EXHIBIT 1.3
THE XXXXX COMPANY
$_____,000,000
MEDIUM-TERM NOTES
DISTRIBUTION AGREEMENT
____________, 199_
[Name(s) and address(es)
of Agent(s)]
Ladies and Gentlemen:
The Xxxxx Company, a Maryland corporation (the "Company"), proposes to
issue and sell from time to time its Medium-Term Notes (the "Securities") in an
aggregate amount up to $_________ and agrees with each of you (individually, an
"Agent", and collectively, the "Agents") as set forth in this Agreement.
Subject to the terms and conditions stated herein and to the
reservation by the Company of the right to sell Securities directly on its own
behalf, the Company hereby (i) appoints each Agent as an agent of the Company
for the purpose of soliciting and receiving offers to purchase Securities from
the Company pursuant to Section 2(a) hereof and (ii) agrees that, except as
otherwise contemplated herein, whenever it determines to sell Securities
directly to any Agent as principal, it will enter into a separate agreement
(each, a "Terms Agreement"), substantially in the form of Annex I hereto,
relating to such sale in accordance with Section 2(b) hereof. This Distribution
Agreement shall not be construed to create either an obligation on the part of
the Company to sell any Securities or an obligation of any of the Agents to
purchase Securities as principal.
The Securities will be issued under an indenture, dated as of February
24, 1995 (the "Indenture"), between the Company and The First National Bank of
Chicago, as Trustee (the "Trustee"). The Securities shall have the maturity
ranges, interest rates, if any, redemption provisions and other terms set forth
in the Prospectus referred to below as it may be amended or supplemented from
time to time. The Securities will be issued, and the terms and rights thereof
established, from time to time by the Company in accordance with the Indenture.
1. The Company represents and warrants to, and agrees with, each
Agent that:
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(a) A registration statement on Form S-3 (File No. 333-__________)
(the "Initial Registration Statement") in respect of the Securities has been
filed with the Securities and Exchange Commission (the "Commission") under the
Securities Act of 1933, as amended (the "Act"); the Initial Registration
Statement and any post-effective amendment thereto, each in the form heretofore
delivered or to be delivered to such Agent, excluding exhibits to such
registration statement, but including all documents incorporated by reference in
the prospectus included therein, have been declared effective by the Commission
in such form; other than a registration statement, if any, increasing the size
of the offering (a "Rule 462(b) Registration Statement") filed pursuant to Rule
462(b) of the rules and regulations of the Commission under the Act which become
effective upon filing, no other document with respect to such registration
statement or document incorporated by reference therein has heretofore been
filed or transmitted for filing with the Commission (other than the prospectuses
filed pursuant to Rule 424(b) of the rules and regulations of the Commission
under the Act, each in the form heretofore delivered to the Agents); and no stop
order suspending the effectiveness of the Initial Registration Statement, any
post-effective amendment thereto or the Rule 462(b) Registration Statement, if
any, has been issued and no proceeding for that purpose has been initiated or
threatened by the Commission (any preliminary prospectus included in the Initial
Registration Statement or filed with the Commission pursuant to Rule 424(a) of
the rules and regulations of the Commission under the Act, is hereinafter called
a "Preliminary Prospectus"; the various parts of the Initial Registration
Statement and the 462(b) Registration Statement, if any, including all exhibits
thereto and including (i) the information contained in the form of final
prospectus filed with the Commission pursuant to Rule 424(b) of the rules and
regulations of the Commission under the Act in accordance with Section 5(a)
hereof and deemed by virtue of Rule 430A of the rules and regulations of the
Commission under the Act to be part of the Initial Registration Statement at the
time it was declared effective and (ii) and the documents incorporated by
reference in the prospectus contained in the registration statement at the time
such part of the Registration Statement became effective or such part of the
Rule 462(b) Registration Statement, if any, became effective, but excluding the
Statement of Eligibility and Qualification of the Trustee on Form T-1 ("Form T-
1"), each as amended at the time such part of the Initial Registration Statement
became effective or such part of the Rule 462(b) Registration Statement, if any,
became effective, is hereinafter collectively called the "Registration
Statement"; the prospectus (including, if applicable, any prospectus supplement)
relating to the Securities, in the form in which it has most recently been
filed, or transmitted for filing, with the Commission pursuant to Rule 424(b)
under the Act on or prior to the date of this Agreement, is hereinafter called
the "Prospectus"; any reference herein to any Preliminary Prospectus or the
Prospectus shall be deemed to refer to and include the documents incorporated by
reference therein pursuant to Item 12 of the Form S-3 under the Act, as of the
date of such Preliminary Prospectus or Prospectus, as the case may be; any
reference to any amendment or supplement to any Preliminary
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Prospectus or the Prospectus, including any supplement to the Prospectus that
sets forth only the terms of a particular issue of the Securities (a "Pricing
Supplement"), shall be deemed to refer to and include any documents filed after
the date of such Preliminary Prospectus or Prospectus, as the case may be, under
the Securities Exchange Act of 1934, as amended (the "Exchange Act"), and
incorporated therein by reference; any reference to any amendment to the
Registration Statement shall be deemed to refer to and include any annual report
of the Company filed pursuant to Section 13(a) or 15(d) of the Exchange Act
after the effective date of the Initial Registration Statement that is
incorporated by reference in the Registration Statement; and any reference to
the Prospectus as amended or supplemented shall be deemed to refer to and
include the Prospectus as amended or supplemented (including by the applicable
Pricing Supplement filed in accordance with Section 4(a) hereof) in relation to
Securities to be sold pursuant to this Agreement, in the form filed or
transmitted for filing with the Commission pursuant to Rule 424(b) under the Act
and in accordance with Section 4(a) hereof, including any documents incorporated
by reference therein as of the date of such filing);
(b) The documents incorporated by reference in the Prospectus, when
they became effective or were filed with the Commission, as the case may be,
conformed in all material respects to the requirements of the Act or the
Exchange Act, as applicable, and the rules and regulations of the Commission
thereunder, and none of such documents contained an untrue statement of a
material fact or omitted to state a material fact required to be stated therein
or necessary to make the statements therein not misleading; and any further
documents so filed and incorporated by reference in the Prospectus, or any
further amendment or supplement thereto, when such documents become effective or
are filed with the Commission, as the case may be, will conform in all material
respects to the requirements of the Act or the Exchange Act, as applicable, and
the rules and regulations of the Commission thereunder and will not contain an
untrue statement of a material fact or omit to state a material fact required to
be stated therein or necessary to make the statements therein not misleading;
provided, however, that this representation and warranty shall not apply to any
statements or omissions made in reliance upon and in conformity with information
furnished in writing to the Company by any Agent expressly for use in the
Prospectus as amended or supplemented to relate to a particular issuance of
Securities;
(c) The Registration Statement and the Prospectus conform, and any
further amendments or supplements to the Registration Statement or the
Prospectus will conform, in all material respects to the requirements of the Act
and the Trust Indenture Act of 1939, as amended (the "Trust Indenture Act"), and
the rules and regulations of the Commission thereunder and do not and will not,
as of the applicable effective date as to the Registration Statement and any
amendment thereto and as of the applicable filing date as to the Prospectus and
any amendment or supplement thereto, contain an untrue statement of a material
fact or omit to state a material fact required to
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be stated therein or necessary to make the statements therein not misleading;
provided, however, that this representation and warranty shall not apply to any
statements or omissions made in reliance upon and in conformity with information
furnished in writing to the Company by any Agent expressly for use in the
Prospectus as amended or supplemented to relate to a particular issuance of
Securities;
(d) The Company and its subsidiaries, taken as a whole, have not
sustained since the date of the latest audited financial statements included or
incorporated by reference in the Prospectus any material loss or interference
with its business from fire, explosion, flood or other calamity, whether or not
covered by insurance, or from any labor dispute or court or governmental action,
order or decree, otherwise than as set forth or contemplated in the Prospectus;
and, since the respective dates as of which information is given in the
Registration Statement and the Prospectus, there has not been any change in the
capital stock (other than issuances of capital stock pursuant to bonus stock
awards granted in the ordinary course of business, or upon exercise of options
and stock appreciation rights and upon conversions of convertible securities, in
each case, except with respect to bonus stock awards granted in the ordinary
course of business, which were outstanding as of the date of the latest audited
financial statements included or incorporated by reference in the Prospectus),
or any material and adverse change in the long-term debt of the Company and its
subsidiaries, taken as a whole [(it being understood that, absent unusual
circumstances, an increase in long-term debt of the Company and its
subsidiaries, taken as a whole, of less than 5% would not be a material and
adverse change to the Company and its subsidiaries, taken as a whole)], or any
material adverse change, or any development involving a prospective material
adverse change, in or affecting the general affairs, management, current value
basis shareholders' equity or results of operations (based on Earnings Before
Depreciation and Deferred Taxes from Operations) of the Company and its
subsidiaries, taken as a whole, otherwise than as set forth or contemplated in
the Prospectus;
(e) The Company and its subsidiaries have, or in those cases where
such subsidiary is a general partner in a partnership, such partnership has,
good and marketable fee simple and/or leasehold title (as the case may be) to
all real property (except for those lesser estates in real property which, in
the aggregate, are not material in value to the Company and its subsidiaries),
subject only to (A) those liens and encumbrances which have been reflected
generally or in the aggregate in the financial statements of the Company as
disclosed in the Prospectus or as are described specifically, generally or in
the aggregate in the Prospectus, or (B) such liens and encumbrances (i) not
required by generally accepted accounting principles to be disclosed in the
financial statements of the Company, which (a) if all material covenants and
conditions thereof are observed or performed, will not materially interfere with
the use made or proposed to be made of such property by the Company and its
subsidiaries or (b) are reasonable and customary with regard to the normal
operation of land and improvements held for
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commercial purposes by first class owners and operators of commercial real
estate, or (ii) which were incurred after the date of the latest audited
financial statements included or incorporated by reference in the Prospectus in
the ordinary course of business (including financings) and which, in the
aggregate (on a net basis), are not material to the Company and its
subsidiaries, taken as a whole. The Company and its subsidiaries have title to
the personal property owned by it or them and, subject to the continued
performance of the material covenants and conditions of liens and encumbrances
thereon, have the right to use such without interference in the normal course of
business, except for such interference as would have a material adverse effect
on the Company and its subsidiaries taken as a whole;
(f) The Company has been duly incorporated and is validly existing as
a corporation in good standing under the laws of Maryland, with power and
authority (corporate and other) to own its properties and conduct its business
as described in the Prospectus, and has been duly qualified as a foreign
corporation for the transaction of business and is in good standing under the
laws of each other jurisdiction in which the failure so to qualify and maintain
good standing would have a material adverse effect on the Company and its
subsidiaries, taken as a whole; and each subsidiary of the Company has been duly
incorporated and is validly existing as a corporation in good standing under the
laws of its jurisdiction of incorporation except for such failures to maintain
good standing as would not have a material adverse effect on the Company and its
subsidiaries, taken as a whole;
(g) The Company has an authorized capitalization as set forth in the
Prospectus, and all of the issued shares of capital stock of the Company have
been duly and validly authorized and issued and are fully paid and non-
assessable; and all of the issued shares of capital stock of each subsidiary of
the Company have been duly and validly authorized and issued, are fully paid and
non-assessable and are owned (with exceptions that are not material to the
Company and its subsidiaries, taken as a whole) directly or indirectly by the
Company, free and clear of all liens, encumbrances or claims (collectively,
"Liens") except (i) Liens relating to debt which has been disclosed
specifically, generally or in the aggregate in the Prospectus or incurred after
the date of the latest audited financial statements included or incorporated by
reference in the Prospectus in the ordinary course of business (including
financings), (ii) Liens incurred in the ordinary course of business which are
not materially adverse to the operations of the Company and its subsidiaries,
taken as a whole, and (iii) restrictions on the transfer or use of the stock of
any subsidiary under any partnership, joint venture or lease agreements to which
the Company or any of its subsidiaries is a party;
(h) The Securities have been duly authorized, and, when issued and
delivered pursuant to this Agreement and any Terms Agreement, will have been
duly executed, authenticated, issued and delivered and will constitute valid and
legally binding
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obligations of the Company entitled to the benefits provided by the Indenture,
which will be substantially in the form filed as an exhibit to the Registration
Statement; the Indenture has been duly authorized and duly qualified under the
Trust Indenture Act and constitutes a valid and legally binding instrument,
enforceable in accordance with its terms, subject, as to enforcement, to
bankruptcy, insolvency, reorganization and other laws of general applicability
relating to or affecting creditors' rights and to general equity principles; and
the Indenture conforms and the Securities of any particular issuance of
Securities will conform to the descriptions thereof contained in the Prospectus
as amended or supplemented to relate to such issuance of Securities;
(i) The issue and sale of the Securities, the compliance by the
Company with all of the provisions of the Securities, the Indenture, this
Agreement and any Terms Agreement, and the consummation of the transactions
herein and therein contemplated will not conflict with or result in a breach or
violation of any of the terms or provisions of, or constitute a default under,
any indenture, mortgage, deed of trust, loan agreement or other agreement or
instrument to which the Company or any of its subsidiaries is a party or by
which the Company or any of its subsidiaries is bound or to which any of the
property or assets of the Company or any of its subsidiaries is subject except
for such conflict, breach, violation or default which does not have a material
adverse effect on the Company and its subsidiaries, taken as a whole, nor will
such action result in any violation of the provisions of the Articles of
Incorporation (or any articles supplementary thereto) or the Bylaws of the
Company or any statute or any order, rule or regulation of any court or
governmental agency or body having jurisdiction over the Company or any of its
subsidiaries or any of their properties; and no consent, approval,
authorization, order, registration or qualification of or with any court or
governmental agency or body is required for the solicitation of offers to
purchase Securities, the issue and sale of the Securities or the consummation by
the Company of the other transactions contemplated by this Agreement, any Terms
Agreement or the Indenture, except such as have been, or will have been prior to
the Commencement Date (as defined in Section 3 hereof), obtained under the Act
or the Trust Indenture Act and such consents, approvals, authorizations, orders,
registrations or qualifications as may be required under state securities or
Blue Sky laws in connection with the solicitation by such Agent of offers to
purchase Securities from the Company and with purchases of Securities by such
Agent as principal, as the case may be, in each case in the manner contemplated
hereby;
(j) Other than as set forth in the Prospectus, there are no legal or
governmental proceedings pending to which the Company or any of its subsidiaries
is a party or to which any property of the Company or any of its subsidiaries is
subject, which are likely, individually or in the aggregate, to have a material
adverse effect on the Company and its subsidiaries taken as a whole, and, to the
best of the Company's knowledge, no such proceedings are threatened or
contemplated by governmental authorities or threatened by others;
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(k) The Company is not, and after giving effect to each offering and
sale of the Securities will not be, an "investment company" or an entity
"controlled" by an "investment company", as such terms are defined in the
Investment Company Act of 1940, as amended (the "Investment Company Act");
(l) Neither the Company nor any of its affiliates does business with
the government of Cuba or with any person or affiliate located in Cuba within
the meaning of Section 517.075, Florida Statutes;
(m) Immediately after any sale of Securities by the Company hereunder
or under any Terms Agreement, the aggregate amount of Securities which shall
have been issued and sold by the Company hereunder or under any Terms Agreement
and of any debt securities of the Company (other than such Securities) that
shall have been issued and sold pursuant to the Registration Statement will not
exceed the amount of debt securities registered under the Registration
Statement; and
(n) KPMG Peat Marwick LLP, who have certified certain financial
statements of the Company and its subsidiaries, are independent public
accountants as required by the Act and the rules and regulations of the
Commission thereunder.
2. (a) On the basis of the representations and warranties herein
contained, and subject to the terms and conditions herein set forth, each of the
Agents hereby severally and not jointly agrees, as agent of the Company, to use
its reasonable efforts to solicit and receive offers to purchase the Securities
from the Company upon the terms and conditions set forth in the Prospectus as
amended or supplemented from time to time. So long as this Agreement shall
remain in effect with respect to any Agent, the Company shall not, without the
consent of such Agent, solicit or accept offers to purchase, or sell, any debt
securities with a maturity at the time of original issuance of more than 9
months except pursuant to this Agreement, any Terms Agreement, or except
pursuant to a private placement not constituting a public offering under the Act
or except in connection with a firm commitment underwriting pursuant to an
underwriting agreement that does not provide for a continuous offering of
medium-term debt securities. However, the Company reserves the right to sell,
and may solicit and accept offers to purchase, Securities directly on its own
behalf in transactions with persons other than broker-dealers, and, in the case
of any such sale not resulting from a solicitation made by any Agent, no
commission will be payable with respect to such sale. These provisions shall
not limit Section 4(f) hereof or any similar provision included in any Terms
Agreement.
Procedural details relating to the issue and delivery of Securities,
the solicitation of offers to purchase Securities and the payment in each case
therefor shall be
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as set forth in the Administrative Procedure attached hereto as Annex II as it
may be amended from time to time by written agreement between the Agents and the
Company (the "Administrative Procedure"). The provisions of the Administrative
Procedure shall apply to all transactions contemplated hereunder other than
those made pursuant to a Terms Agreement. Each Agent and the Company agree to
perform the respective duties and obligations specifically provided to be
performed by each of them in the Administrative Procedure. The Company will
furnish to the Trustee a copy of the Administrative Procedure as from time to
time in effect.
The Company reserves the right, in its sole discretion, to instruct
the Agents to suspend at any time, for any period of time or permanently, the
solicitation of offers to purchase the Securities. As soon as practicable, but
in any event not later than one business day in New York City, after receipt of
notice from the Company, the Agents will suspend solicitation of offers to
purchase Securities from the Company until such time as the Company has advised
the Agents that such solicitation may be resumed. During such period, the
Company shall not be required to comply with the provisions of Sections 4(h),
4(i), 4(j) and 4(k). Upon advising the Agents that such solicitation may be
resumed, however, the Company shall simultaneously provide the documents
required to be delivered by Sections 4(h), 4(i), 4(j) and 4(k) if such documents
would have otherwise been required to be delivered during such period, and the
Agents shall have no obligation to solicit offers to purchase the Securities
until such documents have been received by the Agents. In addition, any failure
by the Company to comply with its obligations hereunder, including without
limitation its obligations to deliver the documents required by Sections 4(h),
4(i), 4(j) and 4(k), shall automatically terminate the Agents' obligations
hereunder, including without limitation its obligations to solicit offers to
purchase the Securities hereunder as agent or to purchase Securities hereunder
as principal.
The Company may authorize any other firm (an "Additional Agent") to
act as its agent to solicit offers for the purchase of Securities upon
reasonable prior notice to such Agents as are at the time parties to this
Agreement. Each Additional Agent shall execute a copy of this Agreement and
become a party hereto. From and after the time such Additional Agent shall have
executed a copy of this Agreement, the term "Agent" as used in this Agreement
shall mean the Agent and Additional Agent.
The Company agrees to pay each Agent a commission (which may be in the
form of a discount), at the time of settlement of any sale of a Security by the
Company as a result of a solicitation made by such Agent, in an amount equal to
the following applicable percentage of the principal amount (or for Original
Issue Discount Notes that do not currently pay interest, the issue price) of
such Security sold:
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COMMISSION
(PERCENTAGE OF AGGREGATE
PRINCIPAL AMOUNT
(OR FOR ORIGINAL ISSUE DISCOUNT
NOTES THAT DO NOT CURRENTLY PAY
INTEREST, THE ISSUE PRICE)
RANGE OF MATURITIES OF SECURITIES SOLD)
From 9 months to less than 1 year ___%
From 1 year to less than 18 months ___%
From 18 months to less than 2 years ___%
From 2 years to less than 3 years ___%
From 3 years to less than 4 years ___%
From 4 years to less than 5 years ___%
From 5 years to less than 6 years ___%
From 6 years to less than 7 years ___%
From 7 years to less than 10 years ___%
From 10 years to less than 15 years ___%
From 15 years to less than 20 years ___%
From 20 years to 30 years ___%
From more than 30 years to less than 50 years ___%
50 years and more ___%
(b) Each sale of Securities to any Agent as principal shall be made in
accordance with the terms of this Agreement and (unless the Company and such
Agent shall otherwise agree) a Terms Agreement which will provide for the sale
of such Securities to, and the purchase thereof by, such Agent; a Terms
Agreement may also specify certain provisions relating to the reoffering of such
Securities by such Agent; the commitment of any Agent to purchase Securities as
principal, whether pursuant to any Terms Agreement or otherwise, shall be deemed
to have been made on the basis of the representations and warranties of the
Company herein contained and shall be subject to the terms and conditions herein
set forth; each Terms Agreement shall specify the principal amount of Securities
to be purchased by any Agent pursuant thereto, the price to be paid to the
Company for such Securities, any provisions relating to rights of, and default
by, underwriters acting together with such Agent in the reoffering of the
Securities and the time and date and place of delivery of and payment for such
Securities; and such Terms Agreement shall also specify any requirements for
opinions of counsel, accountants' letters and officers' certificates pursuant to
Section 4 hereof. Each Agent proposes to offer Securities purchased by it as
principal for sale at prevailing market prices or prices related thereto at the
time of sale, which may be equal to, greater than or less than the price at
which such Securities are purchased by such Agent from the Company.
For each sale of Securities 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 Securities and payment therefor shall be as set forth in the
Administrative Procedure. For each such sale of Securities to an Agent as
principal that is not made
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pursuant to a Terms Agreement, the Company agrees to pay such Agent a commission
(or grant an equivalent discount) as provided in Section 2(a) hereof and in
accordance with the schedule set forth therein.
Each time and date of delivery of and payment for Securities to be
purchased by an Agent as principal, whether set forth in a Terms Agreement or in
accordance with the Administrative Procedure, is referred to herein as a "Time
of Delivery".
(c) Each Agent agrees, with respect to any Security denominated in a
currency other than U.S. dollars, as agent, directly or indirectly, not to
solicit offers to purchase, and as principal under any Terms Agreement or
otherwise, directly or indirectly, not to offer, sell or deliver, such Security
in, or to residents of, the country issuing such currency, except as permitted
by applicable law.
3. The documents required to be delivered pursuant to Section 6
hereof on the Commencement Date (as defined below) shall be delivered to the
Agents at the offices of ____________________________, at 11:00 a.m., _______
time, on the date of this Agreement, or at such other place and time as shall be
agreed upon by the parties, which date and time of such delivery may be
postponed by agreement between the Agents and the Company but in no event shall
be later than the day prior to the date on which solicitation of offers to
purchase Securities is commenced or on which any Terms Agreement is executed
(such time and date being referred to herein as the "Commencement Date").
4. The Company covenants and agrees with each Agent:
(a) (i) To make no amendment or supplement to the Registration
Statement or the Prospectus (A) prior to the Commencement Date which shall be
disapproved by any Agent promptly after reasonable notice thereof or (B) after
the date of any Terms Agreement or other agreement by an Agent to purchase
Securities as principal and prior to the related Time of Delivery which shall be
disapproved by any Agent party to such Terms Agreement or so purchasing as
principal promptly after reasonable notice thereof; (ii) to prepare, with
respect to any Securities to be sold through or to such Agent pursuant to this
Agreement, a Pricing Supplement with respect to such Securities in a form
previously approved by such Agent and to file such Pricing Supplement pursuant
to Rule 424(b)(3) under the Act not later than the close of business of the
Commission on the fifth business day after the date on which such Pricing
Supplement is first used; (iii) to make no amendment or supplement to the
Registration Statement or Prospectus, other than any Pricing Supplement, at any
time prior to having afforded each Agent a reasonable opportunity to review and
comment thereon; (iv) to file promptly all reports and any definitive proxy or
information statements required to be filed by the Company
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with the Commission pursuant to Section 13(a), 13(c), 14 or 15(d) of the
Exchange Act for so long as the delivery of a prospectus is required in
connection with the offering or sale of the Securities, and during such same
period to advise such Agent, promptly after the Company receives notice thereof,
of the time when any amendment to the Registration Statement has been filed or
has become effective or any supplement to the Prospectus or any amended
Prospectus (other than any Pricing Supplement that relates to Securities not
purchased through or by such Agent) has been filed with the Commission, of the
issuance by the Commission of any stop order or of any order preventing or
suspending the use of any prospectus relating to the Securities, of the
suspension of the qualification of the Securities for offering or sale in any
jurisdiction, of the initiation or threatening of any proceeding for any such
purpose, or of any request by the Commission for the amendment or supplement of
the Registration Statement or Prospectus or for additional information; and (v)
in the event of the issuance of any such stop order or of any such order
preventing or suspending the use of any such prospectus or suspending any such
qualification, to use promptly its best efforts to obtain its withdrawal;
(b) Promptly from time to time to take such action as such Agent may
reasonably request to qualify the Securities for offering and sale under the
securities laws of such jurisdictions as such Agent may request and to comply
with such laws so as to permit the continuance of sales and dealings therein for
as long as may be necessary to complete the distribution or sale of the
Securities; provided, however, that in connection therewith the Company shall
not be required to qualify as a foreign corporation or to file a general consent
to service of process in any jurisdiction;
(c) To furnish such Agent with copies of the Registration Statement
and each amendment thereto, with copies of the Prospectus as each time amended
or supplemented, other than any Pricing Supplement (except as provided in the
Administrative Procedure), in the form in which it is filed with the Commission
pursuant to Rule 424 under the Act, and with copies of the documents
incorporated by reference therein, all in such quantities as such Agent may
reasonably request from time to time; and, if the delivery of a prospectus is
required at any time in connection with the offering or sale of the Securities
(including Securities purchased from the Company by such Agent as principal) and
if at such time any event shall have occurred as a result of which the
Prospectus as then amended or supplemented would include an untrue statement of
a material fact or omit to state any material fact necessary in order to make
the statements therein, in the light of the circumstances under which they were
made when such Prospectus is delivered, not misleading, or, if for any other
reason it shall be necessary during such same period to amend or supplement the
Prospectus or to file under the Exchange Act any document incorporated by
reference in the Prospectus in order to comply with the Act, the Exchange Act or
the Trust Indenture Act, to notify such Agent and request such Agent, in its
capacity as agent of the Company, to suspend solicitation of offers to purchase
Securities from the Company (and, if so notified, such Agent shall
11
cease such solicitations as soon as practicable, but in any event not later than
one business day later); and if the Company shall decide to amend or supplement
the Registration Statement or the Prospectus as then amended or supplemented, to
so advise such Agent promptly by telephone (with confirmation in writing) and to
prepare and cause to be filed promptly with the Commission an amendment or
supplement to the Registration Statement or the Prospectus as then amended or
supplemented that will correct such statement or omission or effect such
compliance; provided, however, that if during such same period such Agent
continues to own Securities purchased from the Company by such Agent as
principal or such Agent is otherwise required to deliver a prospectus in respect
of transactions in the Securities, the Company shall promptly prepare and file
with the Commission such an amendment or supplement;
(d) To make generally available to its securityholders as soon as
practicable, but in any event not later than eighteen months after the effective
date of the Registration Statement (as defined in Rule 158(c) under the Act), an
earnings statement of the Company and its subsidiaries (which need not be
audited) complying with Section 11(a) of the Act and the rules and regulations
of the Commission thereunder (including, at the option of the Company, Rule
158);
(e) So long as any Securities are outstanding, to furnish to such
Agent copies of all reports or other communications (financial or other)
furnished generally to shareholders, and deliver to such Agent (i) as soon as
they are available, copies of any reports and financial statements furnished to
or filed with the Commission or any national securities exchange on which any
class of securities of the Company is listed; and (ii) such additional
information concerning the business and financial condition of the Company as
such Agent may from time to time reasonably request (such financial statements
to be on a consolidated basis to the extent the accounts of the Company and its
subsidiaries are consolidated in reports furnished to its shareholders generally
or to the Commission);
(f) That, from the date of any Terms Agreement with such Agent or
other agreement by such Agent to purchase Securities as principal and continuing
to and including the later of (i) the termination of the trading restrictions
for the Securities purchased thereunder, as notified to the Company by such
Agent and (ii) the related Time of Delivery, not to offer, sell, contract to
sell or otherwise dispose of any debt securities of the Company which both
mature more than 9 months after such Time of Delivery and are substantially
similar to the Securities, without the prior written consent of such Agent;
(g) That each acceptance by the Company of an offer to purchase
Securities hereunder (including any purchase by such Agent as principal not
pursuant to a Terms Agreement), and each execution and delivery by the Company
of a Terms Agreement with such Agent, shall be deemed to be an affirmation to
such Agent that the
12
representations and warranties of the Company contained in or made pursuant to
this Agreement are true and correct as of the date of such acceptance or of such
Terms Agreement, as the case may be, as though made at and as of such date, and
an undertaking that such representations and warranties will be true and correct
as of the settlement date for the Securities relating to such acceptance or as
of the Time of Delivery relating to such sale, as the case may be, as though
made at and as of such date (except that such representations and warranties
shall be deemed to relate to the Registration Statement and the Prospectus as
amended and supplemented relating to such Securities);
(h) That reasonably in advance of each time the Registration Statement
or the Prospectus shall be amended or supplemented (other than by a Pricing
Supplement), each time a document filed under the Act or the Exchange Act is
incorporated by reference into the Prospectus, and each time the Company sells
Securities to such Agent as principal pursuant to a Terms Agreement and such
Terms Agreement specifies the delivery of an opinion or opinions by __________,
counsel to the Agents, as a condition to the purchase of Securities pursuant to
such Terms Agreement, the Company shall furnish to such counsel such papers and
information as they may reasonably request to enable them to furnish to such
Agent the opinion or opinions referred to in Section 6(b) hereof;
(i) That each time the Registration Statement or the Prospectus shall
be amended or supplemented (other than by a Pricing Supplement), each time a
document filed under the Act or the Exchange Act is incorporated by reference
into the Prospectus and each time the Company sells Securities to such Agent as
principal pursuant to a Terms Agreement and such Terms Agreement specifies the
delivery of an opinion under this Section 4(i) as a condition to the purchase of
Securities pursuant to such Terms Agreement, the Company shall furnish or cause
to be furnished forthwith to such Agent a written opinion of the General Counsel
of the Company, and Fried, Frank, Harris, Xxxxxxx & Xxxxxxxx, special counsel
for the Company, or other counsel for the Company satisfactory to such Agent,
dated the date of such amendment, supplement, incorporation or Time of Delivery
relating to such sale, as the case may be, in form satisfactory to such Agent,
to the effect that such Agent may rely on the opinion of such counsel referred
to in Section 6(c) and Section 6(d) hereof which was last furnished to such
Agent to the same extent as though it were dated the date of such letter
authorizing reliance (except that the statements in such last opinion shall be
deemed to relate to the Registration Statement and the Prospectus as amended and
supplemented to such date) or, in lieu of such opinion, an opinion of the same
tenor as the opinion of such counsel referred to in Section 6(c) and Section
6(d) hereof but modified to relate to the Registration Statement and the
Prospectus as amended and supplemented to such date;
(j) That each time the Registration Statement or the Prospectus shall
be amended or supplemented and each time that a document filed under the Act or
13
the Exchange Act is incorporated by reference into the Prospectus, in either
case to set forth financial information included in or derived from the
Company's consolidated financial statements or accounting records, and each time
the Company sells Securities to such Agent as principal pursuant to a Terms
Agreement and such Terms Agreement specifies the delivery of a letter under this
Section 4(j) as a condition to the purchase of Securities pursuant to such Terms
Agreement, the Company shall cause the independent certified public accountants
who have certified the financial statements of the Company and its subsidiaries
included or incorporated by reference in the Registration Statement, or such
other independent certified public accountants as are reasonably satisfactory to
such Agent, forthwith to furnish such Agent a letter, dated the date of such
amendment, supplement, incorporation or Time of Delivery relating to such sale,
as the case may be, in form satisfactory to such Agent, of the same tenor as the
letter referred to in Section 6(e) hereof but modified to relate to the
Registration Statement and the Prospectus as amended or supplemented to the date
of such letter, with such changes as may be necessary to reflect changes in the
financial statements and other information derived from the accounting records
of the Company, to the extent such financial statements and other information
are available as of a date not more than five business days prior to the date of
such letter; provided, however, that, with respect to any financial information
or other matter, such letter may reconfirm as true and correct at such date as
though made at and as of such date, rather than repeat, statements with respect
to such financial information or other matter made in the letter referred to in
Section 6(e) hereof which was last furnished to such Agent;
(k) That each time the Registration Statement or the Prospectus shall
be amended or supplemented (other than by a Pricing Supplement), each time a
document filed under the Act or the Exchange Act is incorporated by reference
into the Prospectus and each time the Company sells Securities to such Agent as
principal and the applicable Terms Agreement specifies the delivery of a
certificate under this Section 4(k) as a condition to the purchase of Securities
pursuant to such Terms Agreement, the Company shall (and with respect to any
filings other than a Form 10-Q, Form 10-K and Form 8-K and any amendments
thereto, upon the request of such Agent) furnish or cause to be furnished
forthwith to such Agent a certificate, dated the date of such supplement,
amendment, incorporation or Time of Delivery relating to such sale, as the case
may be, in such form and executed by such officers of the Company as shall be
satisfactory to such Agent, to the effect that the statements contained in the
certificates referred to in Section 6(j) hereof which were last furnished to
such Agent are true and correct at such date as though made at and as of such
date (except that such statements shall be deemed to relate to the Registration
Statement and the Prospectus as amended and supplemented to such date) or, in
lieu of such certificate, certificates of the same tenor as the certificates
referred to in said Section 6(j) but modified to relate to the Registration
Statement and the Prospectus as amended and supplemented to such date; and
14
(l) To offer to any person who has agreed to purchase Securities from
the Company as the result of an offer to purchase solicited by such Agent the
right to refuse to purchase and pay for such Securities if, on the related
settlement date fixed pursuant to the Administrative Procedure, any condition
set forth in Section 6(a), 6(f), 6(g) or 6(h) hereof shall not have been
satisfied (it being understood that the judgment of such person with respect to
the impracticability or inadvisability of such purchase of Securities shall be
substituted, for purposes of this Section 4(l), for the respective judgments of
an Agent with respect to certain matters referred to in such Sections 6(f) and
6(h), and that such Agent shall have no duty or obligation whatsoever to
exercise the judgment permitted under such Sections 6(f) and 6(h) on behalf of
any such person).
5. The Company covenants and agrees with each Agent that the Company
will pay or cause to be paid the following: (i) the fees, disbursements and
expenses of the Company's counsel and accountants in connection with the
registration of the Securities under the Act and all other expenses in
connection with the preparation, printing and filing of the Registration
Statement, any Preliminary Prospectus, the Prospectus and any Pricing
Supplements and all other amendments and supplements thereto and the mailing and
delivering of copies thereof to such Agent; (ii) the reasonable fees,
disbursements and expenses of counsel for the Agents in connection with the
establishment of the program contemplated hereby, any opinions to be rendered by
such counsel hereunder and under any Terms Agreement and the transactions
contemplated hereunder and under any Terms Agreement; (iii) the cost of
printing, producing or reproducing this Agreement, any Terms Agreement, any
Indenture, any Blue Sky and Legal Investment Memoranda, closing documents
(including any compilations thereof) and any other documents so long as such
documents have been approved by the Company in connection with the offering,
purchase, sale and delivery of the Securities; (iv) all expenses in connection
with the qualification of the Securities for offering and sale under state
securities laws as provided in Section 4(b) hereof, including the fees and
disbursements of Fried, Frank, Harris, Xxxxxxx & Xxxxxxxx in connection with
such qualification and in connection with the Blue Sky and legal investment
surveys; (v) any fees charged by securities rating services for rating the
Securities; (vi) any filing fees incident to, and the reasonable fees and
disbursements of Fried, Frank, Harris, Xxxxxxx & Xxxxxxxx in connection with,
any required review by the National Association of Securities Dealers, Inc. of
the terms of the sale of the Securities; (vii) the cost of preparing the
Securities; (viii) the reasonable fees and expenses of any Trustee and any agent
of any Trustee and any transfer or paying agent of the Company and the
reasonable fees and disbursements of counsel for any Trustee or such agent in
connection with any Indenture and the Securities; (ix) any advertising expenses
connected with the solicitation of offers to purchase and the sale of Securities
so long as such advertising expenses have been approved by the Company; and (x)
all other costs and expenses incident to the performance of its obligations
hereunder which are not otherwise specifically provided
15
for in this Section. Except as provided in Sections 7 and 8 hereof, each Agent
shall pay all other expenses it incurs.
6. The obligation of any Agent, as agent of the Company, at any time
("Solicitation Time") to solicit offers to purchase the Securities and the
obligation of any Agent to purchase Securities as principal, pursuant to any
Terms Agreement or otherwise, shall in each case be subject, in such Agent's
discretion, to the condition that all representations and warranties and other
statements of the Company herein (and, in the case of an obligation of an Agent
under a Terms Agreement, in or incorporated by reference in such Terms
Agreement) are true and correct at and as of the Commencement Date and any
applicable date referred to in Section 4(k) hereof that is prior to such
Solicitation Time or Time of Delivery, as the case may be, and at and as of such
Solicitation Time or Time of Delivery, as the case may be, the condition that
prior to such Solicitation Time or Time of Delivery, as the case may be, the
Company shall have performed all of its obligations hereunder theretofore to be
performed, and the following additional conditions:
(a) (i) With respect to any Securities sold at or prior to such
Solicitation Time or Time of Delivery, as the case may be, the Prospectus as
amended or supplemented (including the Pricing Supplement) with respect to such
Securities shall have been filed with the Commission pursuant to Rule 424(b)
under the Act within the applicable time period prescribed for such filing by
the rules and regulations under the Act and in accordance with Section 4(a)
hereof; (ii) no stop order suspending the effectiveness of the Registration
Statement shall have been issued and no proceeding for that purpose shall have
been initiated or threatened by the Commission; and (iii) all requests for
additional information on the part of the Commission shall have been complied
with to the reasonable satisfaction of such Agent;
(b) _____________, counsel to the Agents, shall have furnished to such
Agent (i) such opinion or opinions, dated the Commencement Date, with respect to
the incorporation of the Company, the validity of the Indenture, the Securities,
the Registration Statement, the Prospectus, and such other related matters as
such Agent may reasonably request, and (ii) if and to the extent requested by
such Agent, with respect to each applicable date referred to in Section 4(h)
hereof that is on or prior to such Solicitation Time or Time of Delivery, as the
case may be, an opinion or opinions, dated such applicable date, to the effect
that such Agent may rely on the opinion or opinions which were last furnished to
such Agent pursuant to this Section 6(b) to the same extent as though it or they
were dated the date of such letter authorizing reliance (except that the
statements in such last opinion or opinions shall be deemed to relate to the
Registration Statement and the Prospectus as amended and supplemented to such
date) or, in any case, in lieu of such an opinion or opinions, an opinion or
opinions of the same tenor as the opinion or opinions referred to in clause (i)
but modified to relate to the Registration
16
Statement and the Prospectus as amended and supplemented to such date; and in
each case such counsel shall have received such papers and information as they
may reasonably request to enable them to pass upon such matters;
(c) The General Counsel of the Company or other counsel for the
Company satisfactory to such Agent, shall have furnished to such Agent his
written opinion (which may be limited to the laws of the State of Maryland and,
with respect to clauses (xii) and (xiii) below, the federal securities laws),
dated the Commencement Date and each applicable date referred to in Section 4(i)
hereof that is on or prior to such Solicitation Time or Time of Delivery, as the
case may be, in form and substance reasonably satisfactory to such Agent, to the
effect that:
(i) The Company has been duly incorporated and is validly existing as
a corporation in good standing under the laws of the State of Maryland, with
corporate power and authority to own its properties and conduct its business as
described in the Prospectus as amended or supplemented;
(ii) The Company has an authorized capitalization as set forth in the
Prospectus as amended or supplemented, and all of the issued shares of capital
stock of the Company have been duly and validly authorized and issued and are
fully paid and non-assessable;
(iii) The Company has been duly qualified as a foreign corporation
for the transaction of business and is in good standing under the laws of each
other jurisdiction in which the failure so to qualify and maintain good standing
would have a material adverse effect on the Company and its subsidiaries taken
as a whole (such counsel being entitled to rely in respect of the opinion in
this clause upon opinions of local counsel and in respect of matters of fact
upon certificates of officers of the Company);
(iv) Each Significant Subsidiary (as defined below) of the Company
that is incorporated under the laws of the State of Maryland has been duly
incorporated and is validly existing as a corporation in good standing under the
laws of the State of Maryland; and all of the issued shares of capital stock of
each such subsidiary have been duly and validly authorized and issued, are fully
paid and non-assessable, and are owned (with exceptions that are not material to
the Company and its subsidiaries, taken as a whole) directly or indirectly by
the Company, free and clear of all liens, encumbrances or claims (collectively
"Liens") except (i) Liens relating to debt which has been disclosed
specifically, generally or in the aggregate in the Prospectus as amended or
supplemented or incurred after the date of the latest audited financial
statements included or incorporated by reference in the Prospectus, as amended
or supplemented in the ordinary course of business (including financings), (ii)
Liens incurred in the ordinary
17
course of business which are not materially adverse to the operations of the
Company and its subsidiaries, taken as a whole, or (iii) restrictions on the
transfer or use of the stock of any subsidiary under any partnership, joint
venture agreements or lease agreements to which the Company or any of its
subsidiaries is a party (such counsel being entitled to rely in respect of the
opinion in this clause upon opinions of local counsel and in respect of matters
of fact upon certificates of officers of the Company or its subsidiaries,
provided that such counsel shall state that he believes that both such Agent and
he are justified in relying upon such opinions and certificates); "Significant
Subsidiary" is defined to be any subsidiary of the Company that holds assets
that have a value, on a current value basis, in excess of 3% of the Company's
Total Common Stock and Other Shareholders' Equity, on a current value basis, as
reported in the Company's most recent Annual Report on Form 10-K or Annual
Report to Shareholders;
(v) To the best of such counsel's knowledge and other than as set
forth in the Prospectus as amended or supplemented, there are no legal or
governmental proceedings pending to which the Company or any of its subsidiaries
is a party or of which any property of the Company or any of its subsidiaries is
the subject which is likely, individually or in the aggregate, to have a
material adverse effect on the Company and its subsidiaries, taken as a whole,
and, to the best of such counsel's knowledge, no such proceedings are threatened
or contemplated by governmental authorities or threatened by others;
(vi) This Agreement and any applicable Terms Agreement have been duly
authorized, executed and delivered by the Company;
(vii) The Securities have been duly authorized;
(viii) The Indenture has been duly authorized, executed and
delivered by the Company;
(ix) To the best of such counsel's knowledge, the issue and sale of
the Securities and the compliance by the Company with all of the provisions of
the Securities, the Indenture, this Agreement and any Terms Agreement, and the
consummation of the transactions herein and therein contemplated will not
conflict with or result in a breach or violation of any of the terms or
provisions of, or constitute a default under, any indenture, mortgage, deed of
trust, loan agreement or other agreement or instrument known to such counsel to
which the Company or any of its subsidiaries is a party or by which the Company
or any of its subsidiaries is bound or to which any of the property or assets of
the Company or any of its subsidiaries is subject except for any such conflict,
breach, violation or default which does not have a material adverse effect on
the Company and its subsidiaries, taken as a whole, nor will such actions result
in any violation of the provisions of the Articles of Incorporation or Bylaws of
the Company or
18
any statute or any order, rule or regulation known to such counsel of any court
or governmental agency or body having jurisdiction over the Company or any of
its properties;
(x) To the best of such counsel's knowledge, no consent, approval,
authorization, order, registration or qualification of or with any court or
governmental agency or body is required for the solicitation of offers to
purchase Securities, issue and sale of the Securities or the consummation by the
Company of the other transactions contemplated by this Agreement, any Terms
Agreement or the Indenture, except such as have been, or will have been prior to
the Commencement Date, obtained under the Act or the Trust Indenture Act and
such consents, approvals, authorizations, registrations or qualifications as may
be required under state securities or Blue Sky laws in connection with the
solicitation by the Agents of offers to purchase Securities from the Company and
with purchases of Securities by an Agent as principal, as the case may be, in
each case in the manner contemplated hereby;
(xi) The Company is not and, after giving effect to the offering and
sale of the Securities, will not be an "investment company" or an entity
"controlled" by an "investment company", as such terms are defined in the
Investment Company Act;
(xii) The documents incorporated by reference in the Prospectus as
amended or supplemented (other than the financial statements and related notes
and schedules therein and other financial data included therein or omitted
therefrom, as to which such counsel need express no opinion), when they were
filed with the Commission appear on their face to be appropriately responsive,
in all material respects, to the requirements of the Exchange Act and the rules
and regulations of the Commission thereunder; and nothing has come to such
counsel's attention to cause such counsel to believe that any of such documents,
when they were so filed contained an untrue statement of a material fact or
omitted to state a material fact necessary in order to make the statements
therein, in the light of the circumstances under which they were made when such
documents were so filed, not misleading; and
(xiii) Nothing has come to such counsel's attention to cause such
counsel to believe that, as of its effective date, the Registration Statement or
any further amendment or supplement thereto made by the Company prior to the
date of such opinion (other than the financial statements and related notes and
schedules therein and other financial data included therein or excluded
therefrom and Form T-1, as to which such counsel need express no opinion)
contained an untrue statement of a material fact or omitted to state a material
fact required to be stated therein or necessary to make the statements therein
not misleading or that, as of the date of such opinion, the Prospectus as
amended or supplemented or any further amendment or supplement thereto made by
the
19
Company prior to the date of such opinion (other than the financial statements
and related notes and schedules therein and other financial data included
therein or excluded therefrom and Form T-1, as to which such counsel need
express no opinion) contained an untrue statement of a material fact or omitted
to state a material fact necessary to make the statements therein, in light of
the circumstances in which they were made, not misleading; and such counsel does
not know of any amendment to the Registration Statement required to be filed or
any contracts or other documents of a character required to be filed as an
exhibit to the Registration Statement or required to be incorporated by
reference into the Prospectus as amended or supplemented or required to be
described in the Registration Statement or the Prospectus as amended or
supplemented which are not filed or incorporated by reference or described as
required.
(d) Fried, Frank, Harris, Xxxxxxx & Xxxxxxxx, special counsel for the
Company, or other counsel for the Company satisfactory to such Agent, shall have
furnished to such Agent their written opinion (which will be limited to the laws
of the State of New York and federal laws and may rely on an opinion of the
General Counsel of the Company, or other counsel for the Company reasonably
satisfactory to such Agent, as to the laws of the State of Maryland), dated the
Commencement Date and each applicable date referred to in Section 4(i) hereof
that is on or prior to such Solicitation Time or Time of Delivery, as the case
may be, in form and substance reasonably satisfactory to such Agent, to the
effect that:
(i) The Securities, when duly executed, authenticated, issued and
delivered by the Company, will constitute valid and binding obligations of the
Company, enforceable against the Company in accordance with their terms;
(ii) The Indenture constitutes a valid and binding obligation of the
Company, enforceable against the Company in accordance with its terms;
(iii) The Indenture has been qualified under the Trust Indenture Act;
(iv) The Indenture conforms, and the Securities will conform, in all
material respects to the descriptions thereof contained in the Prospectus as
amended or supplemented; and
(v) At the time the Registration Statement was declared effective by
the Commission, the Registration Statement and the Prospectus (other than (a)
the financial statements, notes and schedules thereto, (b) other financial data
and statistical information included therein, (c) the documents incorporated by
reference therein and (d) the Form T-1, included therein, as to which such
counsel need not express
20
an opinion), appeared on their face to be responsive as to form in all material
respects to the requirements of the Act and the Trust Indenture Act and the
rules and regulations promulgated thereunder.
The opinion set forth in paragraphs (i) and (ii) above is subject to:
(i) applicable bankruptcy, insolvency, reorganization, fraudulent
transfer, moratorium or other laws now or hereafter in effect affecting
creditors' rights generally; and
(ii) general principles of equity (including, without limitation,
standards of materiality, good faith, fair dealing and reasonableness) whether
such principles are considered in a proceeding in equity or at law;
(e) Not later than 10:00 a.m., New York City time, on the Commencement
Date and on each applicable date referred to in Section 4(j) hereof that is on
or prior to such Solicitation Time or Time of Delivery, as the case may be, the
independent certified public accountants who have certified the financial
statements of the Company and its subsidiaries included or incorporated by
reference in the Registration Statement, as amended or supplemented, or such
other independent certified public accountants as are reasonably satisfactory to
such Agent, shall have furnished to such Agent a letter, dated the Commencement
Date or such applicable date, as the case may be, in form and substance
reasonably satisfactory to such Agent, to the effect set forth in Annex III
hereto;
(f) (i) The Company and its subsidiaries, taken as a whole, have not
sustained since the date of the latest audited financial statements included or
incorporated by reference in the Prospectus as amended or supplemented prior to
the date of the Pricing Supplement relating to the Securities to be delivered at
the relevant Time of Delivery any material loss or interference with its
business from fire, explosion, flood or other calamity, whether or not covered
by insurance, or from any labor dispute or court or governmental action, order
or decree, otherwise than as set forth or contemplated in the Prospectus as
amended or supplemented prior to the date of the Pricing Supplement relating to
the Securities to be delivered at the relevant Time of Delivery and (ii) since
the respective dates as of which information is given in the Prospectus as
amended or supplemented prior to the date of the Pricing Supplement relating to
the Securities to be delivered at the relevant Time of Delivery there shall not
have been any change in the capital stock (other than issuances of capital stock
pursuant to bonus stock awards granted in the ordinary course of business or
upon exercise of options and stock appreciation rights and upon conversion of
convertible securities, in each case, except with respect to bonus stock awards
granted in the ordinary course of business, which were outstanding as of the
date of the latest audited financial statements included or incorporated by
reference
21
in the Prospectus as amended or supplemented prior to the date of the Pricing
Statement relating to the Securities to be delivered at the relevant Time of
Delivery) or any material adverse change in the long-term debt of the Company
and its subsidiaries, taken as a whole, or any material adverse change, or any
development involving a prospective material adverse change, in or affecting the
general affairs, management, current value basis shareholders' equity or results
of operations (based on Earnings Before Depreciation and Deferred Taxes from
Operations) of the Company and its subsidiaries, taken as a whole, otherwise
than as set forth or contemplated in the Prospectus as amended or supplemented
prior to the date of the Pricing Supplement relating to the Securities to be
delivered at the relevant Time of Delivery, the effect of which, in any such
case described in clause (i) or (ii), is in the judgment of such Agent so
material and adverse as to make it impracticable or inadvisable to proceed with
the solicitation by such Agent of offers to purchase Securities from the Company
or the purchase by such Agent of Securities from the Company as principal, as
the case may be, on the terms and in the manner contemplated in the Prospectus
as amended or supplemented prior to the date of the Pricing Supplement relating
to the Securities to be delivered at the relevant Time of Delivery;
(g) On or after the date hereof (i) no downgrading shall have occurred
in the rating accorded the Company's debt securities by any "nationally
recognized statistical rating organization", as that term is defined by the
Commission for purposes of Rule 436(g)(2) under the Act and (ii) no such
organization shall have publicly announced that it has under surveillance or
review, with possible negative implications, its rating of any of the Company's
debt securities;
(h) On or after the date hereof there shall not have occurred any of
the following: (i) a suspension or material limitation in trading in securities
generally on the New York Stock Exchange; (ii) a general moratorium on
commercial banking activities in New York declared by either federal or New York
State authorities; or (iii) the outbreak or
22
escalation of hostilities involving the United States or the declaration by the
United States of a national emergency or war, if the effect of any such event
specified in this clause (iii) in such Agent's reasonable judgment makes it
impracticable or inadvisable to proceed with the public offering or the delivery
of the Securities on the terms and in the manner contemplated by the Prospectus;
(i) With respect to any Security denominated in a currency other than
the U.S. dollar, more than one currency or a composite currency or any Security
the principal or interest of which is indexed to such currency, currencies or
composite currency, there shall not have occurred a suspension or material
limitation in foreign exchange trading in such currency, currencies or composite
currency by major international banks, a general moratorium on commercial
banking activities in the country or countries issuing such currency, currencies
or composite currency, the outbreak or escalation of hostilities involving, the
occurrence of any material adverse change in the existing financial, political
or economic conditions of, or the declaration of war or a national emergency by,
the country or countries issuing such currency, currencies or composite currency
or the imposition or proposal of exchange controls by any governmental authority
in the country or countries issuing such currency, currencies or composite
currency; and
(j) The Company shall have furnished or caused to be furnished to such
Agent certificates of officers of the Company dated the Commencement Date and
each applicable date referred to in Section 4(k) hereof that is on or prior to
such Solicitation Time or Time of Delivery, as the case may be, in such form and
executed by such officers of the Company as shall be satisfactory to such Agent,
as to the accuracy of the representations and warranties of the Company herein
at and as of the Commencement Date or such applicable date, as the case may be,
as to the performance by the Company of all of its obligations hereunder to be
performed at or prior to the Commencement Date or such applicable date, as the
case may be, as to the matters set forth in subsections (a) and (f) of this
Section 6, and as to such other matters as such Agent may reasonably request.
To the extent that any conditions set forth in paragraph (g), (h) or
(i) in this Section 6 are not satisfied and are so specified in a written notice
to such Agent from the Company, such Agent will notify the Company in writing as
soon as practicable whether such Agent will waive the condition so specified in
the Company's notice as a prerequisite to such Agent's obligations to (A)
solicit offers to purchase the Securities and/or (B) purchase Securities as
principal, pursuant to any Terms Agreement or otherwise.
7. (a) The Company will indemnify and hold harmless each Agent
against any losses, claims, damages or liabilities, joint or several, to which
such Agent may become subject, under the Act or otherwise, insofar as such
losses, claims, damages or liabilities (or actions in respect thereof) arise out
of or are based upon an untrue statement or alleged untrue statement of a
material fact contained in any Preliminary Prospectus, the Registration
Statement, the Prospectus, the Prospectus as amended or supplemented or any
other prospectus relating to the Securities, or any amendment or supplement
thereto, or arise out of or are based upon the omission or alleged omission to
state therein a material fact required to be stated therein or necessary to make
the statements therein not misleading, and will reimburse such Agent for any
legal or other expenses reasonably incurred by it in connection with
investigating or defending any such action or claim as such expenses are
incurred; provided, however, that the Company shall not be liable in any such
case to the extent that any such loss, claim, damage or liability arises out of
or is based upon an untrue statement or alleged untrue statement or omission or
alleged omission made in any Preliminary Prospectus, the Registration Statement,
the
23
Prospectus, the Prospectus as amended or supplemented or any other prospectus
relating to the Securities, or any such amendment or supplement, in reliance
upon and in conformity with written information furnished to the Company by such
Agent expressly for use therein.
(b) Each Agent will indemnify and hold harmless the Company against
anyb)Each Agent will indemnify and hold harmless the Company against any losses,
claims, damages or liabilities to which the Company may become subject, under
the Act or otherwise, insofar as such losses, claims, damages or liabilities (or
actions in respect thereof) arise out of or are based upon an untrue statement
or alleged untrue statement of a material fact contained in any Preliminary
Prospectus, the Registration Statement, the Prospectus, the Prospectus as
amended or supplemented or any other prospectus relating to the Securities, or
any amendment or supplement thereto, or arise out of or are based upon the
omission or alleged omission to state therein a material fact required to be
stated therein or necessary to make the statements therein not misleading, in
each case to the extent, but only to the extent, that such untrue statement or
alleged untrue statement or omission or alleged omission was made in any
Preliminary Prospectus, the Registration Statement, the Prospectus, the
Prospectus as amended or supplemented or any other prospectus relating to the
Securities, or any such amendment or supplement, in reliance upon and in
conformity with written information furnished to the Company by such Agent
expressly for use therein; and will reimburse the Company for any legal or other
expenses reasonably incurred by the Company in connection with investigating or
defending any such action or claim as such expenses are incurred.
(c) Promptly after receipt by an indemnified party under subsection
(a) or (b) above of notice of the commencement of any action, such indemnified
party shall, if a claim in respect thereof is to be made against the
indemnifying party under such subsection, notify the indemnifying party in
writing of the commencement thereof; but the omission so to notify the
indemnifying party shall not relieve it from any liability which it may have to
any indemnified party otherwise than under such subsection. In case any such
action shall be brought against any indemnified party and it shall notify the
indemnifying party of the commencement thereof, the indemnifying party shall be
entitled to participate therein and, to the extent that it shall wish, jointly
with any other indemnifying party similarly notified, to assume the defense
thereof, with counsel satisfactory to such indemnified party (who shall not,
except with the consent of the indemnified party, be counsel to the indemnifying
party), and, after notice from the indemnifying party to such indemnified party
of its election so to assume the defense thereof, the indemnifying party shall
not be liable to such indemnified party under such subsection for any legal
expenses of other counsel or any other expenses, in each case subsequently
incurred by such indemnified party, in connection with the defense thereof other
than reasonable costs of investigation. If the indemnifying party does not
assume the defense of such action, it is understood that the indemnifying party
24
shall not, in connection with any one such action or separate but substantially
similar or related actions in the same jurisdiction arising out of the same
general allegations or circumstances, be liable for the fees and expenses of
more than one separate firm of attorneys (in addition to one separate firm of
local attorneys in each such jurisdiction) at any time for all such indemnified
parties, which firms shall be designated in writing by you, if the indemnified
parties under this Section consist of any Underwriter of Designated Securities
or any of its respective controlling persons, or by the Company, if the
indemnified parties under this Section consist of the Company or any of its
directors, officers, administrative trustees or controlling persons. The
indemnifying party shall not be liable for any settlement of an action or claim
for monetary damages which an indemnified party may effect without the consent
of the indemnifying party, which consent shall not be unreasonably withheld. No
indemnifying party shall, without the written consent of the indemnified party,
effect the settlement or compromise of, or consent to the entry of any judgment
with respect to, any pending or threatened action or claim in respect of which
indemnification or contribution may be sought hereunder (whether or not the
indemnified party is an actual or potential party to such action or claim),
unless such settlement, compromise or judgment (i) includes an unconditional
release of the indemnified party from all liability arising out of such action
or claim and (ii) does not include a statement as to, or an admission of, fault,
culpability or a failure to act, by or on behalf of any indemnified party.
(d) If the indemnification provided for in this Section 7 is
unavailable or insufficient to hold harmless an indemnified party under
subsection (a) or (b) above in respect of any losses, claims, damages or
liabilities (or actions in respect thereof) referred to therein, then each
indemnifying party shall contribute to the amount paid or payable by such
indemnified party as a result of such losses, claims, damages or liabilities (or
actions in respect thereof) in such proportion as is appropriate to reflect the
relative benefits received by the Company on the one hand and each Agent on the
other from the offering of the Securities to which such loss, claim, damage or
liability (or action in respect thereof) relates. If, however, the allocation
provided by the immediately preceding sentence is not permitted by applicable
law or if the indemnified party failed to give the notice required under
subsection (c) above, then each indemnifying party shall contribute to such
amount paid or payable by such indemnified party in such proportion as is
appropriate to reflect not only such relative benefits but also the relative
fault of the Company on the one hand and each Agent on the other in connection
with the statements or omissions which resulted in such losses, claims, damages
or liabilities (or actions in respect thereof), as well as any other relevant
equitable considerations. The relative benefits received by the Company on the
one hand and each Agent on the other shall be deemed to be in the same
proportion as the total net proceeds from the sale of Securities (before
deducting expenses) received by the Company bear to the total commissions or
discounts received by such Agent in respect thereof. The relative fault shall be
determined
25
by reference to, among other things, whether the untrue or alleged untrue
statement of a material fact or the omission or alleged omission to state a
material fact required to be stated therein or necessary in order to make the
statements therein not misleading relates to information supplied by the Company
on the one hand or by any Agent on the other and the parties' relative intent,
knowledge, access to information and opportunity to correct or prevent such
statement or omission. The Company and each Agent agree that it would not be
just and equitable if contribution pursuant to this subsection (d) were
determined by per capita allocation (even if all Agents were treated as one
entity for such purpose) or by any other method of allocation which does not
take account of the equitable considerations referred to above in this
subsection (d). The amount paid or payable by an indemnified party as a result
of the losses, claims, damages or liabilities (or actions in respect thereof)
referred to above in this subsection (d) shall be deemed to include any legal or
other expenses reasonably incurred by such indemnified party in connection with
investigating or defending any such action or claim. Notwithstanding the
provisions of this subsection (d), an Agent shall not be required to contribute
any amount in excess of the amount by which the total public offering price at
which the Securities purchased by or through it were sold exceeds the amount of
any damages which such Agent has otherwise been required to pay by reason of
such untrue or alleged untrue statement or omission or alleged omission. No
person guilty of fraudulent misrepresentation (within the meaning of Section
11(f) of the Act) shall be entitled to contribution from any person who was not
guilty of such fraudulent misrepresentation. The obligations of each of the
Agents under this subsection (d) to contribute are several in proportion to the
respective purchases made by or through it to which such loss, claim, damage or
liability (or action in respect thereof) relates and are not joint.
(e) The obligations of the Company under this Section 7 shall be in
addition to any liability which the Company may otherwise have and shall extend,
upon the same terms and conditions, to each person, if any, who controls any
Agent within the meaning of the Act; and the obligations of each Agent under
this Section 7 shall be in addition to any liability which such Agent may
otherwise have and shall extend, upon the same terms and conditions, to each
officer and director of the Company and to each person, if any, who controls the
Company within the meaning of the Act.
8. Each Agent, in soliciting offers to purchase Securities from the
Company and in performing the other obligations of such Agent hereunder (other
than in respect of any purchase by an Agent as principal, pursuant to a Terms
Agreement or otherwise), is acting solely as agent for the Company and not as
principal. Each Agent will make reasonable efforts to assist the Company in
obtaining performance by each purchaser whose offer to purchase Securities from
the Company was solicited by such Agent and has been accepted by the Company,
but such Agent shall not have any liability to the Company in the event such
purchase is not consummated for any reason. If the Company shall default on its
obligation to deliver Securities to a purchaser whose offer it
26
has accepted, the Company shall (i) hold each Agent harmless against any loss,
claim or damage arising from or as a result of such default by the Company and
(ii) notwithstanding such default, pay to the Agent that solicited such offer
any commission to which it would be entitled in connection with such sale.
9. The respective indemnities, agreements, representations,
warranties and other statements by any Agent and the Company set forth in or
made pursuant to this Agreement shall remain in full force and effect regardless
of any investigation (or any statement as to the results thereof) made by or on
behalf of any Agent or any controlling person of any Agent, or the Company, or
any officer or director or any controlling person of the Company, and shall
survive each delivery of and payment for any of the Securities.
10. The provisions of this Agreement relating to the solicitation of
offers to purchase Securities from the Company may be suspended or terminated at
any time by the Company as to any Agent or by any Agent as to such Agent upon
the giving of written notice of such suspension or termination to such Agent or
the Company, as the case may be. In the event of such suspension or termination
with respect to any Agent, (x) this Agreement shall remain in full force and
effect with respect to any Agent as to which such suspension or termination has
not occurred, (y) this Agreement shall remain in full force and effect with
respect to the rights and obligations of any party which have previously accrued
or which relate to Securities which are already issued, agreed to be issued or
the subject of a pending offer at the time of such suspension or termination and
(z) in any event, this Agreement shall remain in full force and effect insofar
as the fourth paragraph of Section 2(a), and Sections 4(d), 4(e), 5, 7, 8 and 9
hereof are concerned.
11. Except as otherwise specifically provided herein or in the
Administrative Procedure, all statements, requests, notices and advice hereunder
shall be in writing, or by telephone if promptly confirmed in writing, and if to
[name(s) of Agent(s)] shall be sufficient in all respects when delivered or sent
by telex, facsimile transmission or registered mail to [address(es), telex
no(s). and facsimile transmission no(s). of Agent(s)], and if to the Company
shall be sufficient in all respects when delivered or sent by facsimile
transmission or registered mail to The Xxxxx Company, 00000 Xxxxxx Xxxxxxxx
Xxxxxxx, Xxxxxxxx, Xxxxxxxx 00000, Attention: Treasurer, with a copy to the
General Counsel, Facsimile Transmission No. (000) 000-0000.
12. This Agreement and any Terms Agreement shall be binding upon, and
inure solely to the benefit of, each Agent and the Company, and to the extent
provided in Sections 7, 8 and 9 hereof, the officers and directors of the
Company and any person who controls any Agent or the Company, and their
respective personal representatives, successors and assigns, and no other person
shall acquire or have any right under or by virtue of this Agreement or any
Terms Agreement. No purchaser of any
27
of the Securities through or from any Agent hereunder shall be deemed a
successor or assign by reason merely of such purchase.
13. Time shall be of the essence in this Agreement and any Terms
Agreement. As used herein, the term "business day" shall mean any day when the
Commission's office in Washington, D.C. is open for business.
14. THIS AGREEMENT AND ANY TERMS AGREEMENT SHALL BE GOVERNED BY, AND
CONSTRUED IN ACCORDANCE WITH, THE LAWS OF THE STATE OF NEW YORK.
15. This Agreement and any Terms Agreement may be executed by any one
or more of the parties hereto and thereto in any number of counterparts, each of
which shall be an original, but all of such respective counterparts shall
together constitute one and the same instrument.
28
If the foregoing is in accordance with your understanding, please sign and
return to us _____ counterparts hereof, whereupon this letter and the acceptance
by each of you thereof shall constitute a binding agreement between the Company
and each of you in accordance with its terms.
Very truly yours,
THE XXXXX COMPANY
By:
Name:
Title:
Accepted in New York, New York,
as of the date hereof:
[[Name(s) of Agent(s)]
By:
Name:
Title: ]
29
ANNEX I
THE XXXXX COMPANY
Medium-Term Notes
Terms Agreement
---------------
___________, 199__
[Name(s) and Address(es)of Agent(s)]
Ladies and Gentlemen:
The Xxxxx Company (the "Company") proposes, subject to the terms and
conditions stated herein and in the Distribution Agreement, dated ____________,
199__ (the "Distribution Agreement"), between the Company on the one hand and
[Name(s) of Agent(s)] (the "Agents") on the other, to issue and sell to [Name(s)
of Agent(s)] the securities specified in the Schedule hereto (the "Purchased
Securities"). Each of the provisions of the Distribution Agreement not
specifically related to the solicitation by the Agents, as agents of the
Company, of offers to purchase Securities is incorporated herein by reference in
its entirety, and shall be deemed to be part of this Terms Agreement to the same
extent as if such provisions had been set forth in full herein. Nothing
contained herein or in the Distribution Agreement shall make any party hereto an
agent of the Company or make such party subject to the provisions therein
relating to the solicitation of offers to purchase Securities from the Company,
solely by virtue of its execution of this Terms Agreement. Each of the
representations and warranties set forth therein shall be deemed to have been
made at and as of the date of this Terms Agreement, except that each
representation and warranty in Section 1 of the Distribution Agreement which
makes reference to the Prospectus shall be deemed to be a representation and
warranty as of the date of the Distribution Agreement in relation to the
Prospectus (as therein defined), and also a representation and warranty as of
the date of this Terms Agreement in relation to the Prospectus as amended and
supplemented to relate to the Purchased Securities.
An amendment to the Registration Statement, or a supplement to the
Prospectus, as the case may be, relating to the Purchased Securities, in the
form heretofore delivered to you is now proposed to be filed with the
Commission.
Subject to the terms and conditions set forth herein and in the
Distribution Agreement incorporated herein by reference, the Company agrees to
issue and sell to [Name(s) of Agent(s)] and [Name(s) of Agent(s)] agrees to
purchase from the Company
I-1
the Purchased Securities, at the time and place, in the principal amount and at
the purchase price set forth in the Schedule hereto.
If the foregoing is in accordance with your understanding, please sign
and return to us ____ counterparts hereof, and upon acceptance hereof by you
this letter and such acceptance hereof, including those provisions of the
Distribution Agreement incorporated herein by reference, shall constitute a
binding agreement between you and the Company.
THE XXXXX COMPANY
By:
Name:
Title:
Accepted:
[[Name(s) of Agent(s)]
By:
Name:
Title: ]
I-2
SCHEDULE TO ANNEX I
Title of Purchased Securities:
Medium-Term Notes
Aggregate Principal Amount:
[$.................... or units of other Specified Currency]
[Price to Public:]
Purchase Price by [Name(s) of Agent(s)]:
% of the principal amount (or for Original Issue Discount Notes that
do not currently pay interest, the issue price) of the Purchased Securities[,
plus accrued interest from ............... to ...............] [and accrued
amortization, if any, from ................. to ................]
Method of and Specified Funds for Payment of Purchase Price:
[By certified or official bank check or checks, payable to the order
of the Company, in [[New York] Clearing House] [immediately available] funds]
[By wire transfer to a bank account specified by the Company in [next
day] [immediately available] funds]
Indenture:
Indenture, dated as of February 24, 1995, between the Company and The
First National Bank of Chicago, as Trustee
Time of Delivery:
Closing Location for Delivery of Securities:
Maturity:
Interest Rate:
[ %]
I-3
Interest Payment Dates:
[months and dates]
Documents to be Delivered:
The following documents referred to in the Distribution Agreement
shall be delivered as a condition to the Closing:
(1) The opinion or opinions of counsel to the Agents referred to in
Section 4(h).
(2) The opinions of counsels to the Company referred to in Section
4(i).
(3) The accountants' letter referred to in Section 4(j).
(4) The officers' certificate referred to in Section 4(k). Other
Provisions (including Syndicate Provisions, if applicable):
I-4
ANNEX II
THE XXXXX COMPANY
Administrative Procedure
------------------------
This Administrative Procedure relates to the Securities defined in the
Distribution Agreement, dated ___________, 199_ (the "Distribution Agreement"),
between The Xxxxx Company (the "Company") and [Name(s) of Agent(s)] (together,
the "Agents"), to which this Administrative Procedure is attached as Annex II.
Defined terms used herein and not defined herein shall have the meanings given
such terms in the Distribution Agreement, the Prospectus as amended or
supplemented or the Indenture.
The procedures to be followed with respect to the settlement of sales
of Securities directly by the Company to purchasers solicited by an Agent, as
agent, are set forth below. The terms and settlement details related to a
purchase of Securities by an Agent, as principal, from the Company will be set
forth in a Terms Agreement pursuant to the Distribution Agreement, unless the
Company and such Agent otherwise agree as provided in Section 2(b) of the
Distribution Agreement, in which case the procedures to be followed in respect
of the settlement of such sale will be as set forth below. An Agent, in
relation to a purchase of a Security by a purchaser solicited by such Agent, is
referred to herein as the "Selling Agent" and, in relation to a purchase of a
Security by such Agent as principal other than pursuant to a Terms Agreement, as
the "Purchasing Agent".
The Company will advise each Agent in writing of those persons with
whom such Agent is to communicate regarding offers to purchase Securities and
the related settlement details.
Each Security will be issued only in fully registered form and will be
represented by either a global security (a "Global Security") delivered to the
Trustee, as agent for The Depository Trust Company (the "Depositary") and
recorded in the book-entry system maintained by the Depositary (a "Book-Entry
Security") or a certificate issued in definitive form (a "Certificated
Security") delivered to a person designated by an Agent, as set forth in the
applicable Pricing Supplement. An owner of a Book-Entry Security will not be
entitled to receive a certificate representing such a Security, except as
provided in the Indenture.
Book-Entry Securities will be issued in accordance with the
Administrative Procedure set forth in Part I hereof, and Certificated Securities
will be issued in accordance with the Administrative Procedure set forth in Part
II hereof.
II-1
PART I: ADMINISTRATIVE PROCEDURE FOR BOOK-ENTRY SECURITIES
In connection with the qualification of the Book-Entry Securities for
eligibility in the book-entry system maintained by the Depositary, the Trustee
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 the Trustee to the Depositary, dated the
date hereof, and a Medium-Term Note Certificate Agreement between the Trustee
and the Depositary, dated as of __________, 199_ (the "Certificate Agreement"),
and its obligations as a participant in the Depositary, including the
Depositary's Same-Day Funds Settlement System ("SDFS").Posting Rates by the
Company:
The Company and the Agents will discuss from time to time the rates of
interest per annum to be borne by and the maturity of Book-Entry Securities that
may be sold as a result of the solicitation of offers by an Agent. The Company
may establish a fixed set of interest rates and maturities for an offering
period ("posting"). If the Company decides to change already posted rates, it
will promptly advise the Agents to suspend solicitation of offers until the new
posted rates have been established with the Agents.
Acceptance of Offers by the Company:
Each Agent will promptly advise the Company by telephone or other
appropriate means of all reasonable offers to purchase Book-Entry Securities,
other than those rejected by such Agent. Each Agent may, in its discretion
reasonably exercised, reject any offer received by it in whole or in part. Each
Agent also may make offers to the Company to purchase Book-Entry Securities as a
Purchasing Agent.
The Company will have the sole right to accept offers to purchase
Book-Entry Securities and may reject any such offer in whole or in part. The
Company will promptly notify the Agent or Purchasing Agent, as the case may be,
of its acceptance or rejection of an offer to purchase Book-Entry Securities.
If the Company accepts an offer to purchase Book-Entry Securities, it will
confirm such acceptance in writing to the Selling Agent or Purchasing Agent, as
the case may be, and the Trustee.
Communication of Sale Information to the Company by Agent and Settlement
Procedures:
A. After the acceptance of an offer by the Company, the Selling Agent
or Purchasing Agent, as the case may be, will communicate promptly, but in no
event later than the time set forth under "Settlement Procedure Timetable"
below, the following details of the terms of such offer (the "Sale Information")
to the Company by telephone (confirmed in writing) or by facsimile transmission
or other acceptable written means:
II-2
(1) Principal Amount of Book-Entry Securities to be purchased;
(2) If a Fixed Rate Book-Entry Security, the interest rate and
initial interest payment date;
(3) Trade Date;
(4) Settlement Date;
(5) Maturity Date;
(6) Specified Currency and, if the Specified Currency is other than
U.S. dollars, the applicable Exchange Rate for such Specified Currency (it being
understood that currently the Depositary accepts deposits of Global Securities
denominated in U.S. dollars only);
(7) Indexed Currency, the Base Rate and the Exchange Rate
Determination Date, if applicable;
(8) Issue Price;
(9) Selling Agent's commission or Purchasing Agent's discount, as
the case may be;
(10) Net Proceeds to the Company;
(11) If a redeemable Book-Entry Security, such of the following
as are applicable:
(i) Redemption Commencement Date,
(ii) Initial Redemption Price (% of par), and
(iii) Amount (% of par) that the Redemption Price shall
decline (but not below par) on each anniversary of the Redemption Commencement
Date;
(12) If a Floating Rate Book-Entry Security, such of the
following as are applicable:
(i) Interest Rate Basis,
(ii) Index Maturity,
(iii) Spread or Spread Multiplier,
II-3
(iv) Maximum Rate,
(v) Minimum Rate,
(vi) Initial Interest Rate,
(vii) Interest Reset Dates,
(viii) Calculation Dates,
(ix) Interest Determination Dates,
(x) Interest Payment Dates,
(xi) Regular Record Dates, and
(xii) Calculation Agent;
(13) Name, address and taxpayer identification number of the
registered owner(s);
(14) Denomination of certificates to be delivered at settlement;
(15) Book-Entry Security or Certificated Security; and
(16) Selling Agent or Purchasing Agent.
B. After receiving the Sale Information from the Selling Agent or
Purchasing Agent, as the case may be, the Company will communicate such Sale
Information to the Trustee by facsimile transmission or other acceptable written
means. The Trustee will assign a CUSIP number to the Global Security from a
list of CUSIP numbers previously delivered to the Trustee by the Company
representing such Book-Entry Security and then advise the Company and the
Selling Agent or Purchasing Agent, as the case may be, of such CUSIP number.
C. The Trustee will enter a pending deposit message through the
Depositary's Participant Terminal System, providing the following settlement
information to the Depositary, and the Depositary shall forward such information
to such Agent and Standard & Poor's Corporation:
(1) The applicable Sale Information;
(2) CUSIP number of the Global Security representing such Book-
Entry Security;
II-4
(3) Whether such Global Security will represent any other Book-
Entry Security (to the extent known at such time);
(4) Number of the participant account maintained by the
Depositary on behalf of the Selling Agent or Purchasing Agent, as the case may
be, which number will be supplied by such Selling Agent or Purchasing Agent;
(5) The interest payment period; and
(6) Initial Interest Payment Date for such Book-Entry Security,
number of days by which such date succeeds the record date for the Depositary's
purposes (or, in the case of Floating Rate Securities which reset daily or
weekly, the date five calendar days immediately preceding the applicable
Interest Payment Date and, in the case of all other Book-Entry Securities, the
Regular Record Date, as defined in the Security) and, if calculable at that
time, the amount of interest payable on such Interest Payment Date.
D. The Trustee will complete and authenticate the Global Security
previously delivered by the Company representing such Book-Entry Security.
E. The Depositary will credit such Book-Entry Security to the
Trustee's participant account at the Depositary.
F. The Trustee will enter an SDFS deliver order through the
Depositary's Participant Terminal System instructing the Depositary to (i) debit
such Book- Entry Security to the Trustee's participant account and credit such
Book-Entry Security to such Agent's participant account and (ii) debit such
Agent's settlement account and credit the Trustee's settlement account for an
amount equal to the price of such Book-Entry Security less such Agent's
commission. The entry of such a deliver order shall constitute a representation
and warranty by the Trustee to the Depositary that (a) the Global Security
representing such Book-Entry Security has been issued and authenticated and (b)
the Trustee is holding such Global Security pursuant to the Certificate
Agreement.
G. Such Agent will enter an SDFS deliver order through the
Depositary's Participant Terminal System instructing the Depositary (i) to debit
such Book- Entry Security to such Agent's participant account and credit such
Book-Entry Security to the participant accounts of the Participants with respect
to such Book-Entry Security and (ii) to debit the settlement accounts of such
Participants and credit the settlement account of such Agent for an amount equal
to the price of such Book-Entry Security.
II-5
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.
I. Upon confirmation of receipt of funds, the Trustee will transfer
to the account of the Company maintained at [Name of Bank], New York, New York,
or such other account as the Company may have previously specified to the
Trustee, in funds available for immediate use in the amount transferred to the
Trustee in accordance with Settlement Procedure "F".
J. Upon request, the Trustee will send to the Company a statement
setting forth the principal amount of Book-Entry Securities outstanding as of
that date under the Indenture.
K. Such Agent will confirm the purchase of such Book-Entry Security
to the purchaser either by transmitting to the Participants with respect to such
Book- Entry Security a confirmation order or orders through the Depositary's
institutional delivery system or by mailing a written confirmation to such
purchaser.
L. The Depositary will, at any time, upon request of the Company or
the Trustee, promptly furnish to the Company or the Trustee a list of the names
and addresses of the participants for whom the Depositary has credited Book-
Entry Securities.
Preparation of Pricing Supplement:
If the Company accepts an offer to purchase a Book-Entry Security, it
will prepare a Pricing Supplement reflecting the terms of such Book-Entry
Security and arrange to have delivered to the Selling Agent or Purchasing Agent,
as the case may be, at least ten copies of such Pricing Supplement, not later
than 5:00 p.m., New York City time, on the Business Day following the Trade Date
(as defined below), or if the Company and the purchaser agree to settlement on
the Business Day following the date of acceptance of such offer, not later than
noon, New York City time, on such date. The Company will arrange to have ten
Pricing Supplements filed with the Commission not later than the close of
business of the Commission on the fifth Business Day following the date on which
such Pricing Supplement is first used.
Delivery of Confirmation and Prospectus to Purchaser by Selling Agent:
The Selling Agent will deliver to the purchaser of a Book-Entry
Security a written confirmation of the sale and delivery and payment
instructions. In addition, the Selling Agent will deliver to such purchaser or
its agent the Prospectus as amended or supplemented (including the Pricing
Supplement) in relation to such Book-Entry Security
II-6
prior to or together with the earlier of the delivery to such purchaser or its
agent of (a) the confirmation of sale or (b) the Book-Entry Security.
Date of Settlement:
The receipt by the Company of immediately available funds in payment
for a Book-Entry Security and the authentication and issuance of the Global
Security representing such Book-Entry Security shall constitute "settlement"
with respect to such Book-Entry Security. All orders of Book-Entry Securities
solicited by a Selling Agent or made by a Purchasing Agent and accepted by the
Company on a particular date (the "Trade Date") will be settled on a date (the
"Settlement Date") which is the third Business Day after the Trade Date pursuant
to the "Settlement Procedure Timetable" set forth below, unless the Company and
the purchaser agree to settlement on another Business Day which shall be no
earlier than the next Business Day after the Trade Date.
Settlement Procedure Timetable:
For orders of Book-Entry Securities solicited by a Selling Agent and
accepted by the Company for settlement on the third Business Day after the Trade
Date, Settlement Procedures "A" through "I" set forth above shall be completed
as soon as possible but not later than the respective times (New York City time)
set forth below:
Settlement
Procedure Time
--------- ----
A 5:00 p.m. on the Business day following the Trade
Date or 10:00 a.m. on the Business Day prior to
the Settlement Date, whichever is earlier
B 12:00 noon on the second Business Day immediately
preceding the Settlement Date
C 2:00 p.m. on the second Business day immediately
preceding the Settlement Date
D 9:00 a.m. on the Settlement Date
E 10:00 a.m. on the Settlement Date
F-G 2:00 p.m. on the Settlement Date
H 4:45 p.m. on the Settlement Date
I 5:00 p.m. on the Settlement Date
If the initial interest rate for a Floating Rate Book-Entry Security
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 2:00 p.m. on the second Business Day
immediately preceding the Settlement Date. Settlement Procedure "H" is subject
to extension in accordance with any extension
II-7
of Fedwire closing deadlines and in the other events specified in the SDFS
operating procedures in effect on the Settlement Date.
If settlement of a Book-Entry Security is rescheduled or canceled, the
Trustee, upon obtaining knowledge thereof, will deliver to the Depositary,
through the Depositary's Participant Terminal System, a cancellation message to
such effect by no later than 2:00 p.m. on the Business Day immediately preceding
the scheduled Settlement Date.
Failure to Settle:
If the Trustee fails to enter an SDFS deliver order with respect to a
Book- Entry Security pursuant to Settlement Procedure "F", the Trustee may
deliver to the Depositary, through the Depositary's Participant Terminal System,
as soon as practicable a withdrawal message instructing the Depositary to debit
such Book- Entry Security to the Trustee's participant account, provided that
the Trustee's participant account contains a principal amount of the Global
Security representing such Book-Entry Security 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 Securities represented by a Global Security, the
Trustee will xxxx such Global Security "canceled", make appropriate entries in
the Trustee's records and send such canceled Global Security to the Company.
The CUSIP number assigned to such Global Security shall, in accordance with
CUSIP Service Bureau procedures, be canceled and not immediately reassigned. If
a withdrawal message is processed with respect to one or more, but not all, of
the Book-Entry Securities represented by a Global Security, the Trustee will
exchange such Global Security for two Global Securities, one of which shall
represent such Book-Entry Security or Securities and shall be canceled
immediately after issuance and the other of which shall represent the remaining
Book-Entry Securities 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 Security is not timely paid
to the participants with respect to such Book-Entry Security by the beneficial
purchaser thereof (or a person, including an indirect participant in the
Depositary, acting on behalf of such purchaser), such participants and, in turn,
the Agent for such Book-Entry Security may enter deliver orders through the
Depositary's Participant Terminal System debiting such Book-Entry Security to
such participant's account and crediting such Book-Entry Security to such
Agent's account and then debiting such Book-Entry Security to such Agent's
participant account and crediting such Book-Entry Security to the Trustee's
participant account and shall notify the Company and the Trustee thereof.
Thereafter, the Trustee will (i) immediately notify the Company of such order
and the Company shall transfer to such Agent funds available for immediate use
in an amount equal to the price of such Book-Entry Security which was credited
to the account of the Company maintained at the
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Trustee in accordance with Settlement Procedure I, and (ii) deliver the
withdrawal message and take the related actions described in the preceding
paragraph. If such failure shall have occurred for any reason other than default
by the applicable Agent to perform its obligations hereunder or under the
Distribution Agreement, the Company will reimburse such Agent on an equitable
basis for the loss of its use of funds during the period when the funds were
credited to the account of the Company.
Notwithstanding the foregoing, upon any failure to settle with respect
to a Book-Entry Security, the Depositary may take any actions in accordance with
its SDFS operating procedures then in effect. In the event of a failure to
settle with respect to one or more, but not all, of the Book-Entry Securities to
have been represented by a Global Security, the Trustee will provide, in
accordance with Settlement Procedure "D", for the authentication and issuance of
a Global Security representing the other Book-Entry Securities to have been
represented by such Global Security and will make appropriate entries in its
records. The Company will, from time to time, furnish the Trustee with a
sufficient quantity of Securities.
PART II: ADMINISTRATIVE PROCEDURE FOR CERTIFICATED SECURITIES
Posting Rates by Company:
The Company and the Agents will discuss from time to time the rates of
interest per annum to be borne by and the maturity of Certificated Securities
that may be sold as a result of the solicitation of offers by an Agent. The
Company may establish a fixed set of interest rates and maturities for an
offering period ("posting"). If the Company decides to change already posted
rates, it will promptly advise the Agents to suspend solicitation of offers
until the new posted rates have been established with the Agents.
Acceptance of Offers by Company:
Each Agent will promptly advise the Company by telephone or other
appropriate means of all reasonable offers to purchase Certificated Securities,
other than those rejected by such Agent. Each Agent may, in its discretion
reasonably exercised, reject any offer received by it in whole or in part. Each
Agent also may make offers to the Company to purchase Certificated Securities as
a Purchasing Agent. The Company will have the sole right to accept offers to
purchase Certificated Securities and may reject any such offer in whole or in
part.
The Company will promptly notify the Selling Agent or Purchasing
Agent, as the case may be, of its acceptance or rejection of an offer to
purchase Certificated Securities. If the Company accepts an offer to purchase
Certificated Securities, it will
II-9
confirm such acceptance in writing to the Selling Agent or Purchasing Agent, as
the case may be, and the Trustee.
Communication of Sale Information to Company by Agent:
After the acceptance of an offer by the Company, the Selling Agent or
Purchasing Agent, as the case may be, will communicate the following details of
the terms of such offer (the "Sale Information") to the Company by telephone
(confirmed in writing) or by facsimile transmission or other acceptable written
means:
(1) Principal Amount of Certificated Securities to be purchased;
(2) If a Fixed Rate Certificated Security, the interest rate and
initial interest payment date;
(3) Trade Date;
(4) Settlement Date;
(5) Maturity Date;
(6) Specified Currency and, if the Specified Currency is other than
U.S. dollars, the applicable Exchange Rate for such Specified Currency;
(7) Indexed Currency, the Base Rate and the Exchange Rate
Determination Date, if applicable;
(8) Issue Price;
(9) Selling Agent's commission or Purchasing Agent's discount, as the
case may be;
(10) Net Proceeds to the Company;
(11) If a redeemable Certificated Security, such of the following as
are applicable:
(i) Redemption Commencement Date,
(ii) Initial Redemption Price (% of par), and
(iii) Amount (% of par) that the Redemption Price shall decline
(but not below par) on each anniversary of the Redemption Commencement Date;
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(12) If a Floating Rate Certificated Security, such of the following
as are applicable:
(i) Interest Rate Basis,
(ii) Index Maturity,
(iii) Spread or Spread Multiplier,
(iv) Maximum Rate,
(v) Minimum Rate,
(vi) Initial Interest Rate,
(vii) Interest Reset Dates,
(viii) Calculation Dates,
(ix) Interest Determination Dates,
(x) Interest Payment Dates,
(xi) Regular Record Dates, and
(xii) Calculation Agent;
(13) Name, address and taxpayer identification number of the
registered owner(s);
(14) Denomination of certificates to be delivered at settlement;
(15) Book-Entry Security or Certificated Security; and
(16) Selling Agent or Purchasing Agent.
Preparation of Pricing Supplement by Company:
If the Company accepts an offer to purchase a Certificated Security,
it will prepare a Pricing Supplement reflecting the terms of such Certificated
Security and arrange to have delivered to the Selling Agent or Purchasing Agent,
as the case may be, at least ten copies of such Pricing Supplement, not later
than 5:00 p.m., New York City time, on the Business Day following the Trade
Date, or if the Company and the purchaser agree to settlement on the date of
acceptance of such offer, not later than noon, New York City time, on such date.
The Company will arrange to have ten Pricing Supplements filed
II-11
with the Commission not later than the close of business of the Commission on
the fifth Business Day following the date on which such Pricing Supplement is
first used.
Delivery of Confirmation and Prospectus to Purchaser by Selling Agent:
The Selling Agent will deliver to the purchaser of a Certificated
Security a written confirmation of the sale and delivery and payment
instructions. In addition, the Selling Agent will deliver to such purchaser or
its agent the Prospectus as amended or supplemented (including the Pricing
Supplement) in relation to such Certificated Security prior to or together with
the earlier of the delivery to such purchaser or its agent of (a) the
confirmation of sale or (b) the Certificated Security.
Date of Settlement:
All offers of Certificated Securities solicited by a Selling Agent or
made by a Purchasing Agent and accepted by the Company will be settled on a date
(the "Settlement Date") which is the fifth Business Day after the date of
acceptance of such offer, unless the Company and the purchaser agree to
settlement (a) on another Business Day after the acceptance of such offer or (b)
with respect to an offer accepted by the Company prior to 10:00 a.m., New York
City time, on the date of such acceptance.
Instruction from Company to Trustee for Preparation of Certificated Securities:
After receiving the Sale Information from the Selling Agent or
Purchasing Agent, as the case may be, the Company will communicate such Sale
Information to the Trustee by telephone (confirmed in writing) or by facsimile
transmission or other acceptable written means.
The Company will instruct the Trustee by facsimile transmission or
other acceptable written means to authenticate and deliver the Certificated
Securities no later than 2:15 p.m., New York City time, on the Settlement Date.
Such instruction will be given by the Company prior to 3:00 p.m., New York City
time, on the Business Day immediately preceding the Settlement Date unless the
Settlement Date is the date of acceptance by the Company of the offer to
purchase Certificated Securities in which case such instruction will be given by
the Company by 11:00 a.m., New York City time.
Preparation and Delivery of Certificated Securities by Trustee and Receipt of
Payment Therefor:
The Trustee will prepare each Certificated Security and appropriate
receipts that will serve as the documentary control of the transaction.
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In the case of a sale of Certificated Securities to a purchaser
solicited by a Selling Agent, the Trustee will, by 2:15 p.m., New York City
time, on the Settlement Date, deliver the Certificated Securities to the Selling
Agent for the benefit of the purchaser of such Certificated Securities against
delivery by the Selling Agent of a receipt therefor. On the Settlement Date the
Selling Agent will deliver payment for such Certificated Securities in
immediately available funds to the Company in an amount equal to the issue price
of the Certificated Securities less the Selling Agent's commission; provided
that the Selling Agent reserves the right to withhold payment for which it has
not received funds from the purchaser. The Company shall not use any proceeds
advanced by a Selling Agent to acquire securities.
In the case of a sale of Certificated Securities to a Purchasing
Agent, the Trustee will, by 2:15 p.m., New York City time, on the Settlement
Date, deliver the Certificated Securities to the Purchasing Agent against
delivery of payment for such Certificated Securities in immediately available
funds to the Company in an amount equal to the issue price of the Certificated
Securities less the Purchasing Agent's discount.
Failure of Purchaser to Pay Selling Agent:
If a purchaser (other than a Purchasing Agent) fails to make payment
to the Selling Agent for a Certificated Security, the Selling Agent will
promptly notify the Trustee and the Company thereof by telephone (confirmed in
writing) or by facsimile transmission or other acceptable written means. The
Selling Agent will immediately return the Certificated Security to the Trustee.
Immediately upon receipt of such Certificated Security by the Trustee, the
Company will return to the Selling Agent an amount equal to the amount
previously paid to the Company in respect of such Certificated Security. The
Company will reimburse the Selling Agent on an equitable basis for its loss of
the use of funds during the period when they were credited to the account of the
Company.
The Trustee will cancel the Certificated Security in respect of which
the failure occurred, make appropriate entries in its records and, unless
otherwise instructed by the Company, destroy the Certificated Security.
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ANNEX III
Accountants' Letter
Pursuant to Sections 4(j) and 6(e), as the case may be, of the
Distribution Agreement, the Company's independent certified public accountants
shall furnish letters to the effect that:
(i) They are independent certified public accountants with respect to
the Company and its subsidiaries within the meaning of the Act and the
applicable published rules and regulations thereunder;
(ii) In their opinion, the financial statements and any supplementary
financial information and schedules audited (and, if applicable, financial
forecasts and/or pro forma financial information) examined by them and included
or incorporated by reference in the Registration Statement or the Prospectus
comply as to form in all material respects with the applicable accounting
requirements of the Act or the Exchange Act, as applicable, and the related
published rules and regulations thereunder; and, if applicable, they have made a
review in accordance with standards established by the American Institute of
Certified Public Accountants of the consolidated interim financial statements,
selected financial data, pro forma financial information, financial forecasts
and/or condensed financial statements derived from audited financial statements
of the Company for the periods specified in such letter, as indicated in their
reports thereon, copies of which have been [separately] furnished to the Agents
[and are attached hereto];
(iii) They have made a review in accordance with standards
established by the American Institute of Certified Public Accountants of the
unaudited condensed consolidated statements of income, consolidated balance
sheets and consolidated statements of cash flows included in the Prospectus
and/or included in the Company's quarterly report on Form 10-Q incorporated by
reference into the Prospectus as indicated in their reports thereon copies of
which [have been separately furnished to the Agents] [are attached hereto]; and
on the basis of specified procedures including inquiries of officials of the
Company who have responsibility for financial and accounting matters regarding
whether the unaudited condensed consolidated financial statements referred to in
paragraph (vi)(A)(i) below comply as to form in all material respects with the
applicable accounting requirements of the [Act and the Exchange] Act and the
related published rules and regulations, nothing came to their attention that
caused them to believe that the unaudited condensed consolidated financial
statements do not comply as to form in all material respects with the applicable
accounting requirements of the [Act and the Exchange] Act and the related
published rules and regulations;
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(iv) The unaudited selected financial information with respect to the
consolidated results of operations and financial position of the Company for the
five most recent fiscal years included in the Prospectus and included or
incorporated by reference in Item 6 of the Company's Annual Report on Form 10-K
for the most recent fiscal year agrees with the corresponding amounts (after
restatement where applicable) in the audited consolidated financial statements
for five such fiscal years which were included or incorporated by reference in
the Company's Annual Reports on Form 10-K for such fiscal years;
(v) They have compared the information in the Prospectus under
selected captions with the disclosure requirements of Regulation S-K and on the
basis of limited procedures specified in such letter nothing came to their
attention as a result of the foregoing procedures that caused them to believe
that this information does not conform in all material respects with the
disclosure requirements of Items 301, 302, 402 and 503(d), respectively, of
Regulation S-K;
(vi) On the basis of limited procedures, not constituting an
examination in accordance with generally accepted auditing standards, consisting
of a reading of the unaudited financial statements and other information
referred to below, a reading of the latest available interim financial
statements of the Company and its subsidiaries, inspection of the minute books
of the Company and its subsidiaries since the date of the latest audited
financial statements included or incorporated by reference in the Prospectus,
inquiries of officials of the Company and its subsidiaries responsible for
financial and accounting matters and such other inquiries and procedures as may
be specified in such letter, nothing came to their attention that caused them to
believe that:
(A) (i) the unaudited condensed consolidated statements of income,
consolidated balance sheets and consolidated statements of cash flows included
in the Prospectus and/or included or incorporated by reference in the Company's
Quarterly Reports on Form 10-Q incorporated by reference in the Prospectus do
not comply as to form in all material respects with the applicable accounting
requirements of the Exchange Act and the related published rules and
regulations, or (ii) any material modifications should be made to the unaudited
condensed consolidated statements of income, consolidated balance sheets and
consolidated statements of cash flows included in the Prospectus or included in
the Company's Quarterly Reports on Form 10- Q incorporated by reference in the
Prospectus for them to be in conformity with generally accepted accounting
principles;
(B) any other unaudited income statement data and balance sheet
items included in the Prospectus do not agree with the corresponding items in
the unaudited consolidated financial statements from which such data and items
were derived, and any such unaudited data and items were not determined on a
basis
III-2
substantially consistent with the basis for the corresponding amounts in the
audited consolidated financial statements included or incorporated by reference
in the Company's Annual Report on Form 10-K for the most recent fiscal year;
(C) the unaudited financial statements which were not included in the
Prospectus but from which were derived the unaudited condensed financial
statements referred to in clause (A) and any unaudited income statement data and
balance sheet items included in the Prospectus and referred to in Clause (B)
were not determined on a basis substantially consistent with the basis for the
audited financial statements included or incorporated by reference in the
Company's Annual Report on Form 10-K for the most recent fiscal year;
(D) any unaudited pro forma consolidated condensed financial
statements included or incorporated by reference in the Prospectus do not comply
as to form in all material respects with the applicable accounting requirements
of the Act and the published rules and regulations thereunder or the pro forma
adjustments have not been properly applied to the historical amounts in the
compilation of those statements;
(E) as of a specified date (where practicable not more than five days
prior to the date of such letter), there have been any changes in the
consolidated capital stock (other than issuances of capital stock upon exercise
of options and stock appreciation rights, upon earn-outs of performance shares
and upon conversions of convertible securities, in each case which were
outstanding on the date of the latest balance sheet included or incorporated by
reference in the Prospectus) or any increase in excess of 1% in the consolidated
long- term debt of the Company and its subsidiaries, or any decreases in
consolidated net current assets or other items specified by the Agents, or any
increases in any items specified by the Agents, in each case as compared with
amounts shown in the latest balance sheet included or incorporated by reference
in the Prospectus, except in each case for changes, increases or decreases which
the Prospectus discloses have occurred or may occur or which are described in
such letter; and
(F) for the period from the date of the latest financial statements
included or incorporated by reference in the Prospectus to the specified date
referred to in Clause (E) there were any decreases in consolidated earnings
before depreciation and deferred taxes from operations or other items specified
by the Agents, or any increases in any items specified by the Agents, in each
case as compared with the comparable period of the preceding year and with any
other period of corresponding length specified by the Agents, except in each
case for increases or decreases which the Prospectus discloses have occurred or
may occur or which are described in such letter; and
(vii) In addition to the audit referred to in their report(s)
included or incorporated by reference in the Prospectus and the limited
procedures, inspection of
III-3
minute books, inquiries and other procedures referred to in paragraphs (iii) and
(vi) above, they have carried out certain specified procedures, not constituting
an audit in accordance with generally accepted auditing standards, with respect
to certain amounts, percentages and financial information specified by the
Agents which are derived from the general accounting records of the Company and
its subsidiaries, which appear in the Prospectus (excluding documents
incorporated by reference), or in Part II of, or in exhibits and schedules to,
the Registration Statement specified by the Agents or in documents incorporated
by reference in the Prospectus specified by the Agents, and have compared
certain of such amounts, percentages and financial information with the
accounting records of the Company and its subsidiaries and have found them to be
in agreement.
All references in this Annex III to the Prospectus shall be deemed to
refer to the Prospectus (including the documents incorporated by reference
therein) as defined in the Distribution Agreement as of the Commencement Date
referred to in Section 6(d) thereof and to the Prospectus as amended or
supplemented (including the documents incorporated by reference therein) as of
the date of the amendment, supplement, incorporation or the Time of Delivery
relating to the Terms Agreement requiring the delivery of such letter under
Section 4(j) thereof.
III-4
