EXHIBIT 1.1
HEWLETT-PACKARD COMPANY
Debt Securities
UNDERWRITING AGREEMENT
To the Representatives named in SCHEDULE I hereto
of the Underwriters named in SCHEDULE II hereto
Ladies and Gentlemen:
Hewlett-Packard Company, a Delaware corporation (the "Company"),
proposes to sell to the underwriters named in SCHEDULE II hereto (the
"Underwriters"), for whom you are acting as representatives (the
"Representatives"), the principal amount of its securities identified in
SCHEDULE I hereto (the "Securities"), to be issued under an Indenture dated as
of June 1, 2000 (the "Indenture"), between the Company and ▇▇ ▇▇▇▇▇▇ Trust
Company, National Association (formerly known as Chase Manhattan Bank and Trust
Company, National Association), as trustee (the "Trustee"). If the firm or firms
listed in SCHEDULE II hereto include only the firm or firms listed in SCHEDULE I
hereto, then the terms "Underwriters" and "Representatives", as used herein
shall each be deemed to refer to such firm or firms.
1. REPRESENTATIONS AND WARRANTIES. The Company represents and warrants
to, and agrees with each Underwriter that:
(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") a registration statement
or statements (the file number or numbers of which is or are set forth in
SCHEDULE I hereto), including a related preliminary prospectus, on such Form for
the registration under the Act of the offering and sale of the Securities. The
Company may have filed one or more amendments thereto, including the related
preliminary prospectus, and may have filed a preliminary prospectus in
accordance with Rules 415 and 424(b), each of which has previously been
furnished to you (if so filed). The Company will next file with the Commission
one of the following: (i) prior to effectiveness of such registration statement,
a further amendment thereto, including the form of final prospectus, (ii) after
the Effective Date of such registration statement, a final prospectus in
accordance with Rules 430A and 424(b)(1) or (4), or (iii) a final prospectus in
accordance with Rules 415 and 424(b)(2) or (5). In the case of clause (ii), the
Company has included in such registration statement or statements, as amended at
the Effective Date, all information (other than Rule 430A Information) required
by the Act and the rules thereunder to be included in the Prospectus with
respect to the Securities and the offering thereof. As filed, such amendment and
form of final prospectus, or such final prospectus, shall include all Rule 430A
Information 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. The Registration Statement, at the Execution Time,
meets the requirements set forth in Rule 415(a)(1)(x).
The terms that follow, when used in this Agreement, shall have the
meanings indicated. The term the "Effective Date" shall mean each date that the
Registration Statement and any post-effective amendment or amendments thereto
became or become effective. "Execution Time" shall mean the date and time that
this Agreement is executed and delivered by the parties hereto. "Preliminary
Prospectus" shall mean any preliminary prospectus referred to in the preceding
paragraph and any preliminary prospectus included in the Registration Statement
at the Effective Date that omits Rule 430A Information. "Prospectus" shall mean
the prospectus relating to the Securities that is first filed pursuant to Rule
424(b) after the Execution Time or, if no filing pursuant to Rule 424(b) is
required, shall mean the form of final prospectus included in the Registration
Statement at the Effective Date. "Registration Statement" shall mean the
registration statement or statements referred to in the preceding paragraph,
including such portions of incorporated documents as are specifically
incorporated by reference, exhibits and financial statements, in the form in
which it or they has or have or shall become effective and, in the event any
post-effective amendment thereto becomes effective prior to the Closing Date (as
hereinafter defined), shall also mean such registration statement or statements
as so amended. Such term shall include Rule 430A Information deemed to be
included therein at the Effective Date as provided by Rule 430A. "Rule 415",
"Rule 424", "Rule 430A" 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. Any reference herein to the
Registration Statement, a Preliminary Prospectus or the Prospectus shall be
deemed to refer to and include such portions of documents as are specifically
incorporated by reference therein pursuant to Item 12 of Form S-3 which were
filed under the Securities Exchange Act of 1934, as amended (the "Exchange
Act"), on or before the Effective Date of the Registration Statement or the date
of such Preliminary Prospectus 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, any Preliminary Prospectus 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 date
of any Preliminary Prospectus or the Prospectus, as the case may be, deemed to
be incorporated therein by reference.
(b) On the Effective Date, the Registration Statement did or will,
and when the Prospectus is first filed (if required) in accordance with Rule
424(b) and on the Closing Date, the Prospectus (and any supplement thereto)
will, comply in all material respects with the applicable requirements of the
Act and the rules thereunder; on the Effective Date and on the Closing Date the
Indenture did or will comply in all material respects with the requirements of
the Trust Indenture Act of 1939, as amended (the "Trust Indenture Act") and the
rules thereunder; on the Effective Date, the Registration Statement did not or
will not contain any untrue statement of a material fact required to be stated
therein or necessary in order to make the statements therein not misleading;
and, on the Effective Date, the Prospectus, if not filed pursuant to Rule
424(b), did not or will not, and on the date of any filing pursuant to Rule
424(b) and on the Closing Date, the Prospectus (together with any supplement
thereto) will not, include 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
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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 Underwriter through
the Representatives specifically for inclusion in connection with the
preparation of the Registration Statement or the Prospectus (or any supplement
thereto).
(c) The Indenture has been duly authorized, executed and delivered
by the Company, has been duly qualified under the Trust Indenture Act, and
constitutes a legal, valid and binding obligation enforceable against the
Company in accordance with its terms (subject to applicable bankruptcy,
insolvency, fraudulent transfer, reorganization, arrangement, moratorium and
other similar laws relating to or affecting the rights and remedies of creditors
generally from time to time in effect, and subject to general principles of
equity, regardless of whether such enforceability is considered in a proceeding
in equity or at law, and subject to limitations on rights to indemnification and
contribution under applicable law or equitable principles); and the Securities
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
Underwriters pursuant to this Agreement, will constitute legal, valid and
binding obligations of the Company entitled to the benefits of the Indenture
(subject to applicable bankruptcy, insolvency, fraudulent transfer,
reorganization, arrangement, moratorium and other similar laws relating to or
affecting the rights and remedies of creditors generally from time to time in
effect, and subject to general principles of equity, regardless of whether such
enforceability is considered in a proceeding in equity or at law, and subject to
limitations on rights to indemnification and contribution under applicable law
or equitable principles).
(d) None of the issue and sale of the Securities, the consummation
of any other of the transactions herein contemplated or the fulfillment of the
terms hereof will conflict with, result in a breach of, or constitute a default
under, (i) the charter or by-laws of the Company or (ii) the terms of any
material indenture or other material agreement or instrument to which the
Company or its subsidiaries is a party or bound, or (iii) any decree or
regulation or order applicable to the Company of any U.S. Federal or California
or Delaware court, governmental authority or agency having jurisdiction over the
Company, except where the conflict or breach of which in clause (ii) or clause
(iii) above would not have a material adverse effect on the Company and its
subsidiaries taken as a whole.
2. PURCHASE AND SALE. Subject to the terms and conditions and in
reliance upon the representations and warranties herein set forth, the Company
agrees to sell to each Underwriter, and each Underwriter agrees, severally and
not jointly, to purchase from the Company, at the purchase price set forth in
SCHEDULE I hereto, the respective principal amounts of the Securities set forth
opposite each respective Underwriter's name in SCHEDULE II hereto.
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3. DELIVERY AND PAYMENT.
(a) Delivery of and payment for the Securities shall be made at the
office, on the date and at the time specified in SCHEDULE I hereto, which date
and time may be postponed by agreement between the Representatives and the
Company or as provided in Section 7 hereof (such date and time of delivery and
payment for the Securities being called the "Closing Date"). Delivery of the
Securities shall be made to the Representatives for the respective accounts of
the several Underwriters against payment by the several Underwriters through the
Representatives of the purchase price thereof to or upon the order of the
Company by wire transfer or transfers in immediately available funds to an
account designated by the Company. The Securities shall be delivered in
definitive global form through the facilities of The Depository Trust Company.
(b) It is understood that the several Underwriters propose to offer
the Securities for sale to the public as set forth in the Prospectus.
4. AGREEMENTS.
The Company agrees with the several Underwriters that:
(a) The Company will use its commercially reasonable efforts to
cause the Registration Statement, and any amendment thereof, if not effective at
the Execution Time, to become effective. If the Registration Statement has
become or becomes effective pursuant to Rule 430A, or filing of the Prospectus
is otherwise required under Rule 424(b), the Company will file the Prospectus,
properly completed, pursuant to the applicable paragraph of Rule 424(b) within
the time period prescribed and will provide evidence satisfactory to the
Representatives of such timely filing. The Company will promptly advise the
Representatives (i) when the Registration Statement shall have become effective
(if not already effective), (ii) when, prior to termination of the offering of
the Securities, any amendment to the Registration Statement relating to the
Securities shall have become effective (if not already effective), (iii) of any
request by the Commission for any amendment of the Registration Statement or
amendment of 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, (v) of the receipt by the Company of any
notification with respect to the suspension of the qualification of the
Securities for sale in any jurisdiction or the initiation or threatening of any
proceeding for such purpose and (vi) when the Prospectus, and any supplement
thereto, shall have been filed (if required) by the Company. The Company will
use its commercially reasonable efforts to prevent the issuance of any such stop
order and, if issued, to obtain as soon as possible the withdrawal thereof. The
Company will not file any amendment of the Registration Statement relating to
the Securities or supplement to the Prospectus unless the Company has afforded
you the opportunity to review it prior to filing and will not file any such
proposed amendment or supplement to which you reasonably and timely object.
(b) If, at any time when a prospectus relating to the Securities is
required to be delivered under the Act, any event occurs as a result of which
the Prospectus as then amended or 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
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made not misleading, or if it shall be necessary to amend the Registration
Statement or supplement the Prospectus to comply with the Act or the rules
thereunder in any material respect, the Company will give the Representatives
prompt notice of the occurrence of such event and promptly will prepare and file
with the Commission, subject to the last sentence of paragraph (a) of this
Section 4, an amendment or supplement which will correct such statement or
omission or an amendment which will effect such compliance.
(c) To make generally available to its securityholders as soon as
practicable, but in any event not later than eighteen months after the effective
date of the Registration Statement (as defined in Rule 158(c) under the Act) an
earnings statement of the Company and its subsidiaries (which need not be
audited) complying with Section 11(a) of the Act and the rules thereunder
(including, at the option of the Company, Rule 158).
(d) The Company will furnish to the Representatives and counsel for
the Underwriters, without charge, copies of the Registration Statement
(including exhibits thereto) and each amendment thereto which shall become
effective on or prior to the Closing Date (and the Company will furnish to
counsel for the Underwriters a photocopy of one signed copy of the Registration
Statement (including exhibits and amendments)) and, so long as delivery of a
prospectus by an Underwriter or dealer may be required by the Act, as many
copies of any Preliminary Prospectus and the Prospectus and any amendments
thereof and supplements thereto as the Representatives may reasonably request.
(e) The Company will take such action as the Representatives may
reasonably request to qualify the Securities for sale under the laws of such
jurisdictions as the Representatives may reasonably request, and to maintain
such qualifications in effect so long as required for the distribution of the
Securities, provided that in connection therewith the Company shall not be
required to qualify to do business in any jurisdiction or to file a consent or
otherwise subject itself to service of process or taxation in any jurisdiction
where it is not already so subject.
(f) Until the earlier of the day on which the distribution of the
Securities is completed or the business day following the Closing Date, the
Company will not, without the consent of the Representatives, offer or sell, or
announce the offering of, any debt securities covered by the Registration
Statement or any other registration statement filed under the Act which mature
more than one year after the date hereof and which are substantially similar to
such debt securities, except any proposed issuances of debt securities with
respect to which the Company has advised the Representatives in writing prior to
the execution hereof.
(g) The Company will not take, directly or indirectly, any action
intended to result in stabilization or manipulation of the price of any security
of the Company to facilitate the sale or resale of the Securities.
The several Underwriters agree with the Company that:
(a) The Company will pay the expenses of printing and producing all
documents relating to the offering.
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(b) The Company will pay the reasonable fees, expenses and
disbursements of outside counsel for the Company and the Trustee relating to the
offering.
(c) The Company will pay any fees of ▇▇▇▇▇'▇ Investors Service,
Inc. and Standard & Poor's Ratings Group, a division of the ▇▇▇▇▇▇-▇▇▇▇
Companies, Inc. relating to the rating of the Securities.
(d) The Company will pay the fees and disbursements of Ernst &
Young LLP relating to the preparation of the letters required by Sections 5(e)
and 5(f) of this Agreement.
(e) The several Underwriters will pay all of their own costs and
expenses, including the fees of their counsel, transfer taxes or resale of any
of the Securities by them and any advertising expenses in connection with any
offers they make.
5. CONDITIONS TO THE OBLIGATIONS OF THE UNDERWRITERS. The obligations
of the Underwriters to purchase the Securities shall be subject to the accuracy
in all material respects of the representations and warranties on the part of
the Company contained herein as of the Execution Time, as of the date of the
effectiveness of any amendment to the Registration Statement filed prior to the
Closing Date (including the filing of any document incorporated by reference
therein) and as of the Closing Date, to the accuracy in all material respects of
the statements of the Company made in any certificates delivered by the Company
pursuant to the provisions hereof, to the performance in all material respects
by the Company of its obligations hereunder and to the following additional
conditions:
(a) If filing of the Prospectus, or any supplement thereto, is
required pursuant to Rule 424(b), the Prospectus shall have been filed in the
manner and within the time period required by Rule 424(b); and no stop order
suspending the effectiveness of the Registration Statement, as amended from time
to time, shall have been issued and no proceedings for that purpose shall have
been instituted or threatened.
(b) The Company shall have furnished to the Representatives:
(i) the opinion of the General Counsel, an Assistant General
Counsel or a Senior Managing Counsel of the Company, or an outside counsel for
the Company, dated the Closing Date, substantially to the effect that:
(A) the Company has been duly incorporated and is validly
existing as a corporation in good standing under the laws of the State of
Delaware, with full corporate power and authority to own its properties and
conduct its business as described in the Prospectus as amended or supplemented,
except where such failure would not have a material adverse effect on the
Company and its subsidiaries, taken as a whole;
(B) the Securities conform in all material respects to the
description thereof contained in the Prospectus;
(C) the Indenture has been duly authorized, executed and
delivered by the Company, has been duly qualified under the Trust Indenture Act,
and constitutes a legal, valid and binding obligation enforceable against the
Company in accordance with its terms (subject to
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applicable bankruptcy, insolvency, fraudulent transfer, reorganization,
arrangement, moratorium and other similar laws relating to or affecting the
rights and remedies of creditors generally from time to time in effect, and
subject to general principles of equity, regardless of whether such
enforceability is considered in a proceeding in equity or at law, and subject to
limitations on rights to indemnification and contribution under applicable law
or equitable principles); and the Securities 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 Underwriters pursuant to this Agreement,
will constitute legal, valid and binding obligations of the Company entitled to
the benefits of the Indenture (subject to applicable bankruptcy, insolvency,
fraudulent transfer, reorganization, arrangement, moratorium and other similar
laws relating to or affecting the rights and remedies of creditors generally
from time to time in effect, and subject to general principles of equity,
regardless of whether such enforceability is considered in a proceeding in
equity or at law, and subject to limitations on rights to indemnification and
contribution under applicable law or equitable principles);
(D) the Registration Statement and any amendments
thereto have become effective under the Act; any required filing of the
Prospectus and any supplement thereto pursuant to Rule 424(b) has been made in
the manner and within the time period required by Rule 424(b); to the best
knowledge of such counsel, no stop order suspending the effectiveness of the
Registration Statement, as amended, has been issued and no proceedings for that
purpose have been instituted or are pending or contemplated under the Act;
(E) this Agreement has been duly authorized, executed and
delivered by the Company;
(F) no authorization, approval or other action by, and no
notice to, consent of, order of, or filing with, any United States Federal or
California or Delaware governmental authority or agency is required for the
consummation of the transactions contemplated herein, except such as have been
obtained under the Act, the Exchange Act and the Trust Indenture Act and such as
may be required under the blue sky laws of any jurisdiction in connection with
the purchase and distribution of the Securities and such other approvals
(specified in such opinion) as have been obtained; and
(G) none of the issue and sale of the Securities, the
consummation of any other of the transactions herein contemplated or the
fulfillment of the terms hereof will conflict with, result in a breach of, or
constitute a default under, the charter or by-laws of the Company or, to such
counsel's knowledge, the terms of any Material Agreements, or any material
decree or regulation known to such counsel to be applicable to the Company of
any U.S. Federal or California or Delaware court, governmental authority or
agency having jurisdiction over the Company. "Material Agreements" means all
agreements filed as Exhibits to the Company's most recent Annual Report on Form
10-K pursuant to clause (10) of paragraph (b) of Item 601 of Regulation S-K (but
only such agreements that continue to be in effect).
Such opinion shall also include a statement that such counsel has
participated in conferences with officers and other representatives of the
Company, counsel for the Company, the independent accountants of the Company and
the underwriters at which the Registration Statement, the
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Preliminary Prospectus and the Prospectus and related matters were discussed
and, although such counsel is not passing upon, and does not assume any
responsibility for, the accuracy, completeness or fairness of the Registration
Statement, the Prospectus or the statements contained therein and has made no
independent check or verification thereof, on the basis of the foregoing, no
facts have come to such counsel's attention that has caused it to believe that
(i) the Registration Statement and the Prospectus (except the financial
statements and the notes thereto and financial statement schedules and other
information of an accounting, statistical or financial nature included therein,
and the Statement of Eligibility (Form T-1) included as an exhibit to the
Registration Statement, as to which such counsel need express no view) were not
appropriately responsive in all material respects with requirements of the Act
and the rules thereunder and (ii) the Registration Statement at the Effective
Date contained an untrue statement of a material fact or omitted to state a
material fact required to be stated therein or necessary to make the statements
therein not misleading, or that the Prospectus as of its date and on the Closing
Date includes any untrue statement of a material fact or omits to state a
material fact necessary in order to make the statements therein, in light of the
circumstances under which they were made, not misleading (in each case except
for the financial statements and the notes thereto and the financial statement
schedules and other information of an accounting, statistical or financial
nature included therein, and the Statement of Eligibility (Form T-1) included as
an exhibit to the Registration Statement, as to which such counsel need express
no view).
Any of the statements described above may be omitted from the opinion
of such counsel; provided, however, that in such event the Company shall also
have furnished to the Representatives the corresponding opinion or statement of
▇▇▇▇▇▇ ▇▇▇▇▇▇▇ ▇▇▇▇▇▇▇▇ & ▇▇▇▇▇▇, Professional Corporation, counsel for the
Company, described in subsection 5(b)(ii) below.
(ii) In the event that any of the statements described in the
foregoing subsection 5(b)(i) are omitted from the opinion delivered pursuant to
such subsection, the opinion of ▇▇▇▇▇▇ ▇▇▇▇▇▇▇ ▇▇▇▇▇▇▇▇ & ▇▇▇▇▇▇, Professional
Corporation, counsel for the Company, dated the Closing Date, to the effect of
the statements so omitted.
In rendering such opinions, such counsel may rely (A) as to matters
involving the application of laws of any jurisdiction other than the State of
California or the United States, to the extent they deem proper and specified in
such opinion, upon the opinion of other counsel of good standing whom they
believe to be reliable and who are satisfactory to counsel for the Underwriters;
and (B) as to matters of fact, to the extent they deem proper, on certificates
of responsible officers of the Company or public officials.
(c) The Representatives shall have received from Cravath, Swaine &
▇▇▇▇▇, counsel for the Underwriters, such opinion or opinions, dated the Closing
Date, with respect to the issuance and sale of the Securities, the Indenture,
the Registration Statement, the Prospectus and other related matters as the
Representatives may reasonably require, and the Company shall have furnished to
such counsel such documents as they reasonably request for the purpose of
enabling them to pass upon such matters.
(d) The Company shall have furnished to the Representatives a
certificate signed by an officer of the Company reasonably acceptable to the
Representatives, dated the Closing Date, to the effect:
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(i) the representations and warranties of the Company in this
Agreement are true and correct in all material respects on and as of the Closing
Date with the same effect as if made on the Closing Date and the Company has
complied with all the agreements and satisfied all the conditions on its part to
be performed or satisfied at or prior to the Closing Date, in each case, in all
material respects, unless otherwise waived by the Representatives;
(ii) no stop order suspending the effectiveness of the
Registration Statement, as amended, 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
financial condition, earnings, business or properties of the Company and its
subsidiaries, taken as a whole, except as set forth in or contemplated in the
Prospectus.
(e) At the Closing Date, Ernst & Young LLP shall have furnished to
the Representatives a letter or letters (which may refer to a letter previously
delivered to one or more of the Representatives), dated as of the Closing Date,
in form and substance reasonably satisfactory to the Representatives, confirming
that they are independent auditors within the meaning of the Act and the
applicable published rules and regulations thereunder, stating in effect that:
(i) in their opinion the financial statements and schedules
thereto audited by such accountants and included in the Company's Annual Report
on Form 10-K and incorporated in the Registration Statement and the Prospectus
comply as to form in all material respects with the applicable accounting
requirements of the Act and the Exchange Act and the published rules and
regulations thereunder with respect to financial statements and financial
statement schedules included or incorporated in annual reports on Form 10-K
under the Exchange Act;
(ii) on the basis of performing the procedures specified by the
American Institute of Certified Public Accountants for a review of the interim
financial information as described in SAS 71, INTERIM FINANCIAL INFORMATION, on
the unaudited consolidated, condensed interim financial statements from the date
of the latest audited balance sheet included or incorporated by reference in the
Registration Statement to the date of the latest interim balance sheet included
or incorporated by reference in the Registration Statement; carrying out certain
specified procedures on the latest interim financial data made available by the
Company and its consolidated subsidiaries (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
including; a reading of the minutes of the meetings of the stockholders and
directors of the Company of the period subsequent to the date of the most recent
financial statements incorporated in the Registration Statement and the
Prospectus, nothing came to their attention which caused them to believe that:
(i) any unaudited interim consolidated financial statements included or
incorporated in the Registration Statement and the Prospectus do not comply as
to form in all material respects with applicable accounting requirements of the
Exchange Act and with the published rules thereunder; and (ii) said unaudited
financial statements are not stated on a basis substantially consistent with
that of the audited financial statements included or incorporated in the
Registration Statement and the Prospectus;
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(iii) they have performed certain other procedures as a result
of which they determined that the information described in a schedule to be
delivered on behalf of the Underwriters of an accounting, financial or
statistical nature (which is limited to accounting, financial or statistical
information that has been obtained from accounting records which are subject to
controls over financial reporting or which has been derived directly from such
accounting records by analysis or computation) set forth in the Registration
Statement, as amended, the Prospectus, as amended or supplemented, and in
Exhibit 12 to the Registration Statement (including selected accounting,
financial or statistical information included or incorporated in the Company's
Annual Report on Form 10-K incorporated in the Prospectus or any of the
Company's Quarterly Reports on Form l0-Q incorporated therein), agrees with
accounting records or compilations made from such accounting records which are
subject to controls over financial reporting or which has been derived directly
from such accounting records by analysis or computation; and
(iv) on the basis of: a reading of the unaudited pro forma
financial statements incorporated by reference in the Registration Statement and
the Prospectus and contained in the Company's Current Report on Form 8-K dated
November 15, 2001, relating to the proposed merger transaction with Compaq
Computer Corporation (the "pro forma financial statements"); inquiries of
certain officers of the Company who have responsibility for financial and
accounting matters; and proving the arithmetic accuracy of the application 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 as to 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 pro forma financial statements.
References to the Prospectus in this paragraph (e) include any
supplements thereto at the date of the letter.
(f) At the Closing Date, Ernst & Young LLP shall have furnished to
the Representatives a letter or letters (which may refer to a letter previously
delivered to one or more of the Representatives), dated as of the Closing Date,
in the form and substance reasonably satisfactory to the Representatives,
confirming that they are independent auditors within the meaning of the Act and
the applicable published rules and regulations thereunder, stating in effect
that:
(i) in their opinion the financial statements and schedules
thereto of Compaq Computer Corporation ("Compaq") audited by such firm and
incorporated in the Registration Statement and the Prospectus comply as to form
in all material respects with the applicable accounting requirements of the Act
adopted by the Commission and the related rules and regulations thereunder with
respect to financial statements and financial statement schedules included or
incorporated in annual reports on Form 10-K under the Exchange Act;
(ii) on the basis of performing the procedures specified by the
American Institute of Certified Public Accountants for a review of the interim
financial information as described in SAS 71, INTERIM FINANCIAL INFORMATION, on
Compaq's unaudited condensed, consolidated interim financial statements from the
date of the latest audited balance sheet incorporated by reference in the
Registration Statement to the date of the latest interim balance sheet
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incorporated by reference in the Registration Statement, nothing came to their
attention which caused them to believe that: (i) any unaudited interim
condensed, consolidated financial statements incorporated in the Registration
Statement and the Prospectus do not comply as to form in all material respects
with applicable accounting requirements of the Act and with the related rules
and regulations adopted by the Commission; and (ii) any material modifications
should be made to said unaudited financial statements for them to be in
conformity with generally accepted accounting principles.
References to the Prospectus in this paragraph (f) include any
supplements thereto at the date of the letter.
(g) Subsequent to the respective dates of which information is
given in the Registration Statement and the Prospectus (exclusive of any
amendment or supplement on or after the Execution Time), there shall not have
been (i) any material change in the capital stock (other than upon exercise of
outstanding stock options) or any significant increase in long-term debt of the
Company or it Subsidiaries, taken as a whole, or (ii) any material adverse
change, or any development involving a prospective material adverse change, in
or affecting the financial condition, earnings, business or properties of the
Company and its subsidiaries, taken as a whole, the effect of which, in any case
referred to in clause (i) or (ii) above, is, in the judgment of the
Representatives, so material and adverse as to make it impractical or
inadvisable to proceed with the public offering or the delivery of the
Securities as contemplated by the Registration Statement and the Prospectus.
(h) Prior to the Closing Date, the Company shall have furnished to
the Representatives such further information, certificates and documents as the
Representatives may reasonably request.
(i) Subsequent to the Execution Time, there shall not have been any
decrease in the ratings of any of the Securities by Moody's Investor's Service,
Inc. ("Moody's") or Standard & Poor's Corporation ("S&P") and neither Moody's
nor S&P shall have publicly announced that it has placed any of the Securities
on a credit watch with negative implications, except as disclosed prior to the
Execution Time.
If any of the conditions specified in this Section 5 shall not have
been fulfilled in all material respects when and as provided in this Agreement,
or if any of the opinions and certificates mentioned above or elsewhere in this
Agreement shall not be in all material respects reasonably satisfactory in form
and substance to the Representatives and their counsel, this Agreement and all
obligations of the Underwriters hereunder may be terminated at, or at any time
prior to, the Closing Date by the Representatives. Notice of such termination
shall be given to the Company in writing or by telephone or telegraph confirmed
in writing.
6. INDEMNIFICATION AND CONTRIBUTION.
(a) The Company agrees to indemnify and hold harmless each
Underwriter and each person who controls any Underwriter within the meaning of
either the Act or the Exchange Act
-11-
against any and all losses, claims, damages or liabilities, joint or several, to
which they or any of them may become subject under the Act, the Exchange Act or
other Federal or state statutory law or regulation, at common law or otherwise,
insofar as such losses, claims, damages or liabilities (or actions in respect
thereof) arise out of or are based upon any untrue statement or alleged untrue
statement of a material fact contained in the Registration Statement for the
registration of the Securities as originally filed or in any amendment thereof,
or in any Preliminary Prospectus or the 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
each such indemnified party for any legal or other expenses reasonably incurred,
as such expenses are 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 Underwriter through the
Representatives for use in connection with the preparation thereof, and (ii)
such indemnity with respect to any Preliminary Prospectus or supplement thereto
shall not inure to the benefit of any Underwriter (or any person controlling
such Underwriter) from whom the person asserting any such loss, claim, damage or
liability purchased the Securities which are the subject thereof if (A) 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 Securities 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 such Preliminary Prospectus was corrected in the
Prospectus (or the Prospectus as supplemented prior to the confirmation of the
sale of such Securities to such person) and (B) the Company had previously
furnished copies of the Prospectus to such Underwriter. This indemnity agreement
will be in addition to any liability that the Company may otherwise have.
(b) Each Underwriter severally (and not jointly) agrees to
indemnify and hold harmless the Company, each of its directors, each of its
officers who signs the Registration Statement, and each person who controls the
Company within the meaning of either the Act or the Exchange Act, to the same
extent as the foregoing indemnity from the Company to each Underwriter, but only
with reference to written information relating to such Underwriter furnished to
the Company by or on behalf of such Underwriter through the Representatives
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 that any Underwriter may otherwise have. The Company acknowledges that
the statements set forth in the third and ninth paragraphs under the heading
"Underwriting" of the Prospectus, constitute the only information furnished in
writing by or on behalf of the several Underwriters for inclusion in the
Prospectus, and you, as the Representatives, confirm that such statements are
correct.
(c) Promptly after receipt by an indemnified party under this
Section 6 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 6, notify the indemnifying party in writing of the
commencement thereof; but the omission so to notify the indemnifying party will
not relieve it from any liability which it may have to any indemnified party
otherwise than under this Section 6.
-12-
In case any such action is brought against any indemnified party, and it
notifies the indemnifying party in writing of the commencement thereof, the
indemnifying party will be entitled to appoint counsel reasonably satisfactory
to such indemnified party to represent the indemnified party in such action;
provided, however, 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 defend 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 appoint counsel to defend such
action and approval by the indemnified party of counsel, the indemnifying party
will not be liable to such indemnified party under this Section 6 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 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 (in addition to any local
counsel), approved by the Representatives in the case of paragraph (a) of this
Section 6, representing the indemnified parties under such paragraph (a) who are
parties to such action), (ii) the indemnifying party shall not have employed
counsel reasonably satisfactory to the indemnified party to represent the
indemnified party within a reasonable time after notice of commencement of the
action or (iii) the indemnifying party has authorized in writing the employment
of counsel for the indemnified party at the expense of the indemnifying party;
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). No
indemnifying party shall, without the prior written consent of the indemnified
party, effect any settlement of any pending or threatened action in respect of
which any indemnified party is a party and indemnity was sought hereunder by
such indemnified party unless such settlement includes an unconditional release
of the indemnified party from all liability on any claims that are the subject
matter of such action.
(d) In order to provide for just and equitable contribution in
circumstances in which the indemnification provided for in this Section 6 is due
in accordance with its terms but is for any reason held by a court to be
unavailable from the Company or the Underwriters on grounds of policy or
otherwise, the Company and the Underwriters shall contribute to the aggregate
losses, claims, damages and liabilities (including legal or other expenses
reasonably incurred in connection with investigating or defending same) to which
the Company and one or more of the Underwriters may be subject (i) in such
proportion as is appropriate to reflect the relative benefits received by the
Company on the one hand and the Underwriters on the other from the offering of
the Securities or (ii) if the allocation provided by clause (i) above is not
permitted by applicable law, in such proportion as is appropriate to reflect not
only the relative benefits referred to in clause (i) above but also the relative
fault of the Company on the one hand and the Underwriters on the other in
connection with the statements or omissions which resulted in such losses,
claims, damages or liabilities as well as any other relevant equitable
considerations. The relative benefits received by the Company on the one hand
and the Underwriters on the other shall be deemed to be in the same proportion
as the total net proceeds from the offering (before deducting expenses) received
by the Company bear to the total underwriting discounts and commissions received
by the Underwriters. The relative fault shall be determined by reference to,
among other things, whether the untrue or alleged untrue statement of a material
fact or the omission or alleged omission to state a material fact
-13-
relates to information supplied by the Company or the Underwriters and the
parties' relative intent, knowledge, access to information and opportunity to
correct or prevent such untrue statement or omission. Notwithstanding the
provisions of this subsection (d), (y) in no case shall any Underwriter (except
as may be provided in any agreement among underwriters relating to the offering
of the Securities) be responsible for any amount in excess of the underwriting
discount applicable to the Securities purchased by such Underwriter hereunder
and (z) no person guilty of fraudulent misrepresentation (within the meaning of
Section 11(f) of the Act) shall be entitled to contribution from any person who
was not guilty of such fraudulent misrepresentation. For purposes of this
Section 6, each person who controls an Underwriter within the meaning of either
the Act or the Exchange Act shall have the same rights to contribution as such
Underwriter, and each person who controls the Company within the meaning of
either the Act or the Exchange Act, each officer of the Company who shall have
signed the Registration Statement and each director of the Company shall have
the same rights to contribution as the Company, subject in each case to clauses
(y) and (z) 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 in
writing 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 any other obligation it or
they may have hereunder or otherwise than under this paragraph (d). The
Underwriters obligations to contribute pursuant to this Section 7(d) are several
in proportion to their respective underwriting commitments as set forth on
SCHEDULE II hereto, and not joint.
7. DEFAULT BY AN UNDERWRITER. If any one or more Underwriters shall
fail to purchase and pay for any of the Securities agreed to be purchased by
such Underwriter or Underwriters hereunder and such failure to purchase shall
constitute a default in the performance of its or their obligations under this
Agreement, the remaining Underwriters shall be obligated severally to take up
and pay for (in the respective proportions which the amount of Securities set
forth opposite their names in SCHEDULE II hereto bears to the aggregate amount
of Securities set forth opposite the names of all the remaining Underwriters)
the Securities which the defaulting Underwriter or Underwriters agreed but
failed to purchase; provided, however, that in the event that the aggregate
amount of Securities which the defaulting Underwriter or Underwriters agreed but
failed to purchase shall exceed 10% of the aggregate amount of Securities set
forth in SCHEDULE II hereto, the remaining Underwriters shall have the right to
purchase all, but shall not be under any obligation to purchase any, of the
Securities, and if such nondefaulting Underwriters do not purchase all the
Securities, this Agreement will terminate without liability to any nondefaulting
Underwriter or the Company. In the event of a default by any Underwriter as set
forth in this Section 7, the Closing Date shall be postponed for such period,
not exceeding seven days, as the Representatives shall determine in order that
the required changes in the Registration Statement and the Prospectus or in any
other documents or arrangements may be effected. Nothing contained in this
Agreement shall relieve any defaulting Underwriter of its liability, if any, to
the Company and any nondefaulting Underwriter for damages occasioned by its
default hereunder.
8. TERMINATION. This Agreement shall be subject to termination in the
absolute discretion of the Representatives, by notice given to the Company prior
to delivery of and payment for the Securities, if prior to such time (i) trading
in securities generally on The New York Stock Exchange or trading of the
Company's common stock on The New York Stock Exchange shall have been
-14-
suspended or limited or minimum prices shall have been established on such
exchange, (ii) a banking moratorium shall have been declared either by Federal
or New York State authorities, (iii) there shall have occurred and be continuing
any major disruption of settlements of securities clearance services in the
United States or (iv) there shall have occurred any outbreak or material
escalation of hostilities or other calamity or crisis the effect of which on the
financial markets of the United States is such as to make it, in the judgment of
the Representatives, impracticable to market the Securities.
9. REPRESENTATIONS AND INDEMNITIES TO SURVIVE. The respective
agreements, representations, warranties, indemnities and other statements of the
Company or its officers and of the Underwriters 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 any Underwriter or the Company or any of
the officers, directors or controlling persons referred to in Section 6 hereof,
and will survive delivery of and payment for the Securities. If this Agreement
is terminated pursuant to Section 7 or if for any reason the purchase of the
Securities by the Underwriters is not consummated, the Company and the
Underwriters shall remain responsible for their respective expenses and
reimbursements pursuant to Section 4 and the respective obligations of the
Company and the Underwriters pursuant to Section 6 shall remain in effect.
10. NOTICES. All communications hereunder will be in writing and
effective only on receipt, and, if sent to the Representatives, will be mailed,
delivered or telegraphed and confirmed to them, at the address specified in
SCHEDULE I hereto; or, if sent to the Company, will be mailed, delivered or
telegraphed and confirmed to it, at Hewlett-Packard Company, ▇▇▇▇ ▇▇▇▇▇▇▇
▇▇▇▇▇▇, ▇▇▇▇-▇▇▇, ▇▇▇▇ ▇▇▇▇, ▇▇▇▇▇▇▇▇▇▇ ▇▇▇▇▇; attention of the Treasurer, fax
(▇▇▇) ▇▇▇-▇▇▇▇, with a copy to the General Counsel, Hewlett-Packard Company,
▇▇▇▇ ▇▇▇▇▇▇▇ ▇▇▇▇▇▇, ▇▇▇▇-▇▇, ▇▇▇▇ ▇▇▇▇, ▇▇▇▇▇▇▇▇▇▇ ▇▇▇▇▇, fax (▇▇▇) ▇▇▇-▇▇▇▇.
11. SUCCESSORS. This Agreement will inure to the benefit of and be
binding upon the parties hereto and their respective successors and the officers
and directors and controlling persons referred to in Section 6 hereof, and no
other person will have any right or obligation hereunder.
12. APPLICABLE LAW. THIS AGREEMENT WILL BE GOVERNED BY AND CONSTRUED IN
ACCORDANCE WITH THE LAWS OF THE STATE OF NEW YORK.
-15-
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 the several Underwriters.
Very truly yours,
HEWLETT-PACKARD COMPANY
By: /S/ ▇▇▇▇▇▇▇ ▇. ▇▇▇▇▇▇▇
-----------------------
▇▇▇▇▇▇▇ ▇. ▇▇▇▇▇▇▇
The foregoing Agreement is hereby Assistant Secretary
confirmed and accepted on
the date specified in SCHEDULE I hereto.
By: CREDIT SUISSE FIRST BOSTON CORPORATION
By: /S/ ▇▇▇▇▇▇▇▇▇ ▇. ▇▇▇▇▇
----------------------------------------
Name: ▇▇▇▇▇▇▇▇▇ ▇. ▇▇▇▇▇
Title: Director
By: ▇▇▇▇▇▇▇ ▇▇▇▇▇ BARNEY INC.
By: /S/ ▇▇▇ ▇▇▇▇▇
----------------------------------------
Name: ▇▇▇ ▇▇▇▇▇
Title: Director
For themselves and the other several
Underwriters, if any, named in SCHEDULE II
to the foregoing Agreement.
SCHEDULE I
DEBT SECURITIES
UNDERWRITING AGREEMENT: Dated December 3, 2001
REGISTRATION STATEMENT NO.: 333-30786
REPRESENTATIVES: Credit Suisse First Boston Corporation
▇▇▇▇▇▇▇ ▇▇▇▇▇ ▇▇▇▇▇▇ Inc.
TITLE OF SECURITIES: 5.75% Global Notes due December 15, 2006
PRINCIPAL AMOUNT: $1,000,000,000
INTEREST RATE: 5.75%
PURCHASE PRICE: $991.15 per $1,000 Note
OFFERING PRICE: $994.65 per $1,000 Note
INTEREST PAYMENT DATES: June 15 and December 15 of each year,
commencing June 15, 2002
SUBORDINATION PROVISIONS: None
OPTIONAL REDEMPTION:
The Company will have the right to redeem the 5.75% Global
Notes due December 15, 2006 (the "Securities"), in whole or in part at
any time, on at least 30 days but no more than 60 days prior written
notice mailed to the registered holders of the Securities to be
redeemed. The redemption price will be equal to the greater of (1) 100%
of the principal amount of the Securities to be redeemed or (2) the sum
as determined by the Quotation Agent (as defined below), of the present
values of the principal amount of the Securities to be redeemed and the
remaining scheduled payments of interest thereon from the redemption
date to the maturity date (the "Remaining Life") discounted from their
scheduled payment dates to the redemption date on a semiannual basis
(assuming a 360-day year consisting of twelve 30-day months) at the
Treasury Rate (as defined below) plus 25 basis points, plus accrued and
unpaid interest on the principal amount being redeemed to the
redemption date.
If money sufficient to pay the redemption price of and accrued
interest on the Securities (or portions thereof) to be redeemed on the
redemption date is deposited with the trustee or paying agent on or
before the redemption date and certain other conditions are satisfied,
then on and after the redemption date, interest will cease to accrue on
such
II-1
Securities (or such portion thereof) called for redemption. If any
redemption date is not a business day, the Company will pay the
redemption price on the next business day without any interest or other
payment due to the delay.
If less than all of the Securities of a series are to be
redeemed, the trustee will select the Securities for redemption on a
pro rata basis, by lot or by such other method as the trustee deems
appropriate and fair. No Securities of $1,000 or less will be redeemed
in part.
"Comparable Treasury Issue" means the United States Treasury
security selected by the Quotation Agent as having a maturity
comparable to the Remaining Life that would be utilized, at the time of
selection, and in accordance with customary financial practice, in
pricing new issues of corporate debt securities of comparable maturity
with the Remaining Life.
"Comparable Treasury Price" means, with respect to any
redemption date, the average of two Reference Treasury Dealer
Quotations for such redemption date.
"Quotation Agent" means the Reference Treasury Dealers.
"Reference Treasury Dealer" means each of Credit Suisse First
Boston Corporation and ▇▇▇▇▇▇▇ ▇▇▇▇▇ Barney Inc., and their respective
successors; provided, however, that if any of the foregoing shall cease
to be a primary U.S. Government securities dealer in The City of New
York (a Primary Treasury Dealer), the Company shall substitute therefor
another Primary Treasury Dealer.
"Reference Treasury Dealer Quotations" means, with respect to
each Reference Treasury Dealer and any redemption date, the average, as
determined by the trustee, of the bid and asked prices for the
Comparable Treasury Issue (expressed in each case as a percentage of
its principal amount) quoted in writing to the trustee by the Reference
Treasury Dealer at 5:00 p.m., New York City time, on the third business
day preceding the redemption date.
"Treasury Rate" means, with respect to any redemption date,
the rate per annum equal to the semiannual equivalent yield to maturity
of the Comparable Treasury Issue, assuming a price for the Comparable
Treasury Issue (expressed as a percentage of its principal amount)
equal to the Comparable Treasury Price for the redemption date.
TAX REDEMPTION:
PAYMENT OF ADDITIONAL AMOUNTS
The Company will, subject to certain exceptions and
limitations set forth below, pay to the holder of any Security who is a
United States Alien (as defined below), as additional interest, such
additional amounts as may be necessary in order that every net payment
on such Security (including payment of the principal of and interest on
such Security) by the Company or the Company's specified paying agent,
after deduction or withholding for or on account of any present or
future tax, assessment or other governmental charge imposed upon
-2-
or as a result of such payment by the United States (or any political
subdivision or taxing authority thereof or therein), will not be less
than the amount provided in such Security to be then due and payable.
However, the Company's obligation to pay additional amounts will not
apply to:
(1) any tax, assessment or other governmental charge that would not
have been so imposed but for:
o the existence of any present or former connection between such
holder or beneficial owner of such Security (or between a
fiduciary, settlor or beneficiary of, or a person holding a power
over, such holder, if such holder is an estate or a trust, or a
member or shareholder of such holder, if such holder is a
partnership or corporation) and the United States or any
political subdivision or taxing authority thereof or therein,
including, without limitation, such holder (or such fiduciary,
settlor, beneficiary, person holding a power, member or
shareholder) being or having been a citizen or resident of the
United States or treated as a resident thereof or being or having
been engaged in a trade or business or present therein or having
or having had a permanent establishment therein; or
o such holder's or beneficial owner's past or present status as a
personal holding company, passive foreign investment company,
foreign personal holding company, foreign private foundation or
other foreign tax-exempt organization with respect to the United
States, controlled foreign corporation for United States tax
purposes or corporation that accumulates earnings to avoid United
States federal income tax;
(2) any estate, inheritance, gift, excise, sales, transfer, wealth or
personal property tax or any similar tax, assessment or other
governmental charge;
(3) any tax, assessment or other governmental charge that would not
have been imposed but for the presentation by the holder of a
Security for payment more than 30 days after the date on which such
payment became due and payable or the date on which payment thereof
was duly provided for, whichever occurred later;
(4) any tax, assessment or other governmental charge that is payable
otherwise than by withholding from a payment on a Security;
(5) any tax, assessment or other governmental charge required to be
withheld by any paying agent from a payment on a Security, if such
payment can be made without such withholding by any other paying
agent;
(6) any tax, assessment or other governmental charge that would not
have been imposed but for a failure to comply with applicable
certification, information, documentation, identification or other
reporting requirements concerning the nationality, residence,
identity or connection with the United States of the holder or
beneficial owner of a Security if such compliance is required by
statute or regulation of the United States or
-3-
an applicable tax treaty to which the United States is a party as
a precondition to relief or exemption from such tax, assessment or
other governmental charge;
(7) any tax, assessment or other governmental charge imposed on a
holder that actually or constructively owns 10% or more of the
combined voting power of all classes of stock of the Company;
(8) any tax, assessment or governmental charge that would not have been
imposed or withheld but for the treatment of the interest by the
Company as contingent interest described in Section 871(h)(4) of
the Internal Revenue Code of 1986, as amended;
(9) any tax, assessment or governmental charge that would not have been
imposed or withheld but for an election by the holder the effect of
which is to make the payment of the principal of, or interest (or
any other amount) on, a Security by the Company or a paying agent
subject to United States Federal income tax; or
(10) any combination of items (1), (2), (3), (4), (5), (6), (7), (8)
and (9).
In addition, the Company shall not be required to pay
additional amounts on a Security to a holder that is a fiduciary or
partnership or other than the sole beneficial owner of such payment to
the extent a beneficiary or settlor with respect to such fiduciary or a
member of such partnership or a beneficial owner would not have been
entitled to additional amounts (or payment of additional amounts would
not have been necessary) had such beneficiary, settlor, member or
beneficial owner been the holder of such Security.
For the purposes above, a "United States Alien" means any
person who, for United States federal income tax purposes, is a foreign
corporation, a non-resident alien individual, a non-resident alien
fiduciary of a foreign estate or trust, or a foreign partnership one or
more of the members of which is, for United States federal income tax
purposes, a foreign corporation, a non-resident alien individual or a
non-resident alien fiduciary, of a foreign estate or trust. "United
States" means the United States of America (including the States and
the District of Columbia) and its territories, its possessions and
other areas subject to its jurisdiction.
REDEMPTION FOR TAX PURPOSES
The Company may, at its option, redeem, as a whole, but not in
part, the Securities on not less than 30 nor more than 60 days' prior
notice to the holder of record at a redemption price equal to 100% of
their principal amount, together with interest accrued to the
redemption date if either of the following occurs:
(1) as a result of any change in, or amendment to, the laws (or any
regulations or rulings promulgated thereunder) of the United States
(or any political subdivision or taxing authority thereof or
therein), or any change in the official application (including a
ruling by a court of competent jurisdiction in the United States)
or interpretation of such laws, regulations or rulings, which
change or amendment is announced or becomes effective on or after
the consummation of this offering, the Company
-4-
becomes or will become obligated to pay additional amounts as
described above under "-- Payment of Additional Amounts;" or
(2) any act is taken by a taxing authority of the United States on or
after the consummation of this offering, whether or not such act is
taken with respect to the Company or any affiliate, that results in
a substantial likelihood that the Company will or may be required
to pay such additional amounts.
However, in order to redeem the Securities pursuant to this
provision the Company will be required to determine, in its business
judgment, that the obligation to pay such additional amounts cannot be
avoided by the use of commercially reasonable measures available to the
Company, not including substitution of the obligor under the Securities
or any action that would entail a material cost to the Company. The
Company may not redeem unless the Company shall have received an
opinion of counsel to the effect that because of an act taken by a
taxing authority of the United States (as discussed above) such an act
results in a substantial likelihood that the Company will or may be
required to pay additional amounts described above and the Company
shall have delivered to the trustee a certificate, signed by a duly
authorized officer, stating that based on such opinion the Company is
entitled to redeem the Securities pursuant to their terms.
SINKING FUND PROVISIONS: None
CLOSING DATE AND TIME: 7:00 a.m., Pacific Standard Time,
December 6, 2001
METHOD OF PAYMENT: Wire transfer of immediately available funds
OVERALLOTMENT OPTION: None
-5-
SCHEDULE II
Amount to be
Underwriter Purchased
----------- --------------
Credit Suisse First Boston Corporation $ 450,000,000
▇▇▇▇▇▇▇ ▇▇▇▇▇ ▇▇▇▇▇▇ Inc. $ 450,000,000
Banc of America Securities LLC $ 50,000,000
HSBC Securities (USA) Inc. $ 50,000,000
==============
TOTAL $1,000,000,000
-6-
