[Draft--8/18/95]
$[ ] 1/
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Medium-Term Senior Notes, Series C, and
---------------------------------------
Medium-Term Subordinated Notes, Series D,
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Due from Nine Months to 30 Years
--------------------------------
from Date of Issue
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Xxxxx Xxxxxx Group Inc.
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Distribution Agreement
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[ ], 1995
New York, New York
PAINEWEBBER INCORPORATED
0000 Xxxxxx xx xxx Xxxxxxxx
Xxx Xxxx, Xxx Xxxx 00000
CS FIRST BOSTON CORPORATION
Park Avenue Plaza
New York, New York 10055
Dear Sirs:
Xxxxx Xxxxxx Group Inc., a Delaware corporation
(the "Company"), confirms its agreement with each of you
with respect to the issue and sale by the Company of up to
$[ ] 1/ aggregate principal amount of its
-
Medium-Term Senior Notes, Series C, and Medium-Term
Subordinated Notes, Series D, Due from Nine Months to
30 Years from Date of Issue (the "Notes"). The Notes will
be issued either as subordinated to ("Subordinated Notes")
or on a parity with ("Senior Notes") other unsecured and
unsubordinated indebtedness of the Company and will have the
annual interest rates, maturities, redemption provisions,
optional repayment rights and other terms as set forth in a
supplement to the Prospectus referred to below. The Senior
Notes will be issued under an Indenture dated as of
March 15, 1988, between the Company and Chemical Bank, as
trustee (the "Senior Note Trustee"), as amended by the First
Supplemental Indenture dated as of September 22, 1989, and
by the Second Supplemental Indenture dated as of March 22,
1991 (such
--------------------
1/ Or the U.S. dollar equivalent.
-
2
Indenture, as so supplemented, being hereinafter referred to
as the "Senior Note Indenture"), each between the Company
and the Senior Note Trustee. The Subordinated Notes will be
issued under an Indenture dated as of March 15, 1988,
between the Company and Chemical Bank Delaware, as trustee
(the "Subordinated Note Trustee"), as amended by the First
Supplemental Indenture dated as of September 22, 1989, by
the Second Supplemental Indenture dated as of March 22,
1991, and by the Third Supplemental Indenture dated as of
November 30, 1993 (such Indenture, as so supplemented, being
hereinafter referred to as the "Subordinated Note
Indenture"), each between the Company and the Subordinated
Note Trustee. The Senior Note Indenture and the
Subordinated Note Indenture are hereinafter sometimes
referred to as the "Indentures"; and the Senior Note Trustee
and the Subordinated Note Trustee are hereinafter sometimes
referred to as the "Trustees". The Notes will be issued,
and the terms thereof established, in accordance with the
Indentures and, in the case of Notes sold pursuant to
Section l(a), the Medium-Term Notes Administrative
Procedures attached hereto as Annex A (the "Procedures").
For the purposes of this Agreement, the term the "Agent"
shall refer to each of you acting solely in the capacity as
agent for the Company pursuant to Section l(a) and not as
principal, the term the "Purchaser" shall in each instance
refer to the applicable Agent acting solely as principal
pursuant to Section l(g) and not as agent, and the term
"you" shall refer to each of you acting in both such capaci-
ties or in either such capacity.
1. Appointment of Agents; Solicitation by the
------------------------------------------
Agents of Offers to Purchase; Sales of Notes to a Purchaser.
------------------------------------------------------------
(a) Subject to the terms and conditions set forth herein,
the Company hereby appoints each of the Agents to act as its
agent for the purpose of soliciting offers to purchase all
or part of the Notes from the Company upon the terms set
forth in the Prospectus, as amended or supplemented from
time to time, and in the Procedures. The appointment of the
Agents hereunder is not exclusive and the Company may from
time to time offer Notes for sale otherwise than to or
through an Agent; provided, however, that so long as this
-------- -------
Agreement is in effect the Company will not solicit offers
to purchase Notes through any agent without amending this
Agreement to appoint such agent an additional Agent
hereunder on the same terms and conditions as provided
herein for the Agents and without giving the Agents prior
notice of such appointment. It is understood, however, that
if from time to time the Company is approached by a
prospective agent offering to solicit a specific purchase of
Notes, the Company may engage such agent with respect to
such specific purchase, provided that (i) such agent is
3
engaged on terms substantially similar to the applicable
terms of this Agreement and (ii) the Agents are given notice
of such engagement promptly after it is agreed to.
(b) On the basis of the representations and
warranties set forth herein, but subject to the terms and
conditions set forth herein, each of the Agents agrees to
use reasonable efforts, as agent of the Company, to solicit
offers to purchase Notes from the Company upon the terms set
forth in the Prospectus, as amended or supplemented from
time to time, 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, be obligated to disclose the
identity of any purchaser or have any liability to the
Company in the event any such purchase is not consummated
for any reason. Subject to the provisions of this Section
and to the Procedures, offers for the purchase of Notes may
be solicited by an Agent at such times and in such amounts
as such Agent may from time to time deem advisable.
(c) The Company reserves the right, in its
sole discretion, to suspend solicitation of offers to
purchase Senior Notes or Subordinated Notes from the Company
at any time for any period of time or permanently. Upon
receipt of instructions from the Company, each Agent
forthwith will suspend its solicitation of offers to
purchase Senior Notes or Subordinated Notes, as the case may
be, from the Company until such time as the Company has
advised such Agent that such solicitation may be resumed.
(d) Each Agent will communicate to the
Company, orally or in writing, each offer to purchase Notes
from the Company that is received by such Agent as agent of
the Company and that is not rejected by such Agent as
provided below. The Company will have the sole right to
accept offers to purchase Notes from the Company and may
reject any such offer, in whole or in part, for any reason.
Each of the Agents may, in its discretion reasonably
exercised, reject any offer to purchase Notes from the
Company that is received by such Agent, in whole or in part,
and any such rejection shall not be deemed a breach of such
Agent's agreements contained herein.
(e) The Company agrees to pay an Agent a
commission, on the date of delivery by the Company of any
Note sold hereunder (a "Closing Date"), with respect to each
sale of Notes by the Company as a result of a solicitation
made
4
by such Agent, in an amount equal to that percentage speci-
fied in Schedule I hereto of the aggregate principal amount
of each Senior Note and each Subordinated Note sold by the
Company. Such commission shall be payable as specified in
the Procedures. The commission rates may be amended from
time to time by written agreement of the Company and the
Agents.
(f) Each of the Agents agrees, with respect to
any Note denominated in a currency other than the U.S.
dollar or the European Currency Unit, as agent, directly or
indirectly, not to solicit offers to purchase, and as
principal under any Terms Agreement (as hereinafter defined)
or otherwise, directly or indirectly, not to offer, sell or
deliver, such Note in, or to residents of, the country
issuing such currency, except as permitted by applicable
law.
(g) Subject to the terms and conditions stated
herein, whenever the Company and an Agent determine that the
Company shall sell Notes directly to such Agent as purchaser
(the "Purchaser"), each such sale of Notes shall be made in
accordance with the terms of this Agreement and any supple-
mental agreement relating thereto between the Company and
the Purchaser. Each such supplemental agreement (which
shall be substantially in the form of Annex B) is herein
referred to as a "Terms Agreement". The Purchaser's com-
mitment to purchase Notes pursuant to any Terms Agreement
shall be deemed to have been made on the basis of the
representations and warranties of the Company herein con-
tained and shall be subject to the terms and conditions
herein set forth. Each Terms Agreement shall describe the
Notes to be purchased by the Purchaser pursuant thereto and
shall specify the principal amount of such Notes, the price
to be paid to the Company for such Notes, the rate at which
interest will be paid on the Notes, the Closing Date for
such Notes, the place of delivery of the Notes and payment
therefor, the method of payment and any modification of the
requirements for the delivery of the opinions of counsel,
the certificates from the Company or its officers and the
letter from the Company's independent public accountants
pursuant to Section 7(c). Such Terms Agreement shall also
specify any period of time referred to in Section 5(l).
Delivery of the certificates for Notes sold to
the Purchaser pursuant to any Terms Agreement shall be made
as agreed to between the Company and the Purchaser and set
forth in the respective Terms Agreement, not later than the
Closing Date set forth in such Terms Agreement, against
payment of funds to the Company in the net amount due to the
5
Company for such Notes by the method and in the form set
forth in such Terms Agreement.
2. Offering Procedures. The Procedures may be
--------------------
amended only by written agreement of the Company and the
Agents after notice to the Trustees, and, to the extent any
such amendment affects a Trustee, with the approval of such
Trustee. The Company and each of the Agents agree to
perform the respective duties and obligations specifically
provided to be performed by them in the Procedures.
3. Registration Statements and Prospectus.
---------------------------------------
The Company has filed with the Securities and Exchange
Commission (the "Commission"), pursuant to the Securities
Act of 1933, as amended (the "Securities Act"), and the
published rules and regulations adopted by the Commission
thereunder (the "Rules"), a registration statement on
Form S-3 (No. 33-51149) (the "First Registration Statement"),
and a registration statement on Form S-3 (No. 33-[ ]) (the
"Second Registration Statement") (such Second Registration
Statement also constituting Post-Effective Amendment No. 1
to the First Registration Statement), each including a basic
prospectus, which have become effective under the Securities
Act under which the sale of $[ ] aggregate
principal amount of debt securities (the "Securities"),
including the Notes, remains registered at this time (the
First Registration Statement and the Second Registration
Statement, each including all exhibits thereto and each as
amended at the date of this Agreement, being hereinafter
collectively called the "Registration Statements"). The
Company has included in the Registration Statements, or has
filed or will file with the Commission pursuant to the
applicable paragraph of Rules 424(b) and 429 under the
Securities Act, a supplement to the form of prospectus
included in the Registration Statements relating to the
Notes and the plan of distribution thereof (the "Prospectus
Supplement"). In connection with the sale of the Notes the
Company proposes to file with the Commission pursuant to the
applicable paragraph of Rules 424(b) and 429 under the
Securities Act further supplements to the Prospectus Supple-
ment specifying the interest rates, maturity dates, redemp-
tion provisions, if any, optional repayment rights, if any,
and other terms of the Notes sold pursuant hereto or the
offering thereof. The Indentures have been qualified under
the Trust Indenture Act of 1939, as amended (the "Trust
Indenture Act"). The term "the Effective Date" shall mean,
for each of the Registration Statements, each date that such
Registration Statement and any post-effective amendment or
amendments thereto became or become effective. "Basic
Prospectus" shall mean the form of basic prospectus relating
to the Securities contained in each Registration Statement
6
at the Effective Date. The term "Prospectus" means the
Basic Prospectus as supplemented by the Prospectus Supple-
ment. Any reference herein to a Registration Statement, the
Basic Prospectus, the Prospectus Supplement or the Prospec-
tus includes the documents incorporated by reference therein
pursuant to Item 12 of Form S-3 (the "Incorporated Docu-
ments") which were filed under the Securities Exchange Act
of 1934, as amended (the "Exchange Act"), on or before the
Effective Date of such 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 "amend", "amendment" or "supplement" with respect to a
Registration Statement, the Basic Prospectus, the Prospectus
Supplement or the Prospectus includes the Incorporated
Documents filed under the Exchange Act after the Effective
Date of such 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 Registration Statements includes each of the First
Registration Statement and the Second Registration Statement
only so long as Notes may be issued in the future thereunder
and shall refer to either one or both of such Registration
Statements, as appropriate.
The Company confirms that you are authorized to
distribute the Prospectus and any amendments or supplements
thereto.
4. Representations and Warranties. The
-------------------------------
Company represents and warrants to you as follows:
(a) The Company meets the requirements for the
use of Form S-3 under the Securities Act. The Registration
Statements meet the requirements set forth in Rule
415(a)(1)(ix) or (x) of the Rules and comply in all other
material respects with Rule 415 of the Rules.
(b) As of the date hereof, on the Effective
Date, when any amendment or supplement to the Prospectus is
filed with the Commission pursuant to Rule 424 or Rule 429
of the Rules, as of the date of any Terms Agreement and on
any Closing Date, (i) the Registration Statements, as
amended as of any such time, the Prospectus, as amended or
supplemented as of any such time, and the Incorporated
Documents will comply in all material respects with the
applicable requirements of the Securities Act and the Rules,
and the Exchange Act and the Trust Indenture Act and the
respective published rules and regulations adopted by the
Commission thereunder, (ii) the Registration Statements, as
amended as of any such time, did not or will not include any
untrue statement of a material fact or omit to state any
material fact required to
7
be stated therein or necessary in order to make the state-
ments therein not misleading, and (iii) the Prospectus, as
amended or 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 state-
ments therein, in the light of the circumstances under which
they were made, not misleading; except that this representa-
tion and warranty does not apply to (x) statements or
omissions made in reliance on and in conformity with infor-
mation relating to you furnished in writing to the Company
by you expressly for use in the Registration Statements, the
Prospectus or any amendment or supplement thereto or
(y) that part of the Registration Statements that shall
constitute the Statements of Eligibility and Qualification
on Form T-1 of the Trustees under the Trust Indenture Act,
except statements or omissions in any such Statement made in
reliance upon information furnished in writing to the
applicable Trustee by or on behalf of the Company for use
therein.
(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, executed, authenticated and, when paid for by
the purchasers thereof, will constitute legal, valid and
binding obligations of the Company entitled to the benefits
of the Indenture.
Each acceptance by the Company of an offer to
purchase Notes from the Company and each request by the
Company to you that you solicit offers to purchase Notes
from the Company will be deemed to be a representation and
warranty by the Company to you that the representations and
warranties of the Company in this Agreement are true and
correct as of the time of such acceptance and that such
representations and warranties will be true and correct as
of the Closing Date for such Notes, in each case as though
made at and as of such time; it being understood that such
representations and warranties will relate to the Registra-
tion Statements as amended as of any such time and the
Prospectus as amended or supplemented as of any such time.
5. Agreements. (a) Prior to the termination
-----------
of the offering of the Notes, the Company will not file any
amendment or supplement to either of the Registration
Statements or the Prospectus (except for (i) periodic or
current reports filed under the Exchange Act, (ii) a
supplement relating to any offering of Notes providing
solely for the specification of or a change in the maturity
dates, the interest rates, the issuance prices or other
8
similar terms of any Notes or (iii) a supplement relating to
an offering of Securities other than Notes) (including any
document to be incorporated therein by reference) unless a
copy thereof has been submitted to you a reasonable period
of time before its filing and you have not reasonably
objected thereto within a reasonable period of time after
receiving such copy. Subject to the foregoing sentence, the
Company will cause each amendment or supplement to the
Prospectus to be filed with the Commission as required
pursuant to the Securities Act, the applicable paragraph of
Rules 424(b) and/or 429 of the Rules or, in the case of any
document to be incorporated therein by reference, to be
filed with the Commission as required pursuant to the
Exchange Act, within the time period prescribed and will
provide evidence satisfactory to you of such filing.
(b) The Company will advise you promptly
(i) when each amendment or supplement to the Prospectus
shall have been filed with the Commission pursuant to
Rules 424(b) and/or 429 or, in the case of any document
incorporated therein by reference, when such document shall
have been filed with the Commission pursuant to the Exchange
Act, (ii) when, prior to the termination of the offering of
the Notes, any amendment to either of the Registration
Statements shall have been filed or become effective,
(iii) of the initiation or threatening of any proceedings
for, or receipt by the Company of any notice with respect
to, the suspension of the qualification of the Notes for
sale in any jurisdiction or the issuance of any order by the
Commission suspending the effectiveness of either of the
Registration Statements and (iv) of the receipt by the
Company or any representative or attorney of the Company of
any other communication from the Commission relating to
either of the Registration Statements, the Prospectus or any
amendment or supplement thereto or to the transactions
contemplated by this Agreement. The Company will use its
best efforts to prevent the issuance of an order suspending
the effectiveness of either of the Registration Statements
and, if any such order is issued, to obtain its lifting as
soon as possible.
(c) The Company will deliver to you, without
charge, two conformed copies of the Second Registration
Statement and each post-effective amendment to the
Registration Statements filed after the date hereof (includ-
ing all exhibits filed with any such document) and as many
conformed copies of the Registration Statements and each
such amendment (excluding exhibits) and each Indenture as
you may reasonably request.
9
(d) The Company, during the period when a
prospectus relating to the Notes is required to be delivered
under the Act, will deliver, without charge, to you, at such
office or offices as you may designate, as many copies of
the Prospectus or any amendment or supplement thereto as you
may reasonably request, and, if any event occurs during such
period 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
in order to make the statements therein, in the light of the
circumstances under which they were made, not misleading, or
if during such period it is necessary to amend either
Registration Statement or to amend or supplement the
Prospectus to comply with the Securities Act or the Rules or
the Exchange Act or the published rules and regulations
adopted by the Commission thereunder, the Company promptly
will (i) notify you to suspend solicitation of offers to
purchase Notes from the Company, (ii) prepare and file with
the Commission, subject to Section 5(a), and deliver,
without charge, to you, an amendment or supplement which
will correct such statement or omission or effect such
compliance and (iii) supply any amended or supplemented
Prospectus to you in such quantities as you may reasonably
request.
(e) 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. The Company will
make generally available to its security holders as soon as
practicable, but in any event not later than fifteen months
after (i) the Effective Dates of the Registration
Statements, (ii) the Effective Date of each post-effective
amendment to either of the Registration Statements and
(iii) the date of each filing by the Company with the
Commission of an Annual Report on Form 10-K that is
incorporated by reference in the Registration Statements, an
earnings statement satisfying the provisions of Sec-
tion 11(a) of the Securities Act and Rule 158 of the Rules.
(f) The Company will take such actions as you
designate in order to qualify the Notes for offer and sale
under the securities or "blue sky" laws of such
jurisdictions as you designate, will maintain such qualifi-
cation in effect for so long as may be required for the
distribution of the Notes and will arrange for the determi-
nation of the legality of the Notes for purchase by institu-
tional investors.
10
(g) The Company will supply to you copies of
such financial statements and other periodic and special
reports as the Company may from time to time distribute
generally to the holders of any class of its capital stock
and of each annual or other report it is required to file
with the Commission. The Company shall furnish to you such
information, 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 Statements, 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 you may from time to time and at
any time prior to the termination of this Agreement reason-
ably request.
(h) The Company will, whether or not the
transactions contemplated by this Agreement are consummated
or this Agreement is terminated, (i) pay, or reimburse if
paid by you, all costs and expenses incident to the
performance of the obligations of the Company under this
Agreement, including costs and expenses relating to (A) the
preparation, printing and filing of the Registration
Statements and exhibits thereto, the Prospectus, all
amendments and supplements to either of the Registration
Statements and the Prospectus, and the printing or other
reproduction of the Indentures and this Agreement, (B) the
authorization and issuance of the Notes and the preparation
and delivery of certificates for the Notes, (C) the
registration or qualification of the Notes for offer and
sale under the securities or "blue sky" laws of the
jurisdictions referred to in paragraph (f) of this Section 5
and the determination of the legality of the Notes,
including the fees and disbursements of Cravath, Swaine &
Xxxxx, your counsel, in that connection, and the preparation
and printing of preliminary and supplemental "blue sky"
memoranda and legal investment memoranda, (D) the furnishing
(including costs of shipping and mailing) to you of copies
of the Prospectus, and all amendments or supplements to the
Prospectus, and of all other documents, reports and other
information required by this Section to be so furnished,
(E) all transfer taxes, if any, with respect to the sale and
delivery of the Notes by the Company, (F) the fees and
expenses of the Trustees, (G) all fees charged by the
National Association of Securities Dealers, Inc., in
connection with the Notes and (H) the fees charged by rating
agencies in connection with any rating of the Notes,
(ii) reimburse you on a quarterly basis for all out-of-
pocket expenses (including advertising expenses) incurred by
you with the advance approval of the Company and
(iii) reimburse the reasonable fees and disbursements
11
of Cravath, Swaine & Xxxxx, your counsel, incurred in
connection with this Agreement.
(i) Each time that either of the Registration
Statements or the Prospectus is amended or supplemented
(other than by an amendment or supplement relating to any
offering of Securities other than the Notes or providing
solely for the specification of or a change in the maturity
dates, the interest rates, the issuance prices or other
similar terms of any Notes sold pursuant hereto), including
by the filing of any document incorporated therein by
reference, the Company will deliver or cause to be delivered
forthwith to you a certificate of the chief executive,
operating or financial officer or treasurer and the secre-
tary or chief financial or accounting officer or treasurer
of the Company, dated the date of the effectiveness of such
amendment or the date of filing of such supplement, in form
reasonably satisfactory to you, to the effect that the
statements contained in the certificate that was last
furnished to you pursuant to either Section 6(c) or this
paragraph (i) are true and correct at the time of the
effectiveness of such amendment or the filing of such
supplement as though made at and as of such time (except
that (i) the last day of the fiscal quarter for which
financial statements of the Company were last filed with the
Commission shall be substituted for the corresponding date
in such certificate and (ii) such statements shall be deemed
to relate to the Registration Statements and the Prospectus
as amended or supplemented to the time of the effectiveness
of such amendment or the filing of such supplement) or, in
lieu of such certificate, a certificate of the same tenor as
the certificate referred to in Section 6(c) 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 Statements and the Pro-
spectus as amended or supplemented to the time of the
effectiveness of such amendment or the filing of such
supplement.
(j) Each time that either of the Registration
Statements 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,
(ii) providing solely for the specification of or a change
in the maturity dates, the interest rates, the issuance
prices or other similar terms of any Notes sold pursuant
hereto, or (iii) setting forth or incorporating by reference
financial statements or other information as of and for a
fiscal quarter, unless, in the case of clause (iii) above,
in your reasonable judgment, such financial statements or
other information are of such a nature that an opinion of
12
counsel should be furnished), including by the filing of any
document incorporated therein by reference, the Company will
furnish or cause to be furnished forthwith to you a written
opinion and a written letter of counsel for the Company
satisfactory to you, dated the date of the effectiveness of
such amendment or date of filing of such supplement, in form
satisfactory to you, of the same tenor as the opinion and
letter referred to in Section 6(d) but modified to relate to
the Registration Statements and the Prospectus as amended or
supplemented to the time of the effectiveness of such
amendment or the filing of such supplement or, in lieu of
such opinion and letter, counsel last furnishing such an
opinion and letter to you may furnish you with a letter to
the effect that you may rely on such counsel's last opinion
and last letter to the same extent as though it were dated
the date of such letter authorizing reliance (except that
statements in such counsel's last opinion and last letter
will be deemed to relate to the Registration Statements and
the Prospectus as amended or supplemented to the time of the
effectiveness of such amendment or the filing of such
supplement).
(k) Each time that either of the Registration
Statements or the Prospectus is amended or supplemented to
set forth amended or supplemental financial information,
including by the filing of any document incorporated therein
by reference, the Company will cause its independent public
accountants forthwith to furnish a letter, dated the date of
the effectiveness of such amendment or the date of filing of
such supplement, in form satisfactory to you, of the same
tenor as the letter referred to in Section 6(f) with such
changes as may be necessary to reflect the amended and
supplemental financial information included or incorporated
by reference in the Registration Statements and the Prospec-
tus, as amended or supplemented to the date of such letter,
provided that if either of the Registration Statements or
the Prospectus is amended or supplemented solely to include
or incorporate by reference financial information as of and
for a fiscal quarter, the Company's independent public
accountants may limit the scope of such letter, which shall
be satisfactory in form to you, to the unaudited financial
statements, the related "Management's Discussion and Analy-
sis of Financial Condition and Results of Operations" and
any other information of an accounting, financial or statis-
tical nature included in such amendment or supplement,
unless, in your reasonable judgment, such letter should
cover other information or changes in specified financial
statement line items.
(l) During the period, if any, specified in
any Terms Agreement, the Company shall not, without the
prior
13
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 pur-
chased pursuant to such Terms Agreement.
(m) Upon your reasonable request on any
Closing Date, the Company will furnish or cause to be
furnished forthwith to you a written opinion of counsel for
the Company satisfactory to you, dated such Closing Date, of
the same tenor as paragraphs 1 and 3 of the opinion referred
to in Section 6(d), but modified, as necessary, to relate to
the Prospectus as amended or supplemented at such Closing
Date and except that such opinion shall state that the Notes
being sold by the Company on such Closing Date, when deliv-
ered against payment therefor as provided in the applicable
Indenture and this Agreement, will, assuming performance by
the authenticating agent or the applicable Trustee under the
applicable Indenture, have been duly executed, authenti-
cated, issued and delivered and will constitute legal, valid
and binding obligations of the Company entitled to the
benefits of the applicable Indenture and enforceable in
accordance with their terms, subject only to the exceptions
as to enforcement set forth in paragraph 3 of the opinion
referred to in Section 6(d), and that such Notes conform to
the description thereof contained in the Prospectus as
amended or supplemented to such Closing Date.
6. Conditions to the Obligations of each
-------------------------------------
Agent. The obligations of each Agent to solicit offers to
------
purchase Notes from the Company are subject to the accuracy,
on the date of this Agreement, on the Effective Date of each
Registration Statement, when any amendment or supplement to
the Prospectus is filed with the Commission pursuant to the
applicable paragraph of Rule 424(b) and/or 429 of the Rules
and on each Closing Date, of the representations and
warranties of the Company in this Agreement, to the accuracy
and completeness of all statements made by the Company or
any of its officers in any certificate delivered to such
Agent or such Agent's counsel pursuant to this Agreement, to
performance by the Company of its obligations under this
Agreement and to each of the following additional
conditions:
(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); and no order suspending the
effectiveness of either of the Registration
Statements, as amended from time to time, shall be
in effect and no proceedings for such purpose
shall be pending before or
14
threatened by the Commission, and any requests for
additional information on the part of the Commission
(to be included in either of the Registration
Statements or the Prospectus or otherwise) shall have
been complied with to the reasonable satisfaction of
such Agent.
(b) Since the date of the most recent financial
statements included or incorporated by reference in the
Prospectus, (i) there must not have been any change (of
the type indicated in paragraph (b)(3) of Annex D to
this Agreement) specified in the most recent letter of
the type referred to in Section 5(k), in paragraph (f)
of this Section 6 or in Section 7(c)(iv), (ii) there
must not have been any material adverse change in the
general affairs, prospects, management, business,
properties, financial condition or results of
operations 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 by the Prospectus, as then amended or
supplemented, (iii) the Company and its subsidiaries
must not have sustained any material loss or
interference with their business or properties from
fire, explosion, earthquake, flood or other calamity,
whether or not covered by insurance, or from any labor
dispute or any court or legislative or other
governmental action, order or decree not described in
the Prospectus, as then amended or supplemented, and
(iv) there must not have been any downgrading in the
rating of any of the Company's debt securities by any
nationally recognized statistical rating organization
(as defined for purposes of Rule 436(g) of the Rules)
or any public announcement by any such organization of
any proposal by it to downgrade such rating or that it
has under surveillance or review its rating of the
Notes or any other debt securities of the Company
(other than an announcement with positive implications
of a possible upgrading, and no implication of a
possible downgrading, of such rating) if, in the
judgment of such Agent, any such development referred
to in clause (i), (ii), (iii) or (iv) makes it
impracticable or inadvisable to proceed with the
soliciting of offers to purchase Notes from the Company
as contemplated by the Prospectus, as then amended or
supplemented.
(c) The Company shall have furnished to such Agent
on the date of this Agreement a certificate of the
Treasurer and the General Counsel of the Company, dated
such date, certifying that (i) the signers have
15
carefully examined the Registration Statements, the
Prospectus, the Indentures and this Agreement, (ii) the
representations and warranties of the Company in this
Agreement are accurate on and as of the date of such
certificate and the Company has 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 such Agent to solicit offers to purchase
the Notes, (iii) since the date of the most recent
financial statements included or incorporated by
reference in the Prospectus, there has not been any
material adverse change in the general affairs,
prospects, management, business, properties, financial
condition or results of operations 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, as amended or supplemented as of the date
of such certificate, and (iv) to the knowledge of such
officers, no action to suspend the effectiveness of
either of the Registration Statements, as amended as of
the date of such certificate, or to prohibit the sale
of the Notes has been taken or threatened by the
Commission.
(d) Such Agent shall have received on the date of
this Agreement from the General Counsel of the Company
an opinion and a letter each dated such date
substantially identical to the proposed form of opinion
and form of letter set forth in Annex C to this
Agreement.
(e) Such Agent shall have received on the date of
this Agreement from Cravath, Swaine & Xxxxx, its
counsel, an opinion and a letter each dated such date
with respect to the Company, the Notes, the Indentures,
the Registration Statements, the Prospectus, this
Agreement and the form and sufficiency of all
proceedings taken in connection with the sale and
delivery of the Notes. Such opinion, letter and
proceedings shall be satisfactory in all respects to
such Agent. The Company must have furnished to such
counsel such documents as they may reasonably request
for the purpose of enabling them to render such opinion
and letter.
(f) Such Agent shall have received, at the date
of this Agreement, a signed letter from Ernst & Young,
independent accountants for the Company, substantially
in the form of Annex D to this Agreement.
16
All opinions, letters, evidence and certificates
mentioned above or elsewhere in this Agreement will comply with
this Agreement only if they are in form and scope satisfactory to
such Agent and its counsel.
If any of the conditions specified in this Section 6
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 such Agent and its counsel, this Agreement and
all obligations of such Agent hereunder may be canceled at any
time by such Agent. Notice of such cancelation 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 6 shall be delivered at the office of Xxxxxxx, Swaine &
Xxxxx, counsel for the Agents, at Worldwide Plaza, 000 Xxxxxx
Xxxxxx, Xxx Xxxx, Xxx Xxxx, on the date of this Agreement.
7. Conditions to the Obligations of the Purchaser.
-----------------------------------------------
The obligations of the Purchaser to purchase any Notes from the
Company are subject to the accuracy, on the date of any related
Terms Agreement and on the Closing Date for such Notes, of the
representations and warranties of the Company in this Agreement,
to the accuracy and completeness of all statements made by the
Company or any of its officers in any certificate delivered to
the Purchaser or its counsel pursuant to this Agreement, to
performance by the Company of its obligations under this
Agreement and to each of the following additional conditions:
(a) No stop order suspending the effectiveness of
either of the Registration Statements shall have been
issued and no proceedings for that purpose shall have
been instituted or threatened.
(b) Since the date of the most recent financial
statements included or incorporated by reference in the
Prospectus, (i) there must not have been any change (of
the type indicated in paragraph (b)(3) of Annex D to
this Agreement) specified in the most recent letter of
the type referred to in Section 5(k), in Section 6(f)
or in paragraph (c)(iv) of this Section 7, (ii) there
must not have been any material adverse change in the
general affairs, prospects, management, business,
properties, financial condition or results of
operations of the Company and its subsidiaries taken as
17
a whole, whether or not arising from transactions in
the ordinary course of business, except as set forth in
or contemplated by the Prospectus, as then amended or
supplemented, (iii) the Company and its subsidiaries
must not have sustained any material loss or interfer-
ence with their business or properties from fire,
explosion, earthquake, flood or other calamity, whether
or not covered by insurance, or from any labor dispute
or any court or legislative or other governmental
action, order or decree not described in the Prospec-
tus, as then amended or supplemented, and (iv) there
must not have been any downgrading in the rating of any
of the Company's debt securities by any nationally
recognized statistical rating organization (as defined
for purposes of Rule 436(g) of the Rules) or, if so
specified in the applicable Terms Agreement, any public
announcement by any such organization of any proposal
by it to downgrade such rating or that it has under
surveillance or review its rating of the Notes or any
other debt securities of the Company (other than an
announcement with positive implications of a possible
upgrading, and no implication of a possible downgrad-
ing, of such rating) if, in the judgment of the
Purchaser, any such development referred to in
clause (i), (ii), (iii) or (iv) makes it impracticable
or inadvisable to consummate the purchase of the Notes.
(c) If specified by any related 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 Sec-
tion 6(c) (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 the General Counsel of the Company, dated as of the
Closing Date, to the effect set forth in Section 6(d),
(iii) the opinion of Xxxxxxx, Swaine & Xxxxx, counsel
for the Purchaser, dated as of the Closing Date, to the
effect set forth in Section 6(e) and (iv) a letter of
Xxxxx & Xxxxx, independent accountants for the Company,
dated as of the Closing Date, to the effect set forth
in Section 6(f).
(d) Prior to the Closing Date, the Company shall
have furnished to the Purchaser such further informa-
tion, certificates and documents as the Purchaser may
reasonably request.
If any of the conditions specified in this Section 7
shall not have been fulfilled in all material
18
respects when and as provided in this Agreement and any Terms
Agreement, or if any of the opinions and certificates mentioned
above or elsewhere in this Agreement or such Terms Agreement
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 cancelation shall be given to the
Company in writing or by telephone or telegraph confirmed in
writing.
8. Right of Person Who Agreed to Purchase to Refuse
------------------------------------------------
to Purchase. 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 an Agent,
shall have the right to refuse to purchase such Note if, at the
Closing Date therefor, any condition set forth in Section 6 or 7,
as applicable, shall not be satisfied, it being understood that
under no circumstances whatsoever shall an Agent have any duty or
obligation to exercise the judgment permitted under Section 6(b)
or Section 7(b) on behalf of any such person.
9. Indemnification. (a) The Company will indemnify
----------------
and hold harmless you, your directors, officers, employees and
agents and each person, if any, who controls you within the
meaning of either the Securities Act or the Exchange Act against
any and all losses, claims, damages and liabilities, joint or
several (including any investigation, legal and other expenses
reasonably incurred in connection with, and any amount paid in
settlement of, any action, suit or proceeding or any claim
asserted), to which they, or any of them, may become subject
under the Securities 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 arise out
of or are based upon any untrue statement or alleged untrue
statement of a material fact contained in any preliminary
prospectus, either Registration Statement or the Prospectus or
any amendment or supplement to any of the foregoing, 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, provided
that the Company will not be liable to the extent that such loss,
claim, damage or liability arises from the sale of Notes by the
Company to any person in the manner contemplated in the
Prospectus, as amended or supplemented as of the time of the
confirmation of such sale, as a result of a solicitation by you
and is based upon an untrue statement or omission or alleged
untrue statement or omission
19
(i) made in reliance upon and in conformity with information
relating to you furnished in writing to the Company by you
expressly for use in the document or (ii) in a preliminary
prospectus if the Prospectus, as amended or supplemented as of
the time of the confirmation of the sale to such person,
corrected the untrue statement or omission or alleged untrue
statement or omission which is the basis of the loss, claim,
damage or liability for which indemnification is sought and a
copy of the Prospectus, as so amended (but excluding any
documents incorporated therein by reference), was not sent or
given to such person at or before the confirmation of the sale to
such person in any case where such delivery is required by the
Securities Act, unless such failure to deliver the Prospectus, as
so amended, was a result of noncompliance by the Company with
Section 5(d). This indemnity agreement will be in addition to
any liability that the Company might otherwise have.
(b) You will indemnify and hold harmless the
Company, each person, if any, who controls the Company within the
meaning of either the Securities Act or the Exchange Act, each
director of the Company and each officer of the Company who signs
either of the Registration Statements to the same extent as the
foregoing indemnity from the Company to you, but only insofar as
losses, claims, damages or liabilities arise from the sale of
Notes by the Company to any person in the manner contemplated in
the Prospectus as a result of a solicitation by you and are based
upon any untrue statement or omission or alleged untrue statement
or omission made in any preliminary prospectus, either
Registration Statement or the Prospectus or any amendment or
supplement to any of them in reliance upon and in conformity with
information relating to you furnished in writing to the Company
by you expressly for use in the document. This indemnity
agreement will be in addition to any liability that you might
otherwise have.
(c) Any party that proposes to assert the right to
be indemnified under this Section 9 will, promptly after receipt
of notice of commencement of any action against such party in
respect of which a claim is to be made against an indemnifying
party or parties under this Section 9, notify each such
indemnifying party of the commencement of such action, enclosing
a copy of all papers served, but the omission so to notify such
indemnifying party (i) will not relieve it from liability under
this Section 9 unless and to the extent it did not otherwise
learn of such action and such failure results in the forfeiture
by the indemnifying party of substantial rights and defenses and
(ii) will not relieve it from any liability that it may have to
any indemnified party otherwise than under this Section 9. If
20
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 in, and, to
the extent that it elects by delivering written notice to the
indemnified party promptly after receiving notice of the
commencement of the action from the indemnified party, jointly
with any other indemnifying party similarly notified, to assume
the defense of the action, with counsel satisfactory to the
indemnified party, and, after notice from the indemnifying party
to the indemnified party of its election to assume the defense,
the indemnifying party will not be liable to the indemnified
party for any legal or other expenses except as provided below
and except for the reasonable costs of investigation subsequently
incurred by the indemnified party in connection with the defense.
The indemnified party will have the right to employ its own
counsel in any such action, but the fees and expenses of such
counsel will be at the expense of such indemnified party unless
(1) the employment of counsel by the indemnified party has been
authorized in writing by the indemnifying party, (2) the
indemnified party has reasonably concluded that there may be
legal defenses available to it or other indemnified parties which
are different from or in addition to those available to the
indemnifying party (in which case the indemnifying party will not
have the right to direct the defense of such action on behalf of
the indemnified party) or (3) the indemnifying party has not in
fact employed counsel to assume the defense of such action within
a reasonable time after receiving notice of the commencement of
the action, in each of which cases the fees and expenses of such
counsel will be at the expense of the indemnifying party or
parties and all such fees and expenses will be reimbursed
promptly as they are incurred. An indemnifying party will not be
liable for any settlement of any action or claim effected without
its written consent or, in connection with any proceeding or
related proceedings in the same jurisdiction, for the fees and
expenses of more than one separate counsel for all indemnified
parties.
10. Contribution. In order to provide for just and
-------------
equitable contribution in circumstances in which the
indemnification provided for in Section 9 is applicable in
accordance with its terms but for any reason is held to be
unavailable from the Company or you, the Company and each of you
agree to contribute to the aggregate losses, claims, damages and
liabilities (including any investigation, legal and other
expenses reasonably incurred in connection with, and any amount
paid in settlement of, any action, suit or proceeding or any
claim asserted) (collectively "Losses") to which the Company and
one or more of you may be subject in such proportion as is
appropriate to reflect the relative
21
benefits received by the Company and by 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 you yourself in
connection with the sale of 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 you
yourself 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 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
you yourself in connection with the sale of 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 you yourself 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 Section 10, no person found guilty of fraudulent
misrepresentation (within the meaning of Section 11(f) of the
Securities Act) shall be entitled to contribution from any person
who was not guilty of such fraudulent misrepresentation. For
purposes of this Section 10, any person who controls a party to
this Agreement within the meaning of either the Securities Act or
the Exchange Act will have the same rights to contribution as
that party, and each officer of the Company who signed either of
the Registration Statements and each director of the Company will
have the same rights to contribution as the Company, subject in
each case to the applicable terms and conditions of this
Section 10. Any party entitled to contribution will, promptly
after receipt of notice of commencement of any action against
such party in respect of which a claim for contribution may be
made under this Section 10, notify such party or parties from
whom contribution may be sought, but the omission so to notify
(i) will
22
not relieve such party or parties from liability under this
Section 10 unless and to the extent it or they did not otherwise
learn of such action and such failure results in the forfeiture
by such party or parties of substantial rights and defenses and
(ii) will not relieve the party or parties from whom contribution
may be sought from any other obligation it or they may have
otherwise than under this Section 10. No party will be liable
for contribution with respect to any action or claim settled
without its written consent.
11. Termination. (a) This Agreement may, as
------------
between the Company and you, be terminated for any reason at any
time by either the Company or you giving written notice of such
termination to the other party. If any such notice is given,
this Agreement will terminate, as between the Company and you, at
the close of business on the third business day following the
receipt of such notice by the party to whom such notice is given.
In the event of any such termination, no party shall have any
liability to the other party hereto, except as provided in
Sections l(e), 5(h), 9, 10 and 12, and this Agreement shall
continue between the Company and any other party to this
Agreement without regard to any such termination.
(b) Each Terms Agreement shall be subject to
termination in the absolute discretion of the Purchaser by notice
given to the Company if, prior to delivery of any payment for
Notes to be purchased thereunder, (1) trading in the equity
securities of the Company is suspended by the Commission, by an
exchange that lists such equity securities of the Company, or by
the NASDAQ National Market, (2) additional material governmental
restrictions, not in force on the date of this Agreement, have
been imposed upon trading in securities generally or minimum or
maximum prices have been generally established on the New York
Stock Exchange or on the American Stock Exchange, or trading in
securities generally has been suspended on any such Exchange or a
general banking moratorium has been established by Federal or New
York authorities or (3) any outbreak or material escalation of
hostilities or other calamity or crisis occurs the effect of
which is such as to make it, in the judgment of the Purchaser,
impracticable to market such Notes.
12. Miscellaneous. The respective representations,
--------------
warranties and agreements of the Company and you in this
Agreement will remain in full force and effect regardless of any
investigation made by or on behalf of you, the Company or any
person controlling you or the Company and will survive delivery
of and payment for the Notes. The
23
reimbursement, indemnification and contribution agreements in
Sections 1(e), 5(h), 9, 10 and 11 will remain in full force and
effect regardless of any termination of this Agreement.
This Agreement is for the benefit of you and the
Company and the respective successors of each of you and the
Company and, to the extent expressed in this Agreement, for the
benefit of persons controlling you or the Company, and directors
and officers of the Company, and their respective successors, and
no other person, partnership, association or corporation shall
acquire or have any right under or by virtue of this Agreement.
Notwithstanding anything to the contrary contained
in the Distribution Agreement dated November 30, 1993, between
the Company and you (the "Prior Agreement"), the Prior Agreement
shall terminate (except with respect to Sections 1(e), 5(h), 9,
10 and 11 thereof) immediately upon the execution and delivery of
this Agreement.
All notices and communications under this Agreement
will be in writing, effective only on receipt and mailed or
delivered by messenger, facsimile transmission or otherwise to
Xxxxx Xxxxxx Incorporated at 0000 Xxxxxx xx xxx Xxxxxxxx, Xxx
Xxxx, Xxx Xxxx 00000, attention of General Counsel and Treasurer,
to CS First Boston Corporation at Park Avenue Plaza, New York,
New York 10055, attention of New Issue Processing Department, or
to the Company at 0000 Xxxxxx xx xxx Xxxxxxxx, Xxx Xxxx, Xxx Xxxx
00000, attention of General Counsel and Treasurer.
This Agreement may be signed in multiple counter-
parts that taken as a whole constitute one agreement.
This Agreement will be governed by and construed in
accordance with the laws of the State of New York.
Please confirm that the foregoing correctly sets
forth the agreement between us.
Very truly yours,
XXXXX XXXXXX GROUP INC.
by
________________________
Title:
24
Confirmed:
PAINEWEBBER INCORPORATED
by
____________________
Title:
CS FIRST BOSTON CORPORATION
by
____________________
Title:
[Draft--8/16/95]
Schedule I
SENIOR AND SUBORDINATED MEDIUM-TERM NOTE FEES
Maturity Senior Subordinated
--------------------------------- ------ ------------
9 months to less than 12 months .080 .080
12 months to less than 18 months .125 .125
18 months to less than 2 years .150 .150
2 years to less than 3 years .250 .250
3 years to less than 4 years .350 .350
4 years to less than 5 years .450 .450
5 years to less than 7 years .500 .500
7 years to less than 10 years .550 .550
10 years to less than 20 years .600 .600
20 years to 30 years .750 .750
Annex A
-------
XXXXX XXXXXX GROUP INC.
Medium-Term Notes Administrative Procedures
-------------------------------------------
[ ], 1995
-----------------
Medium-Term Senior Notes, Series C, and Medium-
Term Subordinated Notes, Series D, Due from Nine Months to
30 Years from Date of Issue (the "Notes") are to be offered
on a continuing basis by Xxxxx Xxxxxx Group Inc. (the "Com-
pany"). Each of PaineWebber Incorporated, as agent, and CS
First Boston Corporation, as agent (collectively, the
"Agents"), has agreed to use reasonable efforts to solicit
offers to purchase Notes from the Company. Neither Agent
will be obligated to purchase Notes for its own account.
The Notes are being sold pursuant to a Distribution
Agreement between the Company and each of the Agents dated
[ ], 1995 (the "Distribution Agreement"). The Notes
will be issued either as subordinated to ("Subordinated
Notes") or on a parity with ("Senior Notes") other unsecured
and unsubordinated indebtedness of the Company and have been
registered with the Securities and Exchange Commission (the
"Commission"). Chemical Bank (the "Senior Note Trustee") is
the trustee under the Indenture dated as of March 15, 1988,
covering the Senior Notes, as supplemented by the First
Supplemental Indenture dated as of September 22, 1989, and
by the Second Supplemental Indenture dated as of March 22,
1991 (such Indenture, as so supplemented, being hereinafter
referred to as the "Senior Note Indenture"), each between
the Company and the Senior Note Trustee. Chemical Bank
Delaware (the "Subordinated Note Trustee") is the trustee
under the Indenture dated as of March 15, 1988, covering the
Subordinated Notes, as supplemented by the First
Supplemental Indenture dated as of September 22, 1989, by
the Second Supplemental Indenture dated as of March 22,
1991, and by the Third Supplemental Indenture dated as of
November 30, 1993 (such Indenture, as so supplemented, being
hereinafter referred to as the "Subordinated Note
Indenture"), each between the Company and the Subordinated
Note Trustee. The Senior Note Indenture and the
Subordinated Note Indenture are hereinafter sometimes called
the "Indentures"; and the Senior Note "Trustee and the
Subordinated Note Trustee are hereinafter sometimes called
the "Trustees".
Notes may be represented by a Global Note (as
hereinafter defined) delivered to Chemical Bank (in such
capacity, the "Custodian") as agent for The Depository Trust
Company ("DTC"), with ownership of beneficial interests in
such Global Notes recorded in the book-entry system main-
tained by DTC (each such interest in a Global Note being
2
referred to herein as a "Book-Entry Note"), or may be
represented by a certificate delivered to the holder thereof
or a person designated by such holder (each a "Certificated
Note"). An owner of a Book-Entry Note will not be entitled
to receive a certificate representing such Note. In connec-
tion with the qualification of the Book-Entry Notes for
eligibility in the book-entry system maintained by DTC,
Chemical Bank will perform the custodial, document control
and administrative functions described in Part II below, in
accordance with its respective obligations under a Letter of
Representations from the Company and Chemical Bank to DTC
relating to the Senior Notes and a Letter of Representations
from the Company, Chemical Bank and the Subordinated Note
Trustee to DTC relating to the Subordinated Notes (each a
"Letter of Representations", and, collectively, the "Letters
of Representations") and a Medium-Term Note Certificate
Agreement (the "Certificate Agreement") between Chemical
Bank and DTC, and its obligations as a participant in DTC,
including DTC's Same-Day Funds Settlement system ("SDFS").
Administrative procedures and certain terms of the
offering are explained below. Certain general terms of the
offering, applicable to both Book-Entry Notes and Certifi-
cated Notes, are set forth in Part I hereof. Book-Entry
Notes will be issued in accordance with the administrative
procedures set forth in Part II 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 III hereof.
Unless otherwise defined herein, terms defined in the
Distribution Agreement, the Indentures 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 Indentures,
DTC's operating requirements or the Distribution Agreement,
the relevant provisions of the Notes, the Indentures, DTC's
operating requirements and the Distribution Agreement shall
control. The Company will advise each Agent from time to
time in writing of those persons with whom such Agent is to
communicate with respect to offers to purchase Notes from
the Company and the details of their delivery. References
below to "the Agent" shall mean whichever of the Agents is
involved in any proposed purchase and sale of any Note or
Notes.
Part I. Certain Terms of the Offering
-----------------------------
3
Price to Public: Each Note will be issued at the
---------------- percentage of its principal amount
specified in the Prospectus Supple-
ment, as then amended or supple-
mented, relating to the Notes.
Denominations: Notes denominated in U.S. dollars
-------------- will be issued in minimum denomina-
tions of $100,000 and in denomina-
tions exceeding such amount by
integral multiples of $1,000.
Book-Entry Notes will not be
denominated in any currency or
composite currency other than the
U.S. dollar. Certificated Notes
denominated in other than U.S.
dollars will be issued in the
denominations specified pursuant to
"Settlement Procedures" in Part III
below.
Registration: Notes will be issued only in fully
------------- registered form.
Maturities: Each Note will mature on a date
----------- selected by the purchaser and
agreed to by the Company, which
will be not less than nine months
and not more than 30 years after
the date of issue thereof.
Interest
Payment: Each Note will bear interest (i) in
-------- the case of Fixed Rate Notes, at
the annual rate stated on the face
thereof, payable in arrears on such
dates as are specified therein
(each such date of payment other
than the maturity date being an
"Interest Payment Date" with
respect to such respect to such
Fixed Rate Note) and at maturity
and (ii) in the case of Floating
Rate Notes, at a rate determined
pursuant to the formula stated on
the face thereof, payable in
arrears on such dates as are
4
specified therein (each such date
of payment other than the maturity
date an "Interest Payment Date"
with respect to such Floating Rate
Note) and at maturity.
Unless otherwise specified, each
Note will bear interest from and
including the later of its date of
issue and the most recent date to
which interest has been paid or
provided for, to but excluding the
current Interest Payment Date or
the maturity date of such Note.
Interest payments for a Note will
include interest accrued to but
excluding the Interest Payment
Date; provided, however, that a
-------- -------
Floating Rate Note which has a rate
of interest that is reset daily or
weekly will bear interest from and
including the later of its date of
issue and the day following the
most recent Regular Record Date (as
defined below) to which interest on
such Note has been paid or provided
for, to and including the next
preceding Regular Record Date or
the maturity date of such Note,
except as otherwise provided in
such Note. Unless otherwise
specified, the "Regular Record
Date" with respect to any Interest
Payment Date for any Note shall be
the 15th day preceding such
Interest Payment Date, whether or
not such date shall be a Business
Day.
Unless otherwise specified,
interest (including payments for
partial periods) will be calculated
and paid, in the case of Fixed Rate
Notes, on the basis of a 360-day
year of twelve 30-day months and,
in the case of Floating Rate Notes,
on the basis of the actual number
of days elapsed over a year of
360 days, except with respect to
interest on Treasury Rate Notes (as
defined in the Prospectus
5
Supplement relating to the Notes)
which will be calculated and paid
on the basis of the actual number
of days elapsed over a year of 365
or 366 days, as applicable.
Interest will be payable to the
person in whose name the Note is
registered at the close of business
on the Regular Record Date next
preceding the Interest Payment Date
except that, in the case of Notes
issued between a Regular Record
Date and an Interest Payment Date,
interest payable on such Interest
Payment Date will be paid to the
person in whose name such Note was
initially registered; provided,
--------
however, that interest payable at
-------
Maturity (as defined below) will be
payable to the person to whom
principal shall be payable.
"Maturity" shall mean the date on
which the principal of a Note or an
installment of principal becomes
due, whether on the Maturity Date
specified for such Note, upon
redemption or early repayment or
otherwise.
Procedure for Rate
------------------
Setting and Posting: The Company and the Agents will
-------------------- discuss from time to time the
interest rates per annum to be
borne by, the issuance price of,
the aggregate principal amount of
and maturity of Notes that may be
sold as a result of the
solicitation of offers by the
Agents. If the Company establishes
a fixed set of interest rates and
maturities for an offering period
(a "posting"), or if the Company
decides to change already posted
rates, it will promptly advise the
Agents of the rates and maturities
to be posted.
If the Company decides to post
interest rates and a decision has
been reached to change the posted
6
interest rates, the Company will
promptly notify the Agents. Each
Agent forthwith will suspend
solicitation of offers to purchase
notes from the Company until such
time as the Company has advised
such Agent as to the new rates.
Until such time only "indications
of interest" may be recorded.
Acceptance of
-------------
Offers: The Agent will communicate to the
------- Company, orally or in writing, each
offer to purchase Notes from the
Company that is received by the
Agent as agent of the Company and
that is not rejected by the Agent
as provided below. The Company
will have the sole right to accept
offers to purchase Notes from the
Company and may reject any such
offer, in whole or in part, for any
reason. The Agent may, in its
discretion reasonably exercised,
reject any offer to purchase Notes
from the Company that is received
by the Agent, in whole or in part.
The Company will promptly notify
the Agent of its acceptance or
rejection of an offer to purchase
Notes. If the Company accepts an
offer to purchase Notes it will
confirm such acceptance in writing
to the Agent.
Suspension of
-------------
Solicitation;
-------------
Amendment or
------------
Supplement: As provided in the Distribution
----------- Agreement, the Company may suspend
solicitation of offers to purchase
at any time and, upon receipt of
instructions from the Company, an
Agent will forthwith suspend
solicitation until such time as the
Company has advised it that
solicitation of offers to purchase
may be resumed.
7
If an Agent receives the notice
from the Company contemplated by
Section 5(d) of the Distribution
Agreement, it will promptly suspend
solicitation and will only resume
solicitation as provided in the
Distribution Agreement. If the
Company is required, pursuant to
Section 5(d) of the Distribution
Agreement, to prepare an amendment
or supplement, it will promptly
furnish such Agent with the pro-
posed amendment or supplement; in
all other cases, if the Company
decides to amend or supplement
either of the Registration
Statements or the Prospectus, it
will promptly advise such Agent and
will furnish such Agent with the
proposed amendment or supplement in
accordance with the terms of the
Distribution Agreement. The
Company will promptly file such
amendment or supplement, provide
such Agent (and Cravath, Swaine &
Xxxxx or such other law firm as may
be counsel to such Agent at the
time) with copies of any such
amendment or supplement, confirm to
such Agent that such amendment or
supplement has been filed with the
Commission and advise such Agent
that solicitation may be resumed.
In the event that at any time the
Company suspends solicitation of
offers to purchase Notes from the
Company there shall be any out-
standing offers to purchase Notes
from the Company that have been
accepted by the Company but for
which settlement has not yet
occurred, the Company will promptly
advise the Agent and the Trustees
whether such sales may be settled
and whether copies of the Pro-
spectus as amended or supplemented
to the time of the suspension may
be delivered in connection with the
settlement of such sales. The
Company will have the sole respon-
8
sibility 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 the
Prospectus as so amended or supple-
mented may not be so delivered.
Delivery of
-----------
Prospectus: A copy of the Prospectus, as most
----------- recently amended or supplemented on
the date of delivery thereof
(except as provided below),
relating to any Note must be
delivered to a purchaser prior to
or together with the earliest of
(i) any written offer of such Note,
(ii) the delivery of the written
confirmation provided for below and
(iii) the delivery of any Note
purchased by such purchaser.
Subject to the foregoing and to the
procedures described in Part II
below, it is anticipated that
delivery of the Prospectus,
confirmation and Notes to the
purchaser will be made simultane-
ously at settlement. The Company
shall ensure that the Agent
receives copies of the Prospectus
and each amendment or supplement
thereto (including appropriate
pricing stickers) in such
quantities and within such time
limits as will enable the Agent to
deliver such confirmation or Note
to a Purchaser as contemplated by
these procedures and in compliance
with the preceding sentence. If,
since the date of acceptance of a
purchaser's offer, the Prospectus
shall have been supplemented solely
to reflect any sale of Notes on
terms different from those agreed
to between the Company and such
purchaser or a change in posted
rates not applicable to such
purchaser, such purchaser shall not
receive the Prospectus as
supplemented by such new
supplement, but shall receive the
9
Prospectus as supplemented to
reflect the terms of the Notes
being purchased by such Purchaser
and otherwise as most recently
amended or supplemented on the date
of delivery of the Prospectus.
Confirmation: For each offer to purchase a Note
------------- from the Company solicited by the
Agent and accepted by the Company,
the Agent will issue a confirmation
to the purchaser, with a copy to
the Company, setting forth the
Settlement Details (as hereinafter
defined) and delivery and payment
instructions.
Business Day: "Business Day" with respect to any
------------- Note means each day, other than a
Saturday or Sunday, that is (i) not
a day on which banking institutions
in the Business Day Centers with
respect to such Note are authorized
or obligated by law or executive
order to close, (ii) if such Note
is a LIBOR Note (as defined in the
Prospectus Supplement), a London
Banking Day (as hereinafter
defined) and (iii) if such Note is
denominated in the European
Currency Unit ("ECU"), any day that
is not designated as an ECU
settlement day by the ECU Banking
Association in Paris or otherwise
generally regarded in the ECU
interbank market as a day on which
payments in ECU shall not be made.
"Business Day Centers", unless
otherwise specified in the
applicable Note, with respect to
any Note shall mean The City of New
York and, in the case of any Note
payable in a Specified Currency
other than U.S. dollars or ECU, the
principal financial center of the
country issuing the Specified
Currency. As used herein, "London
Banking Day" shall mean any day on
which dealings in deposits in U.S.
dollars are transacted in the
London interbank market.
10
Advertising Cost: The Company will determine with the
----------------- Agents the amount of advertising
that may be appropriate in offering
the Notes. Advertising expenses
approved in advance by the Company
will be paid by the Company.
Payment of Expenses: Each Agent will forward to the
-------------------- Company, following the end of each
quarter, a statement of the out-
of-pocket expenses incurred by such
Agent during that quarter which are
reimbursable to it pursuant to the
terms of the Distribution Agree-
ment. The Company will remit
payment to such Agent promptly
following the receipt of each such
statement.
Authenticity of
---------------
Signatures: Neither Agent will have any obliga-
----------- tion or liability to the Company or
either Trustee or any
Authenticating Agent in respect of
the authenticity of the signature
of any officer, employee or agent
of the Company or either Trustee or
such Authenticating Agent on any
Note.
PART II. Administrative Procedures for Book-Entry Notes
----------------------------------------------
Issuance: On any date of settlement (as
--------- defined under "Settlement" below)
for one or more Book-Entry Notes,
the Company will issue a single
global note in fully registered
form without coupons (a "Global
Note") representing up to
$150,000,000 principal amount of
all of such Book-Entry Notes that
have the same terms, except as to
principal amount. Each Global Note
will be dated and issued as of the
date of its authentication by the
relevant Trustee (or, in the case
of the Subordinated Note Trustee,
by Chemical Bank, as the
Authenticating Agent). No Global
11
Note will represent any
Certificated Note.
Identification
--------------
Numbers: The Company will arrange with the
-------- CUSIP Service Bureau of Standard &
Poor's Corporation (the "CUSIP
Service Bureau") for the
reservation of a series of CUSIP
numbers (including tranche numbers)
consisting of approximately 900
CUSIP numbers and relating to
Global Notes representing Book-
Entry Notes. The Company will
obtain from the CUSIP Service
Bureau a written list of such
series of reserved CUSIP numbers
and will deliver such list to
Chemical Bank and DTC. The Company
will assign CUSIP numbers to Global
Notes 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 Notes. Chemical Bank will
notify the Company at any time when
fewer than 100 of the reserved
CUSIP numbers remain unassigned to
Global Notes, and if it deems
necessary, the Company will reserve
additional CUSIP numbers for
assignment to Global Notes
representing Book-Entry Notes.
Upon obtaining such additional
CUSIP numbers, the Company shall
deliver a list thereof to Chemical
Bank and DTC.
Registration: Each Global Note will be registered
------------- in the name of Cede & Co., as
nominee for DTC, on the Security
Register maintained under the
Indenture governing such Global
Note. 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 Note,
the "Participants") to act as agent
12
or agents for such owner in connec-
tion 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
Note in the account of such
Participants. The ownership
interest of such beneficial owner
(or such participant) in such 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. So
long as Cede & Co. is the
registered owner of a Global Note,
DTC will be considered the sole
owner and holder of the Book-Entry
Notes represented by such Global
Note for all purposes under the
Indenture governing such Global
Note.
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.
Consolidation
-------------
and Exchange: Chemical Bank may deliver to DTC
------------- and the CUSIP Service Bureau at any
time a written notice of consolida-
tion specifying (i) the CUSIP
numbers of two or more outstanding
Global Notes that represent Book
Entry Notes having the same terms
other than principal amount and
(for all such Notes other than zero
coupon Notes) for which interest
has been paid to the same date,
(ii) a date, occurring at least 30
days after such written notice is
delivered and (for all such Notes
other than zero coupon Notes) at
least 30 days before the next
13
Interest Payment Date for such
Book-Entry Notes, on which such
Global Notes shall be exchanged for
a single replacement Global Note
and (iii) a new CUSIP number,
obtained from the Company, to be
assigned to such replacement Global
Note. Upon receipt of such a
notice, DTC will send to its
participants (including Chemical
Bank) a written reorganization
notice to the effect that such
exchange will occur on such date.
Prior to the specified exchange
date, Chemical Bank will deliver to
the CUSIP Service Bureau a written
notice setting forth such exchange
date and the new CUSIP number and
stating that, as of such exchange
date, the CUSIP numbers of the
Global Notes to be exchanged will
no longer be valid. On the speci-
fied exchange date, Chemical Bank
will exchange such Global Notes for
a single Global Note bearing the
new CUSIP number and new Original
Issue Date (determined in
accordance with the Letters of
Represent-ations), and the CUSIP
numbers of the exchanged Global
Notes will, in accordance with
CUSIP Service Bureau procedures, be
canceled and not immediately
reassigned. Notwithstanding the
foregoing, if the Global Notes to
be exchanged exceed $150,000,000 in
aggregate principal amount, one
Global Note will be authenticated
and issued to represent each
$150,000,000 of principal amount of
the exchanged Global Notes and an
additional Global Note will be
authenticated and issued to
represent any remaining principal
amount of such Global Notes (see
"Denominations" below).
Denominations: As noted in Part I above, Book-
-------------- Entry Notes will be issued in
minimum denominations of $100,000
and in denominations exceeding such
14
amount by integral multiples of
$1,000. Global Notes will be
denominated in principal amounts
not in excess of $150,000,000. If
one or more Book-Entry Notes having
an aggregate principal amount in
excess of $150,000,000 would, but
for the preceding sentence, be
represented by a single Global
Note, then one Global Note will be
issued to represent each
$150,000,000 principal amount of
such Book-Entry Note or Notes and
an additional Global Note will be
issued to represent any remaining
principal amount of such Book-Entry
Note or Notes. In such a case,
each of the Global Notes
representing such Book-Entry Note
or Notes shall be assigned the same
CUSIP number.
Interest: General. Except as set forth
--------- --------
below, each Book-Entry Note will
bear interest as set forth in
"Interest Payment" above, and such
interest shall be payable as set
forth therein.
Standard & Poor's Corporation will
use the information received in the
pending deposit message described
under Settlement Procedure "C"
below in order to include the
amount of any interest payable and
certain other information regarding
the related Global Note in the
appropriate (daily or weekly) bond
report published by Standard &
Poor's Corporation.
Payments of
-----------
Principal and
-------------
Interest: Payments of Interest Only. On the
--------- --------------------------
fifth Business Day immediately
preceding each Interest Payment
Date, Chemical Bank will deliver to
the Company's Treasurer's Office
and DTC a written notice specifying
by CUSIP number the amount of
interest to be paid on each Global
15
Note on such Interest Payment Date
and the total of such amounts. DTC
will confirm the amount payable on
each Global Note on such Interest
Payment Date by reference to the
appropriate (daily or weekly) bond
reports published by Standard &
Poor's Corporation. The Company
will pay to Chemical Bank, as
paying agent, the total amount of
interest due on such Interest
Payment Date and Chemical Bank will
pay such amount to DTC at the times
and in the manner set forth below
under "Manner of Payment".
Payments at Maturity. On or about
---------------------
the first Business Day of each
month, Chemical Bank will deliver
to the Company and DTC a written
list of principal and interest to
be paid on each Global Note
maturing in the following month.
The Company, Chemical Bank and DTC
will confirm the amounts of such
principal and interest payments
with respect to each such Global
Note on or about the fifth Business
Day preceding the Maturity of such
Global Note. The Company will pay
to Chemical Bank, as paying agent,
the principal amount of such Global
Note, together with interest due at
such Maturity and Chemical Bank
will pay such amount to DTC at the
times and in the manner set forth
below under "Manner of Payment".
Promptly after payment to DTC of
the principal and interest due at
the Maturity of such Global Note,
the Senior Note Trustee, in the
case of Senior Notes, and the
Authenticating Agent, in the case
of Subordinated Notes, will cancel
such Global Note and deliver it to
the Company with an appropriate
debit advice. On the first
Business Date of each month,
Chemical Bank will deliver to each
Trustee a written statement
16
indicating the total principal
amount of outstanding Global Notes
for which such Trustee serves as
trustee as of the immediately
preceding Business Day.
Manner of Payment. The total
------------------
amount of any principal and/or
interest due on Global Notes on any
Interest Payment Date or at
Maturity shall be paid by the
Company to Chemical Bank in funds
available for use by Chemical Bank
as of 9:30 a.m. (New York City
time) on such date. The Company
will make such payment on such
Global Notes by instructing
Chemical Bank to withdraw funds
from an account maintained by the
Company at Chemical Bank or by wire
transfer to Chemical Bank. The
Company will confirm such
instruction in writing to Chemical
Bank (with a copy to the
Subordinated Note Trustee if such
Global Notes represent Subordinated
Note Trustee if such Global Notes
represent Subordinated Notes).
Prior to 10:00 a.m. (New York City
time) on such date or as soon as
possible thereafter, Chemical Bank
will pay the foregoing amounts to
DTC in same day funds in accordance
with the payment provisions
contained in the applicable Letter
of Representations. DTC will
allocate such payments to its
Participants in accordance with its
existing operating procedures.
NEITHER THE COMPANY, AS ISSUER,
CHEMICAL BANK, THE SENIOR NOTE
TRUSTEE NOR THE SUBORDINATED NOTE
TRUSTEE SHALL HAVE ANY
RESPONSIBILITY OR LIABILITY FOR THE
PAYMENT BY DTC TO SUCH PARTICIPANTS
OF THE PRINCIPAL OF, PREMIUM, IF
ANY, AND INTEREST ON THE BOOK-ENTRY
NOTES.
17
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.
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 Note representing such
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 acceptance unless otherwise
agreed by the purchaser and the
Company. Such date of acceptance
shall be specified upon acceptance
of such offer.
Settlement
----------
Procedures: Settlement Procedure with regard to
----------- each Book-Entry Note sold by the
Company through an Agent, as agent,
shall be as follows:
A. Such Agent will provide to the
Company (unless provided by
the purchaser directly to the
Company) by telephone,
facsimile transmission or
other means agreed upon by the
Company and such Agent the
following information (the
"Settlement Details"):
1. Principal amount and
issue price.
2. If a Fixed Rate Note, the
interest rate, Regular
Record Dates and Interest
Payment Dates, if any.
18
3. Settlement date (Original
Issue Date).
4. Maturity Date.
5. Type of Note (i.e.,
----
Senior Note or
Subordinated Note).
6. Agent's commission (to be
paid in the form of a
discount from the issue
price remitted to the
Company upon settlement).
7. Redemption provisions, if
any.
8. Repayment provisions, if
any.
9. If a Floating Rate Note,
such of the following as
are applicable:
(i) Interest Rate Basis,
(ii) Index Maturity,
(iii) Spread or Spread
Multiplier,
(iv) Maximum Rate,
(v) Minimum Rate,
(vi) Initial Interest
Rate,
(vii) Calculation Date,
(ix) Interest
Determination Dates,
(x) Interest Payment
Dates,
(xi) Regular Record Dates
and
(xii) Calculation Agent.
19
10. All other terms of the
Book-Entry Note and all
other items necessary to
complete the applicable
Global Note.
Before accepting any offer to
purchase a Book-Entry Note that
will have terms in addition to
or different from the terms set
forth on any form of Note
previously delivered by the
Company to, and approved by,
the applicable Trustee, other
than merely as a result of
completing any blanks (other
than the "Other Terms") or
equivalent blank) on such form
the Company will provide a
description of the proposed
different or additional terms
to the applicable Trustee and
its counsel for the purpose of
determining whether such terms
are consistent with the
applicable Trustee and its
counsel for the purpose of
determining whether such terms
are consistent with the
applicable Indenture, are
administratively acceptable to
such Trustee and its agents and
to not affect such Trustee's or
its agents' own rights, duties
or immunities under the Notes
or the applicable Indenture or
otherwise in a manner which is
not reasonably acceptable to
such Trustee or its agents (all
such terms having been
authorized, as of the date of
these administrative
Procedures, by or pursuant to a
Board Resolution and the
applicable Trustee having
received, as of the date of
these Administrative
Procedures, all opinions,
certificates and orders
required prior to the
authentication and issuance of
20
a Note containing such terms).
Any offer to purchase such a
Book-Entry Note shall only be
accepted by the Company if such
terms shall be disapproved by
the applicable Trustee or its
counsel on one of the above-
mentioned grounds after the
foregoing review.
In addition, before accepting
any offer to purchase any Note
to be settled in less than
three Business Days, the
Company will verify that the
Authenticating Agent will have
adequate time to prepare and
authenticate such Note.
B. The Company will assign a CUSIP
number to the Global Note
representing such Book-Entry
Note and then advise Chemical
Bank in writing, including
facsimile or electronic trans-
mission, and, in the case of
Subordinated Notes, the Subor-
dinated Note Trustee by tele-
phone (confirmed in writing at
any time on the same date) or
facsimile transmission of the
information set forth in
Settlement Procedure "A" above,
such CUSIP number and the name
of the Agent. Each such
communication by the Company
shall constitute a representa-
tion and warranty by the
Company to Chemical Bank, each
Trustee and each Agent that
(i) such Book-Entry Note is
then, and at the time of
issuance and sale thereof will
be, duly authorized for issu-
ance and sale by the Company,
(ii) such Book-Entry Note, and
the Global Note representing
such Book-Entry Note, will
conform with the terms of the
Indenture pursuant to which
such Book-Entry Note is issued
21
and (iii) upon authentication
and delivery of such Global
Note and any other Securities
to be issued on or prior to the
settlement date for the Book-
Entry Note represented by such
Global Note, the aggregate
amount of Securities which have
been issued and sold by the
Company will not exceed the
amount of Securities registered
under the Registration State-
ments.
C. Chemical Bank will enter a
pending deposit message through
DTC's Participant Terminal
System, providing the following
settlement information to DTC,
such Agent, Standard & Poor's
Corporation and, upon request,
the Trustee under the Indenture
pursuant to which each Book-
Entry Note which is represented
by the Global Note is to be
issued:
1. The information set forth
in Settlement Procedure
"A".
2. Initial Interest Payment
Date for each such
Book-Entry Note, the number
of days by which such date
succeeds the related
Regular Record Date and the
amount of interest payable
on such Interest Payment
Date (to the extent known
at such time).
3. CUSIP number of the Global
Note representing such
Book-Entry Note.
4. Whether such Global Note
will represent any other
Book-Entry Note (to the
extent known at such time).
22
D. Upon receipt of appropriate
documentation and instructions,
the Company will instruct the
Senior Note Trustee to prepare
and authenticate each Senior
Global Note and will instruct
the Authenticating Agent to
prepare and authenticate each
Subordinated Global Note by
facsimile transmission or other
acceptable written means.
E. Chemical Bank will complete and
the Senior Note Trustee or the
Authenticating Agent, as the
case may be, will authenticate
the Global Note, and Chemical
Bank will register the Global
Note in the name of Cede & Co.,
as nominee of DTC, and hold
such Global Note for delivery
on the Closing Date therefor to
Chemical Bank, as Custodian.
F. DTC will credit each Book-Entry
Note represented by the Global
Note to be issued to the
applicable partici-pant account
at DTC.
G. Chemical Bank will enter an
SDFS deliver order through
DTC's Participant Terminal
System with respect to each
Book-Entry Note represented by
the Global Note to be issued
instructing DTC to (i) debit
such Book-Entry Note to
Chemical Bank's participant
account and credit such Book-
Entry Note to the Agent's
participant account and
(ii) debit such Agent's settle-
ment account and credit
Chemical Bank's settlement
account for an amount equal to
the price of such Book-Entry
Note less such Agent's
commission. The entry of such
a deliver order shall
constitute a representation and
23
warranty by Chemical Bank to
DTC that (i) the Global Note
representing such Book-Entry
Note has been issued and
authenticated and (ii) Chemical
Bank is holding such Global
Note pursuant to the
Certificate Agreement.
H. The Agent will enter an SDFS
deliver order through DTC's
Participant Terminal System
with respect to each Book-Entry
Note represented by the Global
Note to be issued instructing
DTC (i) to debit such Book-
-Entry Note to such Agent's
participant account and credit
such Book-Entry Note to the
participant account of the
Participant with respect to
such Book-Entry Note and
(ii) to debit the settlement
account of such Participant and
credit the settlement account
of such Agent for an amount
equal to the price of such
Book-Entry Note.
I. Transfers of funds in accor-
dance with SDFS deliver orders
described in Settlement Proce-
dures "G" and "H" will be
settled in accordance with SDFS
operating procedures (as
referenced in the Letters of
Representations) in effect on
the settlement date.
J. Chemical Bank will credit to an
account of the Company main-
tained at Chemical Bank funds
available for immediate use in
the amount transferred to
Chemical Bank in accordance
with Settlement Procedure "G".
K. Chemical Bank, as Custodian,
will hold the Global Note
pursuant to the Certificate
Agreement. Periodically,
24
Chemical Bank will send to the
Company a statement setting
forth the principal amount of
Book-Entry Notes outstanding as
of that date under each
Indenture.
L. The relevant Agent will deliver
to the purchaser a copy of the
most recent Prospectus applica-
ble to the Notes with or prior
to the earlier of any written
offer of Notes and the confir-
mation and payment by the
purchaser of the Note.
Such Agent will confirm the
purchase of each Book-Entry
Note to the purchaser either by
transmitting to the Participant
with respect to such Book-Entry
Note a confirmation order or
orders through DTC's institu-
tional delivery system or by
mailing a written confirmation
to such purchaser.
Settlement
----------
Procedures
----------
Timetable: For orders of Book-Entry Notes
---------- solicited by an Agent, as agent,
and accepted by the Company for
settlement on the first Business
Day after the sale date, Settlement
Procedures "A" through "L" 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-B 11:00 A.M. on the sale date
C 2:00 P.M. on the sale date
D 3:00 P.M. on Business Day
before
settlement date
E 9:00 A.M. on settlement
date
25
F 10:00 A.M. on settlement
date
G-H 2:00 P.M. on settlement
date
I 4:45 P.M. on settlement
date
X-X 5:00 P.M. on settlement
date
If a sale is to be settled more
than one Business Day after the
sale date, Settlement Procedures
"A", "B" and "C" shall be completed
as soon as practicable but no later
than 11:00 A.M. and 2:00 P.M., as
the case may be, on the first
Business Day after the sale date.
Settlement Procedure "I" is subject
to extension in accordance with any
extension of Fedwire closing
deadlines and in other events
specified in the SDFS operating
procedures in effect on the
settlement date. Settlement
Procedures "D-H" and "X-X" shall be
completed as soon as practicable
but no later than the respective
dates set forth above.
If settlement of a Book-Entry Note
is rescheduled or canceled, the
Company will as soon as practicable
give Chemical Bank notice to such
effect. Chemical Bank will deliver
to DTC, through DTC's Participant
Terminal System, a cancelation
message to such effect by no later
than 2:00 P.M. on the Business Day
immediately preceding the scheduled
settlement date (provided Chemical
Bank has received such notice from
the Company by noon on the Business
Day immediately preceding the
settlement date).
Fails: If Chemical Bank fails to enter an
------ SDFS deliver order with respect to
a Book-Entry Note pursuant to
Settlement Procedure "G", Chemical
Bank may deliver to DTC, through
DTC's Participant Terminal System,
26
as soon as practicable a withdrawal
message instructing DTC to debit
such Book-Entry Note to Chemical
Bank's participant account. DTC
will process the withdrawal
message, provided that Chemical
Bank's participant account contains
a principal amount of the Global
Note 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 Note,
the Senior Note Trustee, in the
case of Senior Notes, or the
Authenticating Agent, in the case
of Subordi-nated Notes, will mark
such Global Note "Canceled", make
appropriate entries in its records
and send such canceled Global Note
to the Company. The CUSIP number
assigned to such Global Note shall,
in accordance with CUSIP Service
Bureau procedures, be canceled and
not immediately reassigned. If a
withdrawal message is processed
with respect to one or more, but
not all, of the Book-Entry Notes
represented by a Global Note,
Chemical Bank and the Senior Note
Trustee or the Authenticating
Agent, as the case may be, will
exchange such Global Note for two
Global Notes, one of which shall
represent such Book-Entry Note or
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 Note and shall bear the
CUSIP number of the surrendered
Global Note.
If the purchase price for any
Book-Entry Note is not timely paid
to the Participant with respect to
such Note by the beneficial
purchaser thereof (or a person,
including an indirect participant
27
in DTC, acting on behalf of such
purchaser), such Participant and,
in turn, the Agent for such Note
may enter SDFS deliver orders
through DTC's Participant Terminal
System reversing the orders entered
pursuant to Settlement Procedures
"H" and "G", respectively.
Thereafter, Chemical Bank will
deliver the withdrawal message and
take the related actions described
in the preceding paragraph.
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 Note,
Chemical Bank and the Senior Note
Trustee or the Authenticating
Agent, as the case may be, will
provide, in accordance with
Settlement Procedures "D" and "E",
for the authentication and issuance
of a Global Note representing the
other Book-Entry Notes to have been
represented by such Global Note and
will make appropriate entries in
its records.
PART III
Administrative Procedures for Certificated Notes
------------------------------------------------
Issuance: Each Certificated Note will be
--------- dated and issued as of the date of
its authentication by the relevant
Trustee (or, in the case of the
Subordinated Note Trustee, by the
Authenticating Agent).
Transfers and
-------------
Exchanges: A Certificated Note (whether a
---------- Senior Note or a Subordinated Note)
28
may be presented for transfer or
exchange at the principal corporate
trust office in New York City of
the Senior Trustee. Certificated
Notes will be exchangeable for
other Certificated Notes having
identical terms but different
authorized denominations. Cer-
tificated Notes will not be
exchangeable for Book-Entry Notes.
Payments of
-----------
Principal and
-------------
Interest: On the fifth Business Day immedi-
--------- ately preceding each Interest Pay-
ment Date, Chemical Bank, as paying
agent, will furnish the Company
with the total amount of the inter-
est payments to be made on such
Interest Payment Date to the extent
known. In addition, on or about
the first Business Day of each
month, Chemical Bank will provide
to the Company's Treasurer's Office
a list of the principal and
interest to be paid on the respec-
tive Notes maturing in the follow-
ing month. The Company will pro-
vide to Chemical Bank not later
than any payment date sufficient
moneys to pay in full all principal
and interest payments due on such
payment date. Chemical Bank shall
make all such payments in
accordance with the terms of the
Notes. Notes presented to Chemical
Bank at Maturity will be canceled
by Chemical Bank.
Chemical Bank will be responsible
for withholding taxes on interest
paid on Certificated Notes as
required by applicable law.
Settlement: The receipt by the Company of imme-
----------- diately available funds in exchange
for an authenticated Certificated
Note delivered to the Agent and the
Agent's delivery of such Certifi-
cated Note against receipt of imme-
diately available funds shall, with
29
respect to such Certificated Note,
constitute "settlement". All
orders accepted by the Company will
be settled on the third Business
Day following the date of
acceptance unless otherwise agreed
by the purchaser and the Company.
Such date of settlement shall be
specified upon acceptance of such
offer.
Settlement
----------
Procedures: Settlement Procedures with regard
----------- to each Certificated Note sold by
the Company through an Agent, as
agent, shall be as follows:
A. The Agent will provide to the
Company (unless provided by the
purchaser directly to the
Company), by telephone,
facsimile transmission or other
means agreed upon by the
Company and the Agent, the
following information (the
"Settlement Details"):
1. Exact name in which the
Note or Notes are to be
registered.
2. Exact address of registered
owner and, if different,
address for payment of
principal and interest.
3. Taxpayer identifi-cation
number of registered owner.
4. Principal amount and issue
price.
5. If a Fixed Rate Note, the
interest rate, Regular
Record Dates and Interest
Payment Dates, if any.
6. Settlement date (Original
Issue Date).
7. Maturity Date.
30
8. Type of Note (i.e., Senior
----
Note or Subordinated Note).
9. Agent's commission (to be
paid in the form of a
discount from the issue
price remitted to the
Company upon settlement).
10. Redemption provisions, if
any.
11. Repayment provisions, if
any.
12. If a Floating Rate Note,
such of the following as
are applicable:
(i) Interest Rate Basis,
(ii) Index Maturity,
(iii) Spread or Spread
Multiplier,
(iv) Maximum Rate,
(v) Minimum Rate,
(vi) Initial Interest
Rate,
(vii) Interest Reset
Dates,
(viii) Calculation Date,
(ix) Interest
Determination Dates,
(x) Interest Payment
Dates,
(xi) Regular Record
Dates, and
(xii) Calculation Agent.
31
13. Authorized denomi-nations
of Notes denominated in
other than U.S. dollars.
14. All other terms of the Note
and all other items
necessary to complete the
Note.
Before accepting any offer to
purchase a Certificated Note
that will have terms in addi-
tion to or different from the
terms set forth on any form of
Note previously delivered by
the Company to, and approved
by, the applicable Trustee,
other than merely as a result
of completing any blanks (other
than the "Other Terms" or
equivalent blank) on such form,
the Company will provide a
description of the proposed
different or additional terms
to the applicable Trustee and
its counsel for the purpose of
determining whether such terms
are consistent with the appli-
cable Indenture, are adminis-
tratively acceptable to such
Trustee and its agents and do
not affect such Trustee's or
its agents' own rights, duties
or immunities under the Notes
or the applicable Indenture or
otherwise in a manner which is
not reasonably acceptable to
such Trustee or its agents (all
such terms having been author-
ized, as of the date of these
Administrative Procedures, by
or pursuant to a Board
Resolution and the applicable
Trustee having received, as of
the date of these
Administrative Procedures, all
opinions, certificates and
orders required prior to the
authentication and issuance of
a Note containing such terms).
Any offer to purchase such a
32
Certificated Note shall only be
accepted by the Company if such
terms shall not be disapproved
by the applicable Trustee or
its counsel on one of the
above-mentioned grounds after
the foregoing review.
In addition, before accepting
any offer to purchase any
Certificated Note to be settled
in fewer than three Business
Days, the Company will verify
that the Senior Trustee or the
Authenticating Agent, as the
case may be, will have adequate
time to prepare and authenti-
cate such Certificated Note.
B. The Company will advise the
relevant Trustee (and, in the
case of the Subordinated Note
Trustee, the Authenticating
Agent) by telephone (confirmed
in writing at any time on the
next Business Day) or elec-
tronic transmission of the
information set forth in
Settlement Procedure "A" above
and the name of the Agent and
shall instruct the relevant
Trustee or the Authenticating
Agent, as applicable, to
authenticate the Note. Each
such communication by the
Company shall consti-tute a
representation and warranty by
the Company to each Trustee and
each Agent that (i) such
Certificated Note is then, and
at the time of issuance and
sale thereof will be, duly
authorized for issuance and
sale by the Company, (ii) such
Certificated Note will conform
with the terms of the Indenture
pursuant to which such
Certificated Note is issued and
(iii) upon authentication and
delivery of such Certificated
Note and any other Securities
33
to be issued on or prior to the
settlement date for such
Certificated Note, the aggre-
gate amount of Securities which
have been issued and sold by
the Company will not exceed the
amount of Securities registered
under the Registration
Statements.
C. The Company will deliver to
Chemical Bank a pre-printed
five-ply packet for such
Certificated Note, which packet
will contain the following
documents in forms that have
been approved by the Company,
the Agents and the Trustees:
1. Certificated Note with
customer confirmation.
2. Stub One - For Trustee.
3. Stub Two - For Agent.
4. Stub Three - For the
Company.
5. Stub Four - For the Authen-
ticating Agent.
D. The Senior Trustee (or, in the
case of a Subordinated Note,
the Authenticating Agent) will
complete and authenticate such
Certificated Note and deliver
it (with the confirmation) and
Stubs One, Two and Four to the
Agent, and the Agent will
acknowledge receipt of the Note
by stamping or otherwise
marking Stubs One and Four and
returning Stub One to the
relevant Trustee and Stub Four
to the Authenticating Agent in
the case of Subordinated Notes.
Such delivery will be made only
against such acknowl-edgment of
receipt. Upon verification by
the Agent that a Note has been
34
properly prepared and authen-
ticated by the Senior Note
Trustee or the Authenticating
Agent, payment therefor will be
made to the Company by the
Agent on the settlement date in
immediately available funds in
an amount equal to the issue
price of such Note less the
Agent's commission. Such
payment shall be made only upon
prior receipt by the Agent of
immediately available funds
from or on behalf of the
purchaser unless the Agent
decides, at its option, to
advance its own funds for such
payment against subsequent
receipt of funds from the
purchaser.
In the event that any
Certificated Note is incor-
rectly prepared, the applicable
Trustee (and, if a Subordinated
Note, the Authenticating Agent)
will promptly issue a replace-
ment Senior Note or
Subordinated Note, as the case
may be, in exchange for the
incorrectly prepared
Certificated Note.
E. The Agent will deliver such
Certificated Note (with the
confirmation) to the customer
against payment in immediately
payable funds. The Agent will
obtain the acknowl-edgment of
receipt of such Certificated
Note by retaining Stub Two.
F. The applicable Trustee will
send Stub Three to the Company
by first-class mail.
Notwithstanding the foregoing, the
Company, the Agent and the applica-
ble Trustee and its agents may
decide to issue Certificated Notes
which are printed as separate
35
documents and not as part of
five-ply plackets and may decide to
dispense with the delivery of Stubs
and instead to use different forms
of receipt. Any such different
arrangements must be agreed to
prior to the acceptance by the
Company of an offer to purchase
Notes.
Settlement
----------
Procedures
----------
Timetable: For orders of Certificated Notes
---------- solicited by any Agent, as agent,
and accepted by the Company,
Settlement Procedures "A" through
"F" set forth above shall be
completed on or before the
respective times (New York City
time) set forth below:
Settlement
Procedure Time
--------------
A 2:00 P.M. on the Business
Day before
settlement
B-C 3:00 P.M. on the Business
Day before
settlement
D 2:15 P.M. on settlement
date
E 3:00 P.M. on settlement
date
F 5:00 P.M. on settlement
date
Notwithstanding the foregoing, if
the settlement date is the date of
acceptance of the offer to purchase
the Note, Settlement Procedures "A"
through "C" shall be completed on
or before 11:00 A.M. (New York City
time) on the settlement date.
Fails: In the event that a purchaser shall
------ fail to accept delivery of and make
payment for a Note by 3:00 P.M.,
New York City time, on the settle-
ment date therefor, the Agent will
notify the relevant Trustee and, if
36
applicable, the Authenticating
Agent and the Company by telephone,
confirmed in writing (which may be
given by telex or telecopy), and if
the Note has been delivered to the
Agent, return the Note to the
Senior Note Trustee or the
Authenticating Agent. The Company
will promptly provide such Trustee
or the Authenticating Agent with
appropriate documentation and
instructions to complete the trans-
actions hereinafter outlined and
will remit to the Agent funds in
the amount, if any, it received
with respect to such Note. Such
payment will be made on the settle-
ment date for such Note, if possi-
ble, and in any event not later
than the Business Day following
such settlement date. if such fail
shall have occurred for any reason
other than the failure of the Agent
to provide the Settlement Details
to the Company or to provide a con-
firmation to the purchaser within a
reasonable period of time as
described above, the Company will
reimburse the Agent on an equitable
basis for its loss of the use of
funds during the period when they
were credited to the account of the
Company.
Immediately upon receipt of a Note
in respect of which a fail occur-
red, the Senior Note Trustee or
Authenticating Agent will make
appropriate entries in its records
and cancel such Note.
[Draft--8/18/95]
Annex B
-------
Xxxxx Xxxxxx Group Inc.
Terms Agreement
---------------
, 1995
[PaineWebber Incorporated
0000 Xxxxxx xx xxx Xxxxxxxx
Xxx Xxxx, Xxx Xxxx 00000]
[CS First Boston Corporation
Park Avenue Plaza
New York, New York 10055]
Dear Sirs:
Xxxxx Xxxxxx Group Inc. (the "Company") proposes, subject to
the terms and conditions stated herein and in the Distribution
Agreement dated [ ], 1995 (the "Distribution Agreement"),
among the Company, PaineWebber Incorporated and CS First Boston
Corporation, to issue and sell to [PaineWebber Incorporated] [CS First
Boston Corporation] (the "Purchaser") the securities specified in the
Schedule hereto (the "Purchased Securities"). Each of the provisions
of the Distribution Agreement not specifically related to the
solicitation by the Agents, as the agents of the Company, of offers to
purchase Securities is incorporated herein by reference in its
entirety, and shall be deemed to be part of this Terms Agreement to
the same extent as if such provisions had been set forth in full
herein. Nothing contained herein or in the Distribution Agreement
shall make any party hereto an agent of the Company or make such party
subject to the provisions therein relating to the solicitation of
offers to purchase securities from the Company solely by virtue of
such party's execution of this Terms Agreement. Each of the
representations and warranties set forth in the Distribution Agreement
shall be deemed to have been made at and as of the date of this Terms
Agreement, except that each representation and warranty in Section 4
of the Distribution Agreement which makes reference to the Prospectus
shall be deemed to be a representation and warranty as of the date of
the Distribution Agreement in relation to the Prospectus (as therein
defined), and also a representation and warranty as of the date of
this Terms Agreement in relation to the Prospectus as amended and
supplemented to relate to the Purchased Securities.
2
An amendment to one or both of the Registration Statements
(as defined in the Distribution Agreement), or a supplement to the
Prospectus, as the case may be, relating to the Purchased Securities,
in the form heretofore delivered to you is now proposed to be filed
with the Commission.
Subject to the terms and conditions set forth herein and in
the Distribution Agreement incorporated herein by reference, the
Company agrees to issue and sell to the Purchaser and the Purchaser
agrees to purchase from the Company the Purchased Securities, at the
time and place, in the principal amount and at the purchase price set
forth in the Schedule hereto.
If the foregoing is in accordance with your understanding,
please sign and return to us the counterparts hereof, and upon
acceptance hereof by you this letter and such acceptance hereof,
including those provisions of the Distribution Agreement incorporated
herein by reference, shall constitute a binding agreement between you
and the Company.
XXXXX XXXXXX GROUP INC.
By ________________________
Title:
Accepted:
[PAINEWEBBER INCORPORATED]
[CS FIRST BOSTON CORPORATION]
By _________________________
Title:
15N
[Draft--8/18/95]
SCHEDULE TO ANNEX B
Title of Purchased Securities:
[ %] Medium-Term [Senior] [Subordinated] Notes,
Series [C] [D]
Aggregate Principal Amount:
$
[Price to Public:]
Purchase Price by [PaineWebber Incorporated) [CS First
Boston Corporation]:
% of the principal amount of the Purchased
Securities, plus accrued interest from to
[and accrued amortization, if any, from
to ] Method of and Specified Funds
for Payment of Purchase Price:
[By certified or official bank check or checks, payable
to the order of the Company, in [[New York] Clearing House]
[immediately available] funds]
[By wire transfer to a bank account specified by the
Company in [next day] [immediately available] funds]
Indenture:
[Senior] [Subordinated) Note Indenture, as defined in
the Distribution Agreement
Time of Delivery:
Closing Location:
Maturity:
Interest Rate:
[ %]
2
Interest Payment Dates:
[months and dates)
Other Terms of the Purchased Securities:
Documents to be Delivered:
The following documents referred to in the Distribution
Agreement shall be delivered as a condition to the Closing:
[(l) The officers' certificate referred to in Section
7(c)(i).]
[(2) The opinion referred to in Section 7(c)(ii).]
[(3) The opinion referred to in Section 7(c)(iii).]
[(4) The accountants' letter referred to in Section
7(c)(iv).]
Other Provisions (including syndicate provisions or Sec-
tion 5(l) limitations, if applicable):
Annex C
-------
(A) The Company 1/ shall furnish to the
-
Agents an opinion of the General Counsel of the Company,
dated the Closing Date, to the effect that:
(1) each of the Company and PaineWebber
Incorporated, Xxxxxxxx Xxxxxxxx Asset Management Inc.
and PaineWebber Real Estate Securities Inc., wholly
owned subsidiaries of the Company (individually a
"Subsidiary" and collectively the "Subsidiaries"), has
been duly incorporated and is validly existing as a
corporation in good standing under the laws of the
jurisdiction in which it is chartered or organized,
with full corporate power and authority to own its
properties and conduct its business as described in the
Prospectus, and is duly qualified to do business as a
foreign corporation and is in good standing under the
laws of each jurisdiction in which the failure to
qualify and be in good standing would materially and
adversely affect the business or condition of the
Company and its consolidated Subsidiaries, considered
as a whole;
(2) all of the outstanding shares of capital stock
of each Subsidiary have been duly and validly
authorized and issued and are fully paid and
nonassessable, and are owned by the Company either
directly or through wholly owned subsidiaries, free and
clear of any perfected security interest and, to the
best knowledge of such counsel, after due inquiry of
appropriate officers of the Company, any other security
interests, claims, liens or encumbrances, except for
restrictions on sales of capital stock contained in
debt instruments;
(3) the Notes conform in all material respects 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 Distribution
Agreement of which this Annex C is a part (the
"Distribution Assessment"); each of the Indentures has
--------------------
1/ All capitalized terms used herein and not otherwise
-
defined shall have the respective meanings ascribed to them
in the Distribution Agreement of which this Annex C is a
part.
2
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 instrument enforceable against the Company in
accordance with its terms (subject to applicable
bankruptcy, insolvency, fraudulent transfer,
reorganization, moratorium and other similar laws
affecting creditors' rights generally from time to time
in effect, and subject, as to enforceability, to
general principles of equity, regardless of whether
such enforceability is considered in a proceeding in
equity or at law); and the Notes have been duly
authorized and, when the remaining terms of any Note of
either series have been established in accordance with
the applicable Indenture and such Note has been duly
executed, authenticated, issued and delivered against
payment therefor in accordance with the provisions of
the applicable Indenture and the Distribution
Agreement, will constitute a legal, valid and binding
obligation of the Company entitled to the benefits of
the applicable Indenture, enforceable in accordance
with its terms (subject to applicable bankruptcy,
insolvency, fraudulent transfer, reorganization,
moratorium or other similar laws affecting creditors'
rights generally from time to time in effect, and
subject, as to enforceability, to general principles of
equity, regardless of whether such enforceability is
considered in a proceeding in equity or at law);
(4) to the best knowledge of such counsel, 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 either of the Registration Statements or
the Prospectus; there is no franchise, contract or
other document of a character required to be described
in either of the Registration Statements or the
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;
(5) the Registration Statements have become
effective under the Securities Act, and, to the best
knowledge of such counsel, no stop order suspending the
3
effectiveness of either of the Registration Statements
has been issued and no proceedings for that purpose
have been instituted or are pending or contemplated
under the Securities Act;
(6) the Distribution Agreement has been duly
authorized, executed and delivered by the Company;
(7) the information required to be set forth in
each of the Registration Statements in answer to
Item 10 (insofar as it relates to such counsel) of
Form S-3, to the best knowledge of such counsel, is
accurately set forth in such Registration Statement in
all material respects or no response is required with
respect to such Item; and the authorized equity
capitalization of the Company is as described in the
documents incorporated by reference in the Prospectus;
(8) no consent, approval, authorization or order
of any court or governmental agency or body is required
for the consummation of the transactions contemplated
in the Distribution Agreement, except such as have been
obtained under the Securities Act and the Trust
Indenture Act and such as may be required under the
"blue sky" laws of any jurisdiction in connection with
the sale of Notes;
(9) none of the issue and sale of the Notes, the
consummation by the Company of any other of the
transactions contemplated in the Distribution Agreement
and the fulfillment of the terms of the Distribution
Agreement will conflict with, result in a breach of, or
constitute a default under the Restated Certificate of
Incorporation, as amended, or By-laws of the Company,
or the terms of any indenture or other agreement or
instrument known to such counsel and to which the
Company or any of its subsidiaries is bound, or any
order or regulation 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
(10) to the best knowledge of such counsel, no
holder of securities of the Company has rights to the
registration of such securities under either of the
Registration Statements.
4
In rendering such opinion, such counsel may rely
as to matters involving the application of laws of any
jurisdiction other than the States of Delaware and New York
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
satisfactory to counsel for the Agents.
(B) The Company shall furnish to the Agents a
letter from the General Counsel of the Company, dated the
Closing Date, to the effect that such counsel has no reason
to believe that: (i) either Registration Statement and the
Prospectus (except the Statements of Eligibility (Form T-1)
included as exhibits to the Registration Statements, as to
which he need not express any view) were not appropriately
responsive in all material respects to the requirements of
the Securities Act and the Trust Indenture Act and the
respective applicable rules and regulations of the
Commission thereunder and (ii) the Registration Statements,
at the respective times they became effective, 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, at the date of the letter, includes an untrue
statement of a material fact or omits 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.
[Draft--8/18/95]
Annex D
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Accountants' Comfort Letter
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At each Closing Date and at such times as provided
in the Distribution Agreement, 1/ Ernst & Young shall
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furnish to the Agents or the Purchaser, as the case may be,
a letter or letters (which may refer to letters previously
delivered to the Agents or the Purchaser, as the case may
be), dated as of the Closing Date or such other date, in
form and substance satisfactory to the Agents or the
Purchaser, as the case may be, confirming that they are
independent certified public accountants within the meaning
of the Securities Act and the Exchange Act and the
respective applicable published rules and regulations
thereunder, that the response to Item 10 of each of the
Registration Statements is correct insofar as it relates to
them and stating in effect that:
(a) in their opinion the consolidated financial
statements and schedules audited by them and
incorporated by reference in the Registration
Statements and the Prospectus and reported on by them
comply as to form in all material respects with the
applicable accounting requirements of the Securities
Act and the Exchange Act and the related published
rules and regulations thereunder;
(b) on the basis of a reading of the "Selected
Financial Data", if any, included or incorporated in
the Registration Statements and the Prospectus and of
the latest unaudited consolidated condensed financial
statements made available by the Company and its
consolidated subsidiaries; 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 audit and executive
committees of the Company; 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
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1/ All capitalized terms used herein shall have the
-
meanings ascribed to them in the Distribution Agreement of
which this Annex D is a part.
2
to the date of the most recent financial statements
included or incorporated in the Registration Statements
and the Prospectus, nothing came to their attention
which caused them to believe that:
(1) the amounts in the unaudited "Summary
Financial Information", if any, included in the
Prospectus, and the amounts in the "Selected
Financial Data", if any, included or incorporated
by reference in the Registration Statements and
the Prospectus, do not agree with the
corresponding amounts in the audited financial
statements from which such amounts were derived;
(2) any unaudited financial statements
included or incorporated in the Registration
Statements and the Prospectus do not comply as to
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 or any material
modifications should be made to the unaudited
financial statements for them to be presented in
conformity with such generally accepted accounting
principles;
(3) with respect to the period subsequent to
the date of the most recent financial statements
included or incorporated in the Registration
Statements 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 consolidated long-term debt or non-convertible
redeemable preferred stock of the Company and its
subsidiaries or capital stock of the Company
(excluding retained earnings and foreign currency
translation adjustment) as compared with the
amounts shown on the most recent consolidated
balance sheet included or incorporated in the
Registration Statements and the Prospectus, except
in all instances for changes disclosed in such
letter or letters; or
(4) if any unaudited pro forma consolidated
condensed financial statements are included or
incorporated by reference in the Registration
3
Statements 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 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 those statements;
(c) 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) set forth in
the Registration Statements, as amended, and the
Prospectus, as amended or supplemented, and in
Exhibit 12 to the Registration Statements, including
specified information, if any, included or incorporated
from the Company's Annual Report on Form 10-K
incorporated therein or specified information, if any,
included or incorporated from any of the Company's
Quarterly Reports on Form 10-Q incorporated therein,
agrees with the accounting records of the Company and
its subsidiaries, excluding any questions of legal
interpretation.
