, there is no action, suit
or proceeding to which the Company or any of its subsidiaries is a party pending
before or brought by any court, arbitrator or governmental body, nor is any such
action, suit or proceeding to the knowledge of the Company threatened, in
respect of which, in the judgment of the Company,
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there is any reasonable likelihood that it will result in a material adverse
change in the condition (financial or other) or business, or materially affect
the properties or assets, of the Company and its subsidiaries taken as a whole.
(j) The Company is not and, upon the issuance and sale of Securities
as herein contemplated, will not be an "investment company" within the meaning
of the Investment Company Act of 1940, as amended (the "1940 Act").
(k) The accountants who reported on the financial statements and any
required supporting schedules thereto included in the Registration Statement and
Prospectus are independent accountants as required by the Act and the rules and
regulations of the Commission thereunder.
(l) The Securities, when issued, authenticated and delivered pursuant
to the terms of this Agreement, will be excluded or exempted under the Commodity
Exchange Act.
(m) The Indentures conform and the Securities when issued will
conform in all material respects to the statements relating thereto contained in
the Prospectus and are substantially in the forms filed or incorporated by
reference, as the case may be, as exhibits to the Registration Statement.
(n) The Company has reviewed its operations and those of its
subsidiaries and any third parties with which the Company or any of its
subsidiaries has a material relationship to evaluate the extent to which the
business or operations of the Company or any of its subsidiaries will be
affected by the Year 2000 Problem. As a result of such review, the Company has
no reason to believe, and does not believe, that the Year 2000 Problem will have
a material adverse effect on the condition (financial or other), business
affairs or business prospects, or materially affect the properties or assets, of
the Company and its subsidiaries taken as a whole. The "Year 2000 Problem" as
used herein means any significant risk that computer hardware or software used
in the receipt, transmission, processing, manipulation, storage, retrieval,
retransmission or other utilization of data will not, in the case of dates or
time periods occurring after December 31, 1999, function at least as effectively
as in the case of dates or time periods occurring prior to January 1, 2000.
2. (a) On the basis of the representations and warranties, and
subject to the terms and conditions, herein set forth, each of the Agents hereby
severally agrees, as an agent of the Company, to use its reasonable best efforts
to solicit offers to purchase the Securities from the Company upon the terms and
conditions set forth in the Prospectus as amended or supplemented.
The Company reserves the right, in its sole discretion, to instruct
any or all of the Agents to suspend at any time, for any period of time or
permanently, the solicitation of offers to purchase the Securities. As soon as
practicable after receipt of instructions from the Company, the Agent or Agents
receiving such instructions will forthwith suspend solicitation of offers to
purchase Securities from the Company until such time as the Company has advised
such Agent or Agents that such solicitation may be resumed.
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Unless otherwise agreed to by the Company and such Agent, the Company
agrees to pay the presenting Agent (or jointly to two or more Agents if such
presentation is jointly made) a commission, at the time of settlement of each
sale of a Security by the Company as a result of a solicitation made by such
Agent, in an amount agreed to by the Company and such Agent within the following
ranges of percentage of the principal amount of such Security sold:
Fee Range as a Percentage
Range of Maturities of Principal Amount
------------------- -------------------
From 9 months to less than 12 months 0.125% - 0.425%
From 12 months to less than 18 months 0.150% - 0.450%
From 18 months to less than 24 months 0.200% - 0.500%
From 2 years to less than 3 years 0.250% - 0.550%
From 3 years to less than 4 years 0.350% - 0.650%
From 4 years to less than 5 years 0.450% - 0.750%
From 5 years to less than 6 years 0.500% - 0.800%
From 6 years to less than 7 years 0.550% - 0.850%
From 7 years up to 10 years 0.600% - 0.900%
From 10 years up to 15 years 0.625% - 0.925%
From 15 years up to 20 years 0.700% - 1.000%
From 20 years up to 30 years` 0.750% - 1.050%
Where the term of the Security is more than 30 years, the commission
shall be as agreed upon between the Company and the Agent at the time of sale.
Each Agent shall communicate to the Company, orally or in writing,
each offer to purchase Securities other than those rejected by such Agent. The
Company shall have the sole right to accept offers to purchase Securities and
may reject any proposed purchase of Securities as a whole or in part. Each of
the Agents shall have the right, in its discretion reasonably exercised, to
reject any offer received by it to purchase Securities, as a whole or in part,
and any such rejection by an Agent shall not be deemed a breach of its
agreements contained herein.
(b) Except to the extent obligated by any Terms Agreement executed by
an Agent, no such Agent shall have any obligation to purchase Securities as
principal. Any sale of Securities to any Agent as principal shall be made in
accordance with the terms of this Agreement and (unless the Company and such
Agent shall otherwise agree) a Terms Agreement which will provide for the sale
of such Securities to, and the purchase thereof by, such Agent. Each Terms
Agreement will take the form of either (i) a written agreement between you and
the Company which shall be substantially in the form of Annex I hereto or (ii)
an oral agreement between you and the Company confirmed in writing by you to the
Company in such form as may be mutually agreed to. Any Agent's commitment to
purchase Securities pursuant to any Terms Agreement or otherwise shall be deemed
to have been made on the basis of the representations and warranties of the
Company herein contained and shall be subject to the terms and conditions herein
set forth; provided that for purposes of any Terms Agreement all references in
this Agreement to "you" or "the Agents" shall be deemed to refer only to the
Agent or Agents party to such Terms Agreement. Each Terms Agreement shall
include a specification of the principal amount of Securities to be purchased by
an Agent pursuant thereto, the price to be paid to the
7
Company for such Securities, any provisions relating to rights of, and default
by, underwriters acting together with such Agent in the reoffering of the
Securities, and the Time of Delivery and place of delivery of and payment for
such Securities. Such Terms Agreement shall also specify any requirements for
officers' certificates, opinions of counsel and accountants' letters pursuant to
Section 4 hereof and any additional agreements pursuant to Section 5 hereof. In
connection with any purchase of Securities by an Agent as principal, such Agent
may utilize dealer groups and reallow commissions and discounts.
For each sale of Securities to an Agent as principal, the procedural
details relating to the issue and delivery of such Securities and payment
thereof shall be as set forth in the Administrative Procedure attached hereto as
Xxxxx XX (the "Procedure"), unless otherwise agreed to by the Agent and the
Company. For each such sale of Securities to an Agent as principal, the Company
agrees to pay such agent a commission (or grant an equivalent discount) as
provided in Section 2(a) hereof and in accordance with the schedule set forth
therein unless otherwise agreed to by the Agent and the Company.
(c) Procedural details relating to the issue and delivery of
Securities, the solicitation of offers to purchase, and purchases by any Agent
as principal of, Securities, and the payment in each case therefor, are set
forth in the Procedure. The provisions of the Procedure shall apply to all
transactions contemplated hereunder except to the extent otherwise expressly
covered by a Terms Agreement. Each of the Agents and the Company agrees to
perform the respective duties and obligations specifically provided to be
performed by each of the Agents and the Company in the Procedure as it may be
amended from time to time by written agreement between the Agents and the
Company.
(d) Each Agent agrees, with respect to any Security denominated in a
currency other than U.S. dollars, as agent, directly or indirectly, not to
solicit offers to purchase, and as principal under any Terms Agreement or
otherwise, directly or indirectly, not to offer, sell or deliver, such Security
in, or to residents of, the country issuing such currency (or if such Security
is denominated in a composite currency, in any country issuing a currency
comprising a portion of such composite currency), except as permitted by
applicable law.
3. The documents required to be delivered pursuant to Section 6
hereof shall be delivered at the offices of Xxxxxx, Xxxxxxxxxx & Xxxxxxxxx LLP,
000 Xxxxxxx Xxxxxx, Xxx Xxxxxxxxx, Xxxxxxxxxx, 00000 at 9:00 a.m., San Francisco
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 Securities are first sold
hereunder, such time and date being herein called the "Closing Date."
4. The Company covenants and agrees with you:
(a) To make no amendment or supplement to the Registration Statement
or the Prospectus prior to the Closing Date or after the date of any Terms
Agreement and prior to the related Time of Delivery which has been disapproved
by you promptly after reasonable notice thereof unless in the opinion of counsel
to the Company such amendment or supplement is required by law; to make no such
amendment or supplement, other than any Pricing Supplement
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relating to Securities not purchased through or by you, at any other time prior
to having afforded you a reasonable opportunity to review it; to file within the
time periods required by the Exchange Act and the regulations thereunder all
reports and any definitive proxy or information statements required to be filed
by the Company with the Commission pursuant to Section 13(a), 13(c), 14 or 15(d)
of the Exchange Act subsequent to the date of the Prospectus and for so long as
the delivery of a prospectus is required in connection with the offering or sale
of the Securities, and during such same period to advise you, promptly after it
receives notice thereof (i) of the time when any amendment to the Registration
Statement has been filed or become effective or any supplement to the Prospectus
or any amended Prospectus (other than any Pricing Supplement relating to
Securities not purchased through or by such Agent) has been filed with, or
transmitted for filing to, the Commission, (ii) of the issuance by the
Commission of any stop order or of any order preventing or suspending the use of
any prospectus relating to the Securities, (iii) of the suspension of the
qualification of the Securities for offering or sale in any jurisdiction, (iv)
of the initiation or threatening of any proceeding for any such purpose, or (v)
of any request by the Commission for the amendment or supplement of the
Registration Statement or Prospectus or for additional information; and, in the
event of the issuance of any such stop order or of any such order preventing or
suspending the use of any such prospectus or suspending any such qualification,
to use promptly its best efforts to obtain its withdrawal. In addition, the
Company shall notify you of any change in the rating assigned by any nationally
recognized statistical rating organization to the Securities or any other debt
securities of the Company, or the public announcement by any nationally
recognized statistical rating organization that it has under review or
surveillance, with possible negative implications, its rating of the Securities
or any such debt securities, or the withdrawal by any nationally recognized
statistical rating organization of its rating of the Securities or any such debt
securities.
(b) Promptly from time to time to take such action as you reasonably
may request to qualify the Securities for offering and sale under the securities
laws of such jurisdictions as you may request and to comply with such laws so as
to permit the continuance of sales and dealings therein for as long as may be
necessary to complete the distribution or sale of the Securities; provided,
however, that in connection therewith the Company shall not be required to
qualify as a foreign corporation or to file a general consent to service of
process in any jurisdiction.
(c) To furnish you with copies of the Registration Statement and each
amendment thereto, and with copies of the Prospectus and each amendment or
supplement thereto, other than any Pricing Supplement relating to Securities not
purchased through or by you, in the form in which it is filed with, or
transmitted for filing to, the Commission pursuant to Rule 424 under the Act,
both in such quantities as you may reasonably request from time to time; and, if
the delivery of a prospectus is required at any time in connection with the
offering or sale of the Securities (including Securities purchased from the
Company by any Agent as principal) and if at such time any event shall have
occurred as a result of which the Registration Statement as then amended or
supplemented would contain an untrue statement of a material fact or omit to
state a material fact required to be stated therein or necessary to make the
statements therein not misleading or any event shall have occurred as a result
of which the Prospectus as then amended or supplemented would include an untrue
statement of a material fact or omit to state any material fact necessary in
order to make the statements therein, in the light of the circumstances under
which they were made when such Prospectus is delivered, not misleading, or, if
for any
9
other reason it shall be necessary during such same period to amend or
supplement the Registration Statement or Prospectus or to file under the
Exchange Act any document incorporated by reference in the Registration
Statement or Prospectus in order to comply with the Act, the Exchange Act or the
Trust Indenture Act, to notify you and request you to suspend solicitation of
offers to purchase Securities from the Company, in your capacity as agents of
the Company and, if so notified, you shall forthwith cease such solicitations;
and if the Company shall decide to amend or supplement the Registration
Statement or the Prospectus as then amended or supplemented, other than by any
Pricing Supplement relating to Securities not purchased through or by you,, to
so advise you promptly by telephone (with confirmation in writing) and to
prepare and cause to be filed promptly with the Commission an amendment or
supplement to the Registration Statement or the Prospectus as then amended or
supplemented that will correct such statement or omission or effect such
compliance; provided, however, that if during such same period any Agent
continues to own Securities purchased from the Company by such Agent as
principal, the Company shall promptly prepare and file with the Commission such
an amendment or supplement. In such event, the Company shall furnish such
amendment or supplement to such Agent a reasonable amount of time prior to such
filing and will not file any such amendment or supplement to which the Agent
reasonably objects.
(d) To prepare with respect to Securities to be sold through or to
one or more Agents pursuant to this Agreement, a Pricing Supplement with respect
to the Securities in a form previously approved by the Agents. The Company shall
deliver such Pricing Supplement no later than 2:00 p.m., New York City time, on
the business day following the date of the Company's acceptance of the offer for
the purchase of the Securities and will file such Pricing Supplement pursuant to
Rule 424(b) under the Act not later than the time required by such rule.
(e) On or prior to the date on which there shall be released to the
general public interim financial statement information related to the Company
with respect to the first three quarters of any fiscal year or preliminary
financial statement information with respect to any fiscal year, the Company
shall furnish such information to you and shall cause the Prospectus to be
amended or supplemented to include such information with respect thereto and
corresponding information for the comparable period of the preceding fiscal
year, as well as such other information as shall be necessary for an
understanding thereof or shall be required by the Act or the regulations
thereunder. On or prior to the date on which there shall be released to the
general public financial information included or derived from the audited
consolidated financial statements of the Company for the preceding fiscal year,
the Company shall cause the Prospectus to be amended or supplemented to include
such audited consolidated financial statements and the report or reports, and
consent or consents to such inclusion, of the independent accountants with
respect thereto, as well as such other information and explanations as shall be
necessary for an understanding of such consolidated financial statements or as
shall be required by the Act and the regulations thereunder.
(f) That, from the date of any Terms Agreement or other agreement by
an Agent to purchase Securities as principal and continuing to and including the
related Time of Delivery, the Company will not, without the prior written
consent of such Agent or Agents, offer, sell, contract to sell or otherwise
dispose of any debt securities of the Company which mature more than nine months
after such Time of Delivery and which are substantially similar to the
Securities.
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(g) To make generally available to its security holders as soon as
practicable, but in any event not later than 90 days after the close of the
period covered thereby, an earnings statement of the Company and its
subsidiaries (which need not be audited) complying with Section 11(a) of the Act
and the rules and regulations of the Commission thereunder (including, at the
option of the Company, Rule 158) and covering each twelve-month period beginning
not later than the first day of the Company's fiscal quarter next following the
effective date of the Registration Statement or a post-effective amendment
thereto (within the meaning of Rule 158).
(h) During the period when this Agreement is in effect, to deliver to
you (i) as soon as they are available, copies of any reports and financial
statements the Company furnishes to or files with the Commission or any national
securities exchange on which any class of securities of the Company is listed;
and (ii) such additional information concerning the business and financial
condition of the Company as you may from time to time reasonably request (such
financial statements to be on a consolidated basis to the extent the accounts of
the Company and its subsidiaries are consolidated in reports furnished to the
Commission).
(i) That each acceptance by the Company of an offer to purchase
Securities hereunder (whether to one or more of the Agents as principal or
through an Agent as agent) shall be deemed to be an affirmation to such Agent or
Agents that the representations and warranties of the Company contained in or
made pursuant to this Agreement are true and correct as of the date of such
acceptance as though made at and as of such time, and an undertaking that such
representations and warranties will be true and correct as of the settlement
date for the Securities relating to such acceptance and as of the Time of
Delivery to such Agent(s) or to the purchaser or its agents, as the case may be,
as though made at and as of each such date (except that such representations and
warranties shall be deemed to relate to the Registration Statement and the
Prospectus as amended and supplemented relating to such Securities).
(j) That each time the Registration Statement or the Prospectus shall
be amended or supplemented (other than by an amendment or supplement relating
solely to a change in the terms of the Securities), each time a document filed
under the Act or the Exchange Act is incorporated by reference into the
Registration Statement or Prospectus, and each time, if so indicated in the
applicable Terms Agreement, the Company sells Securities to an Agent as
principal, the Company shall furnish or cause to be furnished forthwith to you a
certificate of officers of the Company satisfactory to you, dated the date of
such amendment, supplement, incorporation or Time of Delivery relating to such
sale, in form satisfactory to you in your reasonable judgment, to the effect
that the statements contained in the certificate referred to in Section 6(f)
hereof which were last furnished to you are true and correct at such date, as
though made at and as of such date (except that such statements shall be deemed
to relate to the Registration Statement and the Prospectus as amended and
supplemented to such time) or, in lieu of such certificate, certificates of the
same tenor as the certificates referred to in said Section 6(f) but modified to
relate to the Registration Statement and the Prospectus as amended and
supplemented to such date.
(k) That each time the Registration Statement or the Prospectus shall
be amended or supplemented (other than by an amendment or supplement relating
solely to a change in the terms of the Securities), each time a document filed
under the Act or the Exchange Act is incorporated by reference into the
Registration Statement or Prospectus, and each time, if
11
so indicated in the applicable Terms Agreement, the Company sells Securities to
an Agent as principal, the Company shall furnish or cause to be furnished
forthwith to you a written opinion of counsel for the Company, or other counsel
satisfactory to you in your reasonable judgment, dated the date of such
amendment, supplement, incorporation or Time of Delivery relating to such sale,
in form satisfactory to you in your reasonable judgment, to the effect that you
may rely on the opinion referred to in Section 6(c) hereof which was last
furnished to you to the same extent as though it were dated the date of such
letter authorizing reliance (except that statements in such last opinion shall
be deemed to relate to the Registration Statement and the Prospectus as amended
and supplemented to such date) or, in lieu of such opinion, an opinion of the
same tenor as the opinion referred to in Section 6(c) hereof but modified to
relate to the Registration Statement and the Prospectus as amended and
supplemented to such date.
(l) That each time the Registration Statement or the Prospectus shall
be amended or supplemented and each time that a document filed under the Act or
the Exchange Act is incorporated by reference into the Registration Statement or
Prospectus, in either case to set forth financial information included in or
derived from the Company's consolidated financial statements, or, if so
indicated in the applicable Terms Agreement, each time the Company sells
Securities to an Agent as principal, the Company shall cause its independent
public accountants forthwith to furnish you a letter, dated the date of such
amendment, supplement, incorporation or Time of Delivery relating to such sale,
in form satisfactory to you in your reasonable judgment, of the same tenor as
the letter referred to in Section 6(d) hereof but modified to relate to the
Registration Statement and the Prospectus as amended or supplemented to the date
of such letter, with such changes as may be necessary to reflect changes in the
financial statements and other information derived from the accounting records
of the Company, to the extent such financial statements and other information
are available as of a date not more than five business days prior to the date of
such letter; provided, however, that where such amendment, supplement or
document incorporated by reference only sets forth unaudited quarterly financial
information, the scope of such letter may be limited to relate to such unaudited
financial information unless any other accounting or financial information
included or incorporated by reference therein is of such a character that, in
your reasonable judgment, such letter should address such other information.
(m) That, in the event the Company determines to solicit offers to
purchase and sell the Securities to or through agents other than the Agents, the
Company shall provide the Agents prompt notice of such determination.
(n) To offer to any person who has agreed to purchase Securities as
the result of an offer to purchase solicited by such Agent the right to refuse
to purchase and pay for such Securities if, on the related settlement date fixed
pursuant to the Procedure, any condition set forth in Section 6(a), 6(e), 6(g)
or the preamble to Section 6 hereof shall not have been satisfied (it being
understood that the judgment of such person with respect to the impracticability
or inadvisability of such purchase of Securities shall be substituted, for
purposes of this Section 4(n), for the respective judgments of an Agent with
respect to certain matters referred to in such Sections 6(a), 6(e), 6(g) and the
preamble to Section 6, and that such Agent shall have no duty or obligation
whatsoever to exercise the judgment permitted under such Sections 6(a), 6(e),
6(g) and the preamble to Section 6 on behalf of any such person).
12
5. Unless otherwise provided in any applicable Terms Agreement, the
Company covenants and agrees with you that the Company will pay or cause to be
paid the following: (i) the fees and expenses of the Company's counsel and
accountants in connection with the registration of the Securities under the Act
and all other expenses in connection with the preparation, printing and filing
of the Registration Statement, any Preliminary Prospectus and the Prospectus and
amendments and supplements thereto and the mailing and delivering of copies
thereof to you; (ii) the reasonable fees and expenses of your counsel in
connection with the transactions contemplated hereunder; (iii) the reasonable
cost of printing or reproducing this Agreement, any Terms Agreement, any
Indenture, any Blue Sky and Legal Investment Memoranda and any other documents
in connection with the offering, purchase, sale and delivery of the Securities;
(iv) all reasonable expenses in connection with the qualification of the
Securities for offering and sale under state securities laws as provided in
Section 4(b) hereof, including reasonable fees and disbursements of your counsel
in connection with such qualification and in connection with the Blue Sky and
legal investment surveys; (v) any fees charged by security rating services for
rating the Securities; (vi) the cost of preparing the Securities; (vii) the fees
and expenses of any Trustee and any agent of any Trustee and the fees and
disbursements of counsel for any Trustee in connection with any Indenture and
the Securities; (viii) the fees and expenses of any Depositary (as defined in
the Indentures) and any nominees thereof in connection with the Securities; (ix)
any advertising expenses connected with the solicitation of offers to purchase
and the sale of Securities so long as such advertising expenses have been
approved by the Company; (x) the fees and expenses incurred in connection with
any listing by the Company of the Securities on a securities exchange, (xi) any
fees, including filing fees, in connection with any required review, by the
National Association of Securities Dealers, Inc., and (xii) all other reasonable
costs and expenses incident to the performance of its obligations hereunder
which are not otherwise specifically provided for in this Section. Each Agent
shall pay all other fees and expenses incurred by such Agent.
6. The obligations of each Agent, as agent of the Company, to
solicit offers to purchase the Securities, the obligation of each Agent to
purchase Securities as principal pursuant to any Terms Agreement or otherwise,
and the obligation of any purchasers of Securities to purchase securities sold
through an Agent as agent for the Company shall in each case be subject to the
condition that all representations and warranties and other statements of the
Company herein are true and correct at and as of the Closing Date, the date of
each such solicitation, any settlement date related to the acceptance of such an
offer, and each Time of Delivery, the condition that the Company shall have
performed all of its obligations hereunder theretofore in each case to be
performed and the following additional conditions:
(a) The Registration Statement (including any related Rule 462(b)
Registration Statement) has become effective under the Act. No stop order
suspending the effectiveness of the Registration Statement shall have been
issued and no proceeding for that purpose shall have been initiated or
threatened by the Commission; and all requests for additional information on the
part of the Commission shall have been complied with to your reasonable
satisfaction;
(b) Your counsel shall have furnished to you such opinion or
opinions, dated the Closing Date, with respect to the incorporation of the
Company, the validity of the Indentures, the Securities, the Registration
Statement, the Prospectus as amended or
13
supplemented and other related matters as you may reasonably request, and such
counsel shall have received such papers and information as you may reasonably
request to enable them to pass upon such matters;
(c) Counsel for the Company satisfactory to you (which may be inside
or outside counsel) shall have furnished to you their written opinion, dated the
Closing Date or any applicable date required by Section 4(k), as the case may
be, in form and substance satisfactory to you, to the effect that:
(i) Each of the Company and each Significant Subsidiary has
been duly incorporated and is validly existing as a corporation in
good standing under the laws of the jurisdiction of its incorporation
with corporate power and authority to own its properties and conduct
its business as described in the Prospectus;
(ii) Such counsel does not know of any litigation or any
governmental proceeding instituted or threatened against the Company
or any of its consolidated subsidiaries which in such counsel's
opinion would individually or in the aggregate reasonably be expected
to have a material adverse effect on the business or financial
position of the Company and its subsidiaries taken as a whole or be
required to be disclosed in the Registration Statement which is not
disclosed and accurately summarized in the Prospectus;
(iii) This Agreement (and any applicable Terms Agreement) has
been duly authorized, executed and delivered by the Company;
(iv) The Securities have been duly authorized and, when the
terms of any Securities have been established in accordance with the
Indentures and such Securities have been duly executed, issued and
delivered by the Company and authenticated by the applicable Trustee,
such Securities will constitute valid and legally binding obligations
of the Company enforceable in accordance with their terms, subject, as
to enforcement, to bankruptcy, insolvency, reorganization and other
laws of general applicability relating to or affecting creditors'
rights and to general equity principles, and such Securities are
entitled to the benefits provided by the applicable Indenture; and the
Indentures conform and the Securities will conform in all material
respects to the descriptions thereof in the Prospectus;
(v) The Indentures have been duly authorized, executed and
delivered by the Company and constitute valid and legally binding
obligations of the Company, enforceable in accordance with their
terms, subject, as to enforcement, to bankruptcy, insolvency,
reorganization, arrangement, fraudulent conveyance, moratorium or
other laws relating to or affecting creditors' rights generally, and
to general principles of equity, including without limitation concepts
of materiality, reasonableness, good faith and fair dealing, and the
possible unavailability of specific performance or injunctive relief,
regardless of whether considered in a proceeding in equity or at law;
and the Indentures have been duly qualified under the Trust Indenture
Act;
14
(vi) The issue and sale of the Securities and the compliance
by the Company with all of the provisions of the Securities, the
Indentures, this Agreement and any Terms Agreement, and the
consummation of the transactions herein and therein contemplated, will
not conflict with or result in a breach of any of the terms or
provisions of, or constitute a default under, any agreement or
instrument known to such counsel to which the Company is a party or by
which the Company is bound, which conflict, breach or default, if any,
would individually or in the aggregate have a material adverse effect
on the business or financial position of the Company and its
subsidiaries taken as a whole; nor will such action result in any
violation of the provisions of the Certificate of Incorporation or the
By-Laws of the Company or to such counsel's knowledge, any statute of
the United States of America or the Delaware General Corporation Law
or any rule or regulation thereunder (provided that no opinion need be
expressed in this paragraph as to compliance with the Act, the Trust
Indenture Act, the Exchange Act, the Commodity Exchange Act (and the
rules and regulations of the Commodity Futures Trading Commission
thereunder) or the Delaware Securities Act, or with the Bankruptcy
Code of 1978, as amended, with respect to any proceeding in which the
Company is the debtor) or, to such counsel's knowledge, any order of
any court or governmental agency or body of the United States of
America; and no filing, consent, approval, authorization, order,
registration or qualification of or with any such court or
governmental agency or body is required for the issue and sale of the
Securities by the Company or the consummation by the Company of the
other transactions contemplated by this Agreement or any Terms
Agreement or the Indentures, except such as have been obtained under
the Act and the Trust Indenture Act and such consents, approvals,
authorizations, registrations or qualifications as may be required
under Delaware securities laws or Blue Sky laws in connection with the
issue and sale of the Securities;
(vii) The Registration Statement has been declared effective
under the Act, any required filing of the Prospectus pursuant to Rule
424(b) has been made in accordance therewith and, to the best of such
counsel's knowledge, no stop order suspending the effectiveness of the
Registration Statement has been issued under the Act and no
proceedings for that purpose have been instituted or are pending or
threatened under Section 8(d) of the Act;
(viii) The documents incorporated by reference in the
Prospectus (other than the financial statements and related schedules
and other financial data therein, as to which such counsel need
express no opinion or belief), when they were filed with the
Commission, complied as to form in all material respects with the
requirements of the Act or the Exchange Act and the rules and
regulations of the Commission thereunder;
(ix) The Registration Statement, as of the date on which any
part thereof became effective, and the Prospectus, as of its date or
the date of such opinion (other than the financial statements and
related schedules and other financial data therein, as to which such
counsel need express no opinion or belief)
15
complied or complies as to form in all material respects with the
requirements of the Act and the Trust Indenture Act and the rules and
regulations thereunder;
(x) The Company is not, and upon the issuance and sale of the
Securities as described in the Prospectus will not be, an "investment
company" under the 1940 Act;
(xi) The information in the Prospectus under the captions
"Description of the Debt Securities", "Description of Notes,"
"Supplemental Plan of Distribution" and "Certain United States Federal
Income Tax Consequences" to the extent that it constitutes matters of
law and legal conclusions and to the extent it summarizes the
documents referred to therein, has been reviewed by such counsel and
is correct in all material respects; and
(xii) With respect to any opinion furnished to you at a Time of
Delivery, the Securities, when issued, authenticated and delivered
pursuant to the terms of this Agreement, will be excluded or exempted
under the Commodity Exchange Act.
In addition, such counsel shall state that while they make no
representation that they have independently verified the accuracy or
completeness of the information contained in the documents incorporated by
reference in the Prospectus, they have no reason to believe that any of such
documents (other than the financial statements and related schedules and other
financial data therein, as to which they need express no opinion or belief),
when they were so filed, contained an untrue statement of a material fact or
omitted to state a material fact necessary in order to make the statements
therein, in the light of the circumstances under which they were made when such
documents were so filed, not misleading, in each case after excluding any
statement in any such documents which does not constitute part of the
Registration Statement or Prospectus pursuant to Rule 412 of Regulation C under
the Act. Further, such counsel shall state that while they make no
representation that they have independently verified the accuracy or
completeness of the information contained in the Registration Statement and the
Prospectus (other than as set forth in subsection (xi) above), they have no
reason to believe that any part of the Registration Statement, as of the date on
which such part became effective, or the Prospectus, as of its date or the date
of such opinion (other than the financial statements and related schedules and
other financial data therein, as to which they need express no opinion or
belief), contained or contains an untrue statement of a material fact or omitted
or omits to state a material fact required to be stated therein or necessary to
make the statements therein not misleading, in each case after excluding any
statement in any such document which does not constitute part of the
Registration Statement or the Prospectus pursuant to Rule 412 of Regulation C
under the Act; and they do not know of any contracts or other documents of a
character required to be filed as an exhibit to the Registration Statement or
required to be incorporated by reference into the Prospectus or required to be
described in the Registration Statement or the Prospectus which are not filed or
incorporated by reference or described as required;
(d) 9:00 a.m., San Francisco time, on the Closing Date or on any
applicable date required by Section 4(l), as the case may be, the independent
accountants who have certified the financial statements of the Company and its
subsidiaries included or
16
incorporated by reference in the Registration Statement shall have furnished to
you a letter, dated the Closing Date or such applicable date, in form and
substance satisfactory to you, to the effect set forth in Annex III hereto;
(e) Since the respective dates as of which information is given in
the Prospectus as amended or supplemented and (i) prior to the Closing Date,
there shall not have been any change in or affecting the condition, financial or
otherwise, business affairs, and business prospects of the Company and its
subsidiaries, taken as a whole, otherwise than as set forth or contemplated in
the Prospectus, as amended or supplemented through the date of this Agreement
and (ii) prior to each Time of Delivery, there shall not have been any such
change, otherwise than as set forth or contemplated in the Prospectus as amended
and supplemented through the date of each corresponding Terms Agreement, the
effect of which in either clause (i) or (ii) is in your judgment so material and
adverse as to make it impracticable or inadvisable to proceed with your
solicitation of offers to purchase Securities from the Company or your purchase
of Securities from the Company as principal, as the case may be;
(f) The Company shall have furnished or caused to be furnished to
you a certificate of officers of the Company reasonably satisfactory to you,
dated the Closing Date or any applicable date required by Section 4(j), as the
case may be, 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 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 to the matters set
forth in subsections (a) and (e) of this Section 6, and as to such other matters
as you may reasonably request; and
(g) During the period in which you are soliciting offers to purchase
Securities, and during the period between the date of any Terms Agreement and
the related Time of Delivery, there shall not have occurred any of the
following: (i) a suspension or material limitation in trading in securities
generally on the New York Stock Exchange; (ii) a suspension or material
limitation in the trading of securities of the Company on the New York Stock
Exchange; (iii) a general moratorium on commercial banking activities in New
York declared by either Federal or New York State authorities; (iv) the outbreak
or escalation of hostilities involving the United States or the declaration by
the United States of a national emergency or war, if the effect of any such
event specified in clauses (i), (ii), (iii) or (iv) in your judgment makes it
impracticable or inadvisable to proceed with your solicitation of offers to
purchase Securities or your purchase of Securities from the Company as
principal, pursuant to the applicable Terms Agreement or otherwise, as the case
may be; or (v) any downgrading in the rating accorded the Company's debt
securities by any nationally recognized statistical rating organization, or a
public announcement by either such organization that it has under surveillance
or review, with possible negative implications, its rating of any of the
Company's debt securities.
7. (a) The Company will indemnify and hold you harmless against any
losses, claims, damages or liabilities, joint or several, to which you may
become subject, under the Act or otherwise, insofar as such losses, claims,
damages or liabilities (or actions in respect thereof) arise out of or are based
upon an untrue statement or alleged untrue statement of a material fact
contained in any Preliminary Prospectus, the Registration Statement, the
Prospectus as amended or supplemented, and any other prospectus relating to the
Securities or any
17
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 each Agent for any legal or other expenses reasonably incurred by it
in connection with investigating or defending any such action or claim as such
expenses are incurred; provided, however, that the Company shall not be liable
in any such case to the extent that any such loss, claim, damage or liability
arises out of or is based upon an untrue statement or alleged untrue statement
or omission or alleged omission made in any Preliminary Prospectus, the
Registration Statement, the Prospectus as amended or supplemented and any other
prospectus relating to the Securities or any amendment or supplement thereto, in
each case in reliance upon and in conformity with written information furnished
to the Company by an Agent expressly for use in the Prospectus as amended or
supplemented relating to such Securities; and provided, further, that the
Company shall not be liable to any Agent under the indemnity agreement in this
subsection (a) with respect to any Preliminary Prospectus to the extent that any
such loss, claim, damage or liability results from the fact that such Agent sold
Securities to a person to whom there was not sent or given, at or prior to the
written confirmation of such sale, a copy of the Prospectus (excluding documents
incorporated by reference) or of the Prospectus as then amended or supplemented
(excluding documents incorporated by reference) if the Company has previously
furnished copies thereof to such Agent and the untrue statement or omission of a
material fact contained in the Preliminary Prospectus was corrected in such
Prospectus (or any amendment or supplement thereto).
(b) Each Agent will indemnify and hold harmless the Company against
any losses, claims, damages or liabilities to which the Company may become
subject, under the Act or otherwise, insofar as such losses, claims, damages or
liabilities (or actions in respect thereof) arise out of or are based upon an
untrue statement or alleged untrue statement of a material fact contained in any
Preliminary Prospectus, the Registration Statement, the Prospectus as amended or
supplemented and any other prospectus relating to the Securities, or any
amendment or supplement thereto, or arise out of or are based upon the omission
or alleged omission to state therein a material fact required to be stated
therein or necessary to make the statements therein not misleading, in each case
to the extent, but only to the extent, that such untrue statement or alleged
untrue statement or omission or alleged omission was made in any Preliminary
Prospectus, the Registration Statement, the Prospectus as amended or
supplemented and any other prospectus relating to the Securities or any
amendment or supplement thereto, in each case in reliance upon and in conformity
with written information furnished to the Company by such Agent expressly for
use therein; and will reimburse the Company for any legal or other expenses
reasonably incurred by the Company in connection with investigating or defending
any such action or claim .
(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; provided, however, the omission so to
notify the indemnifying party shall not relieve it from any liability which it
may have to any indemnified party unless such failure to give prompt notice has
materially prejudiced the indemnifying party's ability to defend such claim; and
provided, further, that the failure to notify the indemnifying party shall not
relieve it from any liability which it may have to an indemnified party
otherwise than under this Section 7. In case any such action shall be brought
against any
18
indemnified party and it shall notify the indemnifying party of the commencement
thereof, the indemnifying party shall be entitled to participate therein and, to
the extent that it shall wish, jointly with any other indemnifying party
similarly notified, to assume the defense thereof, with counsel satisfactory to
such indemnified party (who shall not, except with the consent of the
indemnified party, be counsel to the indemnifying party), and, after notice from
the indemnifying party to such indemnified party of its election so to assume
the defense thereof, the indemnifying party shall not be liable to such
indemnified party under such subsection for any legal expenses of other counsel
or any other expenses, in each case, subsequently incurred by such indemnified
party, in connection with the defense thereof other than reasonable costs of
investigation; provided, that an indemnified party shall have the right to
employ its own counsel in any such action, but the fees, expenses and other
charges of such counsel for the indemnified party will be at the expense of such
indemnified party unless (i) the employment of counsel by the indemnified party
has been authorized in writing by the indemnifying party, (ii) the indemnified
party has reasonably concluded (based upon advice of counsel to the indemnified
party) that there may be legal defenses available to it or other indemnified
parties that are different from or in addition to those available to the
indemnifying party, (iii) a conflict or potential conflict exists (based upon
advice of counsel to the indemnified party) between the indemnified party and
the indemnifying party (in which case the indemnifying party will not have the
right to direct the defense of such action on behalf of the indemnified party)
or (iv) the indemnifying party has not in fact employed counsel reasonably
satisfactory to the indemnified party to assume the defense of such action
within a reasonable time after receiving notice of the commencement of the
action, in each of which cases the reasonable fees, disbursements and other
charges of counsel will be at the expense of the indemnifying party or parties.
It is understood that the indemnifying party or parties shall not, in connection
with any proceeding or related proceedings in the same jurisdiction, be liable
for the reasonable fees, disbursements and other charges of more than one
separate firm of attorneys (in addition to any local counsel) at any one time
for all such indemnified party or parties. Each indemnified party, as a
condition of the indemnity agreements contained in Sections 7(a) and 7(b), shall
use all reasonable efforts to cooperate with the indemnifying party in the
defense of any such action or claim. No indemnifying party shall be liable for
any settlement of any such action effected without its written consent (which
consent shall not be unreasonably withheld), but if settled with its written
consent or if there be a final judgment for the plaintiff in any such action,
the indemnifying party agrees to indemnify and hold harmless any indemnified
party from and against any loss or liability by reason of such settlement or
judgment. No indemnifying party shall, without the written consent of the
indemnified party, effect the settlement or compromise of, or consent to the
entry of any judgment with respect to, any pending or threatened action or claim
in respect of which indemnification or contribution may be sought hereunder
(whether or not the indemnified party is an actual or potential party to such
action or claim) unless such settlement, compromise or judgment (i) includes an
unconditional release of the indemnified party from all liability arising out of
such action or claim and (ii) does not include a statement as to, or an
admission of, fault, culpability or a failure to act, by or on behalf of any
indemnified party.
(d) If the indemnification provided for in this Section 7 is
unavailable to or insufficient to hold harmless an indemnified party under
subsection (a) 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) in such
19
proportion as is appropriate to reflect the relative benefits received by the
Company on the one hand and the contributing Agent on the other from the
offering of the Securities to which such loss, claim, damage or liability (or
action in respect thereof) relates. If the allocation provided by the
immediately preceding sentence is not permitted by applicable law, then each
indemnifying party shall contribute to such amount paid or payable by such
indemnified party in such proportion as is appropriate to reflect not only such
relative benefi ts but also the relative fault of the Company on the one hand
and the contributing Agent on the other in connection with the statements or
omissions which resulted in such losses, claims, damages or liabilities (or
actions in respect thereof), as well as any other relevant equitable
considerations. The relative benefits received by the Company on the one hand
and the contributing Agent on the other shall be deemed to be in the same
proportion as the total net proceeds from the sale of such Securities (before
deducting expenses) received by the Company bear to the total commissions or
discounts received by the contributing Agent in respect thereof. The relative
fault shall be determined by reference to, among other things, whether the
untrue or alleged untrue statement of a material fact or the omission or alleged
omission to state a material fact required to be stated therein or necessary in
order to make the statements therein not misleading relates to information
supplied by the Company on the one hand or by the contributing Agent on the
other and the parties' relative intent, knowledge, access to information and
opportunity to correct or prevent such statement or omission. The Company and
the contributing Agent agree that it would not be just and equitable if
contribution pursuant to this subsection (d) were determined by pro rata
allocation or by any other method of allocation which does not take account of
the equitable considerations referred to above in this subsection (d). The
amount paid or payable by an indemnified party as a result of the losses,
claims, damages or liabilities (or actions in respect thereof) referred to above
in this subsection (d) shall be deemed to include any legal or other expenses
reasonably incurred by such indemnified party in connection with investigating
or defending any such action or claim. Notwithstanding the provisions of this
subsection (d), no Agent shall be required to contribute any amount in excess of
the amount by which the total price at which the Securities that were the
subject of the claim for indemnification purchased by or through such Agent were
sold exceeds the amount of any damages which such Agent has otherwise been
required to pay by reason of such untrue or alleged untrue statement or omission
or alleged omission. No person guilty of fraudulent misrepresentation (within
the meaning of Section 11(f) of the Act) shall be entitled to contribution from
any person who was not guilty of such fraudulent misrepresentation. The
respective obligations of the Agents to contribute pursuant to this Section 7(d)
are several, and not joint.
(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 the Act; and each Agent's obligations 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 the Act.
8. In soliciting offers by others to purchase Securities from the
Company, each Agent is acting solely as an 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 Securities from
the Company was solicited by such Agent and has been
20
accepted by the Company, but such Agent shall not have any liability to the
Company in the event such purchase for any reason is not consummated. If the
Company shall default on its obligation to deliver Securities to a purchaser
whose offer it has accepted, the Company shall hold each Agent harmless against
any loss, claim or damage arising from or as a result of such default by the
Company.
9. The respective indemnities, agreements, representations,
warranties and other statements by you and the Company set forth in or 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 of you or the Company or any of your or its officers or directors or any
controlling person, and shall survive each delivery of and payment for any of
the Securities.
10. Except as specifically set forth below, the provisions of this
Agreement may be suspended or terminated at any time by the Company as to any or
all Agents or by any Agent insofar as this Agreement relates to such Agent, upon
the giving of written notice of such suspension or termination to the other
parties hereto. In the event of any such suspension or termination, no party
shall have any liability to the other party hereto, except as provided in the
third paragraph of Section 2(a), Section 4(g), Section 5, Section 7, Section 8
and Section 9 and except that, if at the time of such suspension or termination,
an offer for the purchase of Securities shall have been accepted by the Company
but the delivery of the Securities relating thereto to the purchaser or his
agent shall not yet have occurred, the Company shall have the obligations
provided in subsections (c), (d), (e), (f), (g), (h), (j), (k), (l) and (m) of
Section 4. In addition, if any such termination of this Agreement shall occur at
a time when any Agent shall own any of the Securities purchased from the Company
with the intention of reselling them, the obligations of the Company under
Section 4 shall also remain in effect so long as such Agent owns any of such
Securities.
11. Except as otherwise specifically provided herein or in the
Administrative Procedure, all statements, requests, notices and advices
hereunder shall be in writing, or by telephone if promptly confirmed in writing,
and if to Chase Securities Inc., shall be sufficient in all respects when
delivered or sent by facsimile transmission or registered mail to Chase
Securities Inc., 000 Xxxx Xxxxxx, 0xx Xxxxx, Xxx Xxxx, Xxx Xxxx 00000,
Attention: Medium-Term Note Desk, facsimile (000) 000-0000, telephone (212) 834-
4421, except that notices pursuant to Section 7 shall also be sent to 0 Xxxxx
Xxxxxxxxx Xxxxx, 00xx Xxxxx, Xxx Xxxx, Xxx Xxxx 00000, Attention: Legal
Department; if to Credit Suisse First Boston Corporation, shall be sufficient in
all respects when delivered or sent by facsimile transmission or registered mail
to , Xxxxxx Xxxxxxx Xxxxxx, Xxx Xxxx, Xxx Xxxx 00000, Facsimile Transmission No.
000-000-0000, Attention: Short and Medium-Term Finance; if to Xxxxxxx, Xxxxx &
Co., shall be sufficient in all respects when delivered or sent by facsimile
transmission or registered mail to 00 Xxxxx Xxxxxx Xxx Xxxx, Xxx Xxxx 00000,
Facsimile Transmission No. 000-000-0000, Attention: Xxx Xxxxxxxxxxx; if to
Xxxxxx Brothers, Inc., shall be sufficient in all respects when delivered or
sent by facsimile transmission or registered mail to 3 World Financial Center,
12th Floor, New York, NY 10285, Facsimile Transmission No. 000-000-0000,
Attention: Medium-Term Note Department; and if to the Company shall be
sufficient in all respects when delivered or sent by facsimile transmission or
registered mail to Providian Financial Corporation, 201
21
Mission Street, San Francisco, California 94105, Facsimile Transmission No.
(000) 000-0000, Attention: Treasurer.
12. This Agreement and any Terms Agreement shall be binding upon, and
inure solely to the benefit of, each of you 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 of you or the Company,
and your respective personal representatives, successors and assigns, and no
other person shall acquire or have any right under or by virtue of this
Agreement or any Terms Agreement. No purchaser of any of the Securities through
or from any of you shall be deemed a successor or assign by reason of such
purchase.
13. This Agreement and any Terms Agreement shall be governed by, and
construed in accordance with, the laws of the State of New York.
14. Time shall be of the essence in this Agreement and any Terms
Agreement.
15. This Agreement and any Terms Agreement may be executed by any one
or more of the parties hereto and thereto in any number of counterparts, each of
which shall be an original, but all of such respective counterparts shall
together constitute one and the same instrument.
22
If the foregoing is in accordance with your understanding, please
sign and return to us five counterparts hereof, whereupon this letter and the
acceptance by you thereof shall constitute a binding agreement between the
Company and each of you in accordance with its terms.
Very truly yours,
PROVIDIAN FINANCIAL CORPORATION
By: /s/ Xxxxx X. Xxxxxxx
_______________________________
Name: Xxxxx X. Xxxxxxx
Title: Executive Vice President
Accepted in New York, New York, as of the date hereof:
CHASE SECURITIES INC.
By: /s/ Xxxxxxx Xxxxxxx
__________________________________
Name: Xxxxxxx Xxxxxxx
Title: Managing Director
CREDIT SUISSE FIRST BOSTON CORPORATION
By: /s/ Xxxxx X. Xxxxx
__________________________________
Name: Xxxxx X. Xxxxx
Title: Authorized Signatory
XXXXXXX, XXXXX & CO.
By: /s/ Xxxxxxx, Xxxxx & Co.
__________________________________
(Xxxxxxx, Xxxxx & Co.)
XXXXXX BROTHERS INC.
By: /s/ Xxxxx X. Xxxxx
__________________________________
Name: Xxxxx X. Xxxxx
Title: Managing Director
23
ANNEX I
-------
Providian Financial Corporation
TERMS AGREEMENT
---------------
__________ __, ____
Chase Securities Inc.
000 Xxxx Xxxxxx
Xxx Xxxx, XX 00000
Credit Suisse First Boston Corporation
Xxxxxx Xxxxxxx Xxxxxx
Xxx Xxxx, XX 00000
Xxxxxxx, Xxxxx & Co.
00 Xxxxx Xxxxxx
Xxx Xxxx, XX 00000
Xxxxxx Brothers Inc.
0 Xxxxx Xxxxxxxxx Xxxxxx, 00xx Xxxxx
Xxx Xxxx, XX 00000
Dear Sirs:
Providian Financial Corporation (the "Company") proposes, subject to
the terms and conditions stated herein and in the Distribution Agreement, dated
May 14, 1999 (the "Distribution Agreement"), between the Company and Chase
Securities Inc., Credit Suisse First Boston Corporation, Xxxxxxx, Xxxxx & Co.
and Xxxxxx Brothers Inc. to issue and sell to you the securities specified in
the Schedule hereto (the "Purchased Securities"). Each of the provisions of the
Distribution Agreement not specifically related to the solicitation by such
firms, as agents of the Company, of offers to purchase Securities is
incorporated herein by reference in its entirety, and shall be deemed to be part
of this Terms Agreement to the same extent as if such provisions had been set
forth in full herein, provided that for purposes of this Terms Agreement all
references in the Distribution Agreement to "you" or "the Agents" shall be
deemed to refer to you alone. Nothing contained herein or in the Distribution
Agreement shall make you an agent of the Company or make you subject to the
provisions therein relating to the solicitation of offers to purchase securities
from the Company, solely by virtue of your 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 with respect to the Prospectus in Section 1 of the
Distribution Agreement shall be deemed to be a representation and warranty as of
the date of the Distribution Agreement in relation to the Prospectus (as therein
defined), and also a representation and warranty as of the
date of this Terms Agreement in relation to the Prospectus as amended and
supplemented to relate to the Purchased Securities.
An amendment to the Registration Statement, or a supplement to the
Prospectus, as the case may be, relating to the Purchased Securities, in the
form heretofore delivered to you is now proposed to be filed with the
Commission.
Subject to the terms and conditions set forth herein and in the
Distribution Agreement incorporated herein by reference, the Company agrees to
issue and sell to you and you severally agree to purchase from the Company the
Purchased Securities, at the time and place, in the principal amount set forth
opposite your names and at the purchase price set forth in the Schedule hereto.
You may terminate this Terms Agreement, by written notice from all of
you to the Company, at any time at or prior to the Time of Delivery, if any
condition set forth in Section 6 of the Distribution Agreement shall not have
been satisfied when and as required to be satisfied, and such termination shall
be without liability of any party to any other party except as provided in the
following sentence and in Section 5 of the Distribution Agreement and except
that Sections 4(g), 5, 7 and 9 of the Distribution Agreement shall survive such
termination and remain in full force and effect. If you terminate this Terms
Agreement in accordance with the preceding sentence, the Company shall reimburse
you for all of your out-of-pocket expenses, including the reasonable fees and
disbursements of your counsel.
If the foregoing is in accordance with your understanding, please sign
and return to us five counterparts hereof, and upon acceptance by you, this
letter, including those provisions of the Distribution Agreement incorporated
herein by reference, shall constitute a binding agreement between you and the
Company.
PROVIDIAN FINANCIAL CORPORATION
By: ___________________________________
Name:
Title:
Accepted as of the date hereof:
CHASE SECURITIES INC.
By:___________________________
Name:
Title:
I-2
CREDIT SUISSE FIRST BOSTON CORPORATION
By:_____________________________
Name:
Title:
XXXXXXX, XXXXX & CO.
By:_____________________________
(Xxxxxxx, Xxxxx & Co.)
XXXXXX BROTHERS INC.
By:_____________________________
Name:
Title:
I-3
Schedule to Annex I
Agent Allocation:
----------------
Principal Amount
Name of Purchased Securities
---- -----------------------
[ ]....................... $[ ]
[ ]....................... $[ ]
[ ]....................... $[ ]
[ ]....................... $[ ]
[ ]....................... $[ ]
Total............................. $[ ]
Title of Purchased Securities:
Medium-Term Notes, Series A [ % [Senior] [Subordinated] Notes due ]
Specified Currency:
Aggregate principal amount:
[$ or units of other Specified Currency]
[Price to Public:]
Purchase Price:
% of the principal amount of the Purchased
Securities, plus accrued interest from to
[and accrued amortization, if any, from to ]
Specified funds for payment of purchase price:
[New York Clearing House] [same day] funds
Rank:
Indenture:
[Senior Indenture, dated as of May 1, 1999, as amended or supplemented to
the date hereof, between the Company and The First National Bank of
Chicago, as trustee.] [Subordinated Indenture, dated as of May 1, 1999, as
amended or supplemented to the date hereof, between the Company and Chase
Manhattan Bank and Trust Company, National Association, as trustee.]
I-4
Maturity:
Denominations (if other than U.S. dollars):
Interest Rate:
[ %] [Specify floating rate provisions]
Interest Payment Dates:
[months and dates]
[Amortizing Security:
Initial Principal Repayment Date:
Amortization Schedule:]
[Interest Rate Reset:
Optional Reset Date(s):
Basis for Interest Rate Reset:]
[Extension of Maturity:
Extension Period(s):
Final Maturity Date:
Basis for Interest Rate [During Extension]:]
[Renewal of Maturity:
Renewal Period(s):
Final Maturity Date:
Basis for Interest Rate [During Renewal]:]
Time of Delivery:
Closing Location:
Documents to be Delivered:
The following documents referred to in the Distribution Agreement shall be
delivered:
[(1) The officers' certificate referred to in Section 4(j).]
I-5
[(2) The opinion referred to in Section 4(k).]
[(3) The accountants' letter referred to in Section 4(l).]
Syndicate Provisions:
[Set forth any provisions relating to underwriters' default and step-
up of amounts to be purchased by underwriters acting with ___________________.]
Other Provisions:
I-6
XXXXX XX
--------
PROVIDIAN FINANCIAL CORPORATION
Administrative Procedure
------------------------
This Administrative Procedure relates to the Securities defined in the
Distribution Agreement, dated May 14, 1999 (the "Distribution Agreement"),
between Providian Financial Corporation (the "Company") and Chase Securities
Inc., Credit Suisse First Boston Corporation, Xxxxxxx, Xxxxx & Co., and Xxxxxx
Brothers Inc., as agents of the Company (together, the "Agents"), to which this
Administrative Procedure is attached as Annex II. Defined terms used herein and
not defined herein shall have the meanings given such terms in the Distribution
Agreement, the Prospectus, as amended or supplemented, or the Indentures. To
the extent any procedure set forth below conflicts with the provisions of the
Securities, the Indentures or the Distribution Agreement, the relevant
provisions of the Securities, the Indentures and the Distribution Agreement
shall control.
The procedures to be followed with respect to the settlement of sales
of Securities directly by the Company to purchasers solicited by an Agent, as
agent, are set forth below. Part I describes procedures of general applicability
with respect to such Securities. Part II describes procedures specifically and
exclusively applicable (any procedure in Part I below to the contrary
notwithstanding) to such Securities which are Global Securities. Part III
describes procedures specifically applicable to such Securities which are
Certificated Securities. The terms and settlement details related to a purchase
of Securities by an Agent, as principal, from the Company will be set forth in a
Terms Agreement pursuant to the Distribution Agreement. An Agent, in relation
to a purchase of a Security by a purchaser solicited by such Agent, is referred
to herein as the "Selling Agent" and, in relation to a purchase of a Security by
such Agent as principal other than pursuant to a Terms Agreement, as the
"Purchasing Agent".
The Company will advise each Agent in writing of those persons
representing the Company with whom such Agent is to communicate regarding offers
to purchase Securities and the related settlement details.
Each Security will be issued only in fully registered form and will be
represented by either a permanent global certificate (a "Global Certificate")
delivered to the Issuing Agent, as agent for The Depository Trust Company (the
"Depositary"), or a certificate issued in definitive form without coupons (a
"Certificated Security") as set forth in the applicable Pricing Supplement.
Each Security which is represented by a Global Certificate is referred to herein
as a "Book-Entry Security" (it being understood that only such Global
Certificate -- and not any such Book-Entry Security represented thereby --
constitutes a "Security" under each Indenture).
The Company has appointed The First National Bank of Chicago as
trustee under the Senior Indenture (the "Senior Trustee") and Chase Manhattan
Bank and Trust Company, National Association, as trustee under the Subordinated
Indenture (the "Subordinated Trustee," and together with the Senior Trustee, the
"Trustees"). In addition, the Company has appointed The First National Bank of
Chicago as Senior Issuing Agent (the "Senior Issuing Agent") and Chase Manhattan
Bank and Trust Company, National Association, as Subordinated Issuing
Agent (the "Subordinated Issuing Agent", and together with the Senior Issuing
Agent, the "Issuing Agents") in connection with certain procedures to be
followed with respect to the settlement of sales of Securities as set forth in
this Administrative Procedure. The Company has also appointed The First National
Bank of Chicago as Calculation Agent for the Securities issued under the Senior
Indenture (the "Senior Calculation Agent") and Chase Manhattan Bank and Trust
Company, National Association, as Calculation Agent for the Securities issued
under the Subordinated Indenture (the "Subordinated Calculation Agent", and
together with the Senior Calculation Agent, the "Calculation Agents") In
addition, the Company has appointed The First National Bank of Chicago as
Determination Agent (the "Determination Agent") and as Exchange Rate Agent (the
"Exchange Rate Agent") for the Securities.
ANY REFERENCE IN THIS ADMINISTRATIVE PROCEDURE TO THE "TRUSTEE" AND
"ISSUING AGENT" SHALL MEAN THE SENIOR TRUSTEE AND SENIOR ISSUING AGENT,
RESPECTIVELY, WITH RESPECT TO THE SENIOR NOTES (AS DESCRIBED IN THE PROSPECTUS)
AND THE SUBORDINATED TRUSTEE AND SUBORDINATED ISSUING AGENT, RESPECTIVELY, WITH
RESPECT TO THE SUBORDINATED NOTES (AS DESCRIBED IN THE PROSPECTUS).
PART I: PROCEDURES OF GENERAL APPLICABILITY
Posting Rates by Company:
------------------------
The Company and the Agents will discuss from time to time the rates of
interest per annum to be borne by and the maturity of Securities that may be
sold as a result of the solicitation of offers by an Agent. The Company may
establish a fixed set of interest rates and maturities for an offering period
("posting"). If the Company decides to change already posted rates, it will
promptly advise the Agents to suspend solicitation of offers until the new
posted rates have been established with the Agents.
Acceptance of Offers by Company:
-------------------------------
Each Agent will promptly advise the Company by telephone or other
appropriate means of all reasonable offers to purchase Securities, other than
those rejected by such Agent. Each Agent may, in its discretion reasonably
exercised, reject any offer received by it in whole or in part. Each Agent also
may make offers to the Company to purchase Securities as a Purchasing Agent (in
such capacity, a "Purchasing Agent"). The Company will have the sole right to
accept offers to purchase Securities and may reject any such offer in whole or
in part.
The Company will promptly notify the Selling Agent or Purchasing
Agent, as the case may be, of its acceptance or rejection of an offer to
purchase Securities. If the Company accepts an offer to purchase Securities, it
will confirm such acceptance in writing to the Selling Agent or Purchasing
Agent, as the case may be, and the Issuing Agent.
Preparation of Pricing Supplement by Company:
--------------------------------------------
If the Company accepts an offer to purchase a Security, it will
prepare a Pricing Supplement. The Company will send a copy of such Pricing
Supplement to the Selling Agent or Purchasing Agent, as the case may be, not
later than 2:00 p.m., New York City time, on the business day following the date
of acceptance of such offer, or if the Company and the purchaser
II-2
agree to settlement of such Security on the date of such acceptance, not later
than noon, New York City time, on such date. In addition, if Chase Securities
Inc. is Selling Agent or Purchasing Agent, the Company will send at least one
copy of such Pricing Supplement, to arrive not later than 2:00 p.m., New York
City time, on the business day in New York following the date of acceptance of
such offer, by facsimile transmission or registered mail to 000 Xxxx Xxxxxx, 0xx
Xxxxx, Xxx Xxxx, Xxx Xxxx 00000, Facsimile Transmission No. (000) 000-0000,
Attention: Medium-Term Note Desk. In addition, if Credit Suisse First Boston
Corporation is Selling Agent or Purchasing Agent, the Company will send at least
one copy of such Pricing Supplement, to arrive not later than 2:00 p.m., New
York City time, on the business day in New York following the date of acceptance
of such officer, by facsimile transmission or registered mail to Xxxxxx Xxxxxxx
Xxxxxx, Xxx Xxxx, Xxx Xxxx 00000, Facsimile Transmission No. (000) 000-0000,
Attention: Short and Medium-Term Finance. In addition, if Xxxxxxx, Xxxxx & Co.
is Selling Agent or Purchasing Agent, the Company will send at least one copy of
such Pricing Supplement, to arrive not later than 2:00 p.m., New York City time,
on the business day in New York following the date of acceptance of such offer,
by facsimile transmission or registered mail to: 00 Xxxxx Xxxxxx, Xxx Xxxx, Xxx
Xxxx 00000, Facsimile Transmission No. (000) 000-0000, Attention: Xxx
Xxxxxxxxxxx. In addition, if Xxxxxx Brothers Inc. is Selling Agent or Purchasing
Agent, the Company will send at least one copy of such Pricing Supplement, to
arrive not later than 2:00 p.m., New York City time, on the business day in New
York following the date of acceptance of such offer, by facsimile transmission
or registered mail to 3 World Financial Center, 12th Floor, New York, NY 10285,
Facsimile Transmission No. 000-000-0000, Attention: Medium-Term Note Department.
The Company will arrange to have the Pricing Supplement filed with the
Commission via XXXXX not later than the close of business of the Commission on
the second business day following the earlier of the date of the determination
of the offering price or the date on which such Pricing Supplement is first
used.
Delivery of Confirmation and
Prospectus to Purchaser by Selling Agent:
-----------------------------------------
The Selling Agent will deliver to the purchaser of a Security a
written confirmation of the sale and delivery and payment instructions. In
addition, the Selling Agent will deliver to such purchaser or its agent the
Prospectus as amended or supplemented (including the Pricing Supplement) in
relation to such Security prior to or together with the earlier of the delivery
to such purchaser or its agent of (a) the confirmation of sale (including, in
the case of a Book-Entry Security, the confirmation through the Depositary's
Institutional Delivery System) or (b) the Security.
Business Day:
------------
"Business Day" means (a) with respect to any Note, any day that is not
a Saturday or Sunday and that, in the City of New York is not a day on which
banking institutions generally are authorized or obligated by law to close, and
(b) if the Note is denominated in a Specified Currency other than United States
dollars, not a day on which banking institutions are authorized or required by
law to close in the financial center of the country issuing the Specified
Currency, and (c) with respect to LIBOR Notes only, a London Business Day. As
used in the preceding sentence, "financial center" means the capital city of the
country issuing the Specified Currency, or the capital city of the country to
which the LIBOR Currency relates, as applicable, except that
II-3
with respect to United States dollars, Australian dollars, Canadian dollars,
Deutsche marks, Dutch guilders, Euro, Italian lire, Portuguese Escudos, South
African rand and Swiss francs, the "financial center" shall be the City of New
York, Sydney and (solely in the case of the LIBOR Currency) Melbourne, Toronto,
Frankfurt, Amsterdam, London and Luxembourg, Milan, London (solely in the case
of the LIBOR Currency), Johannesburg and Zurich, respectively. "London Business
Day" means any day (a) if the LIBOR Currency is other than the Euro, on which
dealings in deposits in such LIBOR Currency are transacted in the London
interbank market or (b) if the LIBOR Currency is the Euro, any day on which the
Trans-European Automated Real-Time Gross Settlement Express Transfer (TARGET)
System is open. "LIBOR Currency" means, with respect to any Notes, the currency
specified in the Pricing Supplement applicable to such Notes as the currency for
which LIBOR shall be calculated; provided that, if no such currency is specified
in such Pricing Supplement, the LIBOR Currency shall be United States dollars.
PART II: PROCEDURES APPLICABLE TO BOOK-ENTRY
SECURITIES AND GLOBAL SECURITIES
In connection with the qualification of Book-Entry Securities for
eligibility in the book-entry system maintained by the Depositary, the
applicable Issuing Agent and the applicable Trustee will perform the custodial,
document control and administrative functions described below, in accordance
with their respective obligations under (i) a Letter of Representations from the
Company and The First National Bank of Chicago, as Senior Trustee and Senior
Issuing Agent, to the Depositary, dated May 14, 1999, and a Medium-Term Note
Certificate Agreement, dated May 26, 1989, between The First National Bank of
Chicago and the Depositary, and the obligations of The First National Bank of
Chicago as a participant in the Depositary, including the Depositary's Same-Day
Funds Settlement System ("SDFS") and (ii) a Letter of Representations from the
Company and Chase Manhattan Bank and Trust Company, National Association, as
Subordinated Trustee and Subordinated Issuing Agent, to the Depositary, dated
May 14, 1999, and a Medium-Term Note Certificate Agreement, dated December 2,
1988, between Chase Manhattan Bank and Trust Company, National Association and
the Depositary, and the obligations of Chase Manhattan Bank and Trust Company,
National Association, as a participant in the Depositary, including the
Depositary's SDFS. It is understood that the ownership interests of purchasers
of Book-Entry Securities will be credited to the book-entry accounts of one or
more participants in the Depositary (each a "Participant") in accordance with
the Depositary's customary practices and reflected in the records of such
Participants or one or more indirect participants in the Depositary designated
by such purchasers in accordance with the arrangements between such purchasers
and such Participants and indirect participants.
Issuance: All Fixed Rate Securities which are Book-Entry
Securities and have the same rank (senior or
subordinated), Original Issue Date, redemption
provisions, Interest Payment Dates, interest rate,
interest payment periods, Specified Currency, Stated
Maturity and other terms, if any (collectively, the
"Fixed Rate Terms"), will be represented by a single
Global Certificate in fully registered form without
coupons; and all Floating Rate Securities which are
Book-Entry Securities and have the
II-4
same rank (senior or subordinated), Original Issue
Date, redemption provisions, Interest Payment Dates,
interest payment periods, Interest Rate Basis or Bases,
Initial Interest Rate, Index Maturity, Spread or Spread
Multiplier, if any, Minimum Interest Rate, if any,
Maximum Interest Rate, if any, Specified Currency,
Stated Maturity and other terms, if any (collectively,
the "Floating Rate Terms"), will be represented by a
single Global Certificate in fully registered form
without coupons.
Identification: The Company has arranged with the CUSIP Service Bureau
of Standard & Poor's Rating Services, a division of The
XxXxxx-Xxxx Companies, Inc. (the "CUSIP Service
Bureau"), for the reservation of two series of CUSIP
numbers (including tranche numbers), each of which
series consists of approximately 900 CUSIP numbers
which have been reserved for future assignment and
relating to one of the two ranks of Book-Entry
Securities, and the Company has delivered to the
Issuing Agent and the Depositary such list of such
CUSIP numbers. The Company will assign CUSIP numbers to
Book-Entry Securities as described below under
Settlement Procedure C. The Depositary will notify the
CUSIP Service Bureau periodically of the CUSIP numbers
that the Company has assigned to Book-Entry Securities.
The Issuing Agent will notify the Company at any time
when fewer than 100 of the reserved CUSIP numbers
remain unassigned to Book-Entry Securities, and, if it
deems necessary, the Company will reserve additional
CUSIP numbers for assignment to Book-Entry Securities.
Upon obtaining such additional CUSIP numbers, the
Company will deliver a list of such additional numbers
to the Issuing Agent and the Depositary. Book-Entry
Securities having an aggregate principal amount in
excess of $200,000,000 and otherwise required to be
represented by the same Global Certificate will instead
be represented by two or more Global Certificates which
shall all be assigned the same CUSIP number.
Registration: Each Global Certificate will be registered in the name
of Cede & Co., as nominee for the Depositary, on the
Security Register maintained by the Trustee under the
applicable Indenture. On the first Business Day of each
month, the Trustee will deliver to the Company a
written statement indicating the total principal amount
of Outstanding Book-Entry Securities as of the
immediately preceding Business Day.
Transfers: Transfers of interests in a Book-Entry Security will be
effected in accordance with arrangements in effect
between Participants (and in certain cases, one or more
indirect participants in the Depositary) and the
beneficial transferors and beneficial transferees of
such Book-Entry Security, and the interests of
Participants therein will be reflected as
II-5
appropriate by book entries made by the Depositary.
Exchanges: The Issuing Agent may deliver to the Depositary and the
CUSIP Service Bureau at any time a written notice
specifying (a) the CUSIP numbers of two or more Global
Certificates (i) having the same rank and Fixed Rate
Terms or Floating Rate Terms, as the case may be
(except that Original Issue Dates need not be the
same), (ii) for which interest (if any) has been paid
to the same date and (iii) which otherwise constitute
Securities of the same series and tenor under the
Indenture; (b) a date, occurring at least 30 days after
such written notice is delivered and at least 30 days
before the next Interest Payment Date (if any) for such
Book-Entry Securities, on which such Global
Certificates shall be exchanged for a single
replacement Global Certificate; and (c) a new CUSIP
number to be assigned to such replacement Global
Certificate. Upon receipt of such a notice, the
Depositary will send to its Participants (including the
Issuing Agent) a written reorganization notice to the
effect that such exchange will occur on such date.
Prior to the specified exchange date, the Issuing Agent
will deliver to the CUSIP Service Bureau written notice
setting forth such exchange date and the new CUSIP
number and stating that, as of such exchange date, the
CUSIP numbers of the Global Certificates to be
exchanged will no longer be valid. On the specified
exchange date, the Issuing Agent will exchange such
Global Certificates for a single Global Certificate
authenticated by the Trustee and bearing the new CUSIP
number, and the CUSIP numbers of the exchanged Global
Certificates will, in accordance with CUSIP Service
Bureau procedures, be retired and not reassigned.
Notwithstanding the foregoing, if the Global
Certificates to be exchanged exceed $200,000,000 in
aggregate principal amount, one replacement Global
Certificate will be authenticated and issued to
represent each $200,000,000 of principal amount of the
exchanged Global Certificates and an additional Global
Certificate will be authenticated and issued to
represent any remaining principal amount of such Global
Certificates (see "Denominations" below).
Denominations: Book-Entry Securities denominated in U.S. dollars will
be issued in denominations of $1,000 and any larger
denomination which is an integral multiple of $1,000.
Global Certificates will be denominated in principal
amounts not in excess of $200,000,000. If one or more
Book-Entry Securities having an aggregate principal
amount in excess of $200,000,000 would, but for the
preceding sentence, be represented by a single Global
Certificate, then one Global Certificate will be issued
to represent each $200,000,000 principal amount of such
Book-Entry Security or Book-Entry Securities and an
additional Global Certificate will be issued to
represent any remaining principal amount of such Book-
Entry Security or Book-Entry Securities. In such a
case, each of the Global Certificates representing such
Book-Entry Security or
II-6
Securities shall be assigned the same CUSIP number.
Book-Entry Securities denominated in currencies or
currency units other than U.S. dollars shall be issued
in the denominations set forth in the relevant Pricing
Supplement.
Interest: General. The Depositary will arrange for each pending
-------
deposit message described under Settlement Procedure C
below to be transmitted to Standard & Poor's Rating
Services, a division of The XxXxxx-Xxxx Companies, Inc.
("S&P"), which will use the message to include certain
information regarding the related Book-Entry Securities
in the appropriate daily bond report published by S&P.
Notice of Interest Payments and Regular Record Dates.
----------------------------------------------------
Promptly after the amount of interest to be paid on the
following interest payment date is determined for Book-
Entry Securities which are Floating Rate Notes, the
Issuing Agent will notify S&P.
Payments of Payments of Interest Only. Promptly after each
-------------------------
Principal and Regular Record Date, the Issuing Agent will deliver
Interest: to the Company and the Dividend Department of the
Depositary a written notice specifying by CUSIP number
the amount of interest (if any) per $1,000 principal
amount to be paid on each Book-Entry Security on the
following Interest Payment Date (other than an Interest
Payment Date coinciding with the Maturity of such
Security) and the total of such amounts. The Depositary
will confirm the amount payable (if any) on each Book-
Entry Security on such Interest Payment Date by
reference to the daily bond reports published by S&P.
On such Interest Payment Date, the Company will pay to
the Trustee, and the Trustee in turn will pay to the
Depositary, such total amount of interest due (other
than at Maturity of such Security), at the times and in
the manner set forth below under "Manner of Payment".
Payments at Maturity. On or about the first Business
--------------------
Day of each month, the Trustee will deliver to the
Company and the Depositary, to the extent then known, a
written list of principal, premium, if any, and
interest to be paid on each Book-Entry Security
maturing at Stated Maturity, on a Repayment Date or on
a Redemption Date ("Maturity") in the following month.
The Trustee, the Company and the Depositary will
confirm the amounts of such principal, premium (if any)
and interest payments with respect to each such Book-
Entry Security on or about the fifth Business Day
preceding the Maturity of such Book-Entry Security. At
such Maturity, the Company will pay to the Trustee, and
the Trustee in turn will pay to the Depositary, the
principal amount of such Book-Entry Security, together
with interest and premium, if any, due at such
Maturity, at the times and in the manner set forth
below
II-7
under "Manner of Payment". Promptly after payment to
the Depositary of the principal, interest and premium,
if any, due at the Maturity of all Book-Entry
Securities represented by a particular Global
Certificate, the Trustee will cancel such Global
Certificate and destroy it or return it to the Company,
at the direction of the Company.
Manner of Payment. The total amount of any principal,
-----------------
premium and interest due on Book-Entry Securities on
any Interest Payment Date or at Maturity shall be paid
by the Company to the Trustee, in funds immediately
available for use by the Trustee as of 2:00 p.m., New
York City time, on such date. The Company will make
such payment on such Book-Entry Securities by wire
transfer to the Trustee or, if acceptable to the
Trustee, by instructing the Trustee to withdraw funds
from an account maintained by the Company at the
Trustee. The Company will confirm such instructions in
writing to the Trustee. For principal payments at
Maturity, prior to 3:00 p.m., New York City time, on
such 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 Bank of New York previously specified
by the Depositary, in funds available for immediate use
by the Depositary, each payment of interest, principal
and premium, if any, due on Book-Entry Securities on
such date; and for interest payments, the Trustee will
pay the Depositary in same-day funds on the Interest
Payment Date in accordance with existing arrangements
between the Trustee and the Depositary. Thereafter 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 such Book-Entry
Securities are recorded in the book-entry system
maintained by the Depositary. Once payment has been
made to the Depositary, neither the Company nor the
Trustee shall have any responsibility or liability for
the payment by the Depositary of the principal of, or
premium, if any, or interest on, the Book-Entry
Securities to such Participants.
Withholding Taxes. The amount of any taxes required
-----------------
under applicable law to be withheld from any interest
payment on a Book-Entry Security 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 Book-Entry Security, or as
applicable laws may otherwise require.
Settlement Procedures: Settlement Procedures with regard to each Book-Entry
Security sold by each Agent, as agent of the Company,
will be as follows:
A. After the acceptance of an offer by the Company with
respect to a
II-8
Book-Entry Security, the Selling Agent or Purchasing
Agent, as the case may be, will communicate the
following details of the terms of such offer (the
"Book-Entry Sale Information") to the Company by
telephone (confirmed in writing) or by facsimile
transmission or other acceptable written means:
(1) Principal amount of the Book-Entry Security to be
purchased;
(2) Ranking of Security (Senior or Subordinated);
(3) If a Fixed Rate Security, the interest rate;
(4) Maturity Date;
(5) Specified Currency and, if the Specified Currency
is other than U.S. dollars, the applicable
Exchange Rate for such Specified Currency;
(6) Issue Price;
(7) Selling Agent's commission or Purchasing Agent's
discount, as the case may be;
(8) Net proceeds to the Company;
(9) Settlement Date;
(10) If a Security redeemable by the Company, such of
the following as are applicable:
(i) Redemption Date(s), and
(ii) Redemption Price applicable to each Redemption
Date;
(11) If a Security repayable at the option of the
Holder, such of the following as are applicable:
(i) Repayment Date(s), and
(ii) Repayment Price applicable to each Repayment
Date;
(12) If a Floating Rate Security, such of the following
as are applicable:
(i) Interest Rate Basis or Bases,
(ii) Index Maturity,
(iii) Spread or Spread Multiplier,
II-9
(iv) Minimum Interest Rate,
(v) Maximum Interest Rate,
(vi) Initial Interest Rate,
(vii) Interest Reset Dates,
(viii) Calculation Dates,
(ix) Interest Determination Dates,
(x) Interest Payment Dates,
(xi) Interest Payment Period,
(xii) Interest Reset Period,
(xiii) LIBOR Currency, and
(xiv) Calculation Agent;
(13) If an Amortizing Security:
(i) Initial Principal Repayment Date,
(ii) Amortization Schedule;
(14) If Interest Rate Reset option:
(i) Optional Reset Date(s),
(ii) Basis for interest rate reset;
(15) If Extension or Renewal of Maturity option:
(i) Extension or Renewal Period(s),
(ii) Final Maturity Date,
(iii) Basis for Interest Rate during Extension or
Renewal;
(16) Original Issue Discount provisions, if any;
(17) Name, address and taxpayer identification number
of the registered owner;
(18) Denomination of certificates to be delivered at
settlement;
(19) Depositary delivery instructions; and
(20) Any other terms of the Security.
B. Upon receiving the Book-Entry Sale Information from the
Selling Agent or the Purchasing Agent, as the case may
be, the Company will advise the Issuing Agent by
telephone (confirmed by the Company's communication of
the CUSIP number as described below under Settlement
Procedure C) of the Book-Entry Sale Information received
from the Selling Agent or the Purchasing Agent, as the
case may be, and the name of such Selling or
II-10
Purchasing Agent.
C. The Company will assign a CUSIP number to the Global
Certificate representing such Book-Entry Security and
will communicate such assignment to the Issuing Agent,
which will communicate to the Depositary, such Selling
or Purchasing Agent, S&P, and Interactive Data
Corporation, through the Depositary's Participant
Terminal System, a pending deposit message (the form of
which has been previously furnished to the Issuing Agent
by the Depositary) specifying the following settlement
information:
(1) The Book-Entry Sale Information.
(2) Identification numbers of the participant accounts
maintained by the Depositary on behalf of the
Issuing Agent and such Agent.
(3) Identification as a Senior Security or Subordinated
Security.
(4) Identification as a Fixed Rate Security or a
Floating Rate Security.
(5) Initial Interest Payment Date for such Security,
number of days by which such date succeeds the
related record date for Depositary purposes (or, in
the case of Floating Rate Notes which reset daily
or weekly, the date five calendar days preceding
such Initial Interest Payment Date) and, if then
calculable, the amount of interest payable on such
Initial Interest Payment Date (which amount shall
have been confirmed by the Company).
(6) CUSIP number of the Global Certificate representing
such Book-Entry Security.
(7) Whether such Global Certificate will represent any
other Book-Entry Securities issued or to be issued
(to the extent then known).
II-11
D. The Issuing Agent will complete and deliver to the
Trustee a Global Certificate representing such Book-
Entry Security in the form previously provided by the
Company, and the Company will instruct the Trustee by
facsimile transmission or other acceptable written means
to authenticate such Global Certificate, to register
such Global Certificate in the name of Cede & Co., as
nominee of the Depositary, and to effect delivery
thereof to the Depositary by delivering possession of
such authenticated Global Certificate to the Issuing
Agent as agent for the Depositary.
E. The Trustee will authenticate the Global Certificate
representing such Book-Entry Security and register such
Global Certificate in the name of Cede & Co., as nominee
of the Depositary. The Issuing Agent will take delivery
thereof as agent for the Depositary.
F. The Depositary will credit such Book-Entry Security to
the participant account of the Issuing Agent maintained
by the Depositary.
G. The Issuing Agent will enter an SDFS deliver order
through the Depositary's Participant Terminal System
instructing the Depositary (i) to debit such Book-Entry
Security to the Issuing Agent's participant account and
credit such Book-Entry Security to the participant
account of the Selling Agent or the Purchasing Agent, as
the case may be, maintained by the Depositary and (ii)
to debit the settlement account of the Selling Agent or
the Purchasing Agent, as the case may be, and credit the
settlement account of the Issuing Agent maintained by
the Depositary, in an amount equal to the price of such
Book-Entry Security less such Selling or Purchasing
Agent's commission or discount, as the case may be. Any
entry of such a deliver order shall be deemed to
constitute a confirmation by the Trustee and the Issuing
Agent to the Depositary that (i) the Global Certificate
representing such Book-Entry Security has been issued
and authenticated and (ii) the Issuing Agent is holding
such Global Certificate as agent of the Depositary
pursuant to its Medium-Term Certificate Agreement.
H. The Selling Agent or the Purchasing Agent, as the case
may be, will enter an SDFS deliver instruction through
the Depositary's Participant Terminal System instructing
the Depositary (i) to debit such Book-Entry Security to
the participant account of such Selling or Purchasing
Agent and credit such Book-Entry Security to the
participant accounts of the Participants with respect to
such Book-Entry Security maintained by the Depositary
and (ii) to debit the settlement accounts of such
Participants and credit the
II-12
settlement account of such Selling or Purchasing Agent
maintained by the Depositary in an amount equal to the
price of such Book-Entry Security.
I. Transfers of funds in accordance with SDFS deliver
orders described in Settlement Procedures G and H will
be settled in accordance with SDFS operating procedures
in effect on the Settlement Date.
X. The Issuing Agent will credit to an account of the
Company maintained at the Issuing Agent, or such other
account as the Company may direct in writing, funds
available for immediate use in the amount transferred to
the Issuing Agent in accordance with Settlement
Procedure G.
K. The Issuing Agent will send a copy of the Global
Certificate by first-class mail to the Company together
with a statement setting forth the principal amount of
Securities Outstanding and of Book-Entry Securities
Outstanding as of the related Settlement Date after
giving effect to such transaction.
L. The Selling Agent or the Purchasing Agent, as the case
may be, will confirm the purchase of such Book-Entry
Security to the purchaser either by transmitting to the
Participants with respect to such Book-Entry Security a
confirmation order through the Depositary's Participant
Terminal System or by mailing a written confirmation to
such purchaser.
M. Notwithstanding the foregoing, the Selling Agent shall
in all cases take the actions described under the
caption "Delivery of Confirmation and Prospectus to
Purchaser by Selling Agent" in Part I of this
Administrative Procedure, at the time or times specified
under such caption for such actions.
Settlement For orders of Book-Entry Securities accepted by the
Procedures Company, Settlement Procedures "A" through "L" set forth
Timetable: above shall be completed as soon as possible but not
later than the respective times (New York City time) set
forth below:
Settlement
Procedure Time
--------- ----
A 11:00 a.m. on the trade date (or
one hour following the
trade)
B 12:00 Noon on the trade date (or
one hour following the
trade)
II-13
C 5:00 p.m. on the trade date
D 3:00 p.m. on the Business 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
X-X 5:00 p.m. on Settlement Date
If a sale is to be settled more than one Business Day
after the trade date, Settlement Procedures A, B, and C
may, if necessary, be completed at any time prior to the
specified times on the first Business Day after the
trade date. In connection with a sale which is to be
settled more than one Business Day after the trade date,
if the initial interest rate for a Floating Rate Note is
not known at the time that Settlement Procedure A is
completed, Settlement Procedures B and C shall be
completed as soon as such rates have been determined,
but no later than 11:00 a.m. and 2:00 p.m., New York
City time, respectively, on the Business Day before the
Settlement Date. Settlement Procedure I is subject to
extension of Fedwire closing deadlines and in the other
events specified in the SDFS operating procedures in
effect on the settlement date.
If settlement of a Book-Entry Security is rescheduled or
canceled, the Company will as soon as practicable give
the Issuing Agent notice to such effect. The Issuing
Agent will deliver to the Depositary, through the
Depositary's Participant Terminal System, a cancellation
message (the form of which has been previously furnished
to the Issuing Agent by the Depositary) to such effect
by no later than 2:00 p.m., New York City time, on the
Business Day immediately preceding the scheduled
Settlement Date (provided the Issuing Agent received
such notice from the Company by noon on the Business Day
immediately preceding the Settlement Date) and in any
case as soon as practicable. A copy of such message will
be routed through the facilities of the Depositary to
the Selling Agent and S&P.
Failure to Settle: If the Issuing Agent fails to enter in timely fashion an
SDFS deliver order with respect to any portion of a
Book-Entry Security pursuant to Settlement Procedure G,
or if the Selling Agent or the Purchasing Agent, as the
case may be, fails to enter in timely fashion an SDFS
deliver order with respect to such Book-Entry Security
pursuant to Settlement Procedure H, the Company may
direct the Issuing Agent to deliver to the Depositary,
through the Depositary's Participant Terminal System, as
soon as practicable, a withdrawal message (the form of
which has been previously furnished to the Issuing Agent
by the Depositary) instructing the Depositary to debit
such Book-Entry Security to the participant account of
the Issuing Agent maintained at
II-14
the Depositary. A copy of such message will be routed
through the facilities of the Depositary to such Selling
or Purchasing Agent. The Depositary will process the
withdrawal message, provided that such participant
account contains Book-Entry Securities having the same
Fixed Rate Terms or Floating Rate Terms, as the case may
be, having an aggregate principal amount that is at
least equal to the principal amount to be debited. If
withdrawal messages are processed with respect to all
the Book-Entry Securities represented by a particular
Global Certificate, the Issuing Agent will deliver the
Global Certificate to the Trustee, and the Company will
instruct the Trustee to cancel immediately such Global
Certificate, make appropriate entries in its records
and, unless otherwise instructed by the Company, destroy
the Global Certificate. The CUSIP number assigned to
such Global Certificate shall, in accordance with CUSIP
Service Bureau procedures, be retired and not
reassigned. If withdrawal messages are processed with
respect to only a portion of the Book-Entry Securities
represented by a particular Global Certificate, the
Issuing Agent will exchange such Global Certificate for
two Global Certificates authenticated by the Trustee,
one of which shall represent the Book-Entry Securities
for which withdrawal messages are processed and shall,
at the direction of the Company, be canceled by the
Trustee and destroyed immediately after issuance, and
the other of which shall represent the other Book-Entry
Securities previously represented by the surrendered
Global Certificate and shall bear the CUSIP number of
the surrendered Global Certificate. If such failure
shall have occurred for any reason other than default by
the Selling or Purchasing Agent in the performance of
its obligations under the Distribution Agreement, the
Company will reimburse such Selling or Purchasing Agent
on an equitable basis for its loss of the use of funds
during any period when the funds were credited to the
account of the Company in connection with such attempted
settlement.
If the purchase price for any Book-Entry Security is not
timely paid to the Participants with respect to such
Security by the beneficial purchaser thereof or by a
person, including an indirect participant in the
Depositary, acting on behalf of such purchaser (other
than the Purchasing Agent, if any), such Participants
and, in turn, the Selling Agent or the Purchasing Agent,
as the case may be, may enter SDFS deliver orders
through the Depositary's Participant Terminal System
reversing the orders entered pursuant to Settlement
Procedures G and H, respectively. Immediately
thereafter, the Company may direct the Issuing Agent to
deliver the withdrawal message and take the related
actions described in the preceding paragraph. If such
lack of timely payment shall have occurred for any
reason other than default by the Selling or Purchasing
Agent in the performance of its obligations under the
Distribution Agreement, the Company will reimburse such
Agent on an equitable basis for its loss of the use of
funds during any period when
II-15
the funds were credited to the account of the Company in
connection with such attempted settlement.
Notwithstanding the foregoing, upon any failure to
settle with respect to any portion of a Book-Entry
Security, the Depositary may take any actions in
accordance with its SDFS operating procedures then in
effect. In the event of a failure to settle with respect
to any portion of a Book-Entry Security that was to have
been represented by a Global Certificate also
representing other Book-Entry Securities, the Issuing
Agent and, if applicable, the Trustee will provide, in
accordance with Settlement Procedures D and E, for the
authentication and issuance of a Global Certificate
representing the remaining principal amount to have been
represented by such Global Certificate and will make
appropriate entries in its records.
II-16
Issuing Agent and Nothing herein will be deemed to require the Issuing
Trustee Not to Risk Agent or the Trustee to risk or expend its own funds in
Funds: connection with any payment to the Company, the Selling
or Purchasing Agents, the Depositary or any
Securityholder, it being understood by all parties that
payments made by the Issuing Agent or the Trustee to any
party will be made only to the extent that funds are
provided to the Issuing Agent, or the Trustee, as the
case may be, for such purpose.
II-17
PART III: ADMINISTRATIVE PROCEDURE FOR CERTIFICATED
SECURITIES
Currency:
--------
Each Note in certificated form shall be denominated in the currencies
or currency units specified in the relevant Pricing Supplement. Notes
denominated in other than U.S. dollars are herein referred to as "Multi-Currency
Notes".
Denominations:
-------------
Notes denominated in other than U.S. dollars will be issuable in
denominations as set forth in the relevant Pricing Supplement.
Payments of Principal and Interest:
----------------------------------
For provisions relating to Notes denominated in a foreign currency,
see the applicable Supplement to the Prospectus.
Communication of Sale Information
to Company by Selling Agent:
---------------------------
After the acceptance of an offer by the Company, the Selling Agent or
Purchasing Agent, as the case may be, will communicate the following details of
the terms of such offer (the "Sale Information") to the Company by telephone
(confirmed in writing) or by facsimile transmission or other acceptable written
means:
(1) Principal amount of Securities to be purchased;
(2) If a Fixed Rate Security, the interest rate;
(3) Maturity Date;
(4) Specified Currency and, if the Specified Currency is other than
U.S. dollars:
(i) Applicable Exchange Rate for such Specified Currency, and
(ii) Authorized denominations;
(5) Issue Price;
(6) Selling Agent's commission or Purchasing Agent's discount, as the
case may be;
(7) Net proceeds to the Company;
(8) Settlement Date and Settlement Place;
II-18
(9) If a Security redeemable by the Company, such of the following as
are applicable:
(i) Redemption Date(s), and
(ii) Redemption Price applicable to each Redemption Date;
(10) If a Security repayable at the option of the Holder, such of the
following as are applicable:
(i) Repayment Date(s), and
(ii) Repayment Price applicable to each Repayment Date;
(11) If a Floating Rate Security, such of the following as are
applicable:
(i) Interest Rate Basis or Bases,
(ii) Index Maturity,
(iii) Spread or Spread Multiplier,
(iv) Minimum Interest Rate,
(v) Maximum Interest Rate,
(vi) Initial Interest Rate,
(vii) Interest Reset Dates,
(viii) Calculation Dates,
(ix) Interest Determination Dates,
(x) Interest Payment Dates,
(xi) Interest Payment Period,
(xii) Interest Reset Period,
(xiii) LIBOR Currency, and
(xiii) Calculation Agent;
(12) If an Amortizing Security:
(i) Initial Principal Repayment Date,
(ii) Amortization Schedule;
(13) If Interest Rate Reset option:
(i) Optional Reset Date(s),
(ii) Basis for interest rate reset;
(14) If Extension or Renewal of Maturity option:
(i) Extension or Renewal Period(s),
(ii) Final Maturity Date,
(iii) Basis for Interest Rate during Extension or Renewal;
(15) Original Issue Discount provisions, if any;
(16) Name, address and taxpayer identification number of the
registered owner;
II-19
(17) Denomination of certificates to be delivered at settlement;
(18) Physical delivery instructions; and
(19) Any other terms of the Security.
Date of Settlement:
------------------
All offers solicited by a Selling Agent or made by a Purchasing Agent
and accepted by the Company will be settled on a date (the "Settlement Date" or
"Original Issue Date") which is the third business day after the date of
acceptance of such offer, unless the Company and the purchaser agree to
settlement (a) on any other business day after the acceptance of such offer or
(b) with respect to an offer accepted by the Company prior to 10:00 a.m., New
York City time, on the date of such acceptance.
Instruction from the Company to
Issuing Agent for Preparation of Securities:
-------------------------------------------
After receiving the Sale Information from the Selling Agent or
Purchasing Agent, as the case may be, the Company will communicate such Sale
Information to the Issuing Agent by telephone (confirmed in writing) or by
facsimile transmission or other acceptable electronic or written means.
The Company will instruct the Trustee by facsimile transmission or
other acceptable electronic or written means to authenticate and deliver the
Securities no later than 2:15 p.m., New York City time, on the Settlement Date.
Such instruction will be given by the Company prior to 3:00 p.m., New York City
time, on the business day prior to the Settlement Date unless the Settlement
Date is the date of acceptance by the Company of the offer to purchase
Securities in which case such instruction will be given by the Company by 11:00
a.m., New York City time. The Trustee will authenticate and deliver to the
Issuing Agent each Security in accordance with the Company's instruction.
Preparation and Delivery of Securities
by Issuing Agent and Receipt of Payment Therefor:
------------------------------------------------
The Issuing Agent will prepare each Security and appropriate receipts
that will serve as the documentary control of the transaction.
In the case of a sale of Securities to a purchaser solicited by a
Selling Agent, the Issuing Agent will, by 2:15 p.m., New York City time, on the
Settlement Date, deliver the Securities to the Selling Agent for the benefit of
the purchaser of such Securities against delivery by the Selling Agent of a
receipt therefor. On the Settlement Date the Selling Agent will deliver payment
for such Securities in immediately available funds to the Company in an amount
equal to the issue price of the Securities less the Selling Agent's commission;
provided that the Selling Agent reserves the right to withhold payment for which
it has not received funds from the purchaser. The Company shall not use any
proceeds advanced by a Selling Agent to purchase securities or carry any
securities in violation of Regulations T, U or X of the Federal Reserve Board or
otherwise in violation of law.
II-20
In the case of a sale of Securities to a Purchasing Agent, the Issuing
Agent will, by 2:15 p.m., New York City time, on the Settlement Date, deliver
the Securities to the Purchasing Agent against delivery of payment for such
Securities in immediately available funds to the Company in an amount equal to
the issue price of the Securities less the Purchasing Agent's discount.
Failure of Purchaser to Pay Selling Agent:
-----------------------------------------
If a purchaser (other than a Purchasing Agent) fails to make payment
to the Selling Agent for a Security, the Selling Agent will promptly notify the
Issuing Agent, the Trustee and the Company thereof by telephone (confirmed in
writing) or by facsimile transmission or other acceptable written means. The
Selling Agent will immediately return the Security to the Issuing Agent.
Immediately upon receipt of such Security by the Issuing Agent, the Company will
return to the Selling Agent an amount equal to the amount previously paid to the
Company in respect of such Security. If such failure shall have occurred for
any reason other than default by the Selling Agent in the performance of its
obligations under the Distribution Agreement, the Company will reimburse the
Selling Agent on an equitable basis for its loss of the use of funds during the
period when they were credited to the account of the Company.
The Issuing Agent will deliver to the Trustee for cancellation the
Security in respect of which the failure occurred, and instruct the Trustee to
make appropriate entries in its records and, unless otherwise instructed by the
Company, to destroy the Security.
II-21
XXXXX XXX
---------
Pursuant to Section 6(d) of the Distribution Agreement, the Company's
independent public accountants shall furnish letters to you to the effect that:
(i) They are independent certified public accountants with respect
to the Company and its subsidiaries within the meaning of the Act and the
applicable published rules and regulations thereunder;
(ii) In their opinion, the financial statements and any supplementary
financial information and schedules audited by them and included or incorporated
by reference in the Prospectus comply as to form in all material respects with
the applicable accounting requirements of the Act or the Exchange Act, as
applicable, and the published rules and regulations thereunder; and if
applicable, they have made a review in accordance with standards established by
the American Institute of Certified Public Accountants of the consolidated
interim financial statements of the Company for the periods specified in such
letter, as indicated in their reports thereon, copies of which have been
furnished to you;
(iii) In their opinion, the unaudited selected financial information,
if any, with respect to the consolidated results of operations and financial
position of the Company for the five most recent fiscal years included in the
Prospectus and included or incorporated by reference in Item 2 of the Company's
Form 10 or Item 6 of the Company's Annual Report on Form 10-K for the most
recent fiscal year agrees with the corresponding amounts (after restatement
where applicable) in the audited consolidated financial statements for such five
fiscal years which were included or incorporated by reference in the Company's
Form 10 or Annual Reports on Form 10-K for such fiscal years;
(iv) On the basis of limited procedures, not constituting an audit in
accordance with generally accepted auditing standards, consisting of a reading
of the unaudited financial statements and other information referred to below, a
reading of the latest available interim financial statements of the Company and
its subsidiaries, inspection of the minute books of the Company and its
subsidiaries since the date of the latest audited financial statements included
or incorporated by reference in the Prospectus, inquiries of officials of the
Company responsible for financial and accounting matters and such other
inquiries and procedures as may be specified in such letter, nothing came to
their attention that caused them to believe that:
(A) the unaudited condensed consolidated statements of profit,
consolidated statements of financial position and consolidated statements
of cash flows included or incorporated by reference in the Company's
Quarterly Reports on Form 10-Q incorporated by reference in the Prospectus
do not comply as to form in all material respects with the applicable
accounting requirements of the Exchange Act and the published rules and
regulations thereunder or that any material modifications should be made to
such financial statements for them to be in conformity with generally
accepted accounting principles;
(B) any unaudited income statement data and balance sheet items, if
any, included in the Prospectus do not agree with the corresponding items
in the unaudited
consolidated financial statements from which such data and items were
derived, and any such unaudited data and items were not determined on a
basis substantially consistent with the basis for the corresponding amounts
in the audited consolidated financial statements included or incorporated
by reference in the Company's Form 10 or Annual Report on Form 10-K for the
most recent fiscal year;
(C) the unaudited financial statements which were not included in the
Prospectus but from which were derived the unaudited financial statements
referred to in Clause (A) and any unaudited income statement data and
balance sheet items included in the Prospectus and referred to in Clause
(B) were not determined on a basis substantially consistent with the basis
for the audited financial statements included or incorporated by reference
in the Company's Form 10 or Annual Report on Form 10-K for the most recent
fiscal year;
(D) any unaudited pro forma consolidated condensed financial
statements, if any, included or incorporated by reference in the Prospectus
do not comply as to form in all material respects with the applicable
accounting requirements of the Act and the published rules and regulations
thereunder or the pro forma adjustments have not been properly applied to
the historical amounts in the compilation of those statements;
(E) as of a specified date not more than five business days prior to
the date of delivery of such letter, there have been any changes in the
capital stock or any increase in the consolidated long-term debt of the
Company and its subsidiaries, or any decreases in consolidated total assets
or other items specified by you, or any increases in any items specified by
you, in each case as compared with amounts shown in the latest statement of
financial position included or incorporated by reference in the Prospectus,
except in each case for changes, increases or decreases which the
Prospectus discloses have occurred or may occur or which are described in
such letter; and
(F) for the period from the date of the latest financial statements
included or incorporated by reference in the Prospectus to the specified
date referred to in Clause (E), there were any decreases in consolidated
total revenues or net profit or other items specified by you, or any
increases in any items specified by you, in each case as compared with the
comparable period of the preceding year and with any other period of
corresponding length specified by you, except in each case for decreases or
increases which the Prospectus discloses have occurred or may occur or
which are described in such letter; and
(v) In addition to the audit referred to in their report(s) included
or incorporated by reference in the Prospectus and the limited procedures,
inspection of minute books, inquiries and other procedures referred to in
subparagraphs (iii) and (iv) above, they have carried out certain specified
procedures, not constituting an audit in accordance with generally accepted
auditing standards, with respect to certain amounts, percentages and financial
information specified by you which are derived from the general accounting
records of the Company and its subsidiaries, which appear in the Prospectus
(excluding documents incorporated by reference), or in Part II of, or in
exhibits and schedules to, the Registration Statement specified by you or in
documents incorporated by reference in the Prospectus
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specified by you, and have compared certain of such amounts, percentages and
financial information with the accounting records of the Company and its
subsidiaries, and have found them to be in agreement.
All references to the Prospectus in this Annex III shall be deemed to
refer to the Prospectus (including the documents incorporated by reference
therein), as defined in the Distribution Agreement, as of the Closing Date
referred to in Section 6(d) thereof and to the Prospectus as amended or
supplemented (including the documents incorporated by reference therein), as
defined in such Agreement, as of the date of the amendment, supplement,
incorporation or the Time of Delivery related to the Terms Agreement requiring
the delivery of such letter under Section 4(l) thereof.
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