1
EXHIBIT 1B
The ▇▇▇▇▇▇▇-▇▇▇▇▇▇▇▇ Company
Medium-Term Notes, Series A
Due Nine Months or More
From Date of Issue
Selling Agency Agreement
February , 1996
New York, New York
Salomon Brothers Inc
Seven World Trade Center
New York, N.Y. 10048
▇▇▇▇▇▇▇ ▇▇▇▇▇ & Co.
World Financial Center, North Tower
New York, NY 10281
Dear Sirs:
The ▇▇▇▇▇▇▇-▇▇▇▇▇▇▇▇ Company, an Ohio corporation (the "Company"),
confirms its agreement with each of you with respect to the issue and sale by
the Company of up to the aggregate principal amount set forth in Schedule I
hereto of its Medium-Term Notes, Series A, Due Nine Months or More from Date of
Issue (the "Notes"). The Notes will be issued under an indenture dated as of
February 1, 1996 between the Company and Chemical Bank, as trustee (the
"Trustee") (the "Indenture"). Unless otherwise specifically provided for and set
forth in a supplement to the Prospectus referred to below, the Notes in minimum
denominations of $1,000 and in denominations exceeding such amount by integral
multiples of $1,000, will be issued only in fully registered form and will have
the maturities, annual interest rates and, if appropriate, other terms set forth
in such supplement to the Prospectus. The Notes will be issued, and the terms
thereof established, in accordance with the Indenture and the Medium-Term Notes
Administrative Procedures attached hereto as Exhibit A (the "Procedures"). The
Procedures may only be amended by written agreement of the Company and you after
notice to, and with the approval of, the Trustee. For the purposes of this
Agreement, the term "Agent" shall refer to any of you acting solely in the
2
2
capacity as agent for the Company pursuant to Section 2(a) and not as principal
(collectively, the "Agents"), the term the "Purchaser" shall refer to one of you
acting solely as principal pursuant to Section 2(b) and not as agent, and the
term "you" shall refer to collectively whether at any time any of you is acting
in both such capacities or in either such capacity. In acting under this
Agreement, in whatever capacity, each of you is acting individually and not
jointly.
1. Representations and Warranties. The Company represents and warrants
to, and agrees with, each of you as set forth below in this Section 1. Certain
terms used in this Section 1 are defined in paragraph (c) hereof.
(a) The Company meets the requirements for use of Form S-3 under the
Securities Act of 1933, as amended (the "Act"), and has filed with the
Securities and Exchange Commission (the "Commission") registration statements on
such Form (File Numbers: 33-22705 and 333-[ ]), including the same basic
prospectus, which have become effective, for the registration under the Act of
$450,000,000 aggregate principal amount of debt securities (the "Securities"),
including the Notes. The Terms Agreement referred to in Section 2 for any
offering of Securities will specify the registration statement under which such
Securities are registered or, if portions of such Securities are registered
under each of such registration statements, the respective portions thereof.
Such registration statements, as amended as of the Execution Time, meet the
requirements set forth in Rule 415(a)(1)(ix) or (x) under the Act and comply in
all other material respects with said Rule. The Company has included in such
registration statements, or has filed or will file with the Commission pursuant
to the applicable paragraph of Rule 424(b) under the Act, a supplement to the
form of prospectus included in such registration statements relating to the
Notes and the plan of distribution thereof (the "Prospectus Supplement"). In
connection with the sale of Notes the Company proposes to file with the
Commission pursuant to the applicable paragraph of Rule 424(b) under the Act
further supplements to the Prospectus Supplement (each a "Pricing Supplement"),
specifying the interest rates, maturity dates and, if appropriate, other similar
terms of the Notes sold pursuant hereto or the offering thereof. If the Rule 434
Delivery Alternative is used, the Company will also file the Rule 434 Term Sheet
in accordance with Rule 434. As filed, such Rule 434 Term Sheet shall
3
3
contain all the information required by Rule 434, and except to the extent the
Representatives shall agree in writing to a modification, shall be in all
substantive respects in the form furnished to you prior to the Execution Time
or, to the extent not completed at the Execution Time, shall contain only such
specific additional information and other changes (beyond that contained in the
latest Preliminary Prospectus) as the Company has advised you, prior to the
Execution Time, will be included or made therein. Upon your request, but not
without your agreement, the Company will also file a Rule 462(b) Registration
Statement in accordance with Rule 462(b).
(b) As of the Execution Time, on the respective Effective Dates of each
of the registration statements referred to in paragraph (a) above, on the dates
of each post-effective amendment thereto, when any supplement to the Prospectus
is filed with the Commission, as of the date of a Terms Agreement and at the
date of delivery by the Company of any Notes sold hereunder (a "Closing Date"),
(i) the registration statements, each as amended as of any such time, and the
Prospectus, as supplemented as of any such time, and the Indenture will comply
in all material respects with the applicable requirements of the Act, the Trust
Indenture Act of 1939 (the "Trust Indenture Act"), as amended and the Securities
Exchange Act of 1934 (the "Exchange Act") and the respective rules thereunder;
(ii) the registration statements, each as amended as of any such time, did not
or will not contain any untrue statement of a material fact or omit to state any
material fact required to be stated therein or necessary in order to make the
statements therein not misleading; and (iii) the Prospectus, as supplemented as
of any such time, will not contain any untrue statement of a material fact or
omit to state a material fact necessary in order to make the statements therein,
in the light of the circumstances under which they were made, not misleading;
provided, however, that the Company makes no representations or warranties as to
(i) that part of the Registration Statement which shall constitute the Statement
of Eligibility and Qualification (Form T-1) under the Trust Indenture Act of the
Trustee or (ii) the information contained in or omitted from the Registration
Statement or the Prospectus (or any supplement thereto) in reliance upon and in
conformity with information furnished in writing to the Company by or on behalf
of any or all of you specifically for use in connection with the preparation of
the Registration Statement or the Prospectus (or any supplement thereto).
4
4
(c) As of the time any Notes are issued and sold hereunder, the
Indenture will constitute a legal, valid and binding instrument enforceable
against the Company in accordance with its terms and such Notes will have been
duly authorized, and, when issued to and paid for by the purchasers thereof,
will constitute legal, valid and binding obligations of the Company entitled to
the benefits of the Indenture.
(d) The Company has complied with the provisions of the Laws of
Florida, Chapter 92-198 Securities Business with Cuba.
(e) The terms which follow, when used in this Agreement, shall have the
meanings indicated. The term "the Effective Date" shall mean, with respect to
each registration statement referred to in paragraph (a) above, each date that
such registration statement, any post-effective amendment or amendments thereto
and any Rule 462(b) Registration Statement became or become effective.
"Execution Time" shall mean the date and time that this Agreement is executed
and delivered by the parties hereto. "Basic Prospectus" shall mean the form of
basic prospectus relating to the Securities contained in the Registration
Statement at the Effective Date. "Prospectus" shall mean the Basic Prospectus as
supplemented by the Prospectus Supplement. If the Rule 434 Delivery Alternative
is used, such term shall also include the Basic Prospectus and the Rule 434 Term
Sheet, taken together. "Registration Statement" shall mean, collectively, the
registration statements referred to in paragraph (a) above, including
incorporated documents, exhibits and financial statements, as amended at the
Execution Time (or, if not effective at the Execution Time, in the form in which
it shall become effective) and, in the event any post-effective amendment
thereto or any Rule 462(b) Registration Statement becomes effective prior to the
Closing Date, shall also mean such registration statement as so amended. Such
term shall include any Rule 430A Information and Rule 434 Information deemed to
be included therein at the Effective Date as provided by Rule 430A and Rule 434,
respectively. "Rule 415", "Rule 424", "Rule 430A, "Rule 434", "Rule 462(b)" and
"Regulation S-K" refer to such rules under the Act. "Rule 430A Information"
means information with respect to the Securities and the offering thereof
permitted to be omitted from the Registration Statement when it becomes
effective pursuant to Rule 430A. "Rule 434 Delivery Alternative" shall mean the
delivery alternative permitted
5
5
by Rule 434. "Rule 434 Information" shall mean any information to be included in
a Rule 434 Term Sheet. "Rule 434 Term Sheet" shall mean the term sheet or
abbreviated term sheet delivered by the Underwriters to investors and filed by
the Company with the Commission pursuant to Rule 434. "Rule 462(b) Registration
Statement" shall mean a registration statement and any amendments thereto filed
pursuant to Rule 462(b) relating to the final Delayed Offering covered by the
initial Registration Statement (file number 333-[ ]). Any reference herein to
the Registration Statement, the Basic Prospectus, the Prospectus Supplement or
the Prospectus shall be deemed to refer to and include the documents
incorporated by reference therein pursuant to Item 12 of Form S-3 which were
filed under the Exchange Act on or before the Effective Date of the Registration
Statement or the issue date of the Basic Prospectus, the Prospectus Supplement
or the Prospectus, as the case may be; and any reference herein to the terms
"amend", "amendment" or "supplement" with respect to the Registration Statement,
the Basic Prospectus, the Prospectus Supplement or the Prospectus shall be
deemed to refer to and include the filing of any document under the Exchange Act
after the Effective Date of the Registration Statement or the issue date of the
Basic Prospectus, the Prospectus Supplement or the Prospectus, as the case may
be, deemed to be incorporated therein by reference.
2. Appointment of Agents; Solicitation by the Agents of Offers to
Purchase; Sales of Notes to Purchaser. (a) Subject to the terms and conditions
set forth herein, the Company hereby authorizes each of the Agents to act as its
agent to solicit offers for the purchase of all or part of the Notes from the
Company.
On the basis of the representations and warranties, and subject to the
terms and conditions set forth herein, each of the Agents agrees, as agent of
the Company, to use its best efforts to solicit offers to purchase the Notes
from the Company upon the terms and conditions set forth in the Prospectus (and
any supplement thereto) and in the Procedures. Each Agent shall make reasonable
efforts to assist the Company in obtaining performance by each purchaser whose
offer to purchase Notes has been solicited by such Agent and accepted by the
Company, but such Agent shall not, except as otherwise provided in this
Agreement, have any liability to the Company in the event any such purchase is
not consummated for any reason. Except as provided in Section 2(b), under
6
6
no circumstances will any Agent be obligated to purchase any Notes for its own
account. It is understood and agreed, however, that any Agent may purchase Notes
as principal pursuant to Section 2(b).
The Company reserves the right, in its sole discretion, to instruct the
Agents to suspend at any time, for any period of time or permanently, the
solicitation of offers to purchase the Notes. Upon receipt of instructions from
the Company, the Agents will forthwith suspend solicitation of offers to
purchase Notes from the Company until such time as the Company has advised them
that such solicitation may be resumed.
The Company agrees to pay each Agent a commission, on the Closing Date
with respect to each sale of Notes by the Company as a result of a solicitation
made by such Agent, in an amount equal to that percentage specified in Schedule
I hereto of the aggregate principal amount of the Notes sold by the Company.
Such commission shall be payable as specified in the Procedures.
Subject to the provisions of this Section and to the Procedures, offers
for the purchase of Notes may be solicited by an agent as agent for the Company
at such time and in such amounts as such Agent deems advisable. The Company may
from time to time offer Notes for sale otherwise than through an Agent;
provided, however, that so long as this Agreement shall be in effect the Company
shall not solicit or accept offers to purchase Notes through any agent
(excluding the Company's or its subsidiaries' employees) other than an Agent.
(b) Subject to the terms and conditions set forth herein, whenever the
Company and any of you determines that the Company shall sell Notes directly to
any of you as principal, each such sale of Notes shall be made in accordance
with the terms of this Agreement and, a supplemental agreement relating to such
sale. Each such supplemental agreement (which may be either an oral agreement
confirmed in writing or a written agreement) is herein referred to as a "Terms
Agreement". Each Terms Agreement shall describe the Notes to be purchased by the
Purchaser pursuant thereto and shall specify the principal amount of each such
Note, the aggregate principal amount of all such Notes, the maturity date of
such Notes, the rate at which interest will be paid on such Notes, the dates on
which interest will be paid on such Notes and the record
7
7
date with respect to each such payment of interest, the Closing Date for such
Notes, the place of delivery of the Notes and payment therefor, the method of
payment and any requirements for the delivery of opinions of counsel,
certificates from the Company or its officers or a letter from the Company's
independent public accountants, as described in Section 6(b). Any such Terms
Agreement may also specify the period of time referred to in Section 4(m). Any
written Terms Agreement may be in the form attached hereto as Exhibit B. The
Purchaser's commitment to purchase Notes shall be deemed to have been made on
the basis of the representation and warranties of the Company herein contained
and shall be subject to the terms and conditions herein set forth.
Delivery of the certificates for Notes sold to the Purchaser pursuant
to a Terms Agreement shall be made not later than the Closing Date agreed to in
such Terms Agreement, against payment of funds to the Company in the net amount
due to the Company for such Notes by the method and in the form set forth in the
Procedures unless otherwise agreed to between the Company and the Purchaser in
such Terms Agreement.
Unless otherwise agreed to between the Company and the Purchaser in a
Terms Agreement, any Note sold to a Purchaser (i) shall be purchased by such
Purchaser at a price equal to 100% of the principal amount thereof less a
percentage equal to the commission applicable to an agency sale of Note of
identical maturity and (ii) may be resold by such Agent at varying prices from
time to time or, if set forth in the applicable Terms Agreement and Pricing
Supplement, at a fixed public offering price. In connection with any resale of
Notes purchased, a Purchaser may use a selling or dealer group and may reallow
any portion of the discount or commission payable pursuant hereto to dealers or
purchasers.
3. Offering and Sale of Notes. Each Agent shall communicate to the
Company, orally or in writing, each offer (unless previously rejected by such
Agent as provided below) to purchase Notes on terms previously communicated by
the Company to such Agent, and the Company shall have the sole right to accept
such offers to purchase Notes and may refuse any proposed purchase of Notes in
whole or in part for any reason. Each Agent shall have the right, in its
discretion reasonably exercised, to reject any such offer received by it in
whole or in part. Each Agent and the Company agree to
8
8
perform the respective duties and obligations specifically provided to be
performed by them in the Procedures.
4. Agreements. The Company agrees with each of you that:
(a) Prior to the termination of the offering of the Notes (including by
way of resale by a Purchaser of Notes), the Company will not file any amendment
of the Registration Statement or supplement to the Prospectus (except for (i) a
periodic or current report filed under the Exchange Act, (ii) a Supplement
relating to any offering of, or a change in the maturity dates, interest rates,
issuance prices or other similar terms of, any Notes or (iii) a supplement
relating to an offering of Securities other than the Notes) or any Rule 462(b)
Registration Statement unless the Company has furnished each of you a copy for
your review prior to filing and given each of you a reasonable opportunity to
comment on any such proposed amendment or supplement or Rule 462(b) Registration
Statement. Subject to the foregoing sentence, the Company will cause each
supplement to the Prospectus to be filed with the Commission pursuant to the
applicable paragraph of Rule 424(b) within the time period prescribed and will
provide evidence satisfactory to you of such filing. If the Rule 434 Delivery
Alternative is used, the Company will also cause the Rule 434 Term Sheet,
properly completed, to be filed with the Commission pursuant to Rule 434 within
the time period prescribed and will provide evidence satisfactory to the Agents
of such timely filing. Upon your request, the Company will cause the Rule 462(b)
Registration Statement, properly completed, to be filed with the Commission
pursuant to Rule 462(b) and will provide evidence satisfactory to the Agents of
such filing. The Company will promptly advise each of you (i) when the
Prospectus, any supplement thereto (except for a supplement relating to an
offering of Securities other than the Notes), any Rule 434 Term Sheet or any
Rule 462(b) Registration Statement, shall have been filed with the Commission
pursuant to Rule 424(b), (ii) when, prior to the termination of the offering of
the Notes, any amendment of the Registration Statement shall have been filed or
become effective, (iii) of any request by the Commission for any amendment of
the Registration Statement or supplement to the Prospectus or for any additional
information, (iv) of the issuance by the Commission of any stop order suspending
the effectiveness of the Registration Statement or the institution or
threatening of any proceeding for that purpose and (v) of the receipt by
9
9
the Company of any notification with respect to the suspension of the
qualification of the Notes for sale in any jurisdiction or the initiation or
threatening of any reasonable proceeding for such purpose. The Company will use
its best efforts to prevent the issuance of any such stop order and, if issued,
to obtain as soon as possible the withdrawal thereof;
(b) If, at any time when a prospectus relating to the Notes is required
to be delivered under the Act, any event occurs as a result of which the
Prospectus as then supplemented would include any untrue statement of a material
fact or omit to state any material fact necessary to make the statements
therein, in the light of the circumstances under which they were made, not
misleading, or if it shall be necessary to amend the Registration Statement or
to supplement the Prospectus to comply with the Act or the Exchange Act or the
respective rules thereunder, the Company promptly will (i) notify each of you to
suspend solicitation of offers to purchase Notes (and, if so notified by the
Company, each of you shall forthwith suspend such solicitation and ceasing using
the Prospectus as then supplemented), (ii) prepare and file with the Commission,
subject to the first sentence of paragraph (a) of this Section 4, an amendment
or supplement which will correct such statement or omission or effect such
compliance and (iii) supply any supplemented Prospectus to each of you in such
quantities as you may reasonably request. If such amendment or supplement, and
any documents, certificates and opinions furnished to each of you pursuant to
paragraph (g) of this Section 4 in connection with the preparation or filing of
such amendment or supplement are reasonably satisfactory in all respects to you,
you will, upon the filing of such amendment or supplement with the Commission
and upon the effectiveness of an amendment to the Registration Statement, if
such an amendment is required, resume your obligation to solicit offers to
purchase Notes hereunder.
(c) The Company, during the period when a prospectus relating to the
Notes is required to be delivered under the Act, will file promptly all
documents required to be filed with the Commission pursuant to Section 13(a),
13(c), 14 or 15(d) of the Exchange Act and will furnish to each of you copies of
such documents. In addition, on or prior to the date on which the Company makes
any announcement to the general public concerning earnings or concerning any
other event which is required to be
10
10
described, or which the Company proposes to describe, in a document filed
pursuant to the Exchange Act, the Company will furnish to each of you the
information contained or to be contained in such announcement. The Company also
will furnish to each of you copies of all material press releases or material
announcements furnished to news or wire services. The Company will promptly
notify each of you by telephone or telecopy of (i) any decrease in the rating of
the Notes or any other debt securities of the Company by ▇▇▇▇▇'▇ Investors
Service Inc. ("Moody's") or Standard & Poor's Corporation ("S&P") or (ii) any
written notice received from S&P or Moody's of any intended or contemplated
decrease in any such rating or of a possible change in any such rating that does
not indicate the direction of the possible change;
(d) As soon as practicable, the Company will make generally available
to its security holders and to each of you an earnings statement or statements
of the Company and its subsidiaries which will satisfy the provisions of Section
11(a) of the Act and Rule 158 under the Act;
(e) The Company will furnish to each of you and your counsel, without
charge, copies of the Registration Statement (including exhibits thereto) and,
so long as delivery of a prospectus may be required by the Act, as many copies
of the Prospectus and any supplement thereto as you may reasonably request;
(f) The Company will arrange for the qualification of the Notes for
sale under the laws of such jurisdictions as any of you may designate, will
maintain such qualifications in effect so long as required for the distribution
of the Notes and will arrange for the determination of the legality of the Notes
for purchase by institutional investors;
(g) The Company shall furnish to each of you such documents,
certificates of officers of the Company and opinions of counsel for the Company
relating to the business, operations and affairs of the Company, the
Registration Statement, the Prospectus, and any amendments thereof or
supplements thereto, the Indenture, the Notes, this Agreement, the Procedures
and the performance by the Company and you of its and your respective
obligations hereunder and thereunder as any of you may from time to time and at
any time prior to the termination of this Agreement reasonably request;
11
11
(h) The Company shall, whether or not any sale of the Notes is
consummated, (i) pay all expense incident to the performance of its obligations
under this Agreement, including the fees and disbursements of its accountants
and counsel, the cost of printing or other production and delivery of the
Registration Statement, the Prospectus, all amendments thereof and supplements
thereto, the Indenture, this Agreement and all other documents relating to the
offering, the cost of preparing, printing, packaging and delivering the Notes,
the reasonable fees and disbursements, including fees of counsel, incurred in
compliance with Section 4(f), the fees and disbursements of the Trustee and the
fees of any agency that rates the Notes, (ii) reimburse each of you, upon
request, on a monthly basis for all out-of-pocket expenses, if any, incurred by
you and approved by the Company in advance, in connection with this Agreement
and (iii) pay the reasonable fees and expenses of your counsel incurred in
connection with this Agreement and approved by the Company in advance (which
approval may be oral);
(i) Each acceptance by the Company of an offer to purchase Notes will
be deemed to be an affirmation that its representations and warranties contained
in Section 1 of this Agreement are true and correct at the time of such
acceptance, as though made at and as of such time, and a covenant that such
representations and warranties will be true and correct at the time of delivery
to the purchaser of the Notes relating to such acceptance, as though made at and
as of such time (it being understood that for purposes of the foregoing
affirmation and covenant such representations and warranties shall relate to the
Registration Statement and Prospectus as amendment or supplemented at each such
time). Each such acceptance by the Company of an offer for the purchase of Notes
shall be deemed to constitute an additional representation, warranty and
agreement by the Company that, as of the settlement date for the sale of such
Notes, after giving effect to the issuance of such Notes, of any other Notes to
be issued on or prior to such settlement date and of any other Securities to be
issued and sold by the Company on or prior to such settlement date, the
aggregate amount of Securities (including any Notes) which have been issued and
sold by the Company will not exceed the amount of Securities registered pursuant
to the Registration Statement. The Company will inform you promptly upon your
inquiry of the aggregate amount of Securities registered under the Registration
Statement which remain unsold;
12
12
(j) Each time that the Registration Statement or the Prospectus is
amended or supplemented (other than by an amendment or supplement (i) relating
to any offering of Securities other than the Notes or (ii) providing solely for
the specification of or a change in the maturity dates, the interest rates, the
issuance prices, the redemption dates (whether pursuant to a sinking fund or
otherwise) or other similar terms of any Notes sold pursuant hereto), the
Company will deliver or cause to be delivered promptly to each of you a
certificate of the Company, signed by the chairman of the board, or the
president and the principal financial or accounting officer of the Company,
dated the date of the effectiveness of such amendment or the date of the filing
of such supplement, in form reasonably satisfactory to you, of the same tenor as
the certificate referred to in Section 5(d) but modified to relate to the last
day of the fiscal quarter for which financial statements of the Company were
last filed with the Commission and to the Registration Statement and the
Prospectus as amended and supplemented to the time of the effectiveness of such
amendment or the filing of such supplement;
(k) Each time that the Registration Statement or the Prospectus is
amended or supplemented (other than by an amendment or supplement (i) relating
to any offering of Securities other than the Notes or (ii) providing solely for
the specification of or a change in the maturity dates, the interest rates, the
issuance prices, the redemption dates or other similar terms of any Notes sold
pursuant hereto), the Company shall furnish or cause to be furnished promptly to
each of you a written opinion of counsel of the Company in form reasonably
satisfactory to each of you, dated the date of the effectiveness of such
amendment or the date of the filing of such supplement, of the same tenor as the
opinion referred to in Section 5(b) but modified to relate to the Registration
Statement and the Prospectus as amended and supplemented to the time of the
effectiveness of such amendment or the filing of such supplement or, in lieu of
such opinion, counsel last furnishing such an opinion to you may furnish each of
you with a letter to the effect that you may rely on such last opinion to the
same extent as though it were dated the date of such letter authorizing reliance
(except that statements in such last opinion will be deemed to relate to the
Registration Statement and the Prospectus as amended and supplemented to the
time of the effectiveness of such amendment or the filing of such supplement);
13
13
(l) Each time that the Registration Statement or the Prospectus is
amended or supplemented to set forth amended or supplemental financial
information or such amended or supplemental information is incorporated by
reference in the Registration Statement or the Prospectus, the Company shall
cause Ernst & Young LLP, its independent public accountants, promptly to furnish
each of you a letter, dated the date of the effectiveness of such amendment or
the date of the filing of such supplement, in form reasonably satisfactory to
each of you, of the same tenor as the letter referred to in Section 5(e) with
such changes as may be necessary to reflect the amended and supplemental
financial information included or incorporated by reference in the Registration
Statement and the Prospectus, as amended or supplemented to the date of such
letter; provided, however, that, if the Registration Statement or the Prospectus
is amended or supplemented solely to include or incorporate by reference
financial information as of and for a fiscal quarter, Ernst & Young LLP may
limit the scope of such letter, which shall be reasonably satisfactory in form
to each of you, to the unaudited financial statements, the related "Management's
Discussion and Analysis of Financial Condition and Results of Operations" and
any other information of an accounting, financial or statistical nature included
in such amendment or supplement, unless, in the reasonable judgment of any of
you, such letter should cover other information; and
(m) During the period, if any, specified in any Terms Agreement, the
Company shall not, without the prior consent of the Purchaser, issue or announce
the proposed issuance of any of its debt securities, including Notes, with terms
substantially similar to the Notes being purchased pursuant to such Terms
Agreement, other than borrowings under its revolving credit agreements and lines
of credit and issuances of its commercial paper.
5. Conditions to the Obligations of the Agents. The obligations of each
Agent to solicit offers to purchase the Notes shall be subject to the accuracy
in all material respects of the representations and warranties on the part of
the Company contained in Section 1 hereof as of the Execution Time, on the
Effective Date, as of the date any supplement to the Prospectus is filed with
the Commission and as of each Closing Date, to the accuracy in all material
respects of the statements of the Company made in any certificates pursuant to
the provisions of this Section 5, to the performance in all material respects by
the Company
14
14
of its obligations hereunder and to satisfaction of the following additional
conditions in all material respects:
(a) If filing of the Prospectus, or any supplement thereto, is
required pursuant to Rule 424(b), the Prospectus and any such
supplement, shall have been filed in the manner and within the time
period required by Rule 424(b), or if the filing of the Rule 434 Term
Sheet is required pursuant to Rule 434, the Rule 434 Term Sheet will be
filed in the manner and within the time period required by Rule 434;
and no stop order suspending the effectiveness of the Registration
Statement shall have been issued and no proceedings for that purpose
shall have been instituted or threatened;
(b) The Company shall have furnished to each Agent the opinion
of the Vice President, General Counsel and Secretary of the Company,
dated the Execution Time, to the effect that:
(i) the Company has been duly incorporated and is validly
existing as a corporation in good standing under the laws of
the State of Ohio, with full corporate power to own its
properties and conduct its business as described in the
Prospectus and is qualified to do business as a foreign
corporation and is in good standing under the laws of each
jurisdiction which requires such qualification wherein it owns
or leases material properties or conducts material business
except where the failure to so qualify would not have a
material adverse effect on the Company and its subsidiaries
taken as a whole. The Company's significant subsidiaries (as
defined in Rule 405 under the Securities Act) (the
"Subsidiaries") are duly incorporated and validly existing as
corporations in good standing under the laws of the
jurisdiction in which it is organized, each with full
corporate power and authority to own its properties and
conduct business as described in the Prospectus, and are duly
qualified to do business as foreign corporations and are in
good standing under the laws of each jurisdiction which
requires such qualification wherein each such Subsidiary owns
or leases material properties or conducts material business
except where the failure to so qualify would not have a
material adverse effect on the operations of the Company and
its subsidiaries taken as a whole;
15
15
(ii) all the outstanding shares of capital stock of the
Subsidiaries have been duly and validly authorized and issued
and are fully paid and nonassessable, and, except as otherwise
set forth in the Prospectus, all outstanding shares of capital
stock of the Subsidiaries are owned by the Company either
directly or through wholly owned subsidiaries free and clear
of any perfected security interest and, to the knowledge of
such counsel, after due inquiry, any other security interests,
claims, liens or encumbrances;
(iii) the Company's authorized equity capitalization is as
incorporated in the Prospectus; and the Notes conform to the
description thereof contained in the Prospectus (subject to
the insertion in the Notes of the maturity dates, the interest
rates and other similar terms thereof which will be described
in supplements to the Prospectus as contemplated by the fourth
sentence of Section 1(a) of this Agreement);
(iv) the Indenture has been duly authorized, executed and
delivered, has duly qualified under the Trust Indenture Act,
and constitutes a legal, valid and binding instrument
enforceable against the Company in accordance with its terms
(subject, as to enforcement of remedies, to applicable
bankruptcy, reorganization, insolvency, moratorium or other
laws affecting creditors' rights generally from time to time
in effect); and the Notes have been duly authorized and, when
executed and authenticated in accordance with the provisions
of the Indenture and delivered to and paid for by the
purchasers thereof, will constitute legal, valid and binding
obligations of the Company entitled to the benefits of the
Indenture;
(v) to the knowledge of such counsel, after due inquiry,
there is no pending or threatened action, suit or proceeding
before any court or governmental agency, authority or body or
any arbitrator involving the Company or any of its
subsidiaries, of a character required to be disclosed in the
Registration Statement which is not adequately disclosed in
the Prospectus, and there is no franchise, contract or other
document
16
16
of a character required to be described in the Registration
Statement or Prospectus, or to be filed as an exhibit, which
is not described or filed as required; and the statements
included or incorporated in the Prospectus describing any
legal proceedings or material contracts or agreements relating
to the Company fairly summarize such matters;
(vi) the Registration Statement has become effective under
the Act; any required filing of the Prospectus pursuant to
Rule 424(b) has been made in the manner and within the time
period required by Rule 424(b), or if the Rule 434 Delivery
Alternative was used, the required filing of the Rule 434 Term
Sheet has been made in the manner and time period required by
Rule 434; to the best knowledge of such counsel, no stop order
suspending the effectiveness of the Registration Statement has
been issued, no proceedings for that purpose have been
instituted or threatened, and the Registration Statement and
the Prospectus (other than the financial statements and other
financial and statistical information contained therein as to
which such counsel need express no opinion) comply as to form
in all material respects with the applicable requirements of
the Act, the Exchange Act and the Trust Indenture Act and the
respective rules thereunder; and such counsel has no reason to
believe that the Registration Statement at the Effective Date
or at the Execution Time contained any untrue statement of a
material fact or omitted to state any material fact required
to be stated therein or necessary to make the statements
therein not misleading or that the Prospectus includes any
untrue statement of a material fact or omits to state a
material fact necessary to make the statements therein, in the
light of the circumstances under which they were made, not
misleading;
(vii) this Agreement has been duly authorized, executed
and delivered by the Company;
(viii) no consent, approval, authorization or order of any
court or governmental agency or body is required for the
consummation of the transac-
17
17
tions contemplated herein except such as have been obtained
under the Act and such as may be required under the blue sky
laws of any jurisdiction in connection with the sale of the
Notes as contemplated by this Agreement and such other
approvals (specified in such opinion) as have been obtained;
(ix) neither the execution and delivery of the Indenture,
the issue and sale of the Notes, nor the consummation of any
other of the transactions herein contemplated nor the
fulfillment of the terms hereof will conflict with, result in
a breach of, or constitute a default under the Amended
Articles of Incorporation or Code of Regulations, as amended,
of the Company or the terms of any indenture or other material
agreement or instrument known to such counsel and to which the
Company or any of its subsidiaries is a party or bound, or any
judgment, order or decree known to such counsel to be
applicable to the Company or any of its subsidiaries of any
court, regulatory body, administrative agency, governmental
body or arbitrator having jurisdiction over the Company or any
of its subsidiaries; and
(x) no holders of securities of the Company have rights to
the registration of such securities under the Registration
Statement.
In rendering such opinion, such counsel may rely (A) as to matters
involving the application of laws of any jurisdiction other than the
State of Ohio or the United States, to the extent deemed proper and
specified in such opinion, upon the opinion of other counsel of good
standing believed to be reliable and who are reasonably satisfactory to
counsel for the Agents and (B) as to matter of fact, to the extent
deemed proper, on certificates of responsible officers of the Company
and public officials.
(c) The Agents shall have received from ▇▇▇▇▇▇▇, Swaine &
▇▇▇▇▇, counsel for the Agents, such opinion or opinions, dated the
Execution Time, with respect to the issuance and sale of the Notes, the
Indenture, the Registration Statement, the Prospectus and other related
matters as the Agents may reasonably require, and the Company shall
have furnished to such counsel such documents as they reasonably
require, and the
18
18
Company shall have furnished to such counsel such documents as they
request for the purpose of enabling them to pass upon such matters;
(d) The Company shall have furnished to the Agents a
certificate of the Company, signed by the chairman of the board or the
president and the principal financial or accounting officer of the
Company, dated the Execution Time, to the effect that the signers of
such certificate have carefully examined the Registration Statement,
the Prospectus and this Agreement and that:
(i) the representations and warranties in Section 1 hereof
of the Company in this Agreement are true and correct in all
material respects on and as of the date hereof with the same
effect as if made on the date hereof and the Company has
substantially complied with all the agreements and satisfied
all the conditions on its part to be performed or satisfied as
a condition to the obligation of the Agents to solicit offers
to purchase the Notes;
(ii) no stop order suspending the effectiveness of the
Registration Statement has been issued and no proceedings for
that purpose have been instituted or, to the Company's
knowledge, threatened; and
(iii) since the date of the most recent financial
statements included in the Prospectus, there has been no
material adverse change in the condition (financial or other),
earnings, business or properties of the Company and its
subsidiaries, taken as a whole, whether or not arising from
transactions in the ordinary course of business, except as set
forth in or contemplated in the Prospectus;
(e) At the Execution Time, ▇▇▇▇▇ & Young LLP shall have
furnished to the Agents a letter or letters (which may refer to letters
previously delivered to the Agents), dated as of the Execution Time, in
form and substance reasonably satisfactory to the Agents, confirming
that they are independent accountants within the meaning of the Act and
the Exchange Act and the
19
19
respective applicable published rules and regulations thereunder and
stating in effect that:
(i) in their opinion the audited financial statements and
financial statement schedules included or incorporated in the
Registration Statement and the Prospectus and reported on by
them comply in form in all material respects with the
applicable accounting requirements of the Act and the Exchange
Act and the related published rules and regulations;
(ii) on the basis of a reading of the amounts included or
incorporated in the Registration Statement and the Prospectus
in response to Item 301 of Regulation S-K and of the latest
unaudited financial statements made available by the Company
and its subsidiaries; their limited review in accordance with
standards established by the American Institute of Certified
Public Accountants of the unaudited interim financial
information as indicated in their reports incorporated in the
Registration Statement and the Prospectus; carrying out
certain specified procedures (but not an examination in
accordance with generally accepted auditing standards) which
would not necessarily reveal matters of significance with
respect to the comments set forth in such letter; a reading of
the minutes of the meetings of the stockholders, directors and
executive committees of the Company and the Subsidiaries; and
inquiries of certain officials of the Company who have
responsibility for financial and accounting matters of the
Company and its subsidiaries as to transactions and events
subsequent to the date of the most recent audited financial
statements included or incorporated in the Registration
Statement and the Prospectus, nothing came to their attention
which caused them to believe that:
(1) the amounts in the "Selected Financial
Data", if any, included or incorporated in the
Registration Statement and the Prospectus do not
agree with the corresponding amounts in the audited
financial statements from which such amounts were
derived;
20
20
(2) any unaudited financial statements included
or incorporated in the Registration Statement and the
Prospectus do not comply in form in all material
respects with applicable accounting requirements and
with the published rules and regulations of the
Commission with respect to financial statements
included or incorporated in quarterly reports on Form
10-Q under the Exchange Act; and said unaudited
financial statements are not in conformity with
generally accepted accounting principles applied on a
basis substantially consistent with that of the
audited financial statements included or incorporated
in the Registration Statement and the Prospectus;
(3) with respect to the period subsequent to the
date of the most recent financial statements (other
than any capsule information), audited or unaudited,
in or incorporated in the Registration Statement and
the Prospectus, there were any changes, at a
specified date not more than five business days prior
to the date of the letter, in the aggregate long-term
debt due within one year and long-term debt
(exclusive of current portion) of the Company and its
consolidated subsidiaries or common stock of the
Company or decreases in the shareholders' equity of
the Company and its consolidated subsidiaries as
compared with the amounts shown on the most recent
consolidated balance sheet included or incorporated
in the Registration Statement and the Prospectus, or
for the period from the date of the most recent
financial statements included or incorporated in the
Registration Statement and the Prospectus to the date
of the most recently available monthly unaudited
financial information there were any decreases
relating to continuing operations, as compared with
the corresponding period in the preceding year in
total revenue or earnings before income taxes or in
the total or per share amounts of net earnings of the
Company and its consolidated subsidiaries, except in
all instances for changes or decreases set forth in
such letter, in which case the letter shall be
21
21
accompanied by an explanation by the Company
as to the significance thereof unless said
explanation is not deemed necessary by the
Agents; or
(4) the amounts included in any unaudited
"capsule" information included or incorporated in the
Registration Statement and the Prospectus do not
agree with the amounts set forth in the unaudited
financial statements for the same periods or were not
determined on a basis substantially consistent with
that of the corresponding amounts in the audited
financial statements included or incorporated in the
Registration Statement and the Prospectus;
(iii) they have performed certain other specified
procedures as a result of which they determined that certain
information of an accounting, financial or statistical nature
(which is limited to accounting, financial or statistical
information derived from the general accounting records of the
Company and its subsidiaries) set forth in the Registration
Statement and the Prospectus and in Exhibit 12 to the
Registration Statement, including the information included or
incorporated in Items 1, 2, 5, 6, 7 and 11 of the Company's
Annual Report on Form 10-K, incorporated in the Registration
Statement and the Prospectus, and the information included in
the "Management's Discussion and Analysis of Financial
Condition and Results of Operations" included or incorporated
in the Company's Quarterly Reports on Form 10-Q, incorporated
in the Registration Statement and the Prospectus, agrees with
the accounting records of the Company and its subsidiaries,
excluding any questions of legal interpretation; and
(iv) if unaudited pro forma financial statements are
included or incorporated in the Registration Statement and the
Prospectus, on the basis of a reading of the unaudited pro
forma financial statements, carrying out certain specified
procedures, inquiries of certain officials of the Company and
the acquired company who have responsibility for financial and
accounting matters, and proving the arithmetic accuracy of the
application
22
22
of the pro forma adjustments to the historical amounts in the
pro forma financial statements, nothing came to their
attention which caused them to believe that the pro forma
financial statements do not comply in form in all material
respects with the applicable accounting requirements of Rule
11-02 of Regulation S-X or that the pro forma adjustments have
not been properly applied to the historical amounts in the
compilation of such statements; and
(f) Prior to the Execution Time, the Company shall have
furnished to each Agent such further information, documents,
certificates and opinions of counsel as the Agents may reasonably
request.
If any of the conditions specified in this Section 5 shall not
have been fulfilled when and as provided in this Agreement, or if any of
the opinions and certificates mentioned above or elsewhere in this
Agreement shall not be in all material respects reasonably satisfactory in
form and substance to the Agents and their counsel, this agreement and all
obligations of any Agent hereunder may be canceled at any time by such
Agent. Notice of such cancellation shall be given to the Company in writing
or by telephone or telegraph confirmed in writing.
The documents required to be delivered by this Section 5 shall
be delivered at the office of Cravath, Swaine & ▇▇▇▇▇, counsel for the
Agents, at Worldwide Plaza, ▇▇▇ ▇▇▇▇▇▇ ▇▇▇▇▇▇, ▇▇▇ ▇▇▇▇, ▇▇▇ ▇▇▇▇, on the
date hereof.
6. Conditions to the Obligations of the Purchaser. The
obligations of the Purchaser to purchase any Notes will be subject to the
accuracy in all material respects of the representations and warranties on
the part of the Company in Section 1 of this Agreement as of the date of
the Terms Agreement and as of the Closing Date for such Notes, to the
performance and observance in all material respects by the Company of all
covenants and agreements herein contained on its part to be performed and
observed and to satisfaction of the following additional conditions
precedent in all material respects:
(a) No stop order suspending the effectiveness of the
Registration Statement shall have been issued and no proceedings for
that purpose shall have been instituted or threatened;
23
23
(b) To the extent agreed to between the Company and the
Purchaser in a Terms Agreement and except to the extent modified by
such Terms Agreement, the Purchaser shall have received, appropriately
updated, (i) a certificate of the Company, dated as of the Closing
Date, to the effect set forth in Section 5(d) (except that references
to the Prospectus shall be to the Prospectus as supplemented at the
time of execution of the Terms Agreement), (ii) the opinion of counsel
for the Company, dated as of the Closing Date, to the effect set forth
in Section 5(b), (iii) the opinion of ▇▇▇▇▇▇▇, ▇▇▇▇▇▇ & ▇▇▇▇▇, counsel
for the Purchaser, dated as of the Closing Date, to the effect set
forth in Section 5(c), and (iv) letter of ▇▇▇▇▇ & ▇▇▇▇▇, dated as of
the Closing Date, to the effect set forth in Section 5(e); and
(c) Prior to the Closing Date, the Company shall have
furnished to the Purchaser such further information, certificates and
documents as the Purchaser may reasonably request, including any
further items specified in Exhibit B.
If any of the conditions specified in this Section 6 shall not
have been fulfilled when and as provided in this Agreement and an
applicable Terms Agreement, or if any of the opinions and certificates
mentioned above or elsewhere in this Agreement or such Terms Agreement and
required to be delivered to the Purchaser pursuant to the terms hereof and
thereof shall not be in all material respects reasonably satisfactory in
form and substance to the Purchaser and its counsel, such Terms Agreement
and all obligations of the Purchaser thereunder and with respect to the
Notes subject thereto may be canceled at, or at any time prior to, the
respective Closing Date by the Purchaser. Notice of such cancellation shall
be given to the Company in writing or by telephone or telegraph confirmed
in writing.
7. Right of Person Who Agreed to Purchase to Refuse to
Purchase. (a) The Company agrees that any person who has agreed to purchase
and pay for any Note, including the Purchaser and any person who purchases
pursuant to a solicitation by any of the Agents, shall have the right to
refuse to purchase such Note if (a) at the Closing Date therefor, any
condition set forth in Section 5 or 6, as applicable, shall not be
satisfied.
24
24
(b) The Company agrees that any person who has agreed to
purchase and pay for any Note pursuant to a solicitation by any of the
Agents shall have the right to refuse to purchase such note if, subsequent
to the agreement to purchase such Note, any change, condition or
development specified in any of Sections 9(b)(i) through (v) shall have
occurred (with the judgment of the Agent which presented the offer to
purchase such Note being substituted for any judgment of a Purchaser
required therein), the effect of which is, in the judgment of the Agent
which presented the offer to purchase such Note, so material and adverse as
to make it impractical to proceed with the sale and delivery of such Note
(it being understood that under no circumstance shall any such Agent have
any duty or obligation under this Agreement to the Company or to any such
person to exercise the judgment permitted to be exercised under this
Section 7(b) and Section 9(b)).
8. Indemnification and Contribution. (a) The Company agrees to
indemnify and hold harmless each of you, the directors, officers and
employees of each of you and each person who controls each of you within
the meaning of either the Act or the Exchange Act against any and all
losses, claims, damages or liabilities, joint or several, to which you,
they or any of you or them may become subject under the Act, the Exchange
Act or other Federal or state statutory law or regulation, at common law or
otherwise, insofar as such losses, claims, damages or liabilities (or
actions in respect thereof) arise out of or are based upon any untrue
statement or alleged untrue statement of a material fact contained in the
Registration Statement as originally filed or in any amendment thereof, or
in the Prospectus or any preliminary Prospectus, or in any amendment
thereof or supplement thereto, or arise out of or are based upon the
omission or alleged omission to state therein a material fact required to
be stated therein or necessary to make the statements therein not
misleading, and agrees to reimburse as incurred each such indemnified party
for any legal or other expenses reasonably incurred by them in connection
with investigating or defending any such loss, claim, damage, liability or
action; provided, however, that (i) the Company will not be liable in any
such case to the extent that any such loss, claim, damage or liability
arises out of or is based upon any such untrue statement or alleged untrue
statement or omission or alleged omission made therein in reliance upon and
in conformity with written information furnished to the Company by or on
behalf of any of you specifically for use in connection with the
25
25
preparation thereof, and (ii) such indemnity with respect to the Prospectus
or any preliminary Prospectus shall not inure to the benefit of any of you
(or any person controlling any of you) from whom the person asserting any
such loss, claim, damage or liability purchased the Notes which are the
subject thereof if such person did not receive a copy of the Prospectus (or
the Prospectus as supplemented) excluding documents incorporated therein by
reference at or prior to the confirmation of the sale of such Notes to such
person in any case where such delivery is required by the Act and the
untrue statement or omission of a material fact contained in the Prospectus
or any preliminary Prospectus was corrected in the Prospectus (or the
Prospectus as supplemented). This indemnity agreement will be in addition
to any liability which the Company may otherwise have. If the Company shall
default in its obligations to deliver Notes to a purchaser whose offer it
has accepted, the Company shall indemnify and hold each of you harmless
against any loss, claim or damage arising from or as a result of such
default by the Company.
(b) Each of you agrees to indemnify and hold harmless the
Company, each of its employees and directors, each of its officers who
signs the Registration Statement and each person who controls the Company
within the meaning of either the Act or the Exchange Act, to the same
extent as the foregoing indemnity from the Company to you, but only with
reference to written information relating to such of you furnished to the
Company by or on behalf of such of you specifically for use in the
preparation of the documents referred to in the foregoing indemnity. This
indemnity agreement will be in addition to any liability which you may
otherwise have. The Company acknowledges that the statements set forth in
the last paragraph of the cover page and under the heading "Underwriting"
or "Plan of Distribution", of any preliminary Prospectus and the Prospectus
constitute the only information furnished in writing by or on behalf of any
of you for inclusion in the documents referred to in the foregoing
indemnity, and you, as the Agents, confirm that such statements are
correct.
(c) Promptly after receipt by an indemnified party under this
Section 8 of notice of the commencement of any action, such indemnified
party will, if a claim in respect thereof is to be made against the
indemnifying party under this Section 8, notify the indemnifying party in
writing of the commencement thereof; but the omission so to notify the
indemnifying party (i) will not relieve it from liability which it may have
to any indemnified party
26
26
otherwise than under this Section 8. In case any such action is brought
against any indemnified party, and it notifies the indemnifying party of
the commencement thereof, the indemnifying party will be entitled to
participate therein, and to the extent that it may elect by written notice
delivered to the indemnified party promptly after receiving the aforesaid
notice from such indemnified party, to assume the defense thereof, with
counsel satisfactory to such indemnified party; provided, however, that if
the defendants in any such action include both the indemnified party and
the indemnifying party and the indemnified party shall have reasonably
concluded that there may be legal defenses available to it and/or other
indemnified parties which are different from or additional to those
available to the indemnifying party, the indemnified party or parties shall
have the right to select separate counsel to assert such legal defenses and
to otherwise participate in the defense of such action on behalf of such
indemnified party or parties. Upon receipt of notice from the indemnifying
party to such indemnified party of its election so to assume the defense of
such action and approval by the indemnified party of counsel, the
indemnifying party will not be liable to such indemnified party under this
Section 8 for any legal or other expenses subsequently incurred by such
indemnified party in connection with the defense thereof unless (i) the
indemnified party shall have employed separate counsel in connection with
the assertion of legal defenses in accordance with the proviso to the next
preceding sentence (it being understood, however, that the indemnifying
party shall not be liable for the expenses of more than one separate
counsel and an additional local counsel, if needed, approved by you in the
case of paragraph (a) of this Section 8, representing the indemnified
parties under such paragraph (a) who are parties to such action), (ii) the
indemnifying party shall not have employed counsel satisfactory to the
indemnified party to represent the indemnified party within a reasonable
time after notice of commencement of the action, (iii) the indemnifying
party has authorized the employment of counsel for the indemnified party at
the expense of the indemnifying party or (iv) the use of counsel chosen by
the indemnifying party to represent the indemnified party would present
such counsel with a conflict of interest; and except that, if clause (i) or
(iii) is applicable, such liability shall be only in respect of the counsel
referred to in such clause (i) or (iii).
(d) In order to provide for just and equitable contribution in
circumstances in which the indemnification
27
27
provided for in paragraph (a) or (b) of this Section 8 is due in accordance
with its terms, but is held by a court to be unavailable in whole or in
part to hold harmless an indemnified party for any reason (other than an
act or omission or such indemnified party), the Company and each of you
agree to contribute to the aggregate losses, claims, damages and
liabilities (including legal or other expenses reasonably incurred in
connection with investigating or defending same) (collectively, "Losses")
to which the Company and one or more of you may be subject in such
proportion so that each of you is responsible for that portion as is
appropriate to reflect the relative benefits received by the Company and
each of you from the offering of the Notes from which such Losses arise;
provided, however, that in no case shall any of you be responsible for any
amount in excess of the commissions received by such of you in connection
with the Notes from which such Losses arise (or, in the case of Notes sold
pursuant to a Terms Agreement, the aggregate commissions that would have
been received by such of you if such commissions had been payable). If the
allocation provided by the immediately preceding sentence is unavailable
for any reason, the Company and each of you shall contribute in such
proportion as is appropriate to reflect not only such relative benefits but
also the relative fault of the Company and of each of you in connection
with the statements or omissions which resulted in such Losses as well as
any other relevant equitable considerations. Benefits received by the
Company shall be deemed to be equal to the total net proceeds from the
offering (before deducting expenses) of the Notes from which such Losses
arise, and benefits received by each of you shall be deemed to be equal to
the total commissions received by such of you in connection with the Notes
from which such Losses arise (or, in the case of Notes sold pursuant to a
Terms Agreement, the aggregate commissions that would have been received by
such of you if such commissions had been payable). Relative fault shall be
determined by reference to whether any alleged untrue statement or omission
relates to information provided by the Company or any of you. The Company
and each of you agree that it would not be just and equitable if
contribution were determined by pro rata allocation or any other method of
allocation which does not take account of the equitable considerations
referred to above. Notwithstanding the provisions of this paragraph (d), no
person guilty of fraudulent misrepresentation (within the meaning of
Section 11(f) of the Act) shall be entitled to contribution from any person
who was not guilty of such fraudulent
28
28
misrepresentation. For purposes of this Section 8, each person who controls
any of you within the meaning of the Act or the Exchange Act and each
director, officer and employee of any of you shall have the same rights to
contribution as you and each person who controls the Company within the
meaning of either the Act or the Exchange Act, each officer of the Company
who shall have signed the Registration Statement and each director, officer
and employee of the Company shall have the same rights to contribution as
the Company, subject in each case to the applicable terms and conditions of
this paragraph (d). Any party entitled to contribution will, promptly after
receipt of notice of commencement of any action, suit or proceeding against
such party in respect of which a claim for contribution may be made against
another party or parties under this paragraph (d), notify such party or
parties from whom contribution may be sought, but the omission to so notify
such party or parties shall not relieve the party or parties from whom
contribution may be sought from other obligation it or they may have
hereunder or otherwise than under this paragraph (d).
9. Termination. (a) This Agreement will continue in effect
until terminated as provided in this Section 9. This Agreement may be
terminated by either the Company as to any of you insofar as this Agreement
relates to such of you, giving written notice of such termination to such
of you or the Company, as the case may be. This Agreement shall so
terminate at the close of business on the first business day following the
receipt of such notice by the party to whom such notice is given. In the
event of such termination, no party shall have any liability to the other
party hereto, except as provided in Section 2(a), Section 4(h), Section 8
and Section 10.
(b) Each Terms Agreement shall be subject to termination in
the absolute discretion of the Purchaser, by notice given to the Company
prior to delivery of any payment for any Note to be purchased thereunder,
if prior to such time (i) there shall have occurred, subsequent to the
agreement to purchase such Note, any change, or any development involving a
prospective change, in or affecting the business or properties of the
Company and its subsidiaries, taken as a whole, the effect of which is, in
the judgment of the Purchaser, so material and adverse as to make it
impractical to proceed with the offering or delivery of such Note, (ii)
there shall have been, subsequent to the agreement to purchase such Note,
any decrease in the rating
29
29
of any of the Company's debt securities by ▇▇▇▇▇'▇ or S&P or any formal
notice given of any intended or contemplated decrease in any such rating,
(iii) trading in the Company's Common Stock shall have been suspended by
the Commission or the New York Stock Exchange (other than temporarily
pending an announcement or development) or trading in securities generally
on the New York Stock Exchange shall have been suspended or limited or
minimum prices shall have been established on such Exchange, (iv) a banking
moratorium shall have been declared either by Federal or New York State
authorities or (v) there shall have occurred any material outbreak or
material escalation of hostilities, declaration by the United States of war
or other calamity or crisis, the effect of which on financial markets is
such as to make it, in the judgment of the Purchaser, impracticable to
proceed with the offering or delivery of such Notes as contemplated by the
Prospectus (exclusive of any supplement subsequent to such event).
10. Survival of Certain Provisions. The respective agreements,
representations, warranties, indemnities and other statements of the
Company or its officers and of you set forth in or made pursuant to this
Agreement will remain in full force and effect, regardless of any
investigation made by or on behalf of you or the Company or any of the
directors, officers, employees or controlling persons referred to in
Section 8 hereof, and will survive delivery of and payment for the Notes.
The provisions of Sections 4(h) and 8 hereof shall survive the termination
or cancellation of this Agreement. The provisions of this Agreement
(including without limitation Section 7 hereof) applicable to any purchase
of a Note for which an agreement to purchase exists prior to the
termination hereof shall survive any termination of this Agreement. If at
the time of termination of this Agreement any Purchaser shall own any Notes
purchased pursuant to a Terms Agreement with the intention of selling them,
the provisions of Section 4 shall remain in effect until such Notes are
resold.
11. Notices. All communications hereunder will be in writing
and effective only on receipt, and, if sent to any of you, will be mailed,
delivered or telegraphed and confirmed to such of you, at the address
specified in Schedule I hereto; or, if sent to the Company, will be mailed,
delivered or telecopied and confirmed to it at ▇▇▇ ▇▇▇▇▇▇▇▇ ▇▇▇▇▇▇, ▇.▇.,
▇▇▇▇▇▇▇▇▇, ▇▇▇▇ ▇▇▇▇▇, attention of the Treasurer.
30
30
12. Successors. This Agreement will inure to the benefit of
and be binding upon the parties hereto, their respective successors, the
directors, officers, employees, and controlling persons referred to in
Section 8 hereof and, to the extent provided in Section 7, any person will
have any right or obligation hereunder.
13. Applicable Law. This Agreement will be governed by and
construed in accordance with the laws of the State of New York.
14. Counterparts. This Agreement may be executed in
counterparts, each of which shall be deemed an original but all of which
shall together constitute one and the same instrument.
31
31
If the foregoing is in accordance with your understanding of
our agreement, please sign and return to us the enclosed duplicate hereof,
whereupon this letter and your acceptance shall represent a binding
agreement among the Company and you.
Very truly yours,
THE ▇▇▇▇▇▇▇-▇▇▇▇▇▇▇▇ COMPANY,
by
-------------------------
Title:
The foregoing Agreement is hereby confirmed and accepted as of the date hereof.
SALOMON BROTHERS INC,
by
--------------------
Title:
▇▇▇▇▇▇▇ LYNCH, ▇▇▇▇▇▇, ▇▇▇▇▇▇ & ▇▇▇▇▇ INCORPORATED
by
----------------------
Title:
32
SCHEDULE I
Selling Agency Agreement dated [ ], 1996
Registration Statement No. 33-22705 ("Registration Statement 1")
Amount of the Securities registered under Registration Statement 1: $200,000,000
Registration Statement No. 333-[ ] ("Registration Statement 2")
Amount of the Securities registered under Registration Statement 2: $250,000,000
Aggregate Amount of the Securities Registered: $450,000,000
The Company agrees to pay each Agent a commission equal to the
following percentage of the principal amount of each Note sold by each Agent:
Maturity Range of Notes % of Principal Amount
----------------------- ---------------------
From 9 months to less than 1 year....................................... .125%
From 1 year to less than 18 months ..................................... .150%
From 18 months to less than 2 years..................................... .200%
From 2 years to less than 3 years....................................... .250%
From 3 years to less than 4 years....................................... .350%
From 4 years to less than 5 years....................................... .450%
From 5 years to less than 6 years....................................... .500%
From 6 years to less than 7 years....................................... .550%
From 7 years to less than 10 years...................................... .600%
From 10 years to less than 15 years..................................... .625%
From 15 years to less than 20 years..................................... .700%
20 years up to and including 30 years .................................. .750%
Unless otherwise specified in the applicable Terms Agreement, the
discount or commission payable to a Purchaser shall be determined on the basis
of the commission schedule set forth above.
Address for notices:
Notices to Salomon Brothers Inc shall be directed to it at Seven World
Trade Center, New York, New York 10048, Attention Medium Term Notes Department.
33
2
Notices to ▇▇▇▇▇▇▇ ▇▇▇▇▇ & Co. shall be directed to it at ▇▇▇▇▇▇▇
Lynch, Pierce, ▇▇▇▇▇▇ & ▇▇▇▇▇ Incorporated, World Financial Center, North Tower,
10th Floor, New York, New York 10281-1311, Attention: MTN Product Management.
Notices to The ▇▇▇▇▇▇▇-▇▇▇▇▇▇▇▇ Company shall be directed to it at ▇▇▇
▇▇▇▇▇▇▇▇ ▇▇▇▇▇▇, ▇.▇., ▇▇▇▇▇▇▇▇▇, ▇▇▇▇ ▇▇▇▇▇, Attention Treasurer.
The Company may satisfy its obligation under subsection (c) of Section
4 of the Selling Agency Agreement to furnish to each of the Agents copies of all
documents filed by the Company with the Commission pursuant to Section 13(a),
13(c), 14 or 15(d) of the Exchange Act by promptly furnishing such documents to
Cravath, Swaine & ▇▇▇▇▇, ▇▇▇ ▇▇▇▇▇▇ ▇▇▇▇▇▇, ▇▇▇ ▇▇▇▇, ▇▇▇ ▇▇▇▇, ▇▇▇▇▇,
Attention: ▇▇▇▇▇▇▇ ▇. ▇▇▇▇▇▇, Esq.
34
EXHIBIT A
THE ▇▇▇▇▇▇▇-▇▇▇▇▇▇▇▇ COMPANY
Medium-Term Note Administrative Procedures
February , 1996
Medium-Term Notes, Series A, Due Nine Months or More from Date of Issue
(the "Notes") are to be offered on a continuing basis by The ▇▇▇▇▇▇▇-▇▇▇▇▇▇▇▇
Company (the "Company"). Salomon Brothers Inc and ▇▇▇▇▇▇▇ ▇▇▇▇▇ & Co., as agents
(individually, an "Agent" and collectively, the "Agents"), have agreed to
solicit purchases of Notes issued in fully registered form. The Agents will not
be obligated to purchase Notes for their own accounts. The Notes are being sold
pursuant to a Selling Agency Agreement among the Company and the Agents dated
February , 1996 (the "Agency Agreement"). The Notes will rank equally with all
other unsecured and unsubordinated debt of the Company and have been registered
with the Securities and Exchange Commission (the "Commission"). Chemical Bank
(the "Trustee") is the trustee under the Indenture dated as of February 1, 1996
(the "Indenture").
The Agency Agreement provides that Notes may also be purchased by an
Agent acting solely as principal and not as agent. In the event of any such
purchase, the functions of both the Agent and the beneficial owner under the
administrative procedures set forth below shall be performed by such Agent
acting solely as principal, unless otherwise agreed to between the Company and
such Agent acting as principal.
Each Note will be represented by either a Global Security (as defined
hereinafter) delivered to Chemical Bank ("Chemical"), as agent for The
Depository Trust Company ("DTC"), and recorded in the book-entry system
maintained by DTC (a "Book-Entry Note") or a certificate delivered to the Holder
thereof or a Person designated by such Holder (a "Certificated Note"). Only
Notes denominated and payable in U.S. dollars may be issued as Book-Entry Notes.
An owner of a Book-Entry Note will not be entitled to receive a certificate
representing such Note, except in the event that use of the book-entry system
for the Notes is discontinued.
The procedures to be followed during, and the specific terms of, the
solicitation of offers by the Agents and the sale as a result thereof by the
Company are
35
2
explained below. Administrative and record-keeping responsibilities will be
handled for the Company by its Treasury Department. The Company will advise the
Agents and the Trustee in writing of those persons handling administrative
responsibilities with whom the Agents and the Trustee are to communicate
regarding offers to purchase Notes and the details of their delivery.
Administrative procedures and specific terms of the offering are
explained below. Book-Entry Notes will be issued in accordance with the
administrative procedures set forth in Part I hereof, as adjusted in accordance
with changes in DTC's operating requirements, and Certificated Notes will be
issued in accordance with the administrative procedures set forth in Part II
hereof. Unless otherwise defined herein, terms defined in the Indenture and the
Notes shall be used herein as therein defined. Notes for which interest is
calculated on the basis of a fixed interest rate, which may be zero, are
referred to herein as "Fixed Rate Notes". Notes for which interest is calculated
on the basis of a floating interest rate are referred to herein as "Floating
Rate Notes". To the extent the procedures set forth below conflict with the
provisions of the Notes, the Indenture, DTC's operating requirements or the
Agency Agreement, the relevant provisions of the Notes, the Indenture, DTC's
operating requirements and the Agency Agreement shall control.
PART I
Administrative Procedures for
Book-Entry Notes
In connection with the qualification of the Book- Entry Notes for
eligibility in the book-entry system maintained by DTC, Chemical will perform
the custodial, document control and administrative functions described below, in
accordance with its respective obligations under a Letter of Representations
from the Company and Chemical to DTC dated as of the date hereof and a
Medium-Term Note Certificate Agreement between Chemical and DTC and its
obligations as a participant in DTC, including DTC's Same- Day Funds Settlement
System ("SDFS").
Issuance: On any date of settlement (as defined under
"Settlement" below) for one or more Book-Entry
Notes,
36
3
the Company will issue a single global
security in fully registered form without coupons
(a "Global Security") representing up to
$200,000,000 principal amount of all such
Book-Entry Notes that have the same original issue
date, original issue discount provisions, if any,
Interest Payment Dates, Record Dates, reset,
extension, repayment, sinking fund and redemption
provisions, if any, Maturity Date and, in the case
of Fixed Rate Notes, interest rate, or, in the case
of Floating Rate Notes, initial interest rate, Base
Rate, Index Maturity, Interest Reset Period,
Interest Reset Dates, Spread or Spread Multiplier,
if any, minimum interest rate, if any, and maximum
interest rate, if any (all of the foregoing are
collectively referred to as the "Terms"). Each
Global Security will be dated and issued as of the
date of settlement and authenticated by the
Trustee. Each Global Security will bear an original
issue date, which will be (i) with respect to an
original Global Security (or any portion thereof),
the original issue date specified in such Global
Security and (ii) following a consolidation of
Global Securities, with respect to the Global
Security resulting from such consolidation, the
most recent Interest Payment Date to which interest
has been paid or duly provided for on the
predecessor Global Securities, regardless of the
date of authentication of such resulting Global
Security. No Global Security will represent (i)
both Fixed Rate and Floating Rate Book- Entry Notes
or (ii) any Certificated Note.
37
4
Identification The Company has arranged with the CUSIP Service
Numbers: Bureau of Standard & Poor's Corporation (the "CUSIP
Service Bureau") for the reservation of a series of
CUSIP numbers, which series consists of
approximately 900 CUSIP numbers and relates to
Global Securities representing Book-Entry Notes and
book-entry medium-term notes issued by the Company
with other series designations. Chemical, the
Company and DTC have obtained from the CUSIP
Service Bureau a written list of such reserved
CUSIP numbers. The Company will assign CUSIP
numbers to Global Securities as described below
under Settlement Procedure "B". DTC will notify the
CUSIP Service Bureau periodically of the CUSIP
numbers that the Company has assigned to Global
Securities. Chemical will notify the Company at any
time when fewer than 100 of the reserved CUSIP
numbers remain unassigned to Global Securities,
and, if it deems necessary, the Company will
reserve additional CUSIP numbers for assignment to
Global Securities. Upon obtaining such additional
CUSIP numbers, the Company shall deliver a list of
such additional CUSIP numbers to Chemical and DTC.
Registration: Global Securities will be issued only in fully
registered form without coupons. Each Global
Security will be registered in the name of Cede &
Co., as nominee for DTC, on the securities register
for the Notes maintained under the Indenture. The
beneficial owner of a Book-Entry Note (or one or
more indirect participants in DTC designated by
such owner) will designate one or more participants
in DTC (with respect to such Book-
38
5
Entry Note, the "Participants") to act as agent or
agents for such owner in connection with the
book-entry system maintained by DTC, and DTC will
record in book-entry form, in accordance with
instructions provided by such Participants, a
credit balance with respect to such beneficial
owner of such Book-Entry Note in the account of
such Participants. The ownership interest of such
beneficial owner (or such participant) in such
Book- Entry Note will be recorded through the
records of such Participants or through the
separate records of such Participants and one or
more indirect participants in DTC.
Transfers: Transfers of a Book-Entry Note will be accomplished
by book entries made by DTC and, in turn, by
Participants (and in certain cases, one or more
indirect participants in DTC) acting on behalf of
beneficial transferors and transferees of such
Note.
Exchanges: Chemical may deliver to DTC and the CUSIP Service
Bureau at any time a written notice of
consolidation (a copy of which shall be attached to
the resulting Global Security described below)
specifying (i) the CUSIP numbers of two or more
Outstanding Global Securities that represent (A)
Fixed-Rate Book-Entry Notes having the same Terms
and for which interest has been paid to the same
date, or (B) Floating Rate Book-Entry Notes having
the same terms and for which interest has been paid
to the same date, (ii) a date, occurring at least
thirty days after such written notice is delivered
and at least thirty days before the next Interest
Payment Date for such Book-Entry Notes, on
39
6
which such Global Securities shall be exchanged for
a single replacement Global Security and (iii) a
new CUSIP number, obtained from the Company, to be
assigned to such replacement Global Security. Upon
receipt of such a notice, DTC will send to its
participants (including Chemical) a written
reorganization notice to the effect that such
exchange will occur on such date. Prior to the
specified exchange date, Chemical will deliver to
the CUSIP Service Bureau a written notice setting
forth such exchange date and such new CUSIP number
and stating that, as of such exchange date, the
CUSIP numbers of the Global Securities to be
exchanged will no longer be valid. On the specified
exchange date, Chemical will exchange such Global
Securities for a single Global Security bearing the
new CUSIP number and the CUSIP numbers of the
exchanged Global Securities will, in accordance
with CUSIP Service Bureau procedures, be canceled
and not immediately reassigned. Notwithstanding the
foregoing, if the Global Securities to be exchanged
exceed $200,000,000 in aggregate principal amount,
one Global Security will be authenticated and
issued to represent each $200,000,000 of principal
amount of the exchanged Global Securities and an
additional Global Security will be authenticated
and issued to represent any remaining principal
amount of such Global Securities (see
"Denominations" below).
Maturities: Each Book-Entry Note will mature on a date (the
"Maturity Date") not less than 9 months after the
Original Issue Date for such Note.
40
7
Price to Public: Each Book-Entry Note will be issued at the
percentage of principal amount specified in the
Prospectus Supplement (as defined in Section 1(c)
of the Agency Agreement) or in a Pricing Supplement
as defined in the Prospectus Supplement relating to
such Note.
Denominations: The denomination of any Book-Entry Note will be a
minimum of $1,000 or any amount in excess thereof
that is an integral multiple of $1,000. Global
Securities will be denominated in principal amounts
not in excess of $200,000,000. If one or more
Book-Entry Notes having an aggregate principal
amount in excess of $200,000,000 would, but for the
preceding sentence, be represented by a single
Global Security, then one Global Security will be
authenticated and issued to represent each
$200,000,000 principal amount of such Book-Entry
Note or Notes and an additional Global Security
will be authenticated and issued to represent any
remaining principal amount of such Book-Entry Note
or Notes. In such a case, each of the Global
Securities representing such Book-Entry Note or
Notes shall be assigned the same CUSIP number.
Interest: General. Except as set forth in the Book-Entry
Note, interest, if any, on each Book-Entry Note
will accrue from the original issue date for the
first interest period or the last date to which
interest has been paid, if any, for each subsequent
interest period, on the Global Security
representing such Book-Entry Note, and will be
calculated and paid in the manner described in such
Book-Entry Note
41
8
and in the Prospectus, as supplemented by the
applicable Pricing Supplement. Unless otherwise
specified therein, each payment of interest on a
Book-Entry Note will include interest accrued to
but excluding the Interest Payment Date or to but
excluding the maturity of any payment of principal
(hereinafter referred to as "Maturity"), other than
a Maturity of a Fixed Rate Book-Entry Note
occurring on the 31st day of a month, in which case
such payment of interest will include interest
accrued to but excluding the 30th day of such
month, or to but excluding the date of redemption
or repayment in full of such Book-Entry Note
(hereinafter referred to as "Redemption"). Interest
payable at the Maturity or upon Redemption of a
Book-Entry Note will be payable to the person to
whom the principal of such Note is payable.
Standard & Poor's Corporation will use the
information received in the pending deposit message
described under Settlement Procedure "C" below in
order to include the amount of any interest payable
and certain other information regarding the related
Global Security in the appropriate (daily or
weekly) bond report published by Standard & Poor's
Corporation.
Record Dates. The Record Date with respect to any
Interest Payment Date shall be the date 15 calendar
days immediately preceding such Interest Payment
Date (whether or not a Business Day).
Interest Payment Dates on Fixed Rate Book-Entry
Notes. Unless otherwise specified pursuant to
Settlement Procedure "A" below,
42
9
interest payments on Fixed Rate Book-Entry Notes
will be made semi-annually on May 1 and November 1
of each year and at Maturity or upon Redemption;
provided, however, that in the case of a Fixed Rate
Book- Entry Note issued between a Record Date and
an Interest Payment Date, the first interest
payment will be made on the Interest Payment Date
following the next succeeding Record Date. If any
Interest Payment Date for a Fixed Rate Book- Entry
Note is not a Business Day, the payment due on such
day shall be made on the next succeeding Business
Day and no interest shall accrue on such payment
for the period from and after such Interest Payment
Date.
Interest Payment Dates on Floating Rate Book-Entry
Notes. Interest Payments will be made on Floating
Rate Book-Entry Notes monthly, quarterly,
semi-annually or annually, or as specified in the
applicable Pricing Supplement. Unless otherwise set
forth in the Note, interest will be payable, in the
case of Floating Rate Book- Entry Notes with a
monthly Interest Payment Period, on the third
Wednesday of each month; with a quarterly Interest
Payment Period, on the third Wednesday of March,
June, September and December of each year; with a
semi-annual Interest Payment Period, on the third
Wednesday of the two months specified pursuant to
Settlement Procedure "A" below; and with an annual
Interest Payment Period, on the third Wednesday of
the month specified pursuant to Settlement
Procedure "A" below; provided, however, that if an
Interest Payment Date for a Floating Rate
43
10
Book-Entry Note would otherwise be a day that is
not a Business Day with respect to such Floating
Rate Book-Entry Notes, such Interest Payment Date
will be the next succeeding Business Day with
respect to such Floating Rate Book-Entry Note,
except in the case of a Floating Book-Entry Note
for which the Base Rate is LIBOR, if such Business
Day is in the next succeeding calendar month, such
Interest Payment Date will be the immediately
preceding Business Day; and provided further that
in the case of a Floating Rate Book-Entry Note
issued between a Record Date and an Interest
Payment Date, the first interest payment will be
made on the Interest Payment Date following the
next succeeding Record Date.
Notice of Interest Payment and Record Dates. At the
written request of the Company, Chemical will
deliver to the Company and DTC a written list of
Record Dates and Interest Payment Dates that will
occur with respect to Book-Entry Notes. Promptly
after each Interest Determination Date for Floating
Rate Book-Entry Notes, Chemical, as Calculation
Agent, will notify Standard & Poor's Corporation of
the interest rates determined on such Interest
Determination Date.
Calculation of Interest: Fixed Rate Book-Entry Notes. Interest on Fixed Rate
Book-Entry Notes (including interest for partial
periods) will be calculated on the basis of a
360-day year of twelve 30-day months.
Floating Rate Book-Entry Notes. Interest rates on
Floating Rate
44
11
Book-Entry Notes will be determined as set forth in
the form of Notes. Interest on Floating Rate Book-
Entry Notes, except as otherwise set forth therein,
will be calculated on the basis of actual days
elapsed and a year of 360 days, except that in the
case of a Floating Rate Book-Entry Note for which
the Base Rate is the Treasury Rate, interest will
be calculated on the basis of the actual number of
days in the year.
Payment of Principal and Payment of Interest Only. Promptly after each
Interest: Record Date, Chemical will deliver to the Company
and DTC a written notice setting forth, by CUSIP
number, to the extent then ascertainable, the
amount of interest to be paid on each Global
Security on the following Interest Payment Date
(other than an Interest Payment Date coinciding
with Maturity or Redemption) and the total of such
amounts. DTC will confirm the amount payable on
each Global Security on such Interest Payment Date
by reference to the appropriate bond reports
published by Standard & Poor's Corporation. The
Company will pay to Chemical, as paying agent, the
total amount of interest due on such Interest
Payment Date (other than at Maturity or upon
Redemption), and Chemical will pay such amount to
DTC, at the times and in the manner set forth below
under "Manner of Payment".
Payments at Maturity or Upon Redemption. On or
about the first Business Day of each month,
Chemical will deliver to the Company, DTC and the
Trustee a written list of principal and to the
extent then ascertainable,
45
12
interest to be paid on each Global Security
maturing (at Maturity or upon Redemption or
otherwise) in such month. Chemical, the Company and
DTC will confirm the amounts of such principal and
interest payments with respect to each such Global
Security on or about the fifth Business Day
preceding the Maturity Date or Redemption Date, as
the case may be, of such Global Security. On or
before the Maturity Date or Redemption Date, as the
case may be, the Company will pay to Chemical, as
paying agent, the principal amount of such Global
Security, together with interest due at such
Maturity Date or Redemption Date, as the case may
be. Chemical will pay such amount to DTC at the
times and in the manner set forth below under
"Manner of Payment". If any Maturity Date or
Redemption Date of a Global Security representing
Book-Entry Notes is not a Business Day, the payment
due on such day shall be made on the next
succeeding Business Day and no interest shall
accrue on such payment for the period from and
after such Maturity Date or Redemption Date.
Promptly after payment to DTC of the principal and
interest due at Maturity or upon Redemption of such
Global Security, the Trustee will cancel such
Global Security in accordance with the Indenture
and so advise the Company. On the first Business
Day of each month, if Chemical is not the Trustee,
then Chemical will deliver to the Trustee a written
statement indicating the total principal amount of
Outstanding Global Securities as of the immediately
preceding Business Day.
46
13
Manner of Payment. The total amount of any
principal and interest due on Global Securities on
any Interest Payment Date or at Maturity or upon
Redemption shall be paid by the Company to Chemical
in immediately available funds no later than 9:30
A.M. (New York City time) on such date, or as soon
as possible thereafter. The Company will make such
payment on such Global Securities by instructing
Chemical to withdraw funds from an account
maintained by the Company at Chemical or by wire
transfer to Chemical. The Company will confirm any
such instructions in writing to Chemical. Prior to
10 A.M. (New York City time) on the Maturity Date
or Redemption Date or as soon as possible
thereafter, Chemical will pay by separate wire
transfer (using Fedwire message entry instructions
in a form previously specified by DTC) to an
account at the Federal Reserve Bank of New York
previously specified by DTC, in funds available for
immediate use by DTC, each payment of principal
(together with interest thereon) due on a Global
Security on such date. On each Interest Payment
Date (other than at Maturity or upon Redemption),
interest payments shall be made to DTC, in funds
available for immediate use by DTC, in accordance
with existing arrangements between Chemical and
DTC. On each such date, DTC will pay, in accordance
with its SDFS operating procedures then in effect,
such amounts in funds available for immediate use
to the respective Participants in whose names the
Book-Entry Notes represented by such Global
Securities are recorded in the book-entry system
maintained by
47
14
DTC. None of the Company (as issuer or as paying
agent), the Trustee or Chemical shall have any
direct responsibility or liability for the payment
by DTC to such Participants of the principal of and
interest on the Book-Entry Notes.
Withholding Taxes. The amount of any taxes required
under applicable law to be withheld from any
interest payment on a Book-Entry Note will be
determined and withheld by the Participant,
indirect participant in DTC or other Person
responsible for forwarding payments and materials
directly to the beneficial owner of such Note.
Procedures upon Company Notice to Trustee Regarding Exercise of
Company's Exercise Optional Reset. Not less than 50 or more than 60
of Optional Reset or days before an Optional Reset Date as set forth in
Optional Extension a Book-Entry Note, the Company will notify the
of Maturity: Trustee whether it is exercising its option to
reset the Interest Rate or Spread or Spread
Multiplier, as the case may be, for such Book-Entry
Note, and if so, (i) the new Interest Rate or
Spread or Spread Multiplier, as the case may be,
for such Book-Entry Note during the period from
such Optional Reset Date to the next Optional Reset
Date as set forth in such Book- Entry Note or, if
there is no such next Optional Reset Date, to the
Stated Maturity of such Book-Entry Note (the
"Subsequent Interest Period"); and (ii) the
provisions, if any, for redemption of such
Book-Entry Note during such Subsequent Interest
Period, including the date or dates on which or the
period or periods
48
15
during which such redemption may occur during such
Subsequent Interest Period.
Company Notice to Trustee Regarding Exercise of
Optional Extension of Maturity. If the Company
elects to exercise an option, as set forth in a
Book-Entry Note, to extend the Stated Maturity of
such Note, it will so notify the Trustee no less
than 50 or more than 60 days before the Stated
Maturity of such Book- Entry Note, and will further
indicate (i) the new Stated Maturity; (ii) the
Interest Rate or Spread or Spread Multiplier, as
the case may be, applicable to such extension
period and (iii) the provisions, if any, for
redemption of such Book-Entry Note during such
extension period, including the date or dates on
which or the period or periods during which such
redemption may occur during such extension period.
Trustee Notice to DTC Regarding Company's Exercise
of Optional Extension or Reset. Upon receipt of
notice from the Company regarding the Company's
exercise of either an optional extension of
maturity or an optional reset, the Trustee will
hand-deliver a notice to DTC not less than 40 days
before the Optional Reset Date (in which case a
"Reset Notice") or the old Stated Maturity (in
which case an "Extension Notice"), as the case may
be, which Reset Notice or Extension Notice shall
identify such Book-Entry Note by CUSIP number and
shall contain the information required by the terms
of the Book-Entry Note.
Trustee Notice to Company Regarding
49
16
Option to be Repaid. If, after receipt of either a
Reset Notice or an Extension Notice, DTC exercises
the option for repayment by tendering the Global
Security representing the Book-Entry Note to be
repaid as set forth in such Note, the Trustee shall
give notice to the Company not less than 22 days
before the Optional Reset Date or the old Stated
Maturity, as the case may be, of the principal
amount of Book-Entry Notes to be repaid on such
Optional Reset Date or old Stated Maturity, as the
case may be.
Company Notice Regarding New Interest Rate or New
Spread or Spread Multiplier. If the Company elects
to revoke the Interest Rate or Spread or Spread
Multiplier and establish a higher interest rate or
Spread or Spread Multiplier for an Optional Reset
Period or extension period, as the case may be, it
shall, not less than 20 days before such Optional
Reset Date or old Stated Maturity, so notify the
Trustee. The Trustee will immediately thereafter
notify DTC of the new Interest Rate or Spread or
Spread Multiplier applicable to such Book-Entry
Note.
Trustee Notice to Company Regarding DTC Revocation
of Option to be Repaid. If, after DTC has tendered
any Book-Entry Notes for repayment pursuant to an
Extension Notice or an Optional Reset Notice, DTC
then revokes such tender for repayment, the Trustee
shall give notice to the Company not less than five
days prior to the old Stated Maturity or Optional
Reset Date, as the case may be, of such revocation
and of the principal amount of Book-Entry
50
17
Notes for which tender for repayment has been
revoked.
Deposit of Repayment Price. On or before any old
Stated Maturity where the Maturity has been
extended, and on or before an Optional Reset Date,
the Company shall deposit with the Trustee an
amount of money sufficient to pay the principal
amount, plus interest accrued to such old Stated
Maturity or Optional Reset Date, as the case may
be, for all the Book-Entry Notes or portions
thereof which are to be repaid on such old Stated
Maturity or Optional Reset Date, as the case may
be. Such Trustee will use such money to repay such
Book- Entry Notes pursuant to the terms set forth
in such Notes.
Procedures upon Company Notice to Trustee Regarding Exercise of
Company Notice to Optional Redemption. At least 45 days prior to the
Trustee Regarding date on which it intends to redeem a Book-Entry
Company's Exercise Note, the Company will notify the Trustee that it
of Optional Redemption: is exercising such option with respect to such
Book-Entry Note on such date.
Trustee Notice to DTC Regarding Company's Exercise
of Optional Redemption. After receipt of notice
that the Company is exercising its option to redeem
a Book-Entry Note, the Trustee will, at least 30
days before the redemption date for such Book-Entry
Note, hand deliver to DTC a notice identifying such
Book-Entry Note by CUSIP number and informing DTC
of the Company's exercise of such option with
respect to such Book- Entry Note.
Deposit of Redemption Price. On or
51
18
before any redemption date, the Company shall
deposit with such Trustee an amount of money
sufficient to pay the redemption price, plus
interest accrued to such redemption date, for all
the Book-Entry Notes or portions thereof which are
to be repaid on such redemption date. Such Trustee
will use such money to repay such Book-Entry Notes
pursuant to the terms set forth in such Notes.
Payments of Principal Trustee Notice to Company of Option to be Repaid.
and Interest upon Upon receipt of notice of exercise of the option
Exercise of Optional for repayment and the Global Securities
Repayment (Except representing the Book-Entry Notes so to be repaid
Pursuant to Company's as set forth in such Notes, the Trustee shall
Exercise of Optional (unless such notice was received pursuant to the
Reset or Optional Company's exercise of an optional reset or an
Extension) optional extension of maturity, in each of which
cases the relevant procedures set forth above are
to be followed) give notice to the Company not less
than 20 days prior to each Optional Repayment Date
of such Optional Repayment Date and of the
principal amount of Book-Entry Notes to be repaid
on such Optional Repayment Date.
Deposit of Repayment Price. On or prior to any
Optional Repayment Date, the Company shall deposit
with such Trustee an amount of money sufficient to
pay the optional repayment price, and accrued
interest thereon to such date, of all the
Book-Entry Notes or portions thereof which are to
be repaid on such date. Such Trustee will use such
money to repay such Book-Entry Notes pursuant to
the terms set forth in such Notes.
52
19
Procedure for Rate The Company and the Agents will discuss from time
Setting and Posting: to time the aggregate principal amount of, the
issuance price of, and the interest rates to be
borne by, Book-Entry Notes that may be sold as a
result of the solicitation of orders by the Agents.
If the Company decides to set prices of, and rates
borne by, any Book-Entry Notes in respect of which
the Agents are to solicit orders (the setting of
such prices and rates to be referred to herein as
"posting") or if the Company decides to change
prices or rates previously posted by it, it will
promptly advise the Agents of the prices and rates
to be posted.
Acceptance and Rejection Each Agent will promptly advise the Company by
of Offers: telephone of any offers to purchase Book-Entry
Notes received by such Agent. The Company will have
the sole right to accept any such offer to purchase
Book-Entry Notes. The Company may reject any such
orders in whole or in part.
Each Agent may, in its discretion reasonably
exercised, reject an offer to purchase Book-Entry
Notes received by it in whole or in part.
Preparation of Pricing If an offer to purchase a Book- Entry Note is
Supplement: accepted by or on behalf of the Company, the
Company, with the approval of the Agent that
presented such offer (the "Presenting Agent"), will
prepare a pricing supplement (a "Pricing
Supplement") reflecting the terms of such
Book-Entry Note and will arrange to have 10 copies
thereof filed with the Commission in accordance
with the applicable paragraph of Rule 424(b) under
the Act and will supply at least
53
20
10 copies thereof (and additional copies if
requested) to the Presenting Agent and one copy to
the Trustee. The Presenting Agent will cause a
Pricing Supplement to be delivered to the purchaser
of the Book-Entry Note.
The copies of the Pricing Supplement to be sent to
the Presenting Agent shall be sent by telecopy or
overnight courier to arrive no later than 11:00
a.m., New York City time, on the second business
day following the sale date and shall be sent:
(a) if to Salomon Brothers Inc, to
it at:
Salomon Brothers Inc
▇▇▇▇ ▇▇▇▇▇▇ ▇▇▇▇▇ ▇▇▇▇▇▇▇
▇▇▇▇▇, ▇▇▇▇▇▇▇ ▇▇▇▇▇
Attn: ▇▇▇▇▇▇▇ ▇▇▇▇▇▇
Tel: ▇▇▇-▇▇▇-▇▇▇▇
Telecopy: ▇▇▇-▇▇▇-▇▇▇▇
(b) if to ▇▇▇▇▇▇▇ ▇▇▇▇▇ & Co., to
it at:
(i) for overnight, express or special delivery
packages:
Tritech Services
▇▇ ▇▇▇▇▇▇▇▇ ▇▇▇▇▇
▇▇▇▇▇▇▇▇▇▇, ▇▇ ▇▇▇▇▇
Attn: Prospectus Operations/
▇▇▇▇▇▇▇ ▇▇▇▇▇▇▇▇▇
Tel: ▇▇▇-▇▇▇-▇▇▇▇
(ii) for all other types of deliveries:
Tritech Services
#▇ ▇▇▇▇▇▇▇▇▇ ▇▇▇▇▇
Corporate Park ▇▇▇
▇▇▇▇▇▇▇▇▇▇, ▇▇ ▇▇▇▇▇
54
21
Attn: Prospectus Operations/
▇▇▇▇▇▇▇ ▇▇▇▇▇▇▇▇▇
Tel: ▇▇▇-▇▇▇-▇▇▇▇
Telecopy: ▇▇▇-▇▇▇-▇▇▇▇/2776
and, in each case, please send a copy to:
▇▇▇▇▇▇▇ ▇▇▇▇▇ & Co.
▇▇▇▇▇▇▇ ▇▇▇▇▇, ▇▇▇▇▇▇, ▇▇▇▇▇▇
& ▇▇▇▇▇ Incorporated
World Financial Center
North Tower
10th Floor
New York, NY 10281
Attn: MTN Product Management
Tel: ▇▇▇-▇▇▇-▇▇▇▇
Telecopy: ▇▇▇-▇▇▇-▇▇▇▇
or to such other address as the Presenting Agent
may specify. Receipt of all telecopy transmissions
shall be confirmed by telephone.
In each instance that a Pricing Supplement is
prepared, the Presenting Agent will affix the
Pricing Supplement to Prospectuses prior to their
use. Out-dated Pricing Supplements and the
Prospectuses to which they are attached (other than
those retained for files) will be destroyed.
Suspension of The Company reserves the right, in its sole
Solicitation; Amendment discretion, to instruct the Agents to suspend at
or Supplement: any time, for any period of time or permanently,
the solicitation of orders to purchase Book-Entry
Notes. Upon receipt of such instructions, the
Agents will forthwith suspend solicitation until
such time as the Company has advised them that such
solicitation may be resumed.
55
22
If the Company decides to amend or supplement the
Registration Statement (as defined in Section 1(c)
of the Agency Agreement) or the Prospectus (except
for a supplement relating to an offering of
securities other than the Notes), it will promptly
advise the Agents and furnish the Agents with the
proposed amendment or supplement and with such
certificates and opinions as are required, all to
the extent required by and in accordance with the
terms of the Agency Agreement. Subject to the
provisions of the Agency Agreement, the Company may
file with the Commission any supplement to the
Prospectus relating to the Notes. The Company will
provide the Agents, the Trustee and Chemical with
copies of any supplement and confirm to the Agents
that such supplement has been filed with the
Commission pursuant to the applicable paragraph of
Rule 424(b).
In the event that at the time the Company suspends
solicitation of offers to purchase Book-Entry Notes
there shall be any outstanding offers to purchase
Book-Entry Notes that have been accepted by the
Company but for which settlement has not yet
occurred, the Company will promptly advise the
Agents, the Trustee and Chemical whether such
orders may be settled and whether copies of the
Prospectus as supplemented to the time of the
suspension may be delivered in connection with the
settlement of such sales. The Company will have the
sole responsibility for such decision and for any
arrangements that may be made in the event that the
Company determines that such orders may not be
settled or that
56
23
copies of such Prospectus may not be so delivered.
Procedure for Rate When the Company has determined to change the
Changes: interest rates of Book- Entry Notes being offered,
it will promptly advise the Agents and the Agents
will forthwith suspend solicitation of orders. The
Agents will telephone the Company with
recommendations as to the changed interest rates.
At such time as the Company has advised the Agents
of the new interest rates, the Agents may resume
solicitation of orders. Until such time, only
"indications of interest" may be recorded.
Delivery of Prospectus:
A copy of the Prospectus and a Pricing Supplement
relating to a Book-Entry Note must accompany or
precede the earliest of any written offer of such
Book-Entry Note, confirmation of the purchase of
such Book-Entry Note and payment for such
Book-Entry Note by its purchaser. If notice of a
change in the terms of the Book-Entry Notes is
received by the Agents between the time an order
for a Book-Entry Note is placed and the time
written confirmation thereof is sent by the
Presenting Agent to a customer or his agent, such
confirmation shall be accompanied by a Prospectus
and Pricing Supplement setting forth the terms in
effect when the order was placed. Subject to
"Suspension of Solicitation; Amendment or
Supplement" above, the Presenting Agent will
deliver a Prospectus and Pricing Supplement as
herein described with respect to each Book-Entry
Note sold by it. The Company will make such
delivery if such Book-Entry Note is sold
57
24
directly by the Company to a purchaser (other than
an Agent).
Confirmation: For each offer to purchase a Book-Entry Note
solicited by an Agent and accepted by the Company,
the Presenting Agent will issue a confirmation to
the purchaser, with a copy to the Company, setting
forth the details set forth below and delivery and
payment instructions.
Settlement: The receipt by the Company of immediately available
funds in payment for a Book-Entry Note and the
authentication and issuance of the Global Security
representing such Book-Entry Note shall constitute
"settlement" with respect to such Book-Entry Note.
All orders accepted by the Company will be settled
on the third Business Day following the date of
sale of such Book-Entry Note pursuant to the
timetable for settlement set forth below unless the
Company and the purchaser agree to settlement on
another day which shall be no earlier than the next
Business Day following the date of sale.
Details for Settlement: Settlement Procedures with regard to each
Book-Entry Note sold by the Company through any
Agent, as agent, shall be as follows:
A. The Presenting Agent will advise the Company by
telephone of the following settlement
information:
1. Principal amount of the Book-Entry Note.
2. In the case of a Fixed Rate Book-Entry Note,
the
58
25
interest rate or, in the case of a Floating
Rate Book-Entry Note, the Base Rate, initial
interest rate (if known at such time), Index
Maturity, Interest Reset Period, Interest
Reset Dates, Spread or Spread Multiplier (if
any), minimum interest rate (if any).
3. Issuance price of the Book-Entry Note.
4. Trade and Settlement dates.
5. Maturity Date and, if applicable, the
Extension Period and Final Maturity Date.
6. Record Dates, Interest Payment Dates and the
Interest Payment Period.
7. Optional Reset Dates, if any.
8. Redemption provisions, if any.
9. Repayment or sinking fund provisions, if any.
10. Presenting Agent's DTC participant account
number and commission, to be paid in the
form of a discount upon settlement.
11. Whether such Book-Entry Note is issued at an
original issue discount and, if so, the
total amount of OID, the yield
59
26
to maturity and the initial accrual period
OID.
12. Taxpayer identification number of the
purchaser.
13. Net proceeds to the Company.
14. Any other applicable terms.
B. The Company will assign a CUSIP number to the
Global Security representing such Book-Entry
Note, assign an order number to such Book-
Entry Note and then advise Chemical by
telephone (confirmed in writing at any time on
the same date) or electronic transmission of
the information set forth in Settlement
Procedure "A" above, such CUSIP number, such
order number, the name of the Presenting Agent
and any other applicable information. The
Company will also notify the Presenting Agent
by telephone or electronic transmission of such
CUSIP number as soon as practicable. The
Company will provide Chemical with registration
instructions and Taxpayer Identification Number
(if the Note is not to be registered to DTC or
its nominee).
C. Chemical will enter a pending deposit message
through DTC's Participant Terminal System
providing the following settlement information
to DTC (which shall route such information to
Standard &
60
27
Poor's Corporation and Interactive Data
Corporation), the Presenting Agent and, upon
request, the Trustee:
1. The information set forth in Settlement
Procedure "A".
2. Identification as a Fixed Rate Book-Entry
Note or a Floating Rate Book-Entry Note.
3. Initial Interest Payment Date for such
Book-Entry Note, number of days by which
such date succeeds the related Record Date
(which, in the case of Floating Rate
Book-Entry Notes that reset daily or weekly,
shall be the DTC Record Date, which is the
date five calendar days immediately
preceding the applicable Interest Payment
Date and, in the case of all other Book-
Entry Notes, shall be the Record Date as
defined in such Notes) and amount of
interest payable on such Interest Payment
Date.
4. The Interest Payment Period.
5. CUSIP number of the Global Security
representing such Book- Entry Note.
6. Whether such Global Security will represent
any other Book-Entry Note (to the extent
known at such time).
61
28
7. Account numbers of participant accounts
maintained by DTC on behalf of the
Presenting Agent and the Trustee.
D. To the extent the Company has not already done
so, the Company will deliver to the Trustee a
Global Security in a form that has been
approved by the Company, the Agents and the
Trustee.
E. The Trustee will complete such Book-Entry Note,
stamp the appropriate legend, as instructed by
DTC, if not already set forth thereon, and
authenticate the Global Security representing
such Book-Entry Note in accordance with the
terms of the written order of the Company then
in effect.
F. DTC will credit such Book-Entry Note to
Chemical's participant account at DTC.
G. Chemical will enter an SDFS deliver order
through DTC's Participant Terminal System
instructing DTC to (i) debit such Book-Entry
Note to Chemical's participant account and
credit such Book-Entry Note to the Presenting
Agent's participant account and (ii) debit the
Presenting Agent's settlement account and
credit Chemical's settlement account for an
amount equal to the price of such Book-Entry
Note less the Presenting Agent's commission.
The entry of such a deliver order shall
constitute a representation
62
29
and warranty by Chemical to DTC that (i) the
Global Security representing such Book-Entry
Note has been issued and authenticated and (ii)
Chemical is holding such Global Security
pursuant to the Medium-Term Note Certificate
Agreement between Chemical and DTC.
H. The Presenting Agent will enter an SDFS deliver
order through DTC's Participant Terminal System
instructing DTC (i) to debit such Book- Entry
Note to the Presenting Agent's participant
account and credit such Book-Entry Note to the
participant accounts of the Participants with
respect to such Book- Entry Note and (ii) to
debit the settlement accounts of such
Participants and credit the settlement account
of the Presenting Agent for an amount equal to
the price of such Book-Entry Note.
I. Transfers of funds in accordance with SDFS
deliver orders described in Settlement
Procedures "G" and "H" will be settled in
accordance with SDFS operating procedures in
effect on the settlement date.
J. Chemical will, upon receipt of funds from the
Presenting Agent in accordance with Settlement
Procedure "G", credit or wire transfer to an
account specified by the Company funds
available for immediate use in the amount
transferred to Chemical in
63
30
accordance with Settlement Procedure "G".
K. The Presenting Agent will confirm the purchase
of such Book-Entry Note to the purchaser either
by transmitting to the Participants with
respect to such Book-Entry Note a confirmation
order or orders through DTC's institutional
delivery system or by mailing a written
confirmation to such purchaser.
Settlement Procedures For orders of Book-Entry Notes solicited by an
Timetable: Agent and accepted by the Company for settlement on
the first Business Day after the sale date,
Settlement Procedures "A" through "K" set forth
above shall be completed as soon as possible but
not later than the respective times (New York City
time) set forth below:
Settlement
Procedure Time
--------- ----
A 11:00 A.M. on the sale date
B 12:00 Noon on the sale date
C 2:00 P.M. on the sale date
D 3:00 P.M. on the day before
settlement
E 9:00 A.M. on settlement date
F 10:00 A.M. on settlement date
G-H 2:00 P.M. on settlement date
I 4:45 P.M. on settlement date
J-K 5:00 P.M. on settlement date
If a sale is to be settled more than one Business
Day after the sale date, Settlement Procedures "A",
"B" and "C" shall be completed as soon as
practicable but no later than 11:00 A.M. and 12:00
Noon on the first Business Day after the
64
31
sale date and no later than 2:00 P.M. on the
Business Day before the settlement date,
respectively. If the initial interest rate for a
Floating Rate Book-Entry Note has not been
determined at the time that Settlement Procedure
"A" is completed, Settlement Procedures "B" and "C"
shall be completed as soon as such rate has been
determined but no later than 12:00 Noon and 2:00
P.M., respectively, on the Business Day before the
settlement date. Settlement Procedure "I" is
subject to extension in accordance with any
extension of Fedwire closing deadlines and in the
other events specified in SDFS operating procedures
in effect on the settlement date.
If settlement of a Book-Entry Note is rescheduled
or canceled, Chemical will, assuming timely notice
thereof, deliver to DTC, through DTC's Participant
Terminal System, a cancellation message to such
effect by no later than 2:00 P.M. on the Business
Day immediately preceding the scheduled settlement
date.
Failure to Settle: If Chemical fails to enter an SDFS deliver order
with respect to a Book-Entry Note pursuant to
Settlement Procedure "G", then, upon written
request of the Company (which may be by telecopy)
Chemical shall deliver to DTC, through DTC's
Participant Terminal System, as soon as
practicable, a withdrawal message instructing DTC
to debit such Book-Entry Note to Chemical's
participant account. DTC will process the
withdrawal message, provided that Chemical's
participant account contains a
65
32
principal amount of the Global Security
representing such Book-Entry Note that is at least
equal to the principal amount to be debited. If a
withdrawal message is processed with respect to all
the Book-Entry Notes represented by a Global
Security, the Trustee will cancel such Global
Security in accordance with the Indenture and so
advise the Company and Chemical, and Chemical will
make appropriate entries in its records. The CUSIP
number assigned to such Global Security shall, in
accordance with CUSIP Service Bureau procedures, be
canceled and not immediately reassigned. If a
withdrawal message is processed with respect to one
or more, but not all, of the Book-Entry Notes
represented by a Global Security, Chemical will
exchange such Book-Entry Note for two Global
Securities, one of which shall represent such
Book-Entry Notes and shall be canceled immediately
after issuance and the other of which shall
represent the other Book-Entry Notes previously
represented by the surrendered Global Security and
shall bear the CUSIP number of the surrendered
Global Security.
If the purchase price for any Book- Entry Note is
not timely paid to the Participants with respect to
such Note by the beneficial purchaser thereof (or a
Person, including an indirect participant in DTC,
acting on behalf of such purchaser), such
Participants and, in turn, the Presenting Agent may
enter SDFS deliver orders through DTC's Participant
Terminal System reversing the orders entered
pursuant to Settlement Procedures "H" and "G"
respectively.
66
33
Thereafter Chemical will deliver the withdrawal
message and take the related actions described in
the preceding paragraph. If such failure shall have
occurred for any reason other than a default by the
Presenting Agent in the performance of its
obligations hereunder and under the Agency
Agreement, then the Company will reimburse the
Presenting Agent or Chemical, as applicable, on an
equitable basis for the loss of the use of funds
during the period when they were credited to the
account of the Company.
Notwithstanding the foregoing, upon any failure to
settle with respect to a Book-Entry Note, DTC may
take any actions in accordance with its SDFS
operating procedures then in effect. In the event
of a failure to settle with respect to one or more,
but not all, of the Book-Entry Notes to have been
represented by a Global Security, Chemical will
provide, in accordance with Settlement Procedure
"E", for the authentication and issuance of a
Global Security representing the other Book-Entry
Notes to have been represented by such Global
Security and will make appropriate entries in its
records.
Trustee and Chemical Nothing herein shall be deemed to require the
Not to Risk Funds: Trustee or Chemical to risk or expend its own funds
in connection with any payment to the Company, DTC,
the Agents or the purchaser, it being understood by
all parties that payments made by the Trustee or
Chemical to the Company, DTC, the Agents or the
purchaser shall be made only to the extent that
funds are provided to
67
34
the Trustee or Chemical for such purpose.
Authenticity of The Company will cause the Trustee to furnish the
Signatures: Agents from time to time with the specimen
signatures of each of the Trustee's officers,
employees or agents who has been authorized by the
Trustee to authenticate Book-Entry Notes, but
neither Chemical nor any Agent will have any
obligation or liability to the Company or the
Trustee in respect of the authenticity of the
signature of any officer, employee or agent of the
Company or the Trustee on any Book-Entry Note.
Payment of Expenses: Each Agent shall forward to the Company, on a
monthly basis, a statement of the out-of-pocket
expenses incurred by such Agent during that month
that are reimbursable to it pursuant to the terms
of the Agency Agreement. The Company will remit
payment to the Agents currently on a monthly basis.
Periodic Statements Upon the request of the Company, Chemical will send
from Chemical: to the Company a statement setting forth the
principal amount of Book-Entry Notes Outstanding as
of that date and setting forth a brief description
of any sales of Book-Entry Notes of which the
Company has advised Chemical but which have not yet
been settled.
68
35
PART II
Administrative Procedures for Certificated Notes
The Trustee will serve as registrar and transfer agent and
authenticating and paying agent in connection with the Certificated Notes.
Issuance: Each Certificated Note will be dated and issued as
of the date of settlement and authenticated by the
Trustee. Each Certificated Note will bear an
Original Issue Date, which will be (i) with respect
to an original Certificated Note (or any portion
thereof), its original issuance date (which will be
the settlement date) and (ii) with respect to any
Certificated Note (or portion thereof) issued
subsequently upon transfer or exchange of a
Certificated Note or in lieu of a destroyed, lost
or stolen Certificated Note, the Original Issue
Date of the predecessor Certificated Note,
regardless of the date of authentication of such
subsequently issued Certificated Note.
Registration: Certificated Notes will be issued only in fully
registered form without coupons.
Transfer and Exchanges: A Certificated Note may be presented for transfer
or exchange at the office of the Trustee at
Attn: Chemical Bank
▇▇ ▇▇▇▇▇ ▇▇▇▇▇▇
▇▇▇▇▇ ▇▇▇▇▇▇▇▇
▇▇▇ ▇▇▇▇▇, ▇▇▇▇ ▇▇▇
▇▇▇ ▇▇▇▇, ▇▇ ▇▇▇▇▇
Certificated Notes will be exchangeable for other
Certificated Notes having identical terms but
different authorized denominations without service
charge.
69
36
Certificated Notes will not be exchangeable for
Book-Entry Notes.
Maturities: Each Certificated Note will mature on a date not
less than 9 months after the date of delivery by
the Company of such Certificated Note (the "Closing
Date").
Denominations: The denomination of any Certificated Note
denominated in U.S. dollars will be a minimum of
$1,000 or any amount in excess thereof that is an
integral multiple of $1,000.
Interest: General. Interest, if any, on each Certificated
Note will accrue from the original issue date for
the first interest period or the last date to which
interest has been paid, if any, for each subsequent
interest period, and will be calculated and paid in
the manner described in such Note and in the
Prospectus, as supplemented by the applicable
Pricing Supplement. Unless otherwise specified
therein, each payment of interest on a Certificated
Note will include interest accrued to but excluding
the Interest Payment Date or to but excluding
Maturity, other than a Maturity of a Fixed Rate
Certificated Note occurring on the 31st day of a
month, in which case such payment of interest will
include interest accrued to but excluding the 30th
day of such month, or to but excluding the date of
Redemption.
Record Dates. The Record Date with respect to any
Interest Payment Date shall be the date 15 calendar
days immediately preceding such Interest Payment
Date whether or
70
37
not such date shall be a Business Day.
Fixed Rate Certificated Notes. Unless otherwise
specified pursuant to Settlement Procedure "A"
below, interest payments on Fixed Rate Certificated
Notes will be made semiannually on May 1 and
November 1 of each year and at Maturity or upon
Redemption; provided, however, that in the case of
a Fixed Rate Certificated Note issued between a
Record Date and an Interest Payment Date, the first
interest payment will be made on the Interest
Payment Date following the next succeeding Record
Date. If any Interest Payment Date for or the date
of Maturity or Redemption of a Fixed Rate
Certificated Note is not a Business Day, the
payment due on such day shall be made on the next
succeeding Business Day and no interest shall
accrue on such payment for the period from and
after such Interest Payment Date or Maturity or
Redemption, as the case may be.
Floating Rate Certificated Notes. Interest payments
will be made on Floating Rate Certificated Notes
monthly, quarterly, semi-annually or annually or as
specified in the applicable Pricing Supplement.
Interest will be payable, in the case of Floating
Rate Certificated Notes with a monthly Interest
Payment Period, on the third Wednesday of each
month; with a quarterly interest Payment Period, on
the third Wednesday of March, June, September and
December of each year; with a semiannual Interest
Payment Period, on the third Wednesday of the two
months specified pursuant to Settlement Procedure
"A" below; and with an annual Interest Payment
Period, on the third Wednesday of the month
specified pursuant to Settlement
71
38
Procedure "A" below; provided, however, that if any
Interest Payment Date for a Floating Rate
Certificated Note would otherwise be a day that is
not a Business Day with respect to such Floating
Rate Certificated Note, such Interest Payment Date
will be the next succeeding Business Day with
respect to such Floating Rate Certificated Note,
except in the case of a Floating Rate Certificated
Note for which the Base Rate is LIBOR, if such
Business Day is in the next succeeding calendar
month, such Interest Payment Date will be the
immediately preceding Business Day; and provided
further, that in the case of a Floating Rate
Certificated Note issued between a Record Date and
an Interest Payment Date, the first interest
payment will be made on the Interest Payment Date
following the next succeeding Record Date.
Calculation of Interest: Fixed Rate Certificated Notes. Interest on Fixed
Rate Certificated Notes (including interest for
partial periods) will be calculated on the basis of
a 360-day year or twelve 30-day months.
Floating Rate Certificated Notes. Interest rates on
Floating Rate Certificated Notes will be determined
as set forth in the form of Notes. Interest on
Floating Rate Certificated Notes, except as
otherwise set forth therein, will be calculated on
the basis of actual days elapsed and a year of 360
days, except that in the case
72
39
of a Floating Rate Certificated Note for which the
Base Rate is the Treasury Rate, interest will be
calculated on the basis of the actual number of
days in the year.
Payments of Principal
and Interest:
The Trustee or Paying Agent, as the case may be,
will pay the principal amount of each Certificated
Note at Maturity upon presentation of such
Certificated Note to the Trustee or Paying Agent,
as the case may be. Such payment, together with
payment of interest due at Maturity of such
Certificated Note, will be made in funds available
for immediate use by the Trustee and in turn by the
Holder of such Certificated Note. Certificated
Notes presented to the Trustee at Maturity for
payment will be canceled by the Trustee in
accordance with the Indenture. All interest
payments on a Certificated Note (other than
interest due at Maturity) will be made by check
drawn on the Trustee, the Paying Agent, as the case
may be, or another Person appointed by the Trustee,
mailed by the Trustee to the Person entitled
thereto as provided in such Note and the Indenture;
provided, however, that the holder of $10,000,000
or more of the Certificated Notes with similar
tenor and terms will be entitled to receive such
payment by wire transfer in U.S. dollars, but only
if the Trustee, or the Paying Agent, as the case
may be, shall have received appropriate payment
instructions in writing fifteen calendar days prior
to any Interest Payment Date. Within 10 days after
each Record Date, the Trustee will furnish the
Company with a list of interest payments to be made
on the following Interest Payment Date for each
Certificated Note and in total
73
40
for all Certificated Notes to the extent
ascertainable. The Trustee will provide monthly to
the Company lists of principal and interest, to the
extent ascertainable, to be paid on Certificated
Notes maturing in the next month. The Company will
provide to the Trustee not later than any payment
date sufficient moneys to pay in full all principal
and interest payments due on the payment date. The
Trustee shall make all such payments in accordance
with the terms of the Notes.
The Trustee will be responsible for withholding
taxes on interest paid on Certificated Notes as
required by applicable law.
If the Maturity or Redemption of a Certificated
Note is not a Business Day, the payment due on such
day shall be made on the next succeeding Business
Day and no interest shall accrue on such payment
date for the period from and after such Maturity or
date of Redemption, as the case may be.
Procedures upon
Company's Exercise of
Optional Reset or
Optional Extension
of Maturity:
Company Notice to Trustee Regarding Exercise of
Optional Reset. Not less than 50 or more than 60
days before an Optional Reset Date as set forth in
a Certificated Note, the Company will notify the
Trustee whether it is exercising its option to
reset the Interest Rate or Spread or Spread
Multiplier, as the case may be, for such
Certificated Note, and if so, (i) the new Interest
Rate or Spread or Spread Multiplier, as the case
may be, for such Certificated Note during the
period from such Optional Reset Date to the next
Optional Reset Date as set forth in such
74
41
Certificated Note or, if there is no such next
Optional Reset Date, to the Maturity Date of such
Certificated Note (the "Subsequent Interest
Period"); and (ii) the provisions, if any, for
redemption of such Certificated Note during such
Subsequent Interest Period, including the date or
dates on which or the period or periods during
which such redemption may occur during such
Subsequent Interest Period.
Company Notice to Trustee Regarding Exercise of
Optional Extension of Maturity. If the Company
elects to exercise an option, as set forth in a
Certificated Note, to extend the Maturity Date of
such Note, it will so notify the Trustee no less
than 50 or more than 60 days before the Maturity
Date of such Certificated Note, and will further
indicate (i) the new Maturity Date; (ii) the
Interest Rate or Spread or Spread Multiplier, as
the case may be applicable to such extension
period, and (iii) the provisions, if any, for
redemption of such Certificated Note during such
extension period, including the date or dates on
which or the period or periods during which such
redemption may occur during such extension period.
Trustee Notice to Holders Regarding Company's
Exercise of Optional Extension or Reset. Upon
receipt of notice from the Company regarding the
Company's exercise of either an optional extension
of maturity or an optional reset, the Trustee will
mail a notice, first class, postage prepaid, to the
Holder not less than 40 days before the Optional
Reset Date (in which
75
42
case a "Reset Notice") or the old Maturity Date (in
which case an "Extension Notice"), as the case may
be, which Reset Notice or Extension Notice shall
contain the information required by the terms of
the Certificated Note.
Trustee Notice to Company Regarding Option to be
Repaid. If, after receipt of either a Reset Notice
or an Extension Notice, any Holder of a
Certificated Note exercises the option for
repayment by tendering the Certificated Note to be
repaid as set forth in the Certificated Note, the
Trustee shall give notice to the Company not less
than 22 days before the Optional Reset Date or the
old Maturity Date, as the case may be, of the
principal amount of Certificated Notes to be repaid
on such Optional Reset Date or old Maturity Date,
as the case may be.
Company Notice Regarding New Interest Rate or New
Spread or Spread Multiplier. If the Company elects
to revoke the Interest Rate or Spread or Spread
Multiplier and establish a higher interest rate or
Spread or Spread Multiplier for an Optional Reset
Period or extension period, as the case may be, it
shall, not less than 20 days before such Optional
Reset Date or old Maturity Date, so notify the
Trustee. The Trustee will immediately thereafter
notify the Holder of such Certificated Note, by
first class mail, postage prepaid of the new
Interest Rate or Spread or Spread Multiplier
applicable to such Certificated Note.
Trustee Notice to Company Regarding
76
43
Holders Revocation of Option to be Repaid. If,
after the Holder has tendered any Certificated
Notes for repayment pursuant to an Extension Notice
or an Optional Reset Notice, such Holder then
revokes such tender for repayment, the Trustee
shall give notice to the Company not less than five
days prior to the old Maturity Date or Optional
Reset Date, as the case may be, of such revocation
and of the principal amount of Certificated Notes
for which tender for repayment has been revoked.
Deposit of Repayment Price. On or before any old
Maturity Date where the Maturity has been extended,
and on or before an Optional Reset Date, the
Company shall deposit with the Trustee an amount of
money sufficient to pay the principal amount, plus
interest accrued to such old Maturity Date or
Optional Reset Date, as the case may be, for all
the Certificated Notes or portions thereof which
are to be repaid on such old Maturity Date or
Optional Reset Date, as the case may be. Such
Trustee will use such money to repay such
Certificated Notes pursuant to the terms set forth
in such Notes.
Procedures upon Company Notice to Trustee Regarding Exercise of
Company's Exercise Optional Redemption. At least 45 days prior to the
of Optional date on which it intends to redeem a Certificated
Redemption: Note, the Company will notify the Trustee that it
is exercising such option with respect to such
Certificated Note on such date.
Trustee Notice to Holders Regarding Company's
Exercise of Optional Redemption. After receipt of
77
44
notice that the Company is exercising its option to
redeem a Certificated Note, the Trustee will, at
least 30 days before the redemption date for such
Certificated Note, mail a notice, first class,
postage prepaid, to the Holder of such Certificated
Note informing such Holder of the Company's
exercise of such option with respect to such
Certificated Note.
Deposit of Redemption Price. On or before any
redemption date, the Company shall deposit with
such Trustee an amount of money sufficient to pay
the redemption price, plus interest accrued to such
redemption date, for all the Certificated Notes or
portions thereof which are to be repaid on such
redemption date. Such Trustee will use such money
to repay such Certificated Notes pursuant to the
terms set forth in such Notes.
Payments of Principal Trustee Notice to Company of Option to be Repaid.
and Interest Upon Upon receipt of notice of exercise of the option
Exercise of Optional for repayment and the Certificated Notes so to be
Repayment (Except repaid as set forth in such Notes, the Trustee
Pursuant to Company's shall (unless such notice was received pursuant to
Exercise of Optional the Company's exercise of an optional reset or an
Reset or Optional optional extension of maturity, in each of which
Extension): cases the relevant procedures set forth above are
to be followed) give notice to the Company not less
than 20 days prior to each Optional Repayment Date
of such Optional Repayment Date and of the
principal amount of Certificated Notes to be repaid
on such Optional Repayment Date.
Deposit of Repayment Price. On or
78
45
prior to any Optional Repayment Date, the Company
shall deposit with such Trustee an amount of money
sufficient to pay the optional repayment price, and
accrued interest thereon to such date, of all the
Certificated Notes or portions thereof which are to
be repaid on such date. Such Trustee will use such
money to repay such Certificated Notes pursuant to
the terms set forth in such Notes.
Procedure for Rate The Company and the Agents will discuss from time
Setting and Posting: to time the aggregate principal amount of, the
issuance price of, and the interest rates to be
borne by Certificated Notes that may be sold as a
result of the solicitation of offers by the Agents.
If the Company decides to set prices of, and rates
borne by, any Notes in respect of which the Agents
are to solicit orders (the setting of such prices
and rates to be referred to herein as "posting") or
if the Company decides to change prices or rates
previously posted by it, it will promptly advise
the Agents of the prices and rates to be posted.
Acceptance and Each Agent will promptly advise the Company of any
Rejection of Offers: offers to purchase Certificated Notes received by
such Agent.
The Company will have the sole right to accept any
such offer to purchase Certificated Notes. The
Company may reject any such offer in whole or in
part.
Each Agent may, in its discretion reasonably
exercised, reject any offer to purchase
Certificated Notes received by it in whole or in
part.
79
46
Preparation of If any offer to purchase a Certificated Note is
Pricing Supplement: accepted by the Company, the Company, with the
approval of the Presenting Agent, will prepare a
Pricing Supplement reflecting the terms of such
Certificated Note and will arrange to have 10
copies thereof filed with the Commission in
accordance with the applicable paragraph of Rule
424(b) under the Act and will supply at least 10
copies thereof (or additional copies if requested)
to the Presenting Agent and one copy to the
Trustee. The Presenting Agent will cause a Pricing
Supplement to be delivered to the purchaser of the
Certificated Note.
The copies of the Pricing Supplement to be sent to
the Presenting Agent shall be sent by telecopy or
overnight courier to arrive no later than 11:00
a.m., New York City time, on the business day
following the sale date and shall be sent to:
(a) if to Salomon Brothers Inc, to it at:
Salomon Brothers Inc
▇▇▇▇ ▇▇▇▇▇▇ ▇▇▇▇▇ ▇▇▇▇▇▇▇
▇▇▇▇▇, ▇▇▇▇▇▇▇ ▇▇▇▇▇
Attn: ▇▇▇▇▇▇▇ ▇▇▇▇▇▇
Tel: ▇▇▇-▇▇▇-▇▇▇▇
Telecopy: ▇▇▇-▇▇▇-▇▇▇▇
(b) if to ▇▇▇▇▇▇▇ ▇▇▇▇▇ & Co., to it at:
(i) for overnight, express or special delivery
packages:
80
47
Tritech Services
▇▇ ▇▇▇▇▇▇▇▇ ▇▇▇▇▇
▇▇▇▇▇▇▇▇▇▇, ▇▇ ▇▇▇▇▇
Attn: Prospectus Operations/
▇▇▇▇▇▇▇ ▇▇▇▇▇▇▇▇▇
Tel: ▇▇▇-▇▇▇-▇▇▇▇
(ii) for all other types of deliveries:
Tritech Services
#▇ ▇▇▇▇▇▇▇▇▇ ▇▇▇▇▇
▇▇▇▇▇▇▇▇▇ ▇▇▇▇ ▇▇▇
▇▇▇▇▇▇▇▇▇▇, ▇▇ ▇▇▇▇▇
Attn: Prospectus Operations/
▇▇▇▇▇▇▇ ▇▇▇▇▇▇▇▇▇
Tel: ▇▇▇-▇▇▇-▇▇▇▇
Telecopy: ▇▇▇-▇▇▇-▇▇▇▇/2776
and, in each case, please send a copy to:
▇▇▇▇▇▇▇ ▇▇▇▇▇ & Co.
▇▇▇▇▇▇▇ ▇▇▇▇▇, ▇▇▇▇▇▇, ▇▇▇▇▇▇
& ▇▇▇▇▇ Incorporated
World Financial Center
North Tower
10th Floor
New York, NY 10281
Attn: MTN Product Management
Tel: ▇▇▇-▇▇▇-▇▇▇▇
Telecopy: ▇▇▇-▇▇▇-▇▇▇▇
81
48
or to such other address as the Presenting Agent
may specify. Receipt of all telecopy transmissions
shall be confirmed by telephone.
In each instance that a Pricing Supplement is
prepared, the Presenting Agent will affix the
Pricing Supplement to Prospectuses prior to their
use. Outdated Pricing Supplements and the
Prospectuses to which they are attached (other than
those retained for files) will be destroyed.
Suspension of The Company reserves the right, in its sole
Solicitation; discretion, to instruct the Agents to suspend at
Amendment or any time, for any period of time or permanently,
Supplement of the solicitation of offers to purchase Certificated
Prospectus: Notes. Upon receipt of such instructions from the
Company, the Agents will forthwith suspend
solicitation of offers to purchase Certificated
Notes from the Company until such time as the
Company has advised them that such solicitation may
be resumed.
If the Company decides to amend or supplement the
Registration Statement or the Prospectus (except
for a supplement relating to an offering of
securities other than the Notes), it will promptly
advise the Agents and the Trustee and will furnish
the Agents and the Trustee with the proposed
amendment or supplement and with such certificates
and opinions as are required, all to the extent
required by and in accordance with the terms of the
Agency Agreement. Subject to the provisions of the
Agency Agreement, the Company will mail to the
Commission for filing
82
49
therewith any supplement to the Prospectus relating
to the Notes, provide the Agents and the Trustee
with copies of any such supplement and confirm to
the Agents that such supplement has been filed with
the Commission pursuant to the applicable paragraph
of Rule 424(b).
In the event that at the time the Company suspends
solicitation of offers to purchase Certificated
Notes there shall be any outstanding offers to
purchase Certificated Notes that have been accepted
by the Company but for which settlement has not yet
occurred, the Company will promptly advise the
Agents and the Trustee whether such sales may be
settled and whether copies of the Prospectus as
supplemented to the time of the suspension may be
delivered in connection with the settlement of such
sales. The Company will have the sole
responsibility for such decision and for any
arrangements which may be made in the event that
the Company determines that such sales may not be
settled or that copies of such Prospectus may not
be so delivered.
Procedure for Rate When the Company has determined to change the
Changes: interest rates of Certificated Notes being offered,
it will promptly advise the Agents and the Agents
will forthwith suspend solicitation of orders. The
Agents will telephone the Company with
recommendations as to the changed interest rates.
At such time as the Company has advised the Agents
of the new interest rates, the Agents may resume
solicitation of orders.
83
50
Until such time, only "indication of interest" may
be recorded.
Delivery of Prospectus: A copy of the Prospectus and Pricing Supplement
relating to a Certificated Note must accompany or
precede the earliest of any written offer of such
Certificated Note, confirmation of the purchase of
such Certificated Note and payment for such
Certificated Note by its purchaser. If notice of a
change in the terms of the Certificated Notes is
received by the Agents between the time an order
for a Certificated Note is placed and the time
written confirmation thereof is sent by the
Presenting Agent to a customer or his agent, such
confirmation shall be accompanied by a Prospectus
and Pricing Supplement setting forth the terms in
effect when the order was placed. Subject to
"Suspension of Solicitation; Amendment or
Supplement" above, the Presenting Agent will
deliver a Prospectus and Pricing Supplement as
herein described with respect to each Certificated
Note sold by it. The Company will make such
delivery of such Certificated Note if sold directly
by the Company to a purchaser (other than an
Agent).
Confirmation: For each offer to purchase a Certificated Note
solicited by an Agent and accepted by the Company,
the Presenting Agent will issue a confirmation to
the purchaser, with a copy to the Company, setting
forth the details set forth below and delivery and
payment instructions.
Settlement: The receipt by the Company of immediately available
funds in exchange for an authenticated
84
51
Certificated Note delivered to the Presenting Agent
and the Presenting Agent's delivery of such
Certificated Note against receipt of immediately
available funds shall, with respect to such
Certificated Note, constitute "settlement". The
Closing Date with respect to any offer to purchase
Certificated Notes accepted by the Company will be
a date on or before the third Business Day next
succeeding the date of acceptance unless otherwise
agreed by the purchaser and the Company and shall
be specified upon acceptance of such offer (but
shall be no earlier than the next Business Day
following the date of acceptance). The Company will
instruct the Trustee to effect delivery of each
Certificated Note no later than 1:00 P.M., New York
City time, on the Closing Date to the Presenting
Agent for delivery to the purchaser.
Details for Settlement: For each offer to purchase a Certificated Note that
is accepted by the Company, the Presenting Agent
will provide (unless provided by the purchaser
directly to the Company) by telephone the following
information to the Company:
1. Exact name of registered owner.
2. Exact address of registered owner and
address for payment of principal and
interest.
3. Taxpayer identification number of registered
owner.
4. Principal amount of the Certificated Note.
5. In the case of a Fixed Rate Certificated
Note,
85
52
the interest rate or, in the case of a
Floating Rate Certificated Note, the initial
interest rate (if known at such time), Base
Rate, Index Maturity, Interest Reset Period,
Interest Reset Dates, Spread or Spread
Multiplier (if any), minimum interest rate
(if any) and maximum interest rate (if any).
6. Issuance price (including currency) of the
Certificated Note.
7. Trade or Settlement dates.
8. Maturity Date and, if applicable, the
Extension Period and Final Maturity Date.
9. Interest Payment Dates and the Interest
Payment Period.
10.Whether such Certificated Note is issued at
an original issue discount and, if so, the
total amount of OID, the yield to maturity
and the initial accrual period OID.
11.Optional Reset Dates, if any.
12.Redemption provisions, if any.
13.Repayment or sinking fund provisions, if
any.
14.Presenting Agent's commission, determined
as provided in Section 2 of the Agency
Agreement, to be paid in the form of a
discount upon settlement.
15.Any other applicable terms.
86
53
The Presenting Agent will advise the Company by
telephone, confirmed in writing of the foregoing
information (unless provided by the purchaser
directly to the Company) for each offer to purchase
a Certificated Note solicited by such Agent and
accepted by the Company in time for the Trustee to
prepare and authenticate the required Certificated
Note. Before accepting any offer to purchase a
Certificated Note to be settled in less than three
Business Days, the Company shall verify that the
Trustee will have adequate time to prepare and
authenticate such Certificated Note.
After receiving from the Presenting Agent the
detail for each offer to purchase a Certificated
Note that has been accepted by the Company, the
Company will, after recording the details and any
necessary calculations, provide appropriate
documentation to the Trustee, including the
information provided by the Presenting Agent
necessary for the preparation and authentication of
such Certificated Note by no later than 10:00 A.M.
on the Business Day next preceding the Closing
Date. Prior to preparing the Certificated Note for
delivery (but in any case no later than 10:00 A.M.
on the Business Day next preceding the Closing Date
therefor), the Trustee will confirm the details of
such issue with the Presenting Agent by telephone.
Note Deliveries and Upon receipt of appropriate documentation and
Cash Payment: instructions, the Company will cause the Trustee to
prepare and authenticate the pre-printed 4-ply
Certificated Note packet containing the following
87
54
documents in forms approved by the Company, the
Presenting Agent and the Trustee:
1. Certificated Note with customer receipt.
2. Stub 1 - For the Presenting Agent.
3. Stub 2 - For the Company.
4. Stub 3 - For the Trustee.
Each Certificated Note shall be authenticated on
the Closing Date therefor. The Trustee will
authenticate each Certificated Note and deliver it
to the Presenting Agent (and deliver the stubs as
indicated above), all in accordance with written
instructions (or oral instructions confirmed in
writing (which may be given by telex or telecopy)
on the next Business Day) from the Company.
Delivery by the Trustee of each Certificated Note
will be made upon confirmation from the Company
that it has received payment therefor (provided
that the Company shall have previously notified the
Presenting Agent that delivery will not occur until
such confirmation).
Upon verification ("Verification") by the
Presenting Agent that a Note has been prepared and
properly authenticated by the Trustee and
registered in the name of the purchaser in the
proper principal amount and other terms in
accordance with the aforementioned written
instructions or confirmation, payment will be made
to the Company by the Presenting Agent the same day
as the Presenting Agent's receipt of the
Certificated Note in immediately available funds.
Such payment shall be made by the Presenting
88
55
Agent (i) only upon prior receipt by the Presenting
Agent of immediately available funds from or on
behalf of the purchaser unless the Presenting Agent
decides, at its option, to advance its own funds
for such payment against subsequent receipt of
funds from the purchaser and (ii) only after the
Trustee has made the Certificated Note available
for inspection by the Presenting Agent.
Upon delivery of a Certificated Note to the
Presenting Agent, Verification by the Presenting
Agent and the giving of instructions for payment,
the Presenting Agent shall promptly deliver such
Note to the purchaser.
In the event any Certificated Note is incorrectly
prepared, the Trustee shall promptly issue a
replacement Certificated Note in exchange for the
incorrectly prepared Certificated Note.
Failure to Settle: If the Presenting Agent, at its own option, has
advanced its own funds for payment against
subsequent receipt of funds from the purchaser, and
if the purchaser shall fail to make payment for the
Certificated Note on the Closing Date therefor, the
Presenting Agent will promptly notify the Trustee
and the Company by telephone, promptly confirmed in
writing (but no later than the next Business Day).
In such event, the Company shall promptly provide
the Trustee with appropriate documentation and
instructions consistent with these procedures for
the return of the Certificated Note to the Trustee
and the Presenting Agent will promptly return such
Note to the
89
56
Trustee. Upon (i) confirmation from the Trustee in
writing (which may be given by telex or telecopy)
that the Trustee has received such Note and (ii)
confirmation from the Presenting Agent in writing
(which may be given by telex or telecopy) that the
Presenting Agent has not received payment from the
purchaser (the matters referred to in clauses (i)
and (ii) are referred to hereinafter as the
"Confirmations"), the Company will promptly pay to
the Presenting Agent an amount in immediately
available funds equal to the amount previously paid
by the Presenting Agent in respect of such
Certificated Note. Assuming receipt of the
Certificated Note by the Trustee and of the
Confirmations by the Company, such payment will be
made on the Closing Date, if reasonably practical,
and in any event not later than the Business Day
following the date of receipt of the Certificated
Note and Confirmations. If a purchaser shall fail
to make payment for the Certificated Note for any
reason other than the failure of the Presenting
Agent to provide the necessary information to the
Company as described above for settlement or to
provide a confirmation to the purchaser within a
reasonable period of time as described above or
otherwise to satisfy its obligation hereunder or in
the Agency Agreement, and if the Presenting Agent
shall have otherwise complied with its obligations
hereunder and in the Agency Agreement, the Company
will reimburse the Presenting Agent on an equitable
basis for its loss of the use of funds during the
period
90
57
when they were credited to the account of the
Company.
Immediately upon receipt of the Certificated Note
in respect of which the failure occurred, the
Trustee will cancel such Certificated Note, make
appropriate entries in its records and dispose of
the Certificated Note in accordance with its
customary procedures; and upon such action, the
Certificated Note will be deemed not to have been
issued, authenticated and delivered.
Trustee Not to Risk Nothing herein shall be deemed to require the
Funds: Trustee to risk or expend its own funds in
connection with any payment to the Company, the
Agents or the purchaser, it being understood by all
parties that payments made by the Trustee to either
the Company or the Agents shall be made only to the
extent that funds are provided to the Trustee for
such purpose.
Authenticity of The Company will cause the Trustee to furnish the
Signatures: Agents from time to time with the specimen
signatures of each of the Trustee's officers,
employees or agents who has been authorized by the
Trustee to authenticate Certificated Notes but the
Agents will have no obligation or liability to the
Company or the Trustee in respect of the
authenticity of the signature of any officer,
employee or agent of the Company or the Trustee on
any Certificated Note.
Payment of Expenses: Each Agent shall forward to the Company, on a
monthly basis, a statement of the out-of-pocket
expenses incurred by such Agent during that month
which are
91
58
reimbursable to it pursuant to the terms of the
Agency Agreement. The Company will remit payment to
the Agents currently on a monthly basis.
Periodic Statements Upon the request of the Company, the Trustee will
from Chemical: send to the Company a statement setting forth the
principal amount of Certificated Notes Outstanding
as of that date and setting forth a brief
description of any sales of Certificated Notes of
which the Company has advised the Trustee but which
have not yet been settled.
92
EXHIBIT B
The ▇▇▇▇▇▇▇-▇▇▇▇▇▇▇▇ Company
Medium Term Notes, Series A
Due 9 Months or More From Date of Issue
TERMS AGREEMENT
, 199
The ▇▇▇▇▇▇▇-▇▇▇▇▇▇▇▇ Company
▇▇▇ ▇▇▇▇▇▇▇▇ ▇▇▇▇▇▇, ▇.▇.
Cleveland, Ohio 44115
Attention:
Subject in all respects to the terms and conditions of the
Selling Agency Agreement (the "Agreement") dated February , 1996, among
Salomon Brothers Inc, ▇▇▇▇▇▇▇ ▇▇▇▇▇ & Co. and you, the undersigned agrees to
purchase the following Notes of The ▇▇▇▇▇▇▇-▇▇▇▇▇▇▇▇ Company:
Principal Amount of each Note:
Aggregate Principal Amount of all Notes:
Specified Currency and Minimum Denominations (if Specified Currency is other
than U.S. dollars):
Maturity Date:
Interest Payment Dates:
Interest Rate or Method of Determining:
Record Date:
Interest Reset Dates:
Total Amount of OID:
Initial Redemption Date:
Purchase Price: % of Principal Amount [plus accrued
interest from , 19 ]
93
2
Closing Date and Time:
Place for Delivery of Notes
and Payment Therefor:
Method of Payment:
Modification, if any, in
the requirements to
deliver the documents
specified in Section 6(b)
of the Agreement:
Period during which additional
Notes may not be sold pursuant
to Section 4(m) of the Agreement:
Registration Statements: $
of such Notes are registered under
Registration Statement No. 33-22705 and
$ of such Notes are
registered under Registration Statement
No. 333-[ ].
Salomon Brothers Inc
By:
--------------------------
▇▇▇▇▇▇▇ ▇▇▇▇▇, ▇▇▇▇▇▇, ▇▇▇▇▇▇
& ▇▇▇▇▇ Incorporated
By:
--------------------------
Accepted:
The ▇▇▇▇▇▇▇-▇▇▇▇▇▇▇▇ Company
By:
-------------------------
Title:
