1
EXHIBIT 1.1
▇▇▇▇▇▇ Industries, Inc.
$300,000,000
Third Series Medium-Term Notes
Distribution Agreement
----------------------
January 26, 1996
▇▇▇▇▇▇▇, Sachs & Co.
▇▇ ▇▇▇▇▇ ▇▇▇▇▇▇, ▇▇▇▇ ▇▇▇▇▇
▇▇▇ ▇▇▇▇, ▇▇▇ ▇▇▇▇ ▇▇▇▇▇
CS First Boston Corporation
▇▇ ▇▇▇▇ ▇▇▇▇ ▇▇.
▇▇▇▇ Avenue Plaza, 35th Floor
New York, New York 10055
Chase Securities, Inc.
▇▇▇ ▇▇▇▇▇ ▇▇▇▇▇▇▇▇▇ ▇▇▇▇▇, ▇▇▇▇ ▇▇▇▇▇
▇▇▇ ▇▇▇▇, ▇▇▇ ▇▇▇▇ ▇▇▇▇▇
▇▇▇▇▇▇ Brothers Inc.
▇ ▇▇▇▇▇ ▇▇▇▇▇▇▇▇▇ ▇▇▇▇▇▇
▇▇▇ ▇▇▇▇, ▇▇▇ ▇▇▇▇ ▇▇▇▇▇
Dear Sirs:
▇▇▇▇▇▇ Industries, Inc., an Ohio corporation (the "Company"), proposes
to issue and sell up to $300,000,000 aggregate principal amount of its Third
Series Medium-Term Notes (the "Notes"). Subject to the terms and conditions
stated herein and subject to the reservation by the Company of the right to
sell Notes directly to investors on its own behalf or through other agents,
dealers or underwriters on terms substantially identical (including with
respect to commissions) to the terms contained herein, the Company hereby
appoints each of you, as an agent (individually, an "Agent" and collectively,
the "Agents") for the purpose of soliciting and receiving offers to purchase
Notes from the Company by others and, on the basis of the representations and
warranties herein contained but subject to terms and conditions herein set
forth, each of you agrees, severally but not jointly, to use best efforts
consistent with standard industry practice to solicit and receive offers to
purchase Notes upon terms acceptable to the Company at such times and in such
amounts as the Company shall from time to time specify. If the Company sells
1
2
Notes directly on its own behalf to an investor, no commission will be paid
with respect to such sales. In addition, any Agent may also purchase Notes as
principal and the Company will enter into a Terms Agreement in the form
attached hereto as Exhibit A relating to such sale (a "Terms Agreement") in
accordance with the provisions of Section 2(b) hereof. In acting under this
Agreement and in connection with the sale of any Notes by the Company (other
than Notes sold to you as principal), the Agents are acting solely as agents of
the Company and do not assume any obligation towards or relationship of agency
or trust with any purchaser of Notes.
The terms and rights of the Notes shall be as specified in or
established pursuant to the indenture, dated as of January 15, 1990 (such
indenture, as amended by the Trust Indenture Reform Act of 1990, hereinafter
referred to as the "Indenture"), between the Company and The Chase Manhattan
Bank (National Association), as Trustee (the "Trustee"). The Notes shall have
the maturities, annual interest rates, redemption provisions and other terms
set forth in a supplement to the Prospectus referred to below. The Notes will
be issued, and the terms thereof established, from time to time by the Company
in accordance with the Indenture and the Medium-Term Notes Administrative
Procedures attached hereto as Exhibit B (the "Procedures").
The Company has filed with the Securities and Exchange Commission (the
"Commission") a registration statement on Form S-3, including a prospectus,
relating to the Notes. In connection with the sale of Notes, the Company
proposes to file with the Commission from time to time, pursuant to Rule 424
under the Securities Act of 1933, as amended, and the rules and regulations
thereunder (the "Act"), one or more supplements to the form of prospectus
included in such registration statement relating to the Notes and the plan of
distribution thereof. Such registration statement, including the exhibits
thereto, as amended or supplemented from time to time, is hereinafter referred
to as the "Registration Statement." The prospectus in the form in which it
appears in the Registration Statement is hereinafter referred to as the "Basic
Prospectus." A supplement providing solely for the specification of the
principal amount, the issue price, the maturity date, the issue date, the
interest rate or any other principal term of any Notes is referred to herein as
a "Pricing Supplement." The term "Prospectus" means the Basic Prospectus
together with any prospectus supplement (including a Pricing Supplement) or
supplements (each a "Prospectus Supplement") specifically relating to Notes, as
filed with or transmitted for filing to the Commission pursuant to Rule 424 or
by such other method deemed appropriate by the Company. As used herein, the
terms "Registration Statement," Basic Prospectus," "Prospectus Supplement,"
"Pricing Supplement" and "Prospectus" shall include in each case the documents,
if any, incorporated by reference therein. The terms "supplement" and
"amendment" (and all terms derivative of such terms) as used in this Agreement
shall include all documents that are deemed to be incorporated by reference in
the Registration Statement and Prospectus that are filed subsequent to the date
of the Basic Prospectus by the Company with the Commission pursuant to the
Securities Exchange Act of 1934, as amended, (the "Exchange Act").
2
3
1. Representations and Warranties. The Company represents
and warrants to, and agrees with, the Agents that:
(a) The Company meets the requirements for use of Form S-3
under the Act and has filed with the Commission the Registration
Statement on such Form (the file number of which is set forth in
Schedule I hereto), for the registration under the Act of the
aggregate principal amount of debt securities including the Notes (the
"Securities") as set forth in Schedule I hereto. Such Registration
Statement, as amended at the date of this Agreement, meets the
requirements set forth in Rule 415(a)(1)(x) under the Act and complies
in all other material respects with said Rule. The Registration
Statement has become effective; no stop order suspending the
effectiveness of the Registration Statement is in effect, and no
proceedings for such purpose are pending before or threatened by the
Commission.
(b) As of the date hereof, when any amendment to the
Registration Statement becomes effective (including the filing of any
document incorporated by reference in such Registration Statement),
when any Prospectus Supplement is filed with the Commission, as of the
date of any Terms Agreement, and at the date of delivery by the
Company of any Notes sold hereunder, (i) the Registration Statement,
as amended as of any such time, and the Prospectus as supplemented as
of any such time, and the Indenture comply or will comply in all
material respects with the applicable requirements of the Act, the
Trust Indenture Act of 1939, as amended (the "Trust Indenture Act"),
and the Exchange Act and the respective rules and regulations
thereunder and (ii) neither the Registration Statement, as amended as
of any such time, nor the Prospectus as supplemented as of any such
time, contain or will contain any untrue statement of a material fact
or omit or will omit to state any material fact required to be stated
therein or necessary in order to make the statements therein not
misleading; provided, however, that the Company makes no
representations or warranties as to (i) that part of the Registration
Statement which shall constitute the Statement of Eligibility and
Qualification ("Form T-1") under the Trust Indenture Act of the
Trustee or (ii) the information contained in or omitted from the
Registration Statement or Prospectus in reliance upon and in
conformity with information furnished in writing to the Company by or
on behalf of any Agent specifically for use in connection with the
preparation of the Registration Statement and the Prospectus.
(c) The Company has been duly incorporated and is validly
existing as a corporation, 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 which requires such qualification wherein it owns or
leases material properties or conducts material business, except in
such jurisdictions where the failure to be
3
4
so qualified will not have a material effect on the Company and its
subsidiaries taken as a whole.
(d) Each of this Agreement and any applicable Terms
Agreement has been duly authorized, executed and delivered by the
Company.
(e) The Indenture has been duly qualified under the Trust
Indenture Act and has been duly authorized, executed and delivered by
the Company and is a valid and binding agreement of the Company,
enforceable in accordance with its terms except as (i) the
enforceability thereof may be limited by bankruptcy, insolvency or
similar laws affecting creditors' rights generally and (ii) rights of
acceleration and the availability of equitable remedies may be limited
by equitable principles of general applicability.
(f) As of the time any Notes are issued and sold hereunder,
such Notes will have been duly authorized and, when executed and
authenticated in accordance with the Indenture and delivered to and
duly paid for by the purchasers thereof, will be entitled to the
benefits of the Indenture and will be valid and binding obligations of
the Company, enforceable in accordance with their respective terms
except as (i) the enforceability thereof may be limited by bankruptcy,
insolvency or similar laws affecting creditors' rights generally and
(ii) rights of acceleration and the availability of equitable remedies
may be limited by equitable principles of general applicability.
(g) As of the settlement date for the sale of any Notes,
after giving effect to the issuance of such Notes, of any other Notes
to be issued on or prior to such settlement date and of any other
Securities to be issued and sold by the Company on or prior to such
settlement date, the aggregate amount of Securities (including any
Notes) which have been issued and sold by the Company will not exceed
the amount of Securities registered pursuant to the Registration
Statement.
(h) During the period from the date of any Terms Agreement
to the latter of (A) the Closing Date with respect to such Terms
Agreement and (B) the date, if any, specified in such Terms Agreement,
the Company shall not, without the prior consent of the purchaser
thereunder, offer, sell or contract to sell, or announce the offering
of, any debt securities (other than the Notes to be sold pursuant to
the Terms Agreement) covered by the Registration Statement or any
other registration statement filed under the Act.
2. Solicitations as Agent; Purchases as Principal.
(a) Solicitations as Agent. In connection with each
Agent's actions as agent hereunder, each Agent agrees to use best
efforts consistent with standard industry practice to solicit and
receive offers
4
5
to purchase Notes from the Company upon the terms and conditions set
forth in the Prospectus as then amended or supplemented.
The Company reserves the right, in its sole discretion, to
instruct the Agents to suspend at any time, for any period of time or
permanently, the solicitation of offers to purchase Notes. Upon
receipt of such notice from the Company, each Agent will forthwith
suspend solicitations of offers to purchase Notes from the Company
until such time as the Company has advised the Agents that such
solicitations may be resumed. While such solicitation is suspended,
the Company shall not be required to deliver any certificates,
opinions or letters in accordance with Sections 4 or 5 hereof;
provided, however, that if the Registration Statement or the
Prospectus is amended or supplemented during the period of suspension
(other than by an amendment or supplement providing solely for a
change in the interest rates, redemption provisions, amortization
schedules or maturities offered on the Notes or for a change the
Agents deem to be immaterial), no such Agent shall be required to
resume soliciting offers to purchase Notes until the Company has
delivered such certificates, opinions and letters substantially as set
forth in Section 4 or 5 hereof.
The Company agrees to pay to each Agent, as consideration for
the sale of each Note resulting from a solicitation made or an offer
to purchase received by such Agent, a commission in the form of a
discount from the purchase price of such Note in an amount and manner
to be agreed to by the Company and such Agents, which amount shall not
exceed the percentage of the purchase price of such Note set forth in
Schedule I.
Each Agent shall communicate to the Company, orally or in
writing, each offer to purchase Notes received by it as agent that in
its judgment should be considered by the Company. The Company shall
have the sole right to accept offers to purchase Notes and may reject
any offer in whole or in part for any reason. Each Agent shall have
the right, in its discretion reasonably exercised, to reject any offer
to purchase Notes that it considers to be unacceptable, and any such
rejection shall not be deemed a breach of its agreements contained
herein.
(b) Purchases as Principal. Each sale of Notes to an Agent
as principal shall be made in accordance with the terms of this
Agreement, and the Company will enter into a Terms Agreement that will
provide for the sale of such Notes to and the purchase thereof by such
Agent. Each Terms Agreement may be substantially in the form of
Exhibit A hereto or may take the form of an exchange of any form of
written telecommunication between an Agent and the Company.
An Agent's commitment to purchase Notes as principal, whether
pursuant to a Terms Agreement or otherwise, shall be deemed to have
been
5
6
made on the basis of the representations and warranties of the Company
herein contained and shall be subject to the terms and conditions
herein set forth. Each agreement by an Agent to purchase Notes as
principal (whether or not set forth in a Terms Agreement) shall
specify the principal amount of Notes to be purchased by such Agent
pursuant thereto, the maturity date of such Notes, the price to be
paid to the Company for such Notes (including any commissions or
discounts), the interest rate and interest rate formula, if any,
applicable to such Notes and any other terms of such Notes. Each such
agreement shall also specify any requirements for officers'
certificates, opinions of counsel and letters from the independent
public accountants of the Company pursuant to Section 4 hereof. A
Terms Agreement may also specify certain provisions relating to the
offering of such Notes by such Agent.
Each Terms Agreement shall specify the time and place of
delivery of and payment for such Notes. With respect to each sale of
Notes to an Agent as principal that is not made pursuant to a Terms
Agreement, the procedural details relating to the issue and delivery
of such Notes and the payment therefor shall be as set forth in the
Procedures. Each date of delivery of and payment for Notes to be
purchased by an Agent as principal, whether pursuant to a Terms
Agreement or otherwise, is referred to herein as a "Settlement Date."
(c) Administrative Procedures. Each Agent and the Company
agree to perform the respective duties and obligations specifically
provided to be performed by them in the Procedures, as amended from
time to time. The Procedures may only be amended by written agreement
of the Company and the Agents after notice to, and with the approval
of, the Trustee.
(d) Delivery. The documents required to be delivered by
Section 4 of this Agreement as a condition precedent to the Agent's
obligation to begin soliciting offers to purchase Notes as agent of
the Company shall be delivered at the office of Cravath, Swaine &
▇▇▇▇▇, Agents' counsel (hereinafter "Agents' Counsel"), not later than
5:00 p.m., New York time, on the date hereof, or at such other time
and/or place as each Agent and the Company may agree upon in writing,
but in no event later than the day prior to the date on which any
Agent begins soliciting offers to purchase Notes or the first date on
which the Company accepts any offer by any Agent to purchase Notes as
principal (the "Commencement Date").
3. Agreements. The Company agrees with the Agents that:
(a) Prior to the termination of the offering of the Notes
pursuant to this Agreement or any Terms Agreement, the Company will
not file any Prospectus Supplement relating to the Notes or any
amendment to the Registration Statement unless the Company has
afforded each Agent a reasonable opportunity to comment on such
Prospectus Supplement or amendment; provided, however, that the
foregoing requirement shall not
6
7
apply to any of the Company's filings with the Commission required to
be filed pursuant to Section 13(a), 13(c), 14 or 15(d) of the Exchange
Act, copies of which filings the Company will cause to be delivered to
each Agent promptly after being mailed for filing with the Commission;
and provided, further, that the Company need only provide the
opportunity to comment on a Pricing Supplement to the particular Agent
or Agents which, in the judgment of the Company, are involved in the
solicitation or purchase which leads to the filing of such supplement.
Subject to the foregoing sentence, the Company will promptly cause
each Prospectus Supplement to be filed with or transmitted for filing
to the Commission in accordance with Rule 424(b) under the Securities
Act or by such other method as then deemed appropriate by the Company.
The Company will promptly advise each Agent of (i) the filing of any
amendment or supplement to the Basic Prospectus other than a Pricing
Supplement, (ii) the filing and effectiveness of any amendment to the
Registration Statement other than by virtue of the Company's filing
any report required to be filed under the Exchange Act or a Pricing
Supplement, (iii) any request by the Commission for any amendment to
the Registration Statement or any amendment or supplement to the Basic
Prospectus or for any additional information, (iv) the issuance by the
Commission of any stop order suspending the effectiveness of the
Registration Statement or the institution or threatening of any
proceeding for that purpose and (v) the receipt by the Company of any
notification with respect to the suspension of the qualification of
the Notes for sale in any jurisdiction or the initiation or
threatening of any proceeding for such purpose. The Company will use
reasonable efforts to prevent the issuance of any such stop order or
notice of suspension of qualification and, if issued, to obtain as
soon as possible the withdrawal thereof. If the Basic Prospectus is
amended or supplemented other than by virtue of a Pricing Supplement,
no Agent shall be obligated to solicit offers to purchase Notes so
long as it is not reasonably satisfied with such document; provided,
however, that if any Agent is not so satisfied, such Agent shall give
notice of such dissatisfaction to the Company within five business
days of such amendment or supplement.
(b) If, at any time when a prospectus relating to the Notes
is required to be delivered under the Act, any event occurs as a
result of which the Registration Statement, as then amended, or the
Prospectus, as then supplemented, would include any untrue statement
of a material fact, or omit to state any material fact necessary to
make the statements therein in the light of the circumstances under
which they were made not misleading, or if it shall be necessary to
amend the Registration Statement or to supplement the Prospectus to
comply with the Act or the Exchange Act or the respective rules
thereunder, the Company promptly will (i) notify each Agent to suspend
solicitation of offers to purchase Notes (and, if so notified by the
Company, the Agents shall forthwith suspend such solicitation and
cease using the Prospectus as then amended or supplemented), (ii)
prepare and file with the
7
8
Commission, subject to the first sentence of paragraph (a) of this
Section 3, an amendment or supplement which will correct such
statement or omission or an amendment or supplement which will effect
such compliance and (iii) supply any such amended or supplemented
Prospectus to each Agent in such quantities as the Agents may
reasonably request. If such amendment or supplement, and any
documents, certificates and opinions furnished to each Agent pursuant
to Section 4 in connection with the preparation or filing of such
amendment or supplement are satisfactory in all respects to such
Agent, such Agent will, upon the filing of such amendment or
supplement with the Commission and upon the effectiveness of an
amendment to the Registration Statement if such an amendment is
required, resume its obligation to solicit offers to purchase Notes
hereunder.
(c) As soon as reasonably practicable, the Company will
make generally available to its security holders (as defined in Rule
158 under the Act) and to each Agent an earnings statement or
statements that satisfy the provisions of Section 11(a) of the Act and
Rule 158 as promulgated thereunder.
(d) The Company will furnish to each Agent and Agents'
Counsel, without charge, copies of the Registration Statement
(including exhibits thereto) and each amendment thereto which shall
become effective and, so long as delivery of a prospectus may be
required by the Act, as many copies of the Prospectus and any
amendments thereof and supplements thereto as the Agents may
reasonably request.
(e) The Company will, with such assistance from the Agents
as the Company may reasonably request, (i) endeavor to qualify the
Notes for offer and sale under the laws of such jurisdictions as the
Agents may reasonably designate and (ii) maintain such qualifications
in effect so long as reasonably required for the distribution of the
Notes; provided, however that in connection therewith the Company
shall not be required to qualify as a foreign corporation or file a
general consent to service of process in any jurisdiction.
(f) During the period when this Agreement is in effect, the
Company shall furnish to each Agent copies of all reports or other
communications (financial or other) furnished to its public
stockholders, and deliver to each Agent as soon as they are available,
copies of any reports and financial statements (other than reports on
Form 11-K or any similar reports) furnished to or filed with the
Commission or any national securities exchange on which any class of
securities of the Company is listed.
(g) The Company shall, whether or not any sale of the Notes
is consummated and whether or not this Agreement shall be terminated
pursuant to Section 8, (i) pay all its expenses incident to the
performance of its obligations under this Agreement, including the
fees
8
9
and disbursements of its accountants and counsel, the cost of printing
or other production and delivery of the Registration Statement, any
preliminary Prospectus, the Prospectus, all amendments thereof and
supplements thereto, the Indenture and this Agreement, the cost of
preparing, printing, packaging and delivering the Notes, the fees and
disbursements, including reasonable fees of counsel, incurred in
connection with the qualification of the Notes for sale and
determination of eligibility for investment of the Notes under the
securities or Blue Sky laws of each such jurisdiction as each Agent
may reasonably designate, the fees and disbursements of the Trustee
and the fees of any agency that rates the Notes, (ii) reimburse each
Agent against presentation of receipts on a monthly basis for all
out-of-pocket expenses (including without limitation advertising
expenses) incurred by such Agent and approved in writing by the
Company in advance (it being understood that the Company shall be
under no obligation to approve any such out-of-pocket expenses and
that the failure to approve any such out-of-pocket expenses shall not
relieve the Agents of their obligations hereunder), in connection with
the offering and the sale of the Notes, and (iii) be responsible for
the reasonable fees and expenses of Agents' Counsel incurred in
connection with the offering and sale of the Notes.
(h) Each acceptance by the Company of an offer to purchase
Notes will be deemed to be an affirmation that its representations and
warranties contained in this Agreement are true and correct at the
time of such acceptance, as though made at and as of such time, and a
covenant that such representations and warranties will be true and
correct at the time of delivery to the purchaser of the Notes relating
to such acceptance, as though made at and as of such time (it being
understood that for purposes of the foregoing affirmation and covenant
such representations and warranties shall relate to the Registration
Statement and Prospectus as amended or supplemented at each such
time).
(i) The Company may from time to time offer Notes for sale
otherwise than through an Agent. The Company reserves the right to
solicit or accept offers to purchase Notes through an agent other than
the Agents; provided, however, that the Company, promptly after making
any such sale or entering into an agreement with any other agent
notifies the Agents that it has done so.
4. Conditions to the Obligations of the Agents. Each
Agent's obligation to solicit offers to purchase Notes as agent of the
Company, and each Agent's obligation to purchase Notes as principal
pursuant to any Terms Agreement or otherwise, shall be subject to the
accuracy of the representations and warranties on the part of the
Company contained herein, to the accuracy of the statements of the
Company made in any certificates pursuant to the provisions hereof, to
the performance by the Company of its obligations hereunder (in the
case of each Agent's obligation to solicit offers to purchase Notes,
at the time of such
9
10
solicitation, and, in the case of each Agent's obligation to purchase
Notes as principal, at the time the Company accepts the offer to
purchase such Notes and at the time of purchase) and to the following
additional conditions precedent when and as specified (it being
understood that any judgment to be made by the Agents under this
Section 4 shall be made by each Agent individually):
(a) At the time of such solicitation:
(i) no stop order suspending the
effectiveness of the Registration Statement, as amended
from time to time, shall have been issued and no
proceedings for that purpose shall have been instituted
or threatened;
(ii) there shall not have been any change,
or any development involving a prospective change, in
or affecting the business or properties of the Company
and its subsidiaries, taken as a whole, the effect of
which is, in the reasonable judgment of such Agent, so
material and adverse as to make it impractical or
inadvisable to proceed with the soliciting of offers to
purchase the Notes as contemplated by the Registration
Statement and the Prospectus;
(iii) the following shall not have occurred:
(A) trading in the Company's Common Stock shall have
been suspended by the Commission or the New York Stock
Exchange or trading in securities generally on the New
York Stock Exchange shall have been suspended or
limited or minimum prices shall have been established
on such Exchange, (B) a general banking moratorium
shall have been declared either by Federal or New York
State authorities, or (C) there shall have occurred any
outbreak or material escalation of hostilities or other
calamity or crisis the effect of which on the financial
markets of the United States is such as to make it, in
the reasonable judgment of such Agent, impracticable to
market the Notes.
(b) Between the time the Company accepts an offer
from an Agent to purchase Notes as principal and the
purchase of the Notes by such Agent:
(i) no stop order suspending the
effectiveness of the Registration Statement, as amended
from time to time, shall have been issued and no
proceedings for that purpose shall have been instituted
or threatened;
(ii) there shall not have been any change, or
any development involving a prospective change, in or
affecting
10
11
the business or properties of the Company and its
subsidiaries, taken as a whole, the effect of which is,
in the reasonable judgment of such Agent, so material
and adverse as to make it impractical or inadvisable to
proceed with the purchase the Notes as contemplated by
the Registration Statement and the Prospectus;
(iii) there shall not have been any decreases
in the ratings of any of the Company's debt securities
by ▇▇▇▇▇'▇ Investors Service, Inc. or Standard & Poor's
Rating Services (each a "Rating Agency"), nor shall
either Rating Agency have announced publicly that it
has placed any of such debt securities on a watch list
with negative implications; and
(iv) the following shall not have occurred:
(A) trading in the Company's Common Stock shall have
been suspended by the Commission or the New York Stock
Exchange or trading in securities generally on the New
York Stock Exchange shall have been suspended or
limited or minimum prices shall have been established
on such Exchange, (B) a general banking moratorium
shall have been declared either by Federal or New York
State authorities, or (C) there shall have occurred any
outbreak or material escalation of hostilities or other
calamity or crisis the effect of which on the financial
markets of the United States is such as to make it, in
the reasonable judgment of such Agent, impracticable to
market the Notes.
(c) On the Commencement Date such Agent shall have
received and, if called for by any agreement by such Agent to
purchase Notes as principal, on the corresponding Settlement
Date, such Agent shall have received:
(i) the opinion, dated as of such date, of
the General Counsel of the Company to the effect that:
(A) the Company has been duly
incorporated and is validly existing as a
corporation, 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 which requires such
qualification wherein it owns or leases
material properties or conducts material
business, except in such jurisdictions where
the failure to be so qualified will not have a
material effect on the Company and its
subsidiaries taken as a whole;
11
12
(B) 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 the Registration Statement which
is not adequately disclosed in the Prospectus
as amended or supplemented, and there is no
franchise, contract or other document of a
character required to be described in the
Registration Statement or Prospectus, or to be
filed as an exhibit, which is not described or
filed as required; and the statements included
or incorporated in the Prospectus as amended or
supplemented describing any legal proceedings
or material contracts or agreements relating to
the Company fairly summarize such matters;
(C) the documents incorporated by
reference in the Registration Statement, the
Prospectus and each amendment thereof or
supplement thereto as of their respective dates
of filing with the Commission (other than the
financial statements and other financial and
statistical information contained therein as to
which such counsel need express no opinion)
complied as to form in all material respects
with the applicable requirements of the
Exchange Act and the respective rules
thereunder;
(D) each of this Agreement and any
applicable Terms Agreement has been duly
authorized, executed and delivered by the
Company;
(E) no consent, approval,
authorization or order of any court or
governmental agency or body is required for the
consummation of the transactions contemplated
herein, except such as have been obtained under
the Act and such as may be required under the
blue sky laws of any jurisdiction in connection
with the issue and sale of the Notes by the
Company and such other approvals (specified in
such opinion) as have been obtained; and
(F) neither the issue and sale of
the Notes, nor the consummation of any other of
the transactions herein contemplated nor the
fulfillment of the terms hereof will conflict
with, result in a breach of, or constitute a
default under the charter or by-laws of the
Company or the terms of any material indenture
or other material agreement or instrument known
to such
12
13
counsel and to which the Company or any of its
subsidiaries is a party or bound, or any
material 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.
Such opinion shall also state that no facts have come to the attention
of such counsel that lead such counsel to believe that the
Registration Statement (other than the financial statements and other
financial information contained therein or incorporated therein by
reference, the documents incorporated by reference therein and the
Form T-1, as to which such counsel need not comment), at the time it
became effective, contained any untrue statement of a material fact or
omitted to state any material fact required to be stated therein or
necessary to make the statements therein not misleading or that the
Prospectus, as amended or supplemented (other than the financial
statements and other financial information contained therein or
incorporated therein by reference and the documents incorporated by
reference therein, as to which such counsel need not comment),
includes any untrue statement of a material fact or omits to state a
material fact necessary to make the statements therein, in light of
the circumstances under which they were made, not misleading. In
rendering such opinion, such counsel may rely (A) as to matters
involving the application of laws of any jurisdiction other than the
State of Texas 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 Agents'
Counsel, and (B) as to matters of fact, to the extent deemed proper by
such counsel, on certificates of responsible officers of the Company
and public officials.
(ii) the opinion, dated as of such date, of ▇▇▇▇▇▇ & ▇▇▇▇▇▇
L.L.P., counsel for the Company, to the effect that:
(A) the Notes conform in all material respects to
the description thereof contained in the Prospectus;
(B) the Indenture has been duly authorized,
executed and delivered, 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, as to enforcement of remedies, to applicable
bankruptcy, reorganization, insolvency, moratorium or other laws
and judicial decisions affecting creditors' rights generally
from time to time in effect and subject to the application of
equitable principles and the availability of equitable
remedies); and the Notes have been duly authorized and, when
executed and authenticated in accordance with the provisions of
the Indenture and delivered to and paid for by
13
14
the purchasers thereof, will constitute legal, valid and
binding obligations of the Company entitled to the benefits of
the Indenture; and
(C) the Registration Statement and any amendments thereto
have become effective under the Act; to the best knowledge of
such counsel, no stop order suspending the effectiveness of the
Registration Statement, as amended, has been issued, no
proceedings for that purpose have been instituted or threatened,
and the Registration Statement, the Prospectus and each
amendment thereof or supplement thereto as of their respective
effective or issue dates (other than the financial statements
and other financial information contained therein, the documents
incorporated by reference therein and the Form T-1 as to which
such counsel need express no opinion) complied as to form in all
material respects with the applicable requirements of the Act
and the respective rules thereunder.
Such opinion shall also state that no facts have come to the attention
of such counsel that lead such counsel to believe that the
Registration Statement (other than the financial statements and other
financial information contained therein or incorporated therein by
reference, the documents incorporated by reference therein and the
Form T-1, as to which such counsel need not comment), at the time it
became effective, contained any untrue statement of a material fact or
omitted to state any material fact required to be stated therein or
necessary to make the statements therein not misleading or that the
Prospectus, as amended or supplemented (other than the financial
statements and other financial information contained therein and the
documents incorporated by reference therein, as to which such counsel
need not comment), includes any untrue statement of a material fact or
omits to state a material fact necessary to make the statements
therein, in light of the circumstances under which they were made, not
misleading. In rendering such opinion, such counsel may rely (A) as
to matters involving the application of laws of any jurisdiction other
than the State of Texas 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 Agents' Counsel and (B) as to matters of fact, to the
extent deemed proper by such counsel, on certificates of responsible
officers of the Company and public officials.
(iii) an opinion, dated as of such date, of Cravath, Swaine &
▇▇▇▇▇, Agents' Counsel, to the effect set forth in subparagraphs (A),
(B) and (C) of the foregoing paragraph (b)(ii) and to the further
effect that the opinions delivered pursuant to the foregoing
paragraphs (b)(i) and (b)(ii) are satisfactory in form and scope.
Such opinion shall also state that such counsel has no reason to
believe that the Registration Statement (other than the financial
statements and other financial
14
15
information contained therein or incorporated therein by reference,
the documents incorporated by reference therein and the Form T-1, as
to which such counsel need express no opinion), at the time it became
effective, contained any untrue statement of a material fact or
omitted to state any material fact required to be stated therein or
necessary to make the statements therein not misleading or that the
Prospectus, as amended or supplemented (other than the financial
statements and other financial information contained therein or
incorporated therein by reference and the documents incorporated by
reference therein, as to which such counsel need not comment),
includes any untrue statement of a material fact or omits to state a
material fact necessary to make the statements therein, in light of
the circumstances under which they were made, not misleading. In
rendering such opinion, such counsel may rely (A) as to matters
involving the application of laws of the State of Texas, upon the
opinions delivered pursuant to the foregoing paragraphs (b)(i) and
(b)(ii), (B) as to matters involving the application of laws of any
other jurisdiction, other than the State of 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 (C) as to matters of fact, to the extent deemed proper by
such counsel, on certificates of responsible officers of the Company
(which the Company shall have furnished to such counsel upon the
request of such counsel) and public officials.
(d) On the Commencement Date and, if called for by any
agreement to purchase Notes as principal to which any Agent is a
party, on the corresponding Settlement Date, the Agents shall have
received a certificate, dated such Commencement Date or Settlement
Date, as the case may be, signed by the Treasurer or other financial
executive officer of the Company to the effect that the
representations and warranties of the Company contained herein are
true and correct as of such date and the Company has complied with all
of the agreements and satisfied all of the conditions on its part to
be performed or satisfied on or before such date.
The officer signing and delivering such certificate may rely
upon the best of his knowledge as to proceedings threatened.
(e) On the Commencement Date and, if called for by an
agreement to purchase Notes as principal to which any Agent is a
party, on the corresponding Settlement Date, the Company's independent
public accountants shall have furnished to the Agents a letter or
letters (which may refer to letters previously delivered to the
Agents), dated as of such Commencement Date or Settlement Date, as the
case may be, substantially in the form attached hereto as Exhibit C.
(f) On the Commencement Date and on each Settlement Date,
as the case may be, the Company shall have furnished to each Agent
such further
15
16
information, certificates and documents as the Agents may reasonably
request.
If any of the conditions specified in this Section 4 shall not
have been fulfilled in all material respects when and as provided in this
Agreement, this Agreement and all obligations of an Agent hereunder may be
canceled by such Agent. Notice of such cancellation shall be given to the
Company in writing or by telephone or telefax confirmed in writing.
5. Additional Agreements of the Company. (a) Each time
the Registration Statement or Prospectus is amended or supplemented by the
Company's periodic filings pursuant to the Exchange Act, the Company will
deliver or cause to be delivered forthwith to each Agent the certificate
described in the third sentence of this Section 5(a). Except as provided in
the immediately preceding sentence, each time the Registration Statement or
Prospectus is amended or supplemented (other than by a Pricing Supplement or
for a change the Agents deem to be immaterial), the Company will, upon the
reasonable request of the Agents, deliver or cause to be delivered forthwith to
each Agent the certificate referred to in the third sentence of this Section
5(a). The certificate to be delivered pursuant to this Section 5(a) shall be
signed by the Treasurer or other financial executive officer of the Company,
dated the date of such amendment or supplement, as the case may be, in form
reasonably satisfactory to the Agents, and of the same tenor as the certificate
referred to in Section 4(d) relating to the Registration Statement or the
Prospectus as amended and supplemented to the time of delivery of such
certificate.
(b) Each time the Company furnishes a certificate pursuant
to Section 5(a), the Company shall furnish or cause to be furnished forthwith
to each Agent a written opinion of counsel for the Company. Any such opinion
shall be dated the date of such amendment or supplement, as the case may be,
shall be in a form satisfactory to the Agents and shall be of the same tenor as
the opinion referred to in Section 4(c)(i), but modified to relate to the
Registration Statement and the Prospectus as amended and supplemented to the
time of delivery of such opinion. In lieu of such opinion, counsel last
furnishing such an opinion to the Agents may furnish to the Agents a letter to
the effect that the Agents may rely on such last opinion to the same extent as
though it were dated the date of such letter (except that statements in such
last opinion will be deemed to relate to the Registration Statement and the
Prospectus as amended and supplemented to the time of delivery of such letter).
(c) Each time the Registration Statement or the Prospectus
is amended or supplemented to set forth amended or supplemental financial
information or such amended or supplemental financial information is
incorporated by reference in the Registration Statement or the Prospectus, the
Company shall cause its independent public accountants forthwith to furnish the
Agents with a letter, dated the date of such amendment or supplement, as the
case may be, and of the same tenor as the letter referred to in Section
16
17
4(e), with regard to the amended or supplemental financial information included
or incorporated by reference in the Registration Statement or the Prospectus as
amended or supplemented to the date of such letter.
6. Indemnification. (a) The Company agrees to indemnify
and hold harmless each Agent and each person who controls such Agent within the
meaning of either the Act or the Exchange Act against any and all losses,
claims, damages or liabilities, joint or several, to which they or any of them
may become subject under the Act, the Exchange Act or other Federal or state
statutory law or regulation, at common law or otherwise, insofar as such
losses, claims, damages or liabilities (or actions in respect thereof) arise
out of or are based upon any untrue statement or alleged untrue statement of a
material fact contained in the Registration Statement, the Prospectus, or in
any amendment or supplement thereto, or any preliminary prospectus, or arise
out of or are based upon the omission or alleged omission to state therein a
material fact required to be stated therein or necessary to make the statements
therein not misleading, and agrees to reimburse each such indemnified party, as
incurred, for any legal or other expenses reasonably incurred by them in
connection with investigating or defending any such loss, claim, damage,
liability or action; provided, however, that the Company will not be liable in
any such case to the extent that any such loss, claim, damage or liability
arises out of or is based upon any such untrue statement or alleged untrue
statement or omission or alleged omission made therein in reliance upon and in
conformity with written information furnished to the Company by or on behalf of
any Agent specifically for use in connection with the preparation thereof.
This indemnity agreement will be in addition to any liability which the
Company may otherwise have.
(b) Each Agent agrees to indemnify and hold harmless the
Company, each of its directors, each of its officers who signs the Registration
Statement, and each person who controls the Company within the meaning of
either the Act or the Exchange Act, to the same extent as the foregoing
indemnity from the Company to the Agents, but only with reference to written
information relating to such Agent furnished to the Company by or on behalf of
such Agent specifically for use in the preparation of the documents referred to
in the foregoing indemnity. This indemnity agreement will be in addition to
any liability which such Agent may otherwise have.
(c) Promptly after receipt by an indemnified party under
this Section 6 of notice of the commencement of any action, such indemnified
party will, if a claim in respect thereof is to be made against the
indemnifying party under this Section 6, notify the indemnifying party in
writing of the commencement thereof; but the omission so to notify the
indemnifying party will not relieve it from any liability which it may have to
any indemnified party otherwise than under this Section 6. In case any such
action is brought against any indemnified party, and it notifies the
indemnifying party of the commencement thereof, the indemnifying party will be
entitled to participate therein, and to the extent that it may elect by written
notice delivered to the indemnified party promptly after receiving the
aforesaid notice from such
17
18
indemnified party, to assume the defense thereof, with counsel satisfactory to
such indemnified party; provided, however, that if the defendants in any such
action include both the indemnified party and the indemnifying party and the
indemnified party shall have reasonably concluded that there may be legal
defenses available to it and/or other indemnified parties which are different
from or additional to those available to the indemnifying party, the
indemnified party or parties shall have the right to select separate counsel to
assert such legal defenses and to otherwise participate in the defense of such
action on behalf of such indemnified party or parties. Upon receipt of notice
from the indemnifying party to such indemnified party of its election so to
assume the defense of such action and approval by the indemnified party of
counsel, the indemnifying party will not be liable to such indemnified party
under this Section 6 for any legal or other expenses subsequently incurred by
such indemnified party in connection with the defense thereof unless (i) the
indemnified party shall have employed separate counsel in connection with the
assertion of legal defenses in accordance with the proviso to the next
preceding sentence (it being understood, however, that the indemnifying party
shall not be liable for the expenses of more than one separate counsel,
approved by the Agents in the case of paragraph (a) of this Section 6,
representing the indemnified parties under such paragraph (a) who are parties
to such action), (ii) the indemnifying party shall not have employed counsel
satisfactory to the indemnified party to represent the indemnified party within
a reasonable time after notice of commencement of the action or (iii) the
indemnifying party has authorized the employment of counsel for the indemnified
party at the expense of the indemnifying party; and except that, if clause (i)
or (iii) is applicable, such liability shall be only in respect of the counsel
referred to in such clause (i) or (iii). Notwithstanding anything in this
Section 6 to the contrary, the indemnifying party shall not be liable for any
settlement of any claim or action effected without its written consent.
(d) In order to provide for just and equitable contribution
in circumstances in which the indemnification provided for in paragraph (a) of
this Section 6 is unavailable, the Company and the Agents shall contribute to
the aggregate losses, claims, damages and liabilities (including legal or other
expenses reasonably incurred in connection with investigating or defending
same) to which the Company and the Agents may be subject in such proportion so
that each Agent is responsible for that portion represented by the percentage
that the aggregate commissions received by such Agent pursuant to Section 2
bears to the aggregate principal amount of the Notes sold and the Company is
responsible for the balance. If the allocation provided by the immediately
preceding sentence is unavailable for any reason, the Company and the Agents
shall contribute in such proportion as is appropriate to reflect not only such
relative benefits but also the relative fault of the Company and of the Agents
in connection with the statements or omissions which resulted in such losses,
claims, damages and liabilities as well as any other relevant equitable
considerations. Relative fault shall be determined by, among other things,
reference to whether any alleged untrue statement or omission relates to
information provided by the Company or the Agents. Notwithstanding the
18
19
foregoing provisions of this subsection (d), (y) in no case shall an Agent be
responsible for any amount in excess of the commissions received by such Agent
and (z) no person guilty of fraudulent misrepresentation (within the meaning of
Section 11(f) of the Act) shall be entitled to contribution from any person who
was not guilty of such fraudulent misrepresentation. For purposes of this
Section 6, each person who controls an Agent within the meaning of either the
Act or the Exchange Act shall have the same rights to contribution as such
Agent, and each person who controls the Company within the meaning of either
the Act or the Exchange Act, each officer of the Company who shall have signed
the Registration Statement and each director of the Company shall have the same
rights to contribution as the Company, subject in each case to clause (y) of
this paragraph (d). Any party entitled to contribution will, promptly after
receipt of notice of commencement of any action, suit or proceeding against
such party in respect of which a claim for contribution may be made against
another party or parties under this paragraph (d), notify such party or parties
from whom contribution may be sought, but the omission to so notify such party
or parties shall not relieve the party or parties from whom contribution may be
sought from any other obligation it or they may have hereunder or otherwise
than under this paragraph (d).
7. Position of the Agents. In soliciting offers to
purchase the Notes pursuant to Section 2(a), the Agents are acting solely as
agent for the Company, and not as principal, and do not assume any obligation
towards or relationship of agency or trust with any purchaser of Notes. Each
Agent shall use its best efforts consistent with standard industry practice to
assist the Company in obtaining performance by each purchaser whose offer to
purchase Notes has been solicited by it and accepted by the Company, but no
Agent shall have any liability to the Company in the event any such purchase is
not consummated for any reason. If the Company shall default in its
obligations to deliver Notes to an Agent after accepting an offer from such
Agent, the Company shall hold the Agent harmless against any loss, claim,
damage or liability arising from or as a result of such default and shall, in
particular, pay to the Agent the commission the Agent would have received had
such sale been consummated, provided such default is not due to the Agent's
failure to perform.
8. Termination. This Agreement will continue in effect
until terminated as provided in this Section 8. This Agreement may be
terminated by either the Company as to any Agent or an Agent insofar as this
Agreement relates to such Agent, giving written notice of such termination to
the other party hereto. This Agreement shall so terminate at the close of
business on the first business day following the receipt of such notice by the
party to whom such notice is given. In the event of such termination, no party
shall have any liability to any other party hereto, except as provided in the
third paragraph of Section 2(a), Section 3(g), Section 6, and Section 9. The
provisions of this Agreement applicable to any purchase of a Note for which
agreement to purchase exists prior to the termination hereof shall survive any
termination of this Agreement.
19
20
9. Representations and Indemnities to Survive. The
respective agreements, representations, warranties, indemnities and other
statements of the Company or its officers and of the Agents set forth in or
made pursuant to this Agreement will remain in full force and effect,
regardless of any investigation made by or on behalf of the Agents or the
Company or any of the officers, directors or controlling persons referred to in
Section 6 hereof, and will survive delivery of and payment for the Notes. The
provisions of Section 6 hereof shall survive the termination or cancellation of
this Agreement.
10. Notices. All communications hereunder will be in
writing and effective only on receipt, and, if sent to the Agents, will be
mailed, delivered or telefaxed and confirmed to the Agents, at the addresses
specified in Schedule I hereto; or, if sent to the Company, will be mailed,
delivered or telefaxed and confirmed to it as follows: (i) if delivered by
hand, to it at ▇▇▇▇ ▇▇▇▇▇▇, ▇▇▇▇▇ ▇▇▇▇, ▇▇▇▇▇▇▇, ▇▇▇▇▇ ▇▇▇▇▇, (ii) if sent by
mail, to it at ▇.▇. ▇▇▇ ▇▇▇▇, ▇▇▇▇▇▇▇, ▇▇▇▇▇ ▇▇▇▇▇, and (iii) if telefaxed,
to it at (▇▇▇) ▇▇▇-▇▇▇▇, in each case marked to the attention of the Secretary.
11. Successors. This Agreement will inure to the benefit
of and be binding upon the parties hereto and their respective successors and
(in the case of the benefits of Section 6) the officers and directors and
controlling persons referred to in Section 6 hereof, and no other person will
have any right or obligation hereunder.
12. Applicable Law. This Agreement will be governed by and
construed in accordance with the laws of the State of New York.
20
21
If the foregoing is in accordance with your understanding of our
agreement, please sign and return to us the enclosed duplicate hereof,
whereupon this letter and your acceptance shall represent a binding agreement
among the Company and the Agents.
Very truly yours,
▇▇▇▇▇▇ INDUSTRIES, INC.,
By:
_____________________________
▇▇▇▇ ▇. ▇▇▇▇
Vice President and
Treasurer
Accepted in New York, New York
as of the date hereof:
CHASE SECURITIES, INC.
______________________________ By: ______________________________
▇▇▇▇▇▇▇, ▇▇▇▇▇ & CO.
CS FIRST BOSTON CORPORATION ▇▇▇▇▇▇ BROTHERS INC.
By: __________________________ By:_______________________________
21
22
SCHEDULE I
Distribution Agreement dated January 26, 1996
Registration Statement No. 333-00117
Amount of the Notes: $300,000,000
Amount of the Securities: $300,000,000
The Company agrees to pay each Agent a commission not in excess
of the following percentage of the purchase price of each Note sold by such
Agent:
Range of Maturities Commission
------------------- ----------
From nine months through one year .125%
More than one year through 18 months .150%
More than 18 months through two years .200%
More than 2 years through 3 years .250%
More than 3 years through 4 years .350%
More than 4 years through 5 years .450%
More than 5 years through 6 years .500%
More than 6 years through 7 years .5125%
More than 7 years through 9 years .525%
More than 9 years through 10 years .550%
More than 10 years through 15 years .600%
Addresses for Notice to Agents:
▇▇▇▇▇▇▇, ▇▇▇▇▇ & Co. Chase Securities, Inc.
▇▇ ▇▇▇▇▇ ▇▇▇▇▇▇, ▇▇▇▇ ▇▇▇▇▇ ▇▇▇ ▇▇▇▇▇ ▇▇▇▇▇▇▇▇▇ ▇▇▇▇▇,
▇▇▇ ▇▇▇▇, ▇▇▇ ▇▇▇▇ ▇▇▇▇▇ ▇▇▇▇ ▇▇▇▇▇
▇▇▇ ▇▇▇▇, ▇▇▇ ▇▇▇▇ ▇▇▇▇▇
Attn: Medium Term Note Dept.
Fax: ▇▇▇-▇▇▇-▇▇▇▇
CS First Boston Corporation ▇▇▇▇▇▇ Brothers Inc.
▇▇ ▇▇▇▇ ▇▇▇▇ ▇▇. 3 World Financial Center
Park Avenue Plaza, 35th Floor New York, New York 10285
▇▇▇ ▇▇▇▇, ▇▇▇ ▇▇▇▇ ▇▇▇▇▇
Attn: Short & Medium Term Finance Dept.
Fax: ▇▇▇-▇▇▇-▇▇▇▇
22
23
Exhibit A
▇▇▇▇▇▇ INDUSTRIES, INC.
MEDIUM-TERM NOTES
TERMS AGREEMENT
______________, 19 ___
▇▇▇▇▇▇ Industries, Inc.
▇.▇. ▇▇▇ ▇▇▇▇
▇▇▇▇▇▇▇, ▇▇▇▇▇ ▇▇▇▇▇
Attention: Treasurer
Re: Distribution Agreement dated January ____, 1996
(the "Distribution Agreement)"
---------------------------------------------------
The undersigned agrees to purchase the following principal
amount of your Third Series Medium-Term Notes: $
Floating
Fixed Rate Rate
All Notes: Notes: Notes:
---------- ---------- --------
Purchase Interest Base rate:
price: rate:
Price to Applicability Index
public: of modified maturity:
payment upon
Settlement acceleration: Spread or Spread
date and time: multiplier:
Place of Amortization Alternate rate
delivery: schedule: event spread:
Specified Initial interest
currency: rate:
Maturity Interest reset
date: dates:
Initial accrual Maximum interest
period OID: rate:
23
24
Original yield
to maturity:
Optional redemption Minimum interest
dates(s): rate:
Initial redemption Interest payment
date: period:
Initial redemption Interest reset
percentage: period:
Annual redemption Interest payment
percentage dates:
decrease:
Calculation agent:
Other terms:
The provisions of Sections 1, 2(b), 2(c), 3 through 6
and 8 through 12 of the Distribution Agreement and the related definitions are
incorporated by reference herein and shall be deemed to have the same force and
effect as if set forth in full herein.
The opinions, certificates, letters and documents
referred to in Section 4 of the Distribution Agreement will be required if, and
to the extent, set forth below:
[Agent]
By:__________________________________
Name:
Title:
24
25
EXHIBIT B
▇▇▇▇▇▇ INDUSTRIES, INC.
THIRD SERIES MEDIUM-TERM NOTES, ADMINISTRATIVE PROCEDURES
________________________________
Explained below are the administrative procedures and specific terms
of the offering of Third Series Medium-Term Notes (the "Notes") on a
continuous basis by ▇▇▇▇▇▇ Industries, Inc. (the "Company") pursuant to the
Distribution Agreement, dated January 26, 1996 (the "Distribution Agreement")
between the Company and ▇▇▇▇▇▇▇, Sachs & Co., CS First Boston Corporation, Chase
Securites, Inc. and ▇▇▇▇▇▇ Brothers Inc. (each an "Agent" and collectively the
"Agents"). In the Distribution Agreement, each Agent has agreed to use its
best efforts consistent with standard industry practice to solicit purchases of
the Notes. Each Agent, as principal, may purchase Notes for its own account
and the Company and such Agent may enter into a Terms Agreement, as
contemplated by the Distribution Agreement.
The Notes will be issued pursuant to the provisions of an indenture
dated as of January 15, 1990 (as amended by the Trust Indenture Reform Act of
1990 and as it may be further supplemented or amended from time to time, the
"Indenture"), between the Company and The Chase Manhattan Bank (National
Association) ("Chase"), as trustee. Chase will be the Registrar,
Authentication Agent, and Paying Agent for the Notes and will perform the
duties specified herein. Notes will bear interest at a fixed rate (the "Fixed
Rate Notes"), which may be zero in the case of certain original issue discount
notes (the "OID Notes"), or at floating rates (the "Floating Rate Notes").
Fixed Rate Notes may pay a level amount in respect of both interest and
principal amortized over the life of the Notes (the "amortizing notes"). The
Notes will be issued in U.S. dollars or other currencies, including composite
currencies such as the European Currency Unit (the "Specified Currency"). Each
Note will be represented by either a Global Security (as defined below)
delivered to Chase, as agent for the Depository Trust Company ("DTC"), and
recorded in the book-entry system maintained by DTC (a "Book-Entry Note") or a
certificate delivered to the holder thereof or a person designated by such
holder (a "Certificated Note"). Except in limited circumstances, an owner of a
Book-Entry Note will not be entitled to receive a Certificated Note.
Book-Entry Notes, which may only be denominated and payable in U.S.
dollars, will be issued in accordance with the administrative procedures set
forth in Part I hereof as they may subsequently be amended as the result of
changes in DTC's operating procedures, and Certificated Notes will be issued in
accordance with the administrative procedures set forth in Part II hereof.
Unless otherwise defined herein, terms defined in the Distribution Agreement,
Indenture or the Notes shall be used herein as therein defined.
26
- 2 -
PART I: ADMINISTRATIVE PROCEDURES FOR BOOK-ENTRY NOTES
In connection with the qualification of the Book-Entry Notes for
eligibility in the book-entry system maintained by DTC, Chase will perform the
custodial, document control and administrative functions described below, in
accordance with its respective obligations under a Letter of Representation
from the Company and Chase to DTC, dated as of January 24, 1996 (the "Letter of
Representation"), and a Medium Term Note Certificate Agreement between Chase
and DTC, dated as of March 10, 1989, and its obligations as a participant in
DTC, including DTC's Same-Day Funds Settlement System ("SDFS").
Issuance: On any date of Settlement (as defined under
"Settlement" below) for one or more Book-Entry Notes,
the Company will issue a single global security in
fully registered form without coupons (a "Global
Security") representing up to $200,000,000 principal
amount of all such Notes that have the same maturity
date, redemption provisions, ranking, interest payment
dates, interest period, original issue date, original
issue discount provisions (if any) and, in the case of
Fixed Rate Notes, interest rate and amortization
schedule (if any) or, in the case of Floating Rate
Notes, initial interest rate, base rate, index
maturity, interest reset period, interest reset dates,
spread or spread multiplier (if any), minimum interest
rate (if any) and maximum interest rate (if any) and,
in each case, any other relevant terms (collectively,
"Terms"). Each Global Security will be dated and
issued as of the date of its authentication by Chase.
Each Global Security will bear an "Interest Accrual
Date," which will be (i) with respect to an original
Global Security (or any portion thereof), its original
issuance date and (ii) with respect to any Global
Security (or any portion thereof) issued subsequently
upon exchange of a Global Security, or in lieu of a
destroyed, lost or stolen Global Security, the most
recent interest payment date to which interest has been
paid or duly provided for on the predecessor Global
Security or Securities (or if no such payment or
provision has been made, the original issuance date of
the predecessor Global Security), regardless of the
date of authentication of such subsequently issued
Global Security. Book-Entry Notes may only be
denominated and payable in U.S. dollars. No Global
Security will represent any Certificated Note.
27
- 3 -
Identification The Company will arrange with the CUSIP Service Bureau
Numbers: of Standard & Poor's Corporation (the "CUSIP Service
Bureau") for the reservation of a series of CUSIP
numbers (including tranche numbers) for the Notes which
series consists of approximately 900 CUSIP numbers and
relates to Global Securities representing the
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 to Chase and
DTC the written list of 900 CUSIP numbers of such
series. Chase will assign CUSIP numbers to Global
Securities as described below under Settlement
Procedure "B". DTC will notify the CUSIP Service
Bureau periodically of the CUSIP numbers that Chase has
assigned to Global Securities. At any time when fewer
than 100 of the reserved CUSIP numbers of such series
remain unassigned to Global Securities, Chase shall so
advise the Company and, if it deems necessary, the
Company will reserve additional CUSIP numbers for
assignment to Global Securities representing
Book-Entry Notes. Upon obtaining such additional CUSIP
numbers, the Company shall deliver a list of such
additional CUSIP numbers to Chase and DTC.
Registration: Each Global Security will be registered in the name of
CEDE & Co., as nominee for DTC, on the Security
register maintained under the Indenture. The
beneficial owner of a Book-Entry Note (or one or more
indirect participants in DTC designated by such owner)
will designate one or more participants in DTC (with
respect to such Note, the "Participants") to act as
agent or agents for such owner in connection with the
book-entry system maintained by DTC, and DTC will
record in book-entry form, in accordance with
instructions provided by such Participants, a credit
balance with respect to such beneficial owner in such
Note in the account of such Participants. The
ownership interest of such beneficial owner 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.
Transfers: Transfers of a Book-Entry Note will be accompanied 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.
28
- 4 -
Exchanges: Chase may deliver to DTC and the CUSIP Service
Bureau and Interactive Data Corporation at any
time a written notice of consolidation specifying (i)
the CUSIP numbers of two or more outstanding Global
Securities that represent Book-Entry Notes having the
same Terms and for which interest has been paid to the
thirty days after such written notice is delivered and
at least thirty days before the next interest
payment date for such Book-Entry Notes, on which such
Global Securities shall be exchanged for a single
replacement Global Security and (iii) a new CUSIP
number to be assigned by the Company to such
replacement Global Security. Upon receipt of such a
notice, DTC will send to its Participants (including
Chase) a written reorganization notice to the effect
that such exchange will occur on such date. Prior to
the specified exchange date, Chase 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 Securities to be exchanged will no longer be
valid. On the specified exchange date, Chase will
exchange such Global Securities for a single Global
Security bearing the new CUSIP number and a new
Interest Accrual Date, and the CUSIP numbers of the
exchanged Global Securities will, in accordance with
CUSIP Service Bureau procedures, be cancelled and not
immediately reassigned. Notwithstanding the foregoing,
if the Global Securities to be exchanged exceed
$200,000,000 in aggregate principal amount, one Global
Security will be authenticated and issued to represent
each $200,000,000 principal amount of the exchanged
Global Security and an additional Global Security will
be authenticated and issued to represent any remaining
principal amount of such Global Securities (see
"Denominations" below).
Maturities: Each Book-Entry Note will mature on a date not less
than nine months after the Settlement date for such
Note.
Notice of Chase will give notice to DTC prior to each redemption
Redemption Dates: date (as specified in the Note), if any, at the time
and in the manner set forth in the Letter of
Representation from the Company and Chase to DTC dated
January 24, 1996.
Denominations: Book-Entry Notes will be issued in principal amounts of
$100,000 or any amount in excess thereof that is an
29
- 5 -
integral multiple of $1,000. Global Securities will be
denominated in principal amounts not in excess of
$200,000,000. If one or more Book-Entry Notes having
an aggregate principal amount in excess of $200,000,000
would, but for the preceding sentence, be represented
by a single Global Security, then one Global Security
will be issued to represent each $200,000,000 principal
amount of such Book-Entry Note or Notes and an
additional Global Security will be issued to represent
any remaining principal amount of such Book-Entry Note
or Notes. In such a case, each of the Global
Securities representing such Book-Entry Note or Notes
shall be assigned the same CUSIP number.
Interest: General. Interest on each Book-Entry Note will accrue
from the Interest Accrual Date of the Global Security
representing such Note. Each payment of interest on a
Book-Entry Note will include interest accrued to but
excluding the interest payment date; provided that in
the case of Floating Rate Notes that reset daily or
weekly, interest payments will include interest accrued
to and including the Record Date immediately preceding
the interest payment date, except that at maturity or
earlier redemption, the interest payable will include
interest accrued to, but excluding, the maturity date or
the date of redemption, as the case may be. Interest
payable at the maturity or upon redemption of a
Book-Entry Note will be payable to the person to whom
the principal of such Note is payable.
Record Dates. The Record Date with respect to any
interest payment date shall be the date 15 calendar
days immediately preceding such interest payment date.
Fixed Rate Book-Entry Notes. Unless otherwise agreed
upon, interest payments on Fixed Rate Book-Entry
Notes other than amortizing notes will be made
semi-annually on March 1 and September 1 of each year
and at maturity and Book-Entry amortizing notes will
pay principal and interest semi-annually each March 1
and September 1, or quarterly each March 1, June 1,
September 1, and December 1, and at maturity; provided,
however, that if any interest payment date for a Fixed
Rate Book-Entry Note is not a business day, the payment
due on such day shall be made on the next succeeding
business day and no interest shall accrue on such
payment for the period from and after such interest
payment date; and provided, further, that in the case
of a Fixed Rate
30
- 6 -
Book-Entry Note issued between a Record Date and an
interest payment date, the first interest payment
will be made on the interest payment date following the
next succeeding Record Date.
Floating Rate Book-Entry Notes. Interest payments will
be made on Floating Rate Book-Entry Notes monthly,
quarterly, semi-annually or annually. Unless
otherwise agreed upon, interest will be payable, in the
case of Floating Rate Book-Entry Notes with a daily,
weekly or monthly interest reset date, on the third
Wednesday of each month or on the third Wednesday of
March, June, September and December, as specified
pursuant to Settlement Procedure "A" below; in the case
of Notes with a quarterly interest reset date, on the
third Wednesday of March, June, September and December
of each year; in the case of Notes with a semi-annual
interest reset date, on the third Wednesday of the two
months specified pursuant to Settlement Procedure "A"
below; and in the case of Notes with an annual interest
reset date, on the third Wednesday of the month
specified pursuant to Settlement Procedure "A" below;
provided, however, that if an interest payment date for
Floating Rate Book-Entry Notes would otherwise be a day
that is not a business day with respect to such
Floating Rate Book-Entry Notes, such interest payment
date will be the next succeeding business day with
respect to such Floating Rate Book-Entry Notes, except
in the case of a LIBOR Note if such business day is in
the next succeeding calendar month, such interest
payment date will be the immediately preceding business
day; and provided, further, that in the case of a
Floating Rate Book-Entry Note issued between a Record
Date and an interest payment date, the first interest
payment will be made on the interest payment date
following the next succeeding Record Date.
Notice of Interest Payment and Record Dates. On the
first business day of January, April, July and
October of each year, Chase will deliver to the
Company and DTC a written list of Record Dates and
interest payment dates that will occur with respect to
Book-Entry Notes during the six-month period beginning
on such first business day.
Calculation of Fixed Rate Book-Entry Notes.
Interest: Interest on Fixed Rate Book-Entry
31
- 7 -
Notes (including interest for partial periods) will be
calculated on the basis of a year of twelve thirty-day
months.
Floating Rate Book-Entry Notes. Interest rates on
Floating Rate Book-Entry Notes will be determined as
set forth in the form of Notes. Unless otherwise
agreed upon, interest on Floating Rate Book-Entry
Notes will be calculated on the basis of actual days
elapsed and a year of 360 days except that in the case
of treasury rate notes, interest will be calculated on
the basis of the actual number of days in the year.
Reporting of General. The Company and Chasewill take all steps
Interest necessary in order for any interest payment date
Information: interest payment date on any issue of Notes together
with the amount of interest payable, as well as changes
in the interest rates of Floating Rate Book-Entry Notes
as they occur from time to time, to be listed in the
appropriate daily bond report published by Standard &
Poor's Corporation.
Fixed Rate Book-Entry Notes. Standard & Poor's
Corporation will use the information received in the
pending deposit message described under Settlement
Procedure "C" below in order to include the amount of
any interest payable and certain other information
regarding the related Global Security in the
appropriate weekly bond report published by Standard &
Poor's Corporation.
Floating Rate Book-Entry Notes. With regard to
Floating Rate Book-Entry Notes on which the
interest rate is reset weekly or daily, Chase will
deliver to Standard & Poor's Corporation and
Interactive Data Corporation on each day on which the
amount of interest to be paid on the following payment
date (including the Floating Rate Book-Entry Note's
first interest payment date) is determined (at least 15
days prior to each monthly payment date) a listing of
the CUSIP number assigned to each such note along with
corresponding specifications of the next Record Date,
payment date, and dollar amount of interest per $1,000
note to be paid on such payment date. For Floating
Rate Book-Entry Notes on which the interest is reset
monthly, quarterly, semi-annually or annually, Chase
will deliver a similar listing to Standard & Poor's
Corporation and Interactive Data Corporation on the day
32
- 8 -
interest payment amounts are determined (at least 30
calendar days prior to the payment date).
Payments of Payments of Interest. Promptly after each Record Date,
Principal and Chase will deliver to the Company and DTC a written
Interest: notice specifying by CUSIP number the amount of
interest to be paid on each Global Security (other than
an amortizing note) on the following interest payment
date (other than an interest payment date coinciding
with maturity) and the total of such amounts. DTC will
confirm the amount payable on each such Global Security
on such interest payment date by reference to the daily
bond reports published by Standard & Poor's
Corporation. In the case of amortizing notes, Chase
will provide separate written notice to DTC prior to
each interest payment date at the times and in the
manner set forth in the Letter of Representation. The
Company will pay to Chase, as paying agent, the total
amount of interest due on such interest payment date
(and, in the case of an amortizing note, principal and
interest) (other than at maturity), and Chase will pay
such amount to DTC at the times and in the manner set
forth below under "Manner of Payment."
Payments at Maturity or Upon Redemption. On or about
the first business day of each month Chase will
deliver to the Company and DTC a written list of
principal and interest to be paid on each Global
Security (other than an amortizing note) maturing
either at maturity or on a redemption date in the
following month. The Company and DTC will confirm the
amounts of such principal and interest payments with
respect to each such Global Security on or about the
fifth business day preceding the maturity date or
redemption date of such Global Security. In the case
of amortizing notes, Chase will provide separate
written notice to DTC prior to each interest payment
date at the times and in the manner set forth in the
Letter of Representation. The Company will pay to
Chase, as the paying agent, the principal amount of
such Global Security, together with interest due at
such maturity date or redemption date. Chase will pay
such amounts to DTC at the times and in the manner set
forth below under "Manner of Payment." If any maturity
date or redemption date of a Global Security
representing Book-Entry Notes is not a business day,
the payment due on such day shall be made on the next
succeeding business day and, in the case of Fixed Rate
Notes, no interest shall accrue on such payment for the
period from and after such maturity
33
- 9 -
date or redemption date. Promptly after payment to DTC
of the principal and interest due on the maturity date
or redemption date of such Global Security, Chase will
cancel such Global Security in accordance with the
terms of the Indenture and deliver it to the Company
with a certificate of cancellation.
Manner of Payment. The total amount of any
principal and interest due on Global Securities on any
interest payment date or at maturity or upon redemption
shall be paid by the Company to Chase in funds
available for immediate use by Chase as of 9:30 A.M.
(New York City time), or as soon as possible
thereafter, on such date. The Company will make such
payment on such Global Securities by wire transfer
(using Fedwire message entry instructions in a form
previously specified by Chase) to an account at Chase
previously specified by Chase, in funds available for
immediate use by Chase, or by instructing Chase to
withdraw funds from an account maintained by the
Company at Chase. The Company will confirm such
instructions in writing to Chase. Prior to 10 A.M.
(New York City time), or as soon as possible
thereafter, on each maturity date or redemption date,
Chase will pay by separate wire transfer (using Fedwire
message entry instructions in a form previously
specified by DTC) to an account at the Federal Reserve
Bank of New York previously specified by DTC, in funds
available for immediate use by DTC, each payment of
interest or principal (together with interest thereon)
due on Global Securities on any maturity date or
redemption date. On each interest payment date,
interest payments (and, in the case of amortizing
notes, interest and principal payments) shall be made
to DTC in same day funds in accordance with existing
arrangements between Chase and DTC. Thereafter on each
such date, DTC will pay, in accordance with its SDFS
operating procedures then in effect, such amounts in
funds available for immediate use to the respective
Participants in whose names the Book-Entry Notes
represented by such Global Securities are recorded in
the book-entry system maintained by DTC. Neither the
Company nor Chase shall have any responsibility or
liability for the payment by DTC to such Participants
of the principal of and interest on the Book-Entry
Notes.
Withholding Taxes. The amount of any taxes
required under applicable law to be withheld from any
interest payment on a Book-Entry Note will be
determined and
34
- 10 -
withheld by the Participant, indirect participant in
DTC or other person responsible for forwarding
payments directly to the beneficial owner of such Note.
Preparation of If any order to purchase a Book-Entry Note is accepted
Pricing by or on behalf of the Company, the Company will
Supplement: prepare a pricing supplement (a "Pricing Supplement")
to the prospectus (as amended or supplemented) relating
to such Notes (the "Prospectus") reflecting the
terms of such Note and will arrange to file such
Pricing Supplement with the Commission in accordance
with Regulation S-T and the applicable paragraph of
Rule 424(b) under the Act, will deliver the number of
copies of such Pricing Supplement to the selling Agent
as the Agent shall reasonably request by the close of
business on the following business day. The Agent will
cause such Pricing Supplement to be delivered to the
purchaser of the Note.
In each instance that a Pricing Supplement is
prepared, the Agent will affix the Pricing Supplement
to Prospectuses prior to their use. Outdated Pricing
Supplements, and the Prospectuses to which they are
attached (other than those retained for files), will be
destroyed.
Settlement: The receipt by the Company of immediately available
funds in payment for a Book-Entry Note and the
authentication and issuance of the Global Security
representing such Note shall constitute "Settlement"
with respect to such Note. All orders accepted by the
Company will be settled on the third business day
pursuant to the timetable for Settlement set forth below
unless the Company and the purchaser agree to Settlement
on another day which shall be no earlier than the next
business day.
Settlement Settlement Procedures with regard to each Book-Entry
Procedures: Note sold by the Company to or through the Agent,
(except pursuant to a Terms Agreement, as defined in
the Distribution Agreement), shall be as follows:
A. The Agent will advise the Company by
telephone that such Note is a Book-Entry
Note and of the following Settlement
information:
1. Order number.
2. Principal amount.
35
- 11 -
3. Maturity date.
4. In the case of a Fixed Rate
Book-Entry Note, the interest rate and
whether such Note is an amortizing note,
or in the case of a Floating Rate
Book-Entry Note, the initial interest
rate (if known at such time), base rate,
index maturity, interest reset period,
initial interest reset date, interest
reset dates, interest period, spread or
spread multiplier (if any), minimum
interest rate (if any), maximum interest
rate (if any), the alternate rate event
spread (if any) and the applicability of
the modified following banking day
convention.
5. Interest payment dates.
6. Record Date.
7. Redemption and/or repayment
provisions, if any.
8. Trade date.
9. Settlement date.
10. Price.
11. Agent's commission, if any,
determined as provided in the
Distribution Agreement.
12. Whether the Note is an OID Note, and
if it is an OID Note, the total amount of
OID, the yield to maturity, the initial
accrual period OID and the applicability
of modified payment upon acceleration.
13. Net proceeds to Company.
14. Agent name.
15. Any other applicable Terms.
B. The Company will advise Chase by
telephone or electronic transmission
(confirmed in writing at any time on the
same date) of the information set forth
in Settlement Procedure "A" above. The
Company and Chase will mutually then
assign a CUSIP number to the Global
Security representing such
36
- 12 -
Note and will notify the Agent of such
CUSIP number by telephone as soon as
practicable.
▇. ▇▇▇▇▇ will enter a pending deposit
message through DTC's Participant
Terminal System, providing the following
Settlement information to DTC, the Agent
and Standard & Poor's Corporation:
1. The information set forth in
Settlement Procedure "A".
2. The initial interest payment date for
such Note, the number of days by which
such date succeeds the related DTC Record
Date (which in the case of Floating Rate
Notes which reset daily or weekly, shall
be the date five calendar days
immediately preceding the applicable
interest payment date and, in the case of
all other Notes, shall be the Record Date
as defined in the Note) and amount of
interest payable on such initial interest
payment date.
3. The CUSIP number of the Global
Security representing such Note.
4. Whether such Global Security will
represent any other Book-Entry Note (to
the extent known at such time).
5. Whether such Note is an amortizing
note (by appropriate notation in the
comments field of DTC's Participant
Terminal System).
▇. ▇▇▇▇▇ will complete and authenticate the
Global Security representing such Note.
E. DTC will credit such Note to Chase's
participant account at DTC.
▇. ▇▇▇▇▇ will enter a Same Day Funds
Settlement ("SDFS") deliver order through
DTC's Participant Terminal System
instructing DTC to (i) debit such Note to
Chase's participant account and credit
such Note to the Agent's participant
account and (ii) debit the Agent's
Settlement account and credit Chase's
Settlement account for an amount equal to
the price of such Note less the Agent's
commission, if any. The entry of such a
deliver order shall constitute a
representation and warranty by Chase
37
- 13 -
to DTC that (a) the Global Security
representing such Book-Entry Note has
been issued and authenticated and (b)
Chase is holding such Global Security
pursuant to the Medium Term Note
Certificate Agreement between Chase and
DTC.
G. Unless the Agent purchased such Note as
principal, the Agent will enter an SDFS
deliver order through DTC's Participant
Terminal System instructing DTC (i) to
debit such Note to the Agent's
participant account and credit such Note
to the participant accounts of the
Participants with respect to such Note
and (ii) to debit the Settlement accounts
of such Participants and credit the
Settlement account of the Agent for an
amount equal to the price of such Note.
H. Transfers of funds in accordance with
SDFS deliver orders described in
Settlement Procedures "F" and "G" will be
settled in accordance with SDFS operating
procedures in effect on the Settlement
date.
▇. ▇▇▇▇▇ will credit to the account of the
Company maintained at Chase, New York,
New York, in funds available for
immediate use in the amount transferred
to Chase in accordance with Settlement
Procedure "F".
J. Unless the Agent purchased such Note as
principal, the Agent will confirm the
purchase of such Note to the purchaser
either by transmitting to the
Participants with respect to such Note a
confirmation order or orders through
DTC's institutional delivery system or by
mailing a written confirmation to such
purchaser.
K. Monthly, Chase will send to the Company a
statement setting forth the principal
amount of Notes outstanding as of that
date under the Indenture and setting
forth a brief description of any sales of
which the Company has advised Chase but
which have not yet been settled.
Settlement For sales by the Company of Book-Entry
Procedures Notes to or through the Agent (except
Timetable: pursuant to a Terms Agreement) for
Settlement on the first business day
after the sale date, Settlement Procedures
"A" through "J" set forth
38
- 14 -
above shall be completed as soon as possible but not later
than the respective times (New York City time) set forth
below:
Settlement
Procedure Time
----
A 11:00 A.M. on the sale date
B 12:00 Noon on the sale date
C 2:00 P.M. on the sale date
D 9:00 A.M. on Settlement date
E 10:00 A.M. on Settlement date
F-G 2:00 P.M. on Settlement date
H 4:45 P.M. on Settlement date
I-J 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., 12 Noon and 2:00 P.M.,
respectively, on the first business day after the
sale date. If the initial interest rate for a
Floating Rate Book-Entry Note has not been determined
at the time that Settlement Procedure "A" is
completed, Settlement Procedures "B" and "C" shall be
completed as soon as such rate has been determined
but no later than 12 Noon and 2:00 P.M.,
respectively, on the second business day before the
Settlement date. Settlement Procedure "H" is subject
to extension in accordance with any extension of
Fedwire closing deadlines and in the other events
specified in the SDFS operating procedures in effect
on the Settlement date.
If Settlement of a Book-Entry Note is rescheduled or
cancelled, Chase, after receiving notice from the
Company or the Agent, will deliver to DTC, through
DTC's Participant Terminal System, a cancellation
message to such effect by no later than 2:00 P.M. on
the business day immediately preceding the scheduled
Settlement date.
Failure to If Chase fails to enter an SDFS deliver order with respect
Settle: to a Book-Entry Note pursuant to Settlement Procedure "F",
Chase may deliver to DTC, through DTC's Participant
Terminal System, as soon as practicable a withdrawal
message instructing DTC to debit such Note to Chase's
participant account, provided tha Chase's participant
account contains a principal amount of the
39
- 15 -
Global Security representing such Note that is at least
equal to the principal amount to be debited. If a
withdrawal message is processed with respect to all the
Book-Entry Notes represented by a Global Security, Chase
will ▇▇▇▇ such Global Security "cancelled," make appropriate
entries in Chase's records and send such cancelled Global
Security to the Company. The CUSIP number assigned to such
Global Security shall, in accordance with CUSIP Service
Bureau procedures, be cancelled and not immediately
reassigned. If a withdrawal message is processed with
respect to one or more, but not all, of the Book-Entry
Notes represented by a Global Security, Chase will exchange
such Global Security for two Global Securities, one of which
shall represent such Book-Entry Note or Notes and shall be
cancelled immediately after issuance and the other of which
shall represent the remaining Book-Entry Notes previously
represented by the surrendered Global Security and shall
bear the CUSIP number of the surrendered Global Security.
If the purchase price for any Book-Entry Note is not timely
paid to the Participants with respect to such Note by the
beneficial purchaser thereof (or a person, including an
indirect participant in DTC, acting on behalf of such
purchaser), such Participants and, in turn, the Agent may
enter SDFS deliver orders through DTC's Participant Terminal
System reversing the orders entered pursuant to Settlement
Procedures "F" and "G", respectively. Thereafter, Chase
will deliver the withdrawal message and take the related
actions described in the preceding paragraph. If the failure
shall have occurred for any reason other than a default by
the Agent in the performance of its obligations hereunder
and under the Distribution Agreement, then the Company will
reimburse the Agent or Chase, as appropriate, on an
equitable basis for its loss of the use of the funds during
the period when they were credited to the account of the
Company.
Notwithstanding the foregoing, upon any failure to settle
with respect to a Book-Entry Note, DTC may take any
actions in accordance with its SDFS operating procedures
then in effect.
In the event of a failure to settle with respect to one or
more, but not all, of the Book-Entry Notes to have been
represented by a Global Security, Chase will provide, in
accordance with Settlement Procedures "D"
40
- 16 -
and "F", for the authentication and issuance of a Global
Security representing the Book-Entry Notes to be represented
by such Global Security and will make appropriate entries in
its records.
Chase Not to Nothing herein shall be deemed to require Chase to risk
Risk Funds: or expend its own funds in connection with any payment to
the Company, or the Agent, it being understood by all
parties that payments made by Chase to either the
Company or the Agent shall be made only to the extent that
funds are provided to Chase for such purpose.
Authenticity of The Company will cause Chase to furnish the Agents from
Signatures: time to time with the specimen signatures of such of
Chase's officers, employees or agents who have been
authorized by Chase to authenticate Notes, but the Agents
will have no obligation or liability to the Company or Chase
in respect of the authenticity of the signature of any
officer, employee or agent.
PART II: ADMINISTRATIVE PROCEDURES FOR CERTIFICATED NOTES
Chase will serve as registrar in connection with the Certificated Notes.
Issuance: Each Certificated Note will be dated
and issued as of the date of its authentication by
Chase. Each Certificated Note will bear an original
issue date, which will be (i) with respect to an
original Certificated Note (or any portion thereof),
its original issuance date (which will be the
Settlement date) and (ii) with respect to any
Certificated Note (or portion thereof) issued
subsequently upon transfer or exchange of a
Certificated Note or in lieu of a destroyed, lost or
stolen Certificated Note, the original issuance date of
the predecessor Certificated Note, regardless of the
date of authentication of such subsequently issued
Certificated Note.
Registration: Certificated Notes will be issued only in fully registered
form.
Transfers and A Certificated Note may be presented for transfer or
Exchanges: exchange at the corporate trust office of Chase or as set
forth in the Notes. Certificated Notes will be
exchangeable for other Certificated Notes having identical
terms but different denominations without
41
- 17 -
service charge. Certificated Notes will not be
exchangeable for Book-Entry Notes.
Maturities: Each Certificated Note will mature on a date not less than
nine months from the Settlement date for such Note.
Currency: The currency denomination with respect to any Certificated
Note and the payment of interest and repayment of
principal with respect to any such Certificated Note shall
be as set forth therein and in the applicable Pricing
Supplement.
Denominations: Except as otherwise specified in any Note, the
denomination of any Certificated Note will be a minimum of
U.S. $100,000 or any amount in excess thereof that is an
integral multiple of U.S. $1,000 or the equivalent, as
determined pursuant to the provisions of the applicable
Prospectus Supplement, of U.S. $100,000 (rounded down to an
integral multiple of 1,000 units of such Specified Currency)
and any amount in excess thereof which is an integral
multiple of 1,000 units of such Specified Currency.
Interest: General. Interest on each Certificated Note will accrue
from the original issue date of such Note for the first
interest period and from the most recent date to which
interest has been paid for all subsequent interest periods.
Each payment of interest on a Certificated Note will include
interest accrued to but excluding the interest payment date;
provided that in the case of Floating Rate Notes which reset
daily or weekly, interest payments will include the Record
Date immediately preceding the interest payment date, except
that at maturity or earlier redemption, the interest payable
will include interest accrued to, but excluding, the
maturity date or the date of redemption, as the case may be.
Fixed Rate Certificated Notes. Unless otherwise specified
pursuant to Settlement Procedure "A" below or unless
otherwise specified in any Note, interest payments on Fixed
Rate Certificated Notes other than amortizing notes will be
made semi-annually on March 1 and September 1 of each
year and at maturity and Certificated amortizing notes will
pay principal and interest semi-annually each March 1 and
September 1, or quarterly each March 1, June 1, September 1,
and December 1, and at maturity; provided, however, that if
42
- 18 -
any interest payment date for a Fixed Rate Certificated Note
is not a business day, the payment due on such day shall be
made on the next succeeding business day and no interest
shall accrue on such payment for the period from and after
such interest payment date; and provided, further, that in
the case of Certificated Fixed Rate Notes issued between a
Record Date and an interest payment date, the first interest
payment will be made on the interest payment date following
the next succeeding Record Date.
Floating Rate Certificated Notes. Interest payments will be
made on Floating Rate Certificated Notes monthly, quarterly,
semi-annually or annually. Unless otherwise agreed upon,
interest will be payable, in the case of Floating Rate
Certificated Notes with a daily, weekly or monthly interest
reset date, on the third Wednesday of each month or on the
third Wednesday of March, June, September and December, as
specified pursuant to Settlement Procedure "A" below; in the
case of Notes with a quarterly interest payment reset date,
on the third Wednesday of March, June, September and
December of each year; in the case of Notes with a
semi-annual interest reset date, on the third Wednesday of
the two months specified pursuant to Settlement Procedure
"A" below; and in the case of Notes with an annual interest
reset date, on the third Wednesday of the month specified
pursuant to Settlement Procedure "A" below; provided,
however, that if an interest payment date for Floating Rate
Certificated Notes would otherwise be a day that is not a
business day with respect to such Floating Rate Certificated
Notes, such interest payment date will be the next
succeeding business day with respect to such Floating Rate
Certificated Notes, except in the case of a LIBOR Note if
such business day is in the next succeeding calendar month,
such interest payment date will be the immediately preceding
business day; and provided, further, that in the case of a
Floating Rate Certificated Note issued between a Record Date
and an interest payment date, the first interest payment
will be made on the interest payment date following the next
succeeding Record Date.
Calculation of Fixed Rate Certificated Notes.
Interest: Interest on Fixed Rate Certificated Notes (including
interest for partial periods) will be calculated on the
basis of a year of twelve thirty-day months.
43
- 19 -
Floating Rate Certificated Notes. Interest rates on
Floating Rate Certificated Notes will be determined as set
forth in the form of Notes. Unless otherwise agreed
upon, Interest on Floating Rate Certificated Notes will be
calculated on the basis of actual days elapsed and a year of
360 days except that in the case of treasury rate notes,
interest will be calculated on the basis of the actual
number of days in the year.
Payments of Chase will pay the principal amount of each Certificated
Principal and Note at maturity or upon redemption upon maturity or
Interest: upon redemption upon presentation and surrender of such
Note to Chase. Such payment, together with payment of
interest due at maturity or upon redemption of such Note,
will be made in funds available for immediate use by Chase
and in turn by the holder of such Note. Certificated Notes
presented to Chase at maturity or upon redemption for
payment will be cancelled by Chase and delivered to the
Company with a certificate of cancellation. All interest
payments on a Certificated U.S. dollar Note (other than
interest due at maturity or upon redemption) will be made by
U.S. dollar check drawn on Chase (or another person
appointed by Chase) and mailed by Chase to the person
entitled thereto as provided in such Note and the Indenture;
provided, however, that, if so provided in the Notes, the
holder of $5,000,000 or more of Notes having the same
interest payment date will, be entitled to receive payment
by wire transfer of immediately available funds. Following
each Record Date, Chase will furnish the Company with a list
of interest payments to be made on the following interest
payment date for each Certificated Note and in total for all
Certificated Notes. Interest at maturity or upon redemption
will be payable to the person to whom the payment of
principal is payable. Chase will provide monthly to the
Company lists of principal and interest, to the extent
ascertainable, to be paid on Certificated Notes maturing or
to be redeemed in the next month. Chase will be responsible
for withholding taxes on interest paid on Certificated Notes
as required by applicable law.
If any maturity date or redemption date of a Certificated
Note is not a business day, the payment due on such day
shall be made on the next succeeding business day and, in
the case of Fixed Rate Notes, no interest shall accrue on
such payment for the period from and after such maturity
date or redemption date.
44
- 20 -
Preparation of If any order to purchase a Certificated Note is
Pricing Supplement: accepted by or on behalf of the Company, the Company will
prepare a pricing supplement (a "Pricing Supplement")
to the Prospectus reflecting the terms of such Note and will
arrange to file such Pricing Supplement with the Commission
in accordance with Regulation S-T and the applicable
paragraph of Rule 424(b) under the Act, will deliver the
number of copies of such Pricing Supplement to the selling
Agent as the Agent shall reasonably request by the close of
business on the following business day. The Agent will
cause such Pricing Supplement to be delivered to the
purchaser of the Note.
In each instance that a Pricing Supplement is prepared, the
Agent will affix the Pricing Supplement to Prospectuses
prior to their use. Outdated Pricing Supplements, and the
Prospectuses to which they are attached (other than those
retained for files), will be destroyed.
Settlement: The receipt by the Company of immediately available funds
in exchange for an authenticated Certificated Note
delivered to the Agent and the Agent's delivery of
such Note against receipt of immediately available funds
shall constitute "Settlement" with respect to such Note.
All orders accepted by the Company will be settled on or
before the third business day next succeeding the date of
acceptance pursuant to the timetable for Settlement set
forth below, unless the Company and the purchaser agree to
Settlement on another date.
Settlement Settlement Procedures with regard to each Certificated
Procedures: Note sold by the Company to or through the Agent (except
pursuant to a Terms Agreement) shall be as follows:
A. The Agent will advise the Company by telephone that
such Note is a Certificated Note and of the following
Settlement information:
1. Order number.
2. Name in which such Note is to be registered
("Registered Owner").
3. Address of the Registered Owner and address for
payment of principal and interest.
45
- 21 -
4. Taxpayer identification number of the
Registered Owner (if available).
5. Principal amount.
6. Maturity date.
7. In the case of a Fixed Rate Certificated Note, the
interest rate and whether such Note is an
amortizing note or, in the case of a Floating Rate
Certificated Note, the initial interest rate (if known
at such time), base rate, index maturity, interest
reset period, initial interest reset date, interest
reset dates, spread or spread multiplier (if any),
minimum interest rate (if any), maximum interest rate
(if any), the alternate rate event spread (if any) and
the applicability of the modified following banking day
convention.
8. Interest payment dates.
9. Record Dates.
10. Redemption and/or repayment provisions, if any.
11. Trade date.
12. Settlement date.
13. Price.
14. Agent's commission, if any, determined as
provided in the Distribution Agreement between the
Company and the Agent.
15. Whether the Note is an OID Note, and if it is an
OID Note, the total amount of the OID, the yield to
maturity, the initial accrual period OID and the
applicability of modified payment upon acceleration.
16. Net proceeds to Company.
17. Agent name.
18. Any other applicable Terms.
46
- 22 -
B. The Company will advise Chase by telephone or
electronic transmission (confirmed in writing at
any time on the sale date) of the information set
forth in Settlement Procedure "A" above.
C. The Company will have delivered to Chase a
pre-printed four-ply packet for such Note, which
packet will contain the following documents in
forms that have been approved by the Company, the
Agent and Chase:
1. Note with customer confirmation.
2. Stub One - For Chase.
3. Stub Two - For Agent.
4. Stub Three - For the Company.
▇. ▇▇▇▇▇ will complete such Note and authenticate
such Note and deliver it (with the confirmation)
and Stubs One and Two to the Agent, and the
Agent will acknowledge receipt of the Note
by stamping or otherwise marking Stub One and
return it to Chase. Such delivery will be made
only against such acknowledgment of receipt and
evidence that instructions have been given by the
Agent for payment to the account of the Company at
The Chase Manhattan Bank (National Association),
New York, New York, in funds available for
immediate use, of an amount equal to the price of
such Note less the Agent's commission, if any.
In the event that the instructions given by the
Agent for payment to the account of the Company
are revoked, the Company will as promptly as
possible wire transfer to the account of the Agent
an amount of immediately available funds equal to
the amount of such payment made.
E. Unless the Agent purchased such Note as
principal, the Agent will deliver such Note (with
confirmation) to the customer against payment in
immediately payable funds. The Agent will also
send a copy of the confirmation to the Company.
The Agent will obtain the acknowledgment of
receipt of such Note by retaining Stub Two.
▇. ▇▇▇▇▇ will send Stub Three to the Company by
first-class mail. Monthly, Chase will also send
to the
47
- 23 -
Company a statement setting forth the principal
amount of the Notes outstanding as of that
date under each Indenture and setting forth a
brief description of any sales of which the
Company has advised Chase but which have not yet
been settled.
Settlement For sales by the Company of Certified Notes to or
Procedures through the Agent (except pursuant to a Terms
Timetable: Agreement), Settlement Procedures "A" through "F" set forth
above shall be completed on or before the respective
times (New York City time) set forth below:
Procedure Time
--------- ----
A 2:00 P.M. on day before
Settlement date
B 3:00 P.M. on day before
Settlement date
C-D 2:15 P.M. on Settlement date
E 3:00 P.M. on Settlement date
F 5:00 P.M. on Settlement date
Failure to If a purchaser fails to accept delivery of and make
Settle: payment for any Certificated Note, the Agent will notify
the Company and Chase by telephone and in writing and return
such Note to Chase. Upon receipt of such notice, the
Company will immediately wire transfer to the account of the
Agent an amount equal to the amount previously credited
thereto in respect of such Note. Such wire transfer will be
made on the Settlement date, if possible, and in any event
not later than the business day following the Settlement
date. If the failure shall have occurred for any reason
other than a default by the Agent in the performance of its
obligations hereunder and under the Distribution Agreement,
then the Company will reimburse the Agent or Chase, as
appropriate, on an equitable basis for its loss of the use
of the funds during the period when they were credited to
the account of the Company. Immediately upon receipt of the
Certificated Note in respect of which such failure occurred,
Chase will ▇▇▇▇ such Note "cancelled," make appropriate
entries in Chase's records and send such Note to the
Company.
Chase Not to Nothing herein shall be deemed to require Chase to risk
Risk Funds or expend its own funds in connection with any payment to
the Company, or the Agent or the purchaser, it being
understood by all parties that payments made by Chase
48
- 24 -
to either the Company or the Agent shall be made only to
the extent that funds are provided to Chase for such
purpose.
Authenticity of The Company will cause Chase to furnish the Agents
Signatures: from time to time with the specimen signatures of each of
Chase's officers, employees or agents who have been
authorized by Chase to authenticate Notes, but the Agents
will have no obligation or liability to the Company or Chase
in respect of the authenticity of the signature of any
officer, employee or agent.
49
Exhibit C
Dear Sirs:
We have audited the consolidated balance sheet of ▇▇▇▇▇▇ Industries, Inc. (the
"Company") as of ________________________, and the related statements of
consolidated results of operations, changes in shareholders' equity and cash
flows for each of the three years in the period ended
_____________________________ and the related financial statement schedules for
each of the three years in the period ended ________________________, all
included or incorporated by reference in the Company's Annual Report on Form
10-K for the year ended ________________ and incorporated by reference in the
Registration Statement (No. 333-00117) on Form S-3 (referred to as
"Registration Statement") filed by the Company, under the Securities Act of
1933 (the "Act"); our report with respect thereto is also incorporated by
reference in such Registration Statement, herein referred to as the
"Registration Statement."
In connection with the Registration Statement:
1. We are independent auditors with respect to the Company within the
meaning of the Act and the applicable published rules and regulations
thereunder.
2. In our opinion, the consolidated financial statements and schedules
audited by us and (included) or (incorporated by reference) in the Company's
Annual Report on Form 10-K at ______________________ and incorporated by
reference in the Registration Statement comply as to form in all material
respects with the applicable accounting requirements of the Act and the
Securities Exchange Act of 1934 (the "Exchange Act") and the published rules
and regulations thereunder.
3. We have not audited any financial statements of the Company as of any
date or for any period subsequent to _________________________. The purpose
(and therefore the scope) of our examination for the year ended ____________
was to enable us to express our opinion on the consolidated financial
statements at __________________ and for the year then ended, but not on the
financial statements for any interim period within such year. Therefore, we
are unable to express and do not express an opinion on: the unaudited
consolidated balance sheet at _______________, and _____________ or the
unaudited statements of consolidated results of operations and cash flows for
the three-month period ended ____________________________, the six-month
period ended ________________________, and the nine-month period ended
____________________________, incorporated by reference in the
50
Registration Statement from the Company's Quarterly Reports on Form 10-Q for
the quarters ended ___________________, _____________________ and
______________________, or the financial position, results of operations or
cash flows as of any date or for any period subsequent to
__________________________________________________.
4. For the purpose of this letter, we have read the minutes of meetings
of the shareholders, Board of Directors and executive, finance and audit
committees of the Company as set forth in the minute books, through
______________, officials of the Company having advised us that the minutes of
all such meetings through _________________ were set forth therein, and we are
provided with a summary of minutes of meetings from that date through
______________________, and have carried out other procedures to
_____________________, as follows (our work did not extend to the period from
___________________ to ______________________ inclusive):
a. With respect to the three-month periods ended
_________________ and ___________________, six-month periods ended
_______________ and _________________, and the nine-month periods
ended ____________________ and __________________________we have:
(1) performed the procedures specified by the American
Institute of Certified Public Accountants for a
review of interim financial information as described
in SAS 71, Interim Financial Information, on the
unaudited consolidated financial statements for these
periods, described in 3. above, included in the
Company's Quarterly Report on Form 10-Q for the
quarter ended _____________, incorporated by
reference in the Registration Statement; and
(2) made inquiries of certain officials of the Company
who have responsibility for financial and accounting
matters as to whether the unaudited consolidated
financial statements referred to under 4.a.(1) comply
as to form in all material respects with the
applicable accounting requirements of the Exchange
Act as it applies to Form 10-Q and the published
rules and regulations thereunder.
b. With respect to the period from ________________ to _________,
we have:
(1) read the unaudited operating results for the
_______________ period ended ________________, a copy
of which is not attached, officials of the Company
having advised us that no consolidated financial
statements as of any date or for any period subsequent
to _________________ were available except for the
unaudited operating results for the ________________
period ended ____________________;
(2) made inquiries of certain officials of the Company
who have responsibility for financial and accounting
matters
51
as to whether the unaudited operating results
referred to under b.(1) are stated on a basis
substantially consistent with that of the audited
consolidated financial statements incorporated by
reference in the Registration Statement; and
(3) inquired of certain officials of the Company who have
responsibility for financial and accounting matters
as to whether: (i) at __________, there were any
increases in the long-term debt of the Company and
subsidiaries consolidated (except for any increase
which occurs as a result of changes in the
classification of outstanding short-term debt or the
issuance of any Notes) or any decreases in the
aggregate amount of the shareholders' equity of the
Company (calculated exclusive of the translation
component) as compared with the amounts shown in the
__________ unaudited consolidated balance sheet
incorporated by reference in the Registration
Statement (except in each case, as applicable, for
any decrease which occurs as a result of the
declaration of dividends on common stock not in
excess of $__________ per share per quarter) or (ii)
for the period from __________ to __________, there
was any decrease, as compared with the corresponding
period in the preceding year, in consolidated
revenues from continuing operations, income from
continuing operations before federal income taxes, or
in net income of the Company.
The foregoing procedures do not constitute an audit made in accordance with
generally accepted auditing standards. Also, they would not necessarily reveal
matters of significance with respect to the comments in the following
paragraph. Accordingly, we make no representations as to the sufficiency of
the foregoing procedures for your purposes.
5. Nothing came to our attention as a result of the foregoing procedures
that caused us to believe that:
a. any material modifications should be made to the unaudited
consolidated financial statements described in 4.a(1) above,
incorporated by reference in the Registration Statement, for
them to be in conformity with generally accepted accounting
principles.
b. (i) the unaudited consolidated financial statements described
in 4.a.(1) above included in the Company's Quarterly Reports
on Form 10-Q for the quarters ended ____________,
____________, and ______________ and incorporated by reference
in the Registration Statement, do not comply as to form in all
material respects with the applicable accounting requirements
of the Exchange Act as they apply to Form 10-Q, and the
published rules and regulations thereunder; or
c. (i) at ______________________ (the date of most recent
unaudited operating results of the Company), there were any
52
increases in the long-term debt of the Company and
subsidiaries consolidated (except for any increase which
occurs as a result of changes in the classification of
outstanding short-term debt or the issuance of any Notes) or
any decreases in the aggregate amount of shareholders'
equity of the Company (calculated exclusive of the translation
component) as compared with the amounts shown in the
__________ unaudited consolidated balance sheet incorporated
by reference in the Registration Statement (except in each
case, as applicable, for any decrease which occurs as a result
of the declaration of dividends on common stock not in excess
of $________ per share per quarter) or (ii) for the period
from _________________ to ______________________, there was
any decrease, as compared with the corresponding period in the
preceding year, in consolidated revenues from continuing
operations, income from continuing operations before federal
income taxes, or in net income of the Company, except that [to
be completed as applicable].
6. For purposes of this letter, we have read the following as set forth
in the Registration Statement or the Prospectus included therein on the
indicated page.
Item No. Page No. Description
-------- -------- -----------
a. "Ratio of Earnings to Fixed Charges (Unaudited)."
The amounts in the table.
7. Our audits of the consolidated financial statements for the periods
referred to in the introductory paragraph of this letter were comprised of
audit tests and procedures deemed necessary for the purpose of expressing an
opinion on such financial statements taken as a whole. For neither the periods
referred to therein nor any other period did we perform audit tests for the
purpose of expressing an opinion on individual balances of accounts or
summaries of selected transactions such as enumerated above and, accordingly,
we do not express an opinion thereon.
8. For purposes of this letter, we have performed the procedure
enumerated below which was applied as indicated with respect to the information
identified in 6. above.
Item in 6.
above Procedures and Findings
---------- -----------------------
a. Ratio of Earnings to Fixed Charges (Unaudited)
We compared the amounts in the table to a schedule
prepared by the Company and found them to be in
agreement.
9. It should be understood that we make no representations as to
questions of legal interpretation or as to the sufficiency for your purposes of
the procedure enumerated in the preceding paragraph; also, such procedure would
not necessarily reveal any material misstatement of the information identified
in 6. above. Further, we have addressed ourselves
53
solely to the foregoing data as set forth in the Registration Statement or the
Prospectus included therein, and make no representations as to the adequacy of
disclosure or as to whether any material facts have been omitted.
10. This letter is solely for the information of, and to assist the agents
in conducting and documenting their investigation of the affairs of the Company
in connection with the offering of the securities covered by the Registration
Statement, and it is not to be used, circulated, quoted, or otherwise referred
to within or without the group of agents for any other purpose, including but
not limited to the registration, purchase or sale of securities, nor is it to
be filed with or referred to in whole or in part in the Registration Statement
or any other document, except that reference may be made to it in the
distribution agreement or in any list of closing documents pertaining to the
offering of the securities covered by the Registration Statement.
Very truly yours,
