Exhibit 1.2
U.S. $350,000,000
MULTIPLE CURRENCY
MEDIUM-TERM NOTES, SERIES K
DUE NINE MONTHS OR MORE
FROM DATE OF ISSUE
ASHLAND INC.
DISTRIBUTION AGREEMENT
September __, 2001
New York, New York
Credit Suisse First Boston Corporation
▇▇▇▇▇▇ ▇▇▇▇▇▇▇ ▇▇▇▇▇▇
▇▇▇ ▇▇▇▇, ▇▇ ▇▇▇▇▇
▇.▇. ▇▇▇▇▇▇ Securities Inc.
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▇▇▇ ▇▇▇▇, ▇▇ ▇▇▇▇▇
▇▇▇▇▇▇▇ ▇▇▇▇▇ ▇▇▇▇▇▇ Inc.
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▇▇▇ ▇▇▇▇, ▇▇ ▇▇▇▇▇
Banc of America Securities LLC
Bank of America Corporate Center
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Charlotte, NC 28255
Ladies and Gentlemen:
Ashland Inc., a Kentucky corporation (the "Company"), confirms its
agreement with you with respect to the issue and sale by the Company of up to
$350,000,000 aggregate principal amount of its Medium-Term Notes, Series K, Due
Nine Months or More from Date of Issue (the "Notes"). The Notes will have the
interest rates, maturities, redemption provisions and other terms as set forth
in a pricing supplement ("Pricing Supplement") to the Prospectus referred to
below. The Notes will be issued under an Indenture dated as of September __,
2001 (the "Indenture"), between the Company and U.S. Bank National Association,
as trustee (the "Trustee"). The Notes will be issued, and the terms thereof
established, in accordance with the Indenture and, in the case of Notes sold
pursuant to Section 1(a), the Medium-Term Notes Administrative Procedures
attached hereto as Annex A (the "Procedures"). For the purposes of this
Agreement, the term "Agents" shall refer to any or all of you (and any other
person appointed by the Company in accordance with Section 1(a)) acting
solely in the capacity as agent for the Company pursuant to Section 1(a) and not
as principal, the term "Purchasers" shall refer to any or all of you acting
solely as principal pursuant to Section 1(g) and not as agent, the term "you"
shall refer to you acting in both such capacities or in either such capacity and
the term "Closing Date" shall mean the date of delivery of any Notes sold
hereunder, whether to purchasers solicited by you as agents or to you as
principal. The term "Terms Agreement" is defined in Section 1(g). Other terms
are defined in Section 3.
1. Appointment of Agent; Solicitation by the Agent of Offers to
Purchase; Sales of Notes to a Purchaser. (a) Subject to the terms and conditions
set forth herein, the Company hereby appoints the Agents to act as its agents
for the purpose of soliciting offers to purchase all or part of the Notes from
the Company upon the terms set forth in the Prospectus, as amended or
supplemented from time to time, and in the Procedures. The Company shall have
the right to appoint additional persons to act as its agents for such purposes
upon three days prior notice to the Agents then acting hereunder so long as any
such additional persons become parties to this Agreement upon the same terms and
conditions as shall then be applicable to such Agents. So long as this Agreement
shall remain in effect with respect to any Agents, the Company shall not,
without the consent of such Agents, solicit offers to purchase Notes otherwise
than through one of such Agents, except as contemplated by Section 1(g) hereof
and except that nothing contained herein shall be construed to prevent the
Company from selling Notes at any time (x) in a firm commitment underwriting
pursuant to an underwriting agreement which does not provide for a continuous
offering of such Notes or (y) directly to investors other than the Purchasers,
and no commission shall be payable to the Agents with respect to any such sales.
The Company also reserves the right to sell Notes through agents other than
pursuant to this Agreement where offers to purchase are received through such
agents on an unsolicited basis. Settlement of such sales will be on
substantially the same terms and conditions as are contained herein, including
commissions.
(b) On the basis of the representations and warranties set forth
herein, but subject to the terms and conditions set forth herein, each Agent
agrees to use its reasonable efforts, as agent of the Company, to solicit offers
to purchase Notes from the Company upon the terms set forth in the Prospectus,
as amended or supplemented from time to time, and in the Procedures. Subject to
the provisions of Section 1(c) and to the Procedures, offers for the purchase of
Notes may be solicited at such times and in such amounts as each Agent may from
time to time deem advisable.
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(c) The Company reserves the right, in its sole discretion, to suspend
solicitation of offers to purchase Notes from the Company at any time for any
period of time or permanently. Upon receipt of at least one business day's prior
notice from the Company, the Agents forthwith will suspend their
solicitation of offers to purchase Notes from the Company until such time as the
Company has advised the Agents that such solicitation may be resumed.
(d) Each Agent will communicate to the Company, orally or in writing,
each offer to purchase Notes from the Company that is received by such Agent as
agent of the Company and that is not rejected by such Agent as provided below.
The Company will have the sole right to accept offers to purchase Notes from the
Company and may reject any such offer, in whole or in part, for any reason. Each
Agent may, without notice to the Company, in its discretion reasonably
exercised, reject any offer to purchase Notes from the Company that is received
by such Agent, in whole or in part, and any such rejection shall not be deemed a
breach of such Agent's agreements contained herein.
(e) The Company agrees to pay each Agent a commission, on the Closing
Date with respect to each sale of Notes by the Company as a result of a
solicitation made by such Agent, in an amount equal to that percentage specified
in Schedule I hereto of the aggregate principal amount of each Note sold by the
Company. Such commission shall be payable as specified in the Procedures. The
commission rates may be amended from time to time by written agreement of the
Company and the Agents. The Terms Agreement may specify any concessions allowed
or reallowed or paid to dealers.
(f) Each of you agrees, with respect to any Note 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 Note in,
or to residents of, the country issuing such currency (or, if such Note is
denominated in a composite currency, in any country issuing a currency
comprising a portion of such composite currency), except as permitted by
applicable law.
(g) Subject to the terms and conditions stated herein, whenever the
Company and you determine that the Company shall sell Notes directly to any or
all of you acting as principal (the "Purchaser"), each such sale of Notes shall
be made in accordance with the terms of this Agreement and any supplemental
agreement relating thereto between the Company and the Purchaser. Each such
supplemental agreement (which shall be in the form of Annex B or such other form
as may be agreed upon by the Company and the Purchaser) is herein referred to as
a "Terms Agreement". The Purchaser's commitment to purchase Notes pursuant to
any Terms Agreement shall be deemed to have been made on the basis
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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 describe the Notes to be purchased by the Purchaser pursuant thereto,
specify the maturity and principal amount of such Notes, the price to be paid to
the Company for such Notes, the rate at which interest will be paid on the
Notes, the Closing Date for such Notes, the place of delivery of the Notes and
payment therefor, the method of payment and any modification of the requirements
for the delivery of the opinions of counsel, the certificates from the Company
or its officers, and the letter from the Company's independent public
accountants, pursuant to Section 7(c). Such Terms Agreement shall also specify
the period of time referred to in Section 5(l). The Terms Agreement may specify
the terms upon which any Agent may resell any Notes to other dealers.
Delivery of the certificates, if the Notes are certificated, or entry
into the books of the Depository Trust Company, if the Notes are book-entry
Notes, for Notes sold to the Purchaser pursuant to any Terms Agreement shall be
made as agreed to between the Company and the Purchaser as set forth in the
respective Terms Agreement, not later than the Closing Date set forth in such
Terms Agreement, against payment of funds to the Company in the amount due to
the Company for such Notes by the method and in the form set forth in the
respective Terms Agreement.
2. Offering Procedures. The Procedures may be amended only by written
agreement of the Company and the Agents after notice to the Trustee, and, to the
extent any such amendment materially affects the Trustee, with the approval of
the Trustee. The Company and the Agents agree to perform the respective duties
and obligations specifically provided to be performed by them in the Procedures.
The Company will furnish to the Trustee a copy of the Procedures as from time to
time in effect.
3. Registration Statement and Prospectus. The Company has filed with
the Securities and Exchange Commission (the "Commission"), pursuant to the
Securities Act of 1933, as amended (the "Securities Act"), and the published
rules and regulations adopted by the Commission thereunder (the "Rules"), a
registration statement on Form S-3 (No. 333-o) (the "Registration Statement")
relating to $600,000,000 aggregate principal amount of securities, including
debt securities (the "Securities") of the Company registered under the
Securities Act. The Company has filed or will file with the Commission pursuant
to the applicable paragraph of Rule 424(b) under the Securities Act, a
supplement to the form of prospectus included in the Registration Statement
relating to the Notes and the plan of distribution thereof (the "Prospectus
Supplement"). In connection with the sale of the Notes, the Company proposes to
file with the Commission pursuant to the applicable paragraph of Rule 424(b)
under the Securities Act
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further supplements to the Prospectus Supplement specifying the interest rates,
maturity dates, redemption provisions and other similar terms of the Notes sold
pursuant hereto or the offering thereof. The Indenture has been qualified under
the Trust Indenture Act of 1939, as amended (the "Trust Indenture Act"). The
term "Effective Date" shall mean each date that the Registration Statement and
any post-effective amendment thereto became effective. "Basic Prospectus" shall
mean the form of basic prospectus dated September __, 2001 relating to the
Securities contained in the Registration Statement. The term "Prospectus" means
the Basic Prospectus as supplemented by the Prospectus Supplement. Any reference
herein to the Registration Statement, the Basic Prospectus, the Prospectus
Supplement or the Prospectus includes the documents incorporated by reference
therein pursuant to Item 12 of Form S-3 (the "Incorporated Documents") which
were or will be filed under the Securities Exchange Act of 1934, as amended (the
"Exchange Act"), on or before the Effective Date of the Registration Statement
or the issue date of the Basic Prospectus, the Prospectus Supplement or the
Prospectus, as the case may be, and any reference herein to "amend", "amendment"
or "supplement" with respect to the Registration Statement, the Basic
Prospectus, the Prospectus Supplement or the Prospectus includes the
Incorporated Documents filed under the Exchange Act after the Effective Date of
the Registration Statement or the issue date of the Basic Prospectus, the
Prospectus Supplement or the Prospectus, as the case may be.
The Company confirms that you are authorized to distribute the
Prospectus and any amendments or supplements thereto.
4. Representations and Warranties. The Company represents and
warrants to you as follows:
(a) The Company meets the requirements for the use of Form S-3 under
the Securities Act. The Registration Statement meets the requirements set forth
in Rule 415(a)(1)(x) of the Rules and complies in all other material respects
with Rule 415 of the Rules.
(b) As of the date hereof, when any amendment to the Registration
Statement becomes effective, when any document incorporated by reference in the
Registration Statement is filed with the Commission, when any amendment or
supplement to the Prospectus is filed with the Commission pursuant to Rule 424
of the Rules, as of the date of any Terms Agreement and on any Closing Date, (i)
the Registration Statement, as amended as of any such time, the Prospectus, as
amended or supplemented as of any such time, and the Incorporated Documents will
comply in all material respects with the applicable requirements of the
Securities Act and the Rules, and the Exchange Act and the Trust Indenture Act
and the respective published rules and regulations adopted by the Commission
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thereunder, (ii) the Registration Statement, as amended as of any such time, did
not or will not include any untrue statement of a material fact or omit to state
any material fact required to be stated therein or necessary in order to make
the statements therein not misleading, and (iii) the Prospectus, as supplemented
as of any such time, will not contain any untrue statement of a material fact or
omit to state a material fact necessary in order to make the statements therein,
in the light of the circumstances under which they were made, not misleading;
except that this representation and warranty does not apply to (x) statements or
omissions made in reliance on and in conformity with information relating to you
furnished in writing to the Company by you expressly for use in the Registration
Statement, the Prospectus or any amendment or supplement thereto or (y) that
part of the Registration Statement consisting of the Statement of Eligibility
and Qualification on Form T-1 of the Trustee under the Trust Indenture Act,
except statements or omissions in such Statement made in reliance upon
information furnished in writing to the Trustee by or on behalf of the Company
for use therein.
5. Agreements. (a) Prior to the termination of the offering of the
Notes under this Agreement, the Company will not file any amendment or
supplement to the Registration Statement or the Prospectus (except for a
supplement relating to an offering of Securities other than the Notes and
filings with the Commission pursuant to the Exchange Act) unless a copy thereof
has been submitted to you a reasonable period of time before its filing and you
have not reasonably objected thereto within a reasonable period of time after
receiving such copy. Subject to the foregoing sentence, the Company will cause
each amendment or supplement to the Prospectus to be filed with the Commission
as required pursuant to the applicable paragraph of Rule 424(b) of the Rules or,
in the case of any document to be incorporated therein by reference, to be filed
with the Commission as required pursuant to the Exchange Act, within the time
period prescribed.
(b) The Company will advise you promptly (i) when each amendment or
supplement to the Prospectus shall have been filed with the Commission pursuant
to Rule 424(b) of the Rules or, in the case of any document incorporated therein
by reference, when such document shall have been filed with the Commission
pursuant to the Exchange Act, (ii) when, prior to the termination of the
offering of the Notes, any amendment to the Registration Statement shall have
been filed or become effective, (iii) of the initiation or threatening of any
proceedings for, or receipt by the Company of any notice with respect to, the
suspension of the qualification of the Notes for sale in any jurisdiction or the
issuance of any order by the Commission suspending the effectiveness of the
Registration Statement, and (iv) of the receipt by the Company or any
representative or attorney of the Company of any other communication from the
Commission relating to the Registration Statement, the Prospectus or any
amendment or supplement thereto or to the transactions contemplated by this
Agreement. The Company will use
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reasonable efforts to prevent the issuance of an order suspending the
effectiveness of the Registration Statement and, if any such order is issued, to
obtain its lifting as soon as possible.
(c) The Company will deliver to you, without charge, three signed
copies of the Registration Statement and each post-effective amendment thereto
(including all exhibits filed with any such document) and as many conformed
copies of the Registration Statement and each such amendment (excluding
exhibits) and the Indenture as you may reasonably request.
(d) During any Marketing Time, when a prospectus is required by law to
be delivered by you, the Company will deliver, without charge, to you, at such
office or offices as you may designate, as many copies of the Prospectus or any
amendment or supplement thereto as you may reasonably request, and, if any event
occurs during such period as a result of which the Prospectus, as then amended
or supplemented, would include any untrue statement of a material fact or omit
to state any material fact necessary in order to make the statements therein, in
the light of the circumstances under which they were made, not misleading, or if
during such period it is necessary to amend the Registration Statement or to
amend or supplement the Prospectus to comply with the Securities Act or the
Rules or the Exchange Act or the published rules and regulations adopted by the
Commission thereunder, the Company promptly will (y) notify you to suspend
solicitation of offers to purchase Notes from the Company and (z) prepare and
file with the Commission, subject to Section 5(a), and deliver, without charge,
to you, an amendment or supplement which will correct such statement or omission
or effect such compliance, and supply any supplemented Prospectus to you in such
quantities as you may reasonably request. "Marketing Time" means any time when
(i) no suspension of solicitation of offers to purchase Notes pursuant to
Section 1(c) shall be in effect, (ii) you shall own any Notes with the intention
of reselling them or (iii) the Company has accepted an offer to purchase Notes
but the related settlement has not occurred.
(e) The Company will make generally available to its security holders
as soon as practicable, but in any event not later than 15 months after (i) the
Effective Date of the Registration Statement, (ii) the Effective Date of each
post-effective amendment to the Registration Statement, and (iii) the date of
each filing by the Company with the Commission of an Annual Report on Form 10-K
that is incorporated by reference in the Registration Statement, an earnings
statement satisfying the provisions of Section 11(a) of the Securities Act and
Rule 158 of the Rules.
(f) The Company will take such actions as you may reasonably designate
in order to qualify the Notes for offer and sale under the securities or "blue
sky"
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laws of such jurisdictions as you designate, will maintain such qualification in
effect for so long as may be required for the distribution of the Notes and will
arrange for the determination of the legality of the Notes for purchase by
institutional investors.
(g) During the term of this Agreement, the Company will supply to you
copies of such financial statements and other periodic and special reports as
the Company may from time to time distribute generally to the holders of any
class of its capital stock and of each annual or other report it is required to
file with the Commission. The Company shall furnish to you such information,
documents, certificates of officers of the Company and opinions of counsel for
the Company relating to the business, operations and affairs of the Company, the
Registration Statement, the Prospectus, and any amendments thereof or
supplements thereto, the Indenture, the Notes, this Agreement, the Procedures
and the performance by the Company and you of its and your respective
obligations hereunder and thereunder as you may from time to time and at any
time prior to the termination of this Agreement reasonably request.
(h) The Company will, whether or not the transactions contemplated by
this Agreement are consummated or this Agreement is terminated, (i) pay, or
reimburse if paid by you, all costs and expenses incident to the performance of
the obligations of the Company under this Agreement, including costs and
expenses relating to (A) the preparation, printing and filing of the
Registration Statement and exhibits thereto, the Prospectus, all amendments and
supplements to the Registration Statement and the Prospectus, and the printing
or other reproduction of the Indenture and this Agreement, (B) the authorization
and issuance of the Notes, the preparation and delivery of certificates for the
Notes, and the fees charged in connection with the maintenance of a book-entry
system for the Notes, (C) the registration or qualification of the Notes for
offer and sale under the securities or "blue sky" laws of the jurisdictions
referred to in paragraph (f) of this Section 5 and the determination of the
legality of the Notes for investment, including the reasonable fees and
disbursements of counsel for you in that connection, and the preparation and
printing of preliminary and supplemental "blue sky" memoranda and legal
investment memoranda, (D) the furnishing (including costs of shipping and
mailing) to you of copies of the Prospectus, and all amendments or supplements
to the Prospectus, and of all other documents, reports and other information
required by this Section to be so furnished, (E) all transfer taxes, if any,
with respect to the sale and delivery of the Notes by the Company, (F) the fees
and expenses of the Trustee, and (G) the fees charged by rating agencies in
connection with any rating of the Notes, (ii) reimburse you on a quarterly basis
for all reasonable out-of-pocket expenses (including advertising expenses)
incurred by you with the advance approval of the Company, and (iii)
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reimburse the reasonable fees and disbursements of counsel for you incurred in
connection with this Agreement.
(i) During any Marketing Time, each time that either of the
Registration Statement or the Prospectus is amended or supplemented (other than
by an amendment or supplement (x) relating to any offering of Securities other
than the Notes, (y) providing solely for the specification of or a change in the
maturity dates, the interest rates, the issuance prices or other similar terms
of any Notes sold pursuant hereto or (z) resulting from the filing by the
Company of a Current Report on Form 8-K (or any similar successor form), unless
in the case of clause (z) above, in your reasonable judgment, such Current
Report is of such a nature that a certificate should be furnished), including by
the filing of any document incorporated therein by reference, the Company will
deliver or cause to be delivered forthwith to you a certificate of the Company,
signed by the Chairman of the Board, the President, or any Senior or
Administrative Vice President or any Vice President and the principal financial
or accounting officer of the Company, dated the date of the effectiveness of
such amendment or the date of filing of such supplement, in form reasonably
satisfactory to you, to the effect that the statements contained in the
certificate that was last furnished to you pursuant to either Section 6(c) or
this paragraph (i) are true and correct at the time of the effectiveness of such
amendment or the filing of such supplement as though made at and as of such time
(except that (i) the last day of the fiscal quarter for which financial
statements of the Company were last filed with the Commission shall be
substituted for the corresponding date in such certificate and (ii) such
statements shall be deemed to relate to the Registration Statement and the
Prospectus as amended or supplemented to the time of the effectiveness of such
amendment or the filing of such supplement) or, in lieu of such certificate, a
certificate of the same tenor as the certificate referred to in Section 6(c) but
modified to relate to the last day of the fiscal quarter for which financial
statements of the Company were last filed with the Commission and to the
Registration Statement and the Prospectus as amended or supplemented to the time
of the effectiveness of such amendment or the filing of such supplement.
(j) During any Marketing Time, each time that either of the
Registration Statement or the Prospectus is amended or supplemented (other than
by an amendment or supplement (x) relating to any offering of Securities other
than the Notes, (y) providing solely for the specifications of or a change in
the maturity dates, the interest rates, the issuance prices or other similar
terms of any Notes sold pursuant hereto, or (z) resulting from the filing by the
Company of a Quarterly Report on Form 10-Q or a Current Report on Form 8-K (or
any similar successor forms), unless, in the case of clause (z) above, in your
reasonable judgment, such Quarterly or Current Report is of such a nature that
an opinion of counsel should be furnished), including by the filing of any
document
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incorporated therein by reference, the Company will furnish or cause to
be furnished forthwith to you a written opinion of counsel for the Company
reasonably satisfactory to you, dated the date of the effectiveness of such
amendment or date of filing of such supplement, in form reasonably satisfactory
to you, of the same tenor as the opinion referred to in Section 6(d) but
modified to relate to the Registration Statement and the Prospectus as amended
or supplemented to the time of the effectiveness of such amendment or the filing
of such supplement or, in lieu of such opinion, counsel last furnishing such an
opinion to you may furnish you with a letter to the effect that you may rely on
such counsel's last opinion to the same extent as though it were dated the date
of such letter authorizing reliance (except that statements in such counsel's
last opinion will be deemed to relate to the Registration Statement and the
Prospectus as amended or supplemented to the time of the effectiveness of such
amendment or the filing of such supplement).
(k) During any Marketing Time, each time that either of the
Registration Statement or the Prospectus is amended or supplemented to set forth
amended or supplemental financial information (other than by an amendment or
supplement resulting from the filing by the Company of a Quarterly Report on
Form 10-Q or a Current Report on Form 8-K (or any similar successor forms),
unless, in your reasonable judgment, such Quarterly Report or Current Report is
of such a nature that a letter from the Company's independent public accountants
should be furnished), the Company will cause its independent public accountants
forthwith to furnish a letter, dated the date of the effectiveness of such
amendment or the date of filing of such supplement, in form satisfactory to you,
of the same tenor as the letter referred to in Section 6(f) with such changes as
may be necessary to reflect the amended and supplemental financial information
included or incorporated by reference in the Registration Statement and the
Prospectus, as amended or supplemented to the date of such letter, provided that
if either of the Registration Statement or the Prospectus is amended or
supplemented solely to include or incorporate by reference financial information
as of and for a fiscal quarter and you shall have reasonably requested that such
a letter be furnished, the Company's independent public accountants may limit
the scope of such letter, which shall be satisfactory in form to you, to the
unaudited financial statements, the related "Management's Discussion and
Analysis of Financial Condition and Results of Operations" and any other
information of an accounting, financial or statistical nature included in such
amendment or supplement.
(l) During the period, if any, specified in any Terms Agreement, the
Company shall not, without the prior consent of the Purchaser, issue or announce
the proposed issuance of any of its debt securities, including Notes, with terms
substantially similar to the Notes being purchased pursuant to such Terms
Agreement.
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(m) Each acceptance by the Company of an offer for the purchase of
Notes shall be deemed to be an affirmation that its representations and
warranties contained in this Agreement are true and correct at the time of such
acceptance and a covenant that such representations and warranties will be true
and correct at the time of delivery to the purchaser of the Notes relating to
such acceptance as though made at and as of each such time, it being understood
that such representations and warranties shall relate to the Registration
Statement and the Prospectus as amended or supplemented at each such time. Each
such acceptance by the Company of an offer for the purchase of Notes shall be
deemed to constitute an additional representation, warranty and agreement by the
Company that, as of the settlement date for the sale of such Notes, after giving
effect to the issuance of such Notes, of any other Notes to be issued on or
prior to such settlement date and of any other Securities, which have been
issued and sold by the Company will not exceed the amount of Securities
registered pursuant to the Registration Statement.
6. Conditions of the Agents' Obligations. The obligations of the
Agents to solicit offers to purchase Notes from the Company are subject to the
accuracy of the representations and warranties of the Company in this Agreement
on the date of this Agreement, when any amendment to the Registration Statement
becomes effective, when any document incorporated by reference in the
Registration Statement is filed with the Commission, when any amendment or
supplement to the Prospectus is filed with the Commission pursuant to the
applicable paragraph of Rule 424(b) of the Rules, the date of each solicitation
of an offer to purchase Notes from the Company and on each Closing Date, to
performance by the Company of its obligations under this Agreement and to each
of the following additional conditions:
(a) If filing of the Prospectus, or any supplement thereto, is
required pursuant to Rule 424(b), the Prospectus, and any such supplement, shall
have been filed in the manner and within the time period required by Rule
424(b); and no order suspending the effectiveness of the Registration Statement,
as amended from time to time, may be in effect and no proceedings for such
purpose may be pending before or threatened by the Commission, and any requests
for additional information on the part of the Commission (to be included in the
Registration Statement or the Prospectus or otherwise) must be complied with to
the reasonable satisfaction of the Agents.
(b) Since the date of the most recent financial statements included or
incorporated by reference in the Prospectus, (i) there must not have been any
material adverse change or decrease (of the type indicated in paragraphs (ii)(B)
or (ii)(C) of Annex D to this Agreement) specified in the most recent letter of
the type referred to in Section 5(k) or in paragraph (f) of this Section 6, (ii)
there must
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not have been any material adverse change in the general affairs, prospects,
management, business, properties, financial condition or results of operations
of the Company and its subsidiaries taken as a whole, whether or not arising
from transactions in the ordinary course of business, except as set forth in or
contemplated by the Prospectus, as amended or supplemented at the time of
acceptance by the Company of any offer to purchase the Notes, (iii) the Company
and its subsidiaries taken as a whole must not have sustained any material loss
or interference with their business or properties from fire, explosion,
earthquake, flood or other calamity, whether or not covered by insurance, or
from any labor dispute or any court or legislative or other governmental action,
order or decree not described in the Prospectus, as then amended or supplemented
at the time of acceptance by the Company of any offer to purchase the Notes, and
(iv) there must not have been any downgrading in the rating of any of the
Company's long-term debt securities by Standard & Poor's ("S&P") or ▇▇▇▇▇'▇
Investors Service ("Moody's") or any public announcement that either S & P or
Moody's has under surveillance or review its rating of the Company's long-term
debt securities (other than an announcement with positive implications of a
possible upgrading, and no implication of a possible downgrading of such
rating), if, in the judgment of the Agents, any such development referred to in
clause (i), (ii), (iii) or (iv) makes it impracticable or inadvisable to proceed
with the soliciting of offers to purchase Notes from the Company as contemplated
by the Prospectus, as then amended or supplemented.
(c) The Company shall have furnished to the Agents on the date of this
Agreement a certificate of the Company, signed by the Chairman of the Board, the
President, or any Senior or Administrative Vice President or any Vice President
and the principal financial or accounting officer of the Company, dated such
date, certifying that the signers have carefully examined the Registration
Statement, the Prospectus, the Indenture and this Agreement, and, to the best of
their knowledge, after reasonable investigation, (i) the representations and
warranties of the Company in this Agreement are accurate on and as of the date
of such certificate and the Company has complied with all the agreements and
satisfied all the conditions on its part to be performed or satisfied as a
condition to the obligation of the Agents to solicit offers to purchase the
Notes, (ii) there has not been any material adverse change in the general
affairs, prospects, management, business, properties, financial condition or
results of operations of the Company and its subsidiaries taken as a whole,
whether or not arising from transactions in the ordinary course of business,
except as set forth in or contemplated in the Prospectus, as amended or
supplemented as of the date of such certificate, and (iii) no actions to suspend
the effectiveness of the Registration Statement, as amended as of the date of
such certificate, or to prohibit the sale of the Notes have been taken or
threatened by the Commission.
12
(d) The Agents shall have received on the date of this Agreement from
the General Counsel of the Company and Cravath, Swaine & ▇▇▇▇▇, special counsel
to the Company, opinions or letters dated such date substantially in the forms
set forth in Annex C-1, Annex C-2-A and Annex C-2-B to this Agreement.
(e) The Agents shall have received on the date of this Agreement from
▇▇▇▇▇ ▇▇▇▇ & ▇▇▇▇▇▇▇▇, their counsel, an opinion dated such date with respect to
the Company, the Notes, the Indenture, the Registration Statement, the
Prospectus, this Agreement and the form and sufficiency of all proceedings taken
in connection with the sale and delivery of the Notes. Such opinion and
proceedings shall be satisfactory in all respects to the Agents. The Company
must have furnished to such counsel such documents as they may reasonably
request for the purpose of enabling them to render such opinion.
(f) The Agents shall have received, at the date of this Agreement, a
signed letter from Ernst & Young LLP substantially in the form of Annex D to
this Agreement.
All opinions, letters, evidence and certificates mentioned above or
elsewhere in this Agreement will comply with this Agreement only if they are in
form and scope reasonably satisfactory to the Agents and their counsel.
If any of the conditions specified in this Section 6 shall not have
been fulfilled when and as provided in this Agreement, or if any of the opinions
and certificates mentioned above or elsewhere in this Agreement shall not be
reasonably satisfactory in form and substance to the Agents and their counsel,
this Agreement and all obligations of the Agents hereunder may be canceled at
any time by the Agents. Notice of such cancellation shall be given to the
Company in writing or by telephone or telegraph confirmed in writing. The
documents required to be delivered by this Section 6 shall be delivered at the
offices of ▇▇▇▇▇ ▇▇▇▇ & ▇▇▇▇▇▇▇▇, counsel for the Agents, at ▇▇▇ ▇▇▇▇▇▇▇▇▇
▇▇▇▇▇▇, ▇▇▇ ▇▇▇▇, ▇▇▇ ▇▇▇▇, on the date of this Agreement.
7. Conditions to the Obligations of the Purchaser. The obligations of
the Purchaser to purchase any Notes from the Company are subject to the
accuracy, on the Closing Date for such Notes, of the representations and
warranties of the Company in this Agreement, to performance by the Company of
its obligations under this Agreement and to each of the following additional
conditions:
(a) No stop order suspending the effectiveness of the Registration
Statement shall have been issued and no proceedings for that purpose shall have
been instituted or threatened.
13
(b) Since the date of the most recent financial statements included or
incorporated by reference in the Prospectus, (i) there must not have been any
material adverse change or decrease (of the type indicated in paragraphs (ii)(B)
or (C) of Annex D to this Agreement) specified in the most recent letter of the
type referred to in Section 5(k) or in paragraph (c) of this Section 7, (ii)
there must not have been any material adverse change in the general affairs,
prospects, management, business, properties, financial condition or results of
operations of the Company and its subsidiaries taken as a whole, whether or not
arising from transactions in the ordinary course of business, except as set
forth in or contemplated by the Prospectus, as amended or supplemented at the
date of execution of the Terms Agreement relating to such Notes, (iii) the
Company and its subsidiaries taken as a whole must not have sustained any
material loss or interference with their business or properties from fire,
explosion, earthquake, flood or other calamity, whether or not covered by
insurance, or from any labor dispute or any court or legislative or other
governmental action, order or decree not described in the Prospectus, as amended
or supplemented at the date of execution of the Terms Agreement relating to such
Notes, and (iv) there must not have been any downgrading in the rating of any of
the Company's long-term debt securities by S&P or Moody's or any public
announcement that either S & P or Moody's has under surveillance or review its
rating of the Company's long-term debt securities (other than an announcement
with positive implications of a possible upgrading, and no implication of a
possible downgrading of such rating), if, in the judgment of the Purchaser, any
such development referred to in clause (i), (ii), (iii) or (iv) makes it
impracticable or inadvisable to consummate the sale and delivery of the Notes to
the Purchaser as contemplated by the Prospectus, as then amended or
supplemented.
(c) If specified by any related Terms Agreement and except to the
extent modified by such Terms Agreement, the Purchaser shall have received (i) a
certificate of the Company, dated as of such Closing Date, to the effect set
forth in Section 6(c), (ii) the opinions or letters of the General Counsel of
the Company and Cravath, Swaine & ▇▇▇▇▇, special counsel to the Company, each
dated as of such Closing Date, to the effect set forth in Section 6(d), (iii)
the opinion of ▇▇▇▇▇ ▇▇▇▇ & ▇▇▇▇▇▇▇▇, counsel for the Purchaser, dated as of
such Closing Date, to the effect set forth in Section 6(e), and (iv) a letter of
▇▇▇▇▇ & Young LLP, independent accountants for the Company, dated as of such
Closing Date, to the effect set forth in Section 6(f).
(d) Prior to the Closing Date, the Company shall have furnished to the
Purchaser such further information, certificates and documents as the Purchaser
may reasonably request.
14
If any of the conditions specified in this Section 7 shall not have
been fulfilled when and as provided in this Agreement and any Terms Agreement,
or if any of the opinions and certificates mentioned above or elsewhere in this
Agreement or such Terms Agreement shall not be reasonably satisfactory in form
and substance to the Purchaser and its counsel, such Terms Agreement and all
obligations of the Purchaser thereunder and with respect to the Notes subject
thereto may be canceled at, or at any time prior to, the respective Closing Date
by the Purchaser. Notice of such cancellation shall be given to the Company in
writing or by telephone or telegraph confirmed in writing
8. Right of Person Who Agreed to Purchase to Refuse to Purchase. The
Company agrees that any person who has agreed to purchase and pay for any Note
pursuant to a solicitation by the Agents, shall have the right to refuse to
purchase such Note if, at the Closing Date therefor, any condition set forth in
Section 6(a) and (b) shall not be satisfied.
9. Indemnification. (a) The Company will indemnify and hold harmless
each of you and each person, if any, who controls any of you within the meaning
of Section 15 of the Securities Act against any and all losses, claims, damages
and liabilities, joint or several (including any investigation, legal and other
expenses reasonably incurred in connection with, and any amount paid in
settlement of, any action, suit or proceeding or any claim asserted), to which
they, or any of them, may become subject under the Securities Act, the Exchange
Act or other Federal or state statutory law or regulation, at common law or
otherwise, insofar as such losses, claims, damages or liabilities arise out of
or are based upon any untrue statement or alleged untrue statement of a material
fact contained in any preliminary prospectus, the Registration Statement or the
Prospectus 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;
provided that the Company will not be liable to such Agent, Purchaser or
controlling person thereof to the extent that such loss, claim, damage or
liability arises out of or is based upon an untrue statement or omission or
alleged untrue statement or omission (i) made in reliance upon and in conformity
with information relating to such Agent or Purchaser furnished in writing to the
Company by such Agent or Purchaser expressly for use in the document or (ii) in
a preliminary prospectus if the Prospectus, as amended or supplemented as of the
time of the confirmation of the sale to such person, corrected the untrue
statement or omission or alleged untrue statement or omission which is the basis
of the loss, claim, damage or liability for which indemnification is sought and
a copy of the Prospectus, as so amended (but excluding any documents
incorporated therein by reference), was not sent or given to such person at or
before the confirmation of the sale to such person in any case where such
delivery is required by the Securities Act, unless such failure to
15
deliver the Prospectus, as so amended, was a result of noncompliance by the
Company with Section 5(d). This indemnity agreement will be in addition to any
liability that the Company might otherwise have.
(b) Each of you, severally and not jointly, will indemnify and hold
harmless the Company, each person, if any, who controls the Company within the
meaning of Section 15 of the Securities Act, each director of the Company and
each officer of the Company who signs the Registration Statement to the same
extent as the foregoing indemnity from the Company to each of you, but only
insofar as losses, claims, damages or liabilities arise out of or are based upon
any untrue statement or omission or alleged untrue statement or omission made in
any preliminary prospectus, the Registration Statement or the Prospectus or any
amendment or supplement thereto in reliance upon and in conformity with
information relating to such Agent or Purchaser furnished in writing to the
Company by such Agent or Purchaser expressly for use in the document, unless
such Agent or Purchaser has notified the Company in writing that such
information should no longer be used therein, it being understood and agreed
that the following information has been furnished by each of you: (i) the
second, fifth, sixth, seventh and eighth sentences of the second paragraph of
text under the caption "Plan of Distribution" in the Prospectus Supplement
relating to the terms of the offering by you and (ii) the tenth paragraph of
text under the caption "Plan of Distribution" in the Prospectus Supplement
relating to stabilization and over-allotment activities. This indemnity
agreement will be in addition to any liability that you might otherwise have.
(c) Any party that proposes to assert the right to be indemnified
under this Section 9 will, promptly after receipt of notice of commencement of
any action against such party in respect of which a claim is to be made against
an indemnifying party or parties under this Section 9, notify each such
indemnifying party of the commencement of such action, enclosing a copy of all
papers served, but the omission to so notify such indemnifying party will not
relieve it from any liability that it may have to any indemnified party
otherwise than under this Section 9. If any such action is brought against any
indemnified party and it notifies the indemnifying party of the commencement
thereof, the indemnifying party will be entitled to participate in, and, to the
extent that it elects by delivering written notice to the indemnified party
promptly after receiving notice of the commencement of the action from the
indemnified party, jointly with any other indemnifying party similarly notified,
to assume the defense of the action, with counsel who shall be reasonably
satisfactory to the indemnified party, and, after notice from the indemnifying
party to the indemnified party of its election to assume the defense, the
indemnifying party will not be liable to the indemnified party for any legal or
other expenses except as provided below and except for the reasonable costs of
investigation subsequently incurred by the indemnified party
16
in connection with the defense. The indemnified party will have the right to
employ its own counsel in any such action, but the fees and expenses of such
counsel will be at the expense of such indemnified party unless (1) the
employment of counsel by the indemnified party has been authorized in writing by
the indemnifying party, (2) the indemnified party has reasonably concluded that
there may be legal defenses available to it or other indemnified parties which
are different from or in addition to those available to the indemnifying party
(in which case the indemnifying party will not have the right to direct the
defense of such action on behalf of the indemnified party) or (3) the
indemnifying party has not in fact employed counsel reasonably satisfactory to
such indemnified party to assume the defense of such action within a reasonable
time after receiving notice of the commencement of the action, in each of which
cases the reasonable fees and expenses of such counsel will be at the expense of
the indemnifying party or parties and all such fees and expenses will be
reimbursed promptly as they are incurred. An indemnifying party will not be
liable for any settlement of any action or claim effected without its written
consent or, in connection with any proceeding or related proceedings in the same
jurisdiction, for the fees and expenses of more than one separate counsel for
all indemnified parties.
10. Contribution. In order to provide for just and equitable
contribution in circumstances in which the indemnification provided for in
Section 9 is applicable in accordance with its terms but for any reason is held
by a tribunal to be unavailable from the Company or any of you, the Company and
each of you, severally and not jointly, will contribute to the aggregate losses,
claims, damages and liabilities (including any investigation, legal and other
expenses reasonably incurred in connection with, and any amount paid in
settlement of, any action or any claims asserted, but after deducting any
contribution received by the Company from persons other than any of you, such as
persons who control the Company within the meaning of the Securities Act,
officers of the Company who signed the Registration Statement and directors of
the Company, who may also be liable for contribution) to which the Company and
you may be subject in such proportion so that each Agent or Purchaser is
responsible for that portion represented by the percentage that the aggregate
commissions received by such Agent or Purchaser pursuant to Section 1 bears to
the aggregate principal amount of Notes sold by the Company which are the
subject of the action and the Company is responsible for the balance; provided
that (i) no Agent or Purchaser will be responsible for any amount in excess of
the aggregate commissions received by such Agent or Purchaser pursuant to
Section 1 in respect of the Notes which are the subject of the action and (ii)
no person found guilty of fraudulent misrepresentation (within the meaning of
Section 11(f) of the Securities Act) will be entitled to contribution from any
person who was not guilty of such fraudulent misrepresentation. For purposes of
this Section 10, any person who controls a party to this Agreement within the
meaning of the Securities Act will have the same rights to contribution
17
as that party, and each officer of the Company who signed the Registration
Statement and each director of the Company will have the same rights to
contribution as the Company, subject in each case to clauses (i) and (ii) of
this Section 10. Any party entitled to contribution will, promptly after receipt
of notice of commencement of any action against such party in respect of which a
claim for contribution may be made under this Section 10, notify such party or
parties from whom contribution may be sought, but the omission so to notify will
not relieve the party or parties from whom contribution may be sought from any
other obligation it or they may have otherwise than under this Section 10. No
party will be liable for contribution with respect to any action or claim
settled without its written consent.
11. Termination. (a) Upon three days written notice, this Agreement
may be terminated for any reason at any time by the Company as to any or all of
you, or may be terminated for any reason at any time by any or all of you as to
those of you giving such notice. In the event of any such termination, no party
giving such notice shall have any liability to the other party or parties
hereto, except as provided in Sections 1(e), 5(h), 9, 10 and 12.
(b) Each Terms Agreement shall be subject to termination in the
absolute discretion of the Purchaser, by notice given to the Company prior to
delivery of any payment for Notes to be purchased thereunder, if prior to such
time (1) trading in any securities of the Company is suspended by the
Commission, by an exchange that lists such securities of the Company, or by the
National Association of Securities Dealers Automated Quotation National Market
System, (2) additional material governmental restrictions, not in force on the
date of this Agreement, have been imposed upon trading in securities generally
or minimum or maximum prices have been generally established on the New York
Stock Exchange or on the American Stock Exchange, or trading in securities
generally has been suspended on any such Exchange or a general banking
moratorium has been established by Federal or New York authorities, or (3) any
outbreak or material escalation of hostilities or other calamity or crisis
occurs the effect of which is such as to make it impracticable to market such
Notes.
12. Miscellaneous. The reimbursement, indemnification and contribution
agreements in Sections 1(e), 5(h), 9, 10 and 11 and the representations and
other agreements of the Company and you in this Agreement will remain in full
force and effect until the sixth anniversary of the date of termination of this
Agreement as to any party regardless of any termination of this Agreement or any
investigation made by or on behalf of you, the Company or any controlling person
and will survive delivery of and payment for the Notes.
18
This Agreement is for the benefit of you and the Company and their
respective successors and, to the extent expressed in this Agreement, for the
benefit of persons controlling you or the Company, and directors and officers of
each of you and the Company, and their respective successors, and no other
person, partnership, association or corporation shall acquire or have any right
under or by virtue of this Agreement.
All notices and communications under this Agreement will be in writing,
effective only on receipt and mailed or delivered, by messenger, facsimile
transmission or otherwise, addressed to the parties as follows: if to the Agents
or the Purchaser, to Credit Suisse First Boston Corporation, Eleven Madison
Avenue, New York, N.Y. 10010-3629, attention of ▇▇▇▇▇▇ ▇. ▇▇▇▇▇▇, ▇.▇. ▇▇▇▇▇▇
Securities Inc., ▇▇▇ ▇▇▇▇ ▇▇▇▇▇▇, ▇▇▇ ▇▇▇▇▇, ▇▇▇ ▇▇▇▇, ▇.▇. 10017, attention:
Medium-Term Note Department, ▇▇▇▇▇▇▇ ▇▇▇▇▇ ▇▇▇▇▇▇ Inc., ▇▇▇ ▇▇▇▇▇▇▇▇▇ ▇▇▇▇▇▇,
▇▇▇ ▇▇▇▇, ▇▇▇ ▇▇▇▇ ▇▇▇▇▇, Attention of ▇▇▇▇▇▇ ▇. ▇▇▇▇▇▇, and Banc of America
Securities LLC, Bank of America Corporate Center, ▇▇▇ ▇▇▇▇▇ ▇▇▇▇▇ ▇▇▇▇▇▇,
▇▇▇▇▇▇▇▇▇, ▇▇▇▇▇ ▇▇▇▇▇▇▇▇ ▇▇▇▇▇, attention: Medium-Term Note Desk, and if to the
Company, to Ashland Inc., ▇▇▇ ▇▇▇▇▇▇▇▇▇ ▇▇▇▇▇▇▇▇▇, ▇▇▇▇▇▇▇, ▇▇▇▇▇▇▇▇ ▇▇▇▇▇,
attention of the Treasurer, except that legal notices will be sent to the
attention of the General Counsel at ▇▇ ▇. ▇▇▇▇▇▇▇▇▇▇▇ ▇▇▇▇▇▇▇▇▇, ▇▇▇▇▇▇▇▇▇,
▇▇▇▇▇▇▇▇ ▇▇▇▇▇.
This Agreement may be signed in multiple counterparts that taken as a
whole constitute one agreement.
19
This Agreement will be governed by and construed in accordance with the
laws of the State of New York.
Please confirm that the foregoing correctly sets forth the agreement
between us.
Very truly yours,
ASHLAND INC.
By:
-------------------------
Title:
Confirmed:
CREDIT SUISSE FIRST BOSTON CORPORATION
By
----------------------------
Title:
▇.▇. ▇▇▇▇▇▇ SECURITIES INC.
By ----------------------------
Title:
▇▇▇▇▇▇▇ ▇▇▇▇▇ ▇▇▇▇▇▇ INC.
By ----------------------------
Title:
BANC OF AMERICA SECURITIES LLC
By ----------------------------
Title:
20
ANNEX A
Medium-Term Note Administrative Procedures
September __, 2001
The Medium-Term Notes, Series K, due Nine Months or More from their
issue date (the "Notes") are to be offered on a continuing basis by Ashland Inc.
(the "Company"). Credit Suisse First Boston Corporation, ▇.▇. ▇▇▇▇▇▇ Securities
Inc., ▇▇▇▇▇▇▇ ▇▇▇▇▇ ▇▇▇▇▇▇ Inc. and Banc of America Securities LLC, as agents
(individually, an "Agent" and collectively, the "Agents"), have each agreed to
use reasonable efforts to solicit offers to purchase the Notes. None of the
Agents will be obligated to purchase Notes for their own accounts. The Notes are
being sold pursuant to a Distribution Agreement, dated September __, 2001 (the
"Distribution Agreement"), among the Company and the Agents, and will be issued
pursuant to an Indenture, dated as of September __, 2001 (the "Indenture"),
between the Company and U.S. Bank National Association, as trustee (the
"Trustee"). The Notes will rank equally with all other unsecured and
unsubordinated indebtedness of the Company and will have been registered with
the Securities and Exchange Commission (the "Commission"). The Notes may be
denominated in U.S. dollars, or in such foreign currencies or currency units as
may be designated by the Company. The Notes are to be offered in an aggregate
principal amount of up to U.S.$350,000,000 (or the equivalent thereof if any of
the Notes is denominated in foreign currency or currency units).
Administrative and record-keeping responsibilities will be handled for
the Company by its Treasury and Finance Department. The Company will advise the
Agents in writing of those persons handling administrative responsibilities with
whom the Agents are to communicate regarding offers to purchase Notes and the
details of their delivery. Administrative procedures and certain terms of the
offering are explained below. Capitalized terms used herein and not otherwise
defined herein shall have the meanings assigned thereto in the Distribution
Agreement, the Prospectus or the Indenture.
Certain Terms of the Offering
Notes will be issued only in fully registered form and will be
represented by either a global certificate (a "Global Certificate") delivered to
U.S. Bank National Association, as custodian for The Depository Trust Company
(the "Depositary"), with ownership of beneficial interests in such Global
Certificates recorded in the book-entry system maintained by the Depositary (a
"Book-Entry Note") or a certificate (a "Definitive Certificate") delivered to a
person designated by an Agent.
A-1
U.S. Bank National Association, in addition to acting as Trustee, will
act as Exchange Rate Agent, Paying Agent, Calculation Agent and Security
Registrar for the Company, in each case, under the Indenture (in any of the
foregoing capacities, as applicable, "U.S. Bank").
Part I contains provisions common to Book-Entry and Certificated Notes.
Part II contains provisions specific to Certificated Notes and Part III contains
provisions specific to Book-Entry Notes. To the extent the procedures set forth
below conflict with the provisions of the Notes, the Indenture or the
Distribution Agreement, the terms and provisions of the Notes, the Indenture and
the Distribution Agreement shall prevail. Unless otherwise defined herein, terms
defined in the Indenture or the Notes shall be used herein as therein defined.
PART I: GENERAL
Price to Public
Each Note will be issued at or above par.
Denominations
The minimum denomination of the Notes will be $1,000 and in
denominations of integral multiples of $1,000 in excess thereof.
Issue Date
Each Note will be dated the date of its authentication. Each Note will
also bear an original issue date (the "Issue Date") which, with respect to any
Note (or portion thereof), shall mean the date of its original issuance and
shall be specified therein. The Issue Date shall remain the same for all Notes
subsequently issued upon transfer, exchange or substitution of a Note,
regardless of their dates of authentication.
Maturities
Each Note will mature on a Business Day, selected by the purchaser and
agreed to by the Company, which will be at least nine months after the Issue
Date. Each Floating Rate Note (as defined below) will mature on an Interest
Payment Date (as defined below) for such Note.
A-2
Interest Payment
Each interest bearing Note will bear interest from and including its
Issue Date, or in the case of Notes issued upon transfer or exchange, from the
most recent Interest Payment Date to which interest has been paid or provided
for, to but excluding the relevant Interest Payment Date or the maturity date of
such Note. Interest payments, if any, will be the amount of interest accrued
from and including the next preceding Interest Payment Date in respect of which
interest has been paid or duly provided for, or from and including the date of
issue, if no interest has been paid with respect to such Note, to but excluding
the applicable Interest Payment Date. Each Note will bear interest (i) in the
case of Notes bearing interest at a Fixed Rate (the "Fixed Rate Notes"), at the
annual rate stated on the face thereof, payable semi-annually in arrears on
February 15 and August 15 unless otherwise specified in the related pricing
supplement to the Prospectus Supplement (the "Pricing Supplement") (each an
"Interest Payment Date" with respect to such Fixed Rate Note) and at maturity
and (ii) in the case of Notes bearing interest at a rate or rates determined by
reference to an interest rate formula (the "Floating Rate Notes"), at a rate
determined pursuant to the formula stated on the face thereof, payable in
arrears on such dates as are specified therein and in the Pricing Supplement
(each such date an "Interest Payment Date" with respect to such Floating Rate
Note). In addition, a Floating Rate Note may bear interest at the lowest or
highest or average of two or more interest rate formulae. Interest (including
payments for partial periods) will be calculated and paid (a) in the case of
Fixed Rate Notes, on the basis of a 360-day year of twelve 30-day months, (b) in
the case of Floating Rate Notes whose interest formula is based on the Treasury
Rate or the Prime Rate, on the basis of the actual number of days in the year
divided by 365 or 366, as the case may be, and (c) in the case of Floating Rate
Notes whose interest formula is based on the Commercial Paper Rate, the LIBOR
Rate, the Federal Funds Rate, or on the CD Rate, on the basis of the actual
number of days in the year divided by 360. Interest will be payable (a) in the
case of Fixed Rate Notes, to the person in whose name the Note is registered at
the close of business on the February 1 or August 1 (the Regular Record Dates
with respect to Fixed Rate Notes) next preceding the Interest Payment Date,
unless otherwise specified in the Pricing Supplement, and (b) in the case of
Floating Rate Notes, to the person in whose name the Note is registered at the
close of business on the dates established on the Issue Date and set forth in
each such Note and in the applicable Pricing Supplement (the Regular Record
Dates with respect to Floating Rate Notes); provided, however, that interest
payable on a maturity date will be payable to the person to whom principal shall
be payable. Unless otherwise set forth in the applicable Prospectus Supplement,
the first payment of interest on any Note originally issued between a Regular
Record Date and an Interest Payment Date will be made on the Interest Payment
Date following the next succeeding Regular Record Date. With respect to Fixed
Rate Notes, each
A-3
payment of interest shall include interest accrued to but excluding the date of
such payment. For special provisions relating to Floating Rate Notes, see the
section entitled "Description of the Notes" in the Prospectus Supplement
relating to the Notes, dated September __, 2001, attached hereto and hereinafter
referred to as the "Prospectus Supplement". Except in the case of Book-Entry
Notes, all interest payments (excluding interest payments made at maturity) will
be made by check mailed to the person entitled thereto as provided above. All
interest payments on any Book-Entry Note will be made to the Depositary, or its
nominee, as Noteholder thereof, in accordance with arrangements then in effect
between the Trustee and the Depositary.
Trustee and U.S. Bank Not to Risk Funds
Nothing herein shall be deemed to require the Trustee or U.S. Bank to
risk or expend its own funds in connection with any payment to the Company, or
the Agents, or the Depositary, or any Noteholder, it being understood by all
parties that payments made by the Trustee or U.S. Bank to either the Company, or
the Agents, or the Depositary, or any Noteholder shall be made only to the
extent that funds are provided to the Trustee for such purpose.
Advertising Costs
The Company will determine with the Agents the amount of advertising
that may be appropriate in offering the Notes. Advertising expenses approved in
advance by the Company will be paid by the Company.
Business Day
"Business Day" means any day, other than a Saturday or Sunday, that
meets each of the following applicable requirements: the day is (a) not a day on
which banking institutions are authorized or required by law or regulation to be
closed in The City of New York, (b) if the Note is denominated in a Specified
Currency other than the euro or United States dollars, not a day on which
banking institutions are authorized or required by law or regulation to close in
the principal financial center of the country of the Specified Currency, (c) if
the Note is denominated in euro, any day on which the Trans-European Automated
Real-Time Gross Settlement Express Transfer (TARGET) System is open, and (d)
with respect to LIBOR Notes, a London Banking Day. "London Banking Day" means
any day on which dealings in deposits in United States dollars are transacted in
the London interbank market.
A-4
Procedures for Establishing the Terms of the Notes
The Company and the Agents will discuss from time to time the Issue
Date, maturity date, interest rates, and other provisions of the Notes that may
be sold as a result of the solicitation of offers by the Agents. If the Company
decides to post rates and a decision has been reached to change interest rates,
the Company will promptly notify each Agent. Each Agent will forthwith suspend
solicitation of purchases. At that time, the Agents will recommend and the
Company will establish rates to be so "posted". Following establishment of
posted rates and prior to the filing or mailing described in the following
sentence, the Agents may only record indications of interest in purchasing Notes
at the posted rates. If the Company accepts an offer at the posted rates, it
will prepare a Pricing Supplement reflecting the terms of such offer and will
arrange to have such Pricing Supplement electronically filed with the Commission
in accordance with the applicable paragraph of Rule 424(b) under the Act and
Rule 101(a) of Regulation S-T, and will supply at least 10 copies of the Pricing
Supplement to the Agent who presented such offer (the "Presenting Agent"). No
settlements may occur prior to such mailing or filing and the Agents will not,
prior to such mailing or filing, mail confirmations to customers who have
offered to purchase Notes at the posted rates. The Company will not offer Notes
denominated in a foreign currency unless it has received confirmation from the
Trustee that the Trustee will be able to perform its duties in respect of such
Notes, and that the Trustee has had sufficient time to make the necessary
arrangements.
Outdated Pricing Supplements and copies of the Prospectus to which they
are attached (other than those retained for files) will be destroyed.
Suspension of Solicitation; Amendment or Supplement
As provided in the Distribution Agreement, the Company may suspend
solicitation of purchases at any time and, upon receipt of at least one Business
Day's prior notice from the Company, the Agents will each forthwith suspend
solicitation until such time as the Company has advised them that solicitation
of purchases may be resumed.
If the Agents receive the notice from the Company contemplated by
Section 5(b) of the Distribution Agreement, they will promptly suspend
solicitation and will only resume solicitation as provided in the Distribution
Agreement. If the Company decides to amend or supplement the Registration
Statement or the Prospectus relating to the Notes, it will promptly advise each
Agent and will furnish each Agent with the proposed amendment or supplement in
accordance with the terms of the Distribution Agreement. The Company will
promptly file or mail to the Commission for filing such amendment or
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supplement, provide the Agents with copies of any such amendment or supplement,
confirm to the Agents that such amendment or supplement has been filed with the
Commission and advise the Agents that solicitation may be resumed.
Any such suspension shall not affect the Company's obligations under
the Distribution Agreement; and in the event that at the time the Company
suspends solicitation of purchases there shall be any offers already accepted by
the Company outstanding for settlement, the Company will have the sole
responsibility for fulfilling such obligations. The Company will in addition
promptly advise the Agents and the Trustee if such offers are not to be settled
and if copies of the Prospectus as in effect at the time of the suspension may
not be delivered in connection with the settlement of such offers.
Acceptance of Offers
Each Agent will promptly advise the Company, orally or in writing, of
each reasonable offer to purchase Notes received by it, other than those
rejected by such Agent. Each Agent may, in its discretion reasonably exercised,
without notice to the Company, reject any offer received by it, in whole or in
part. The Company will have the sole right to accept offers to purchase Notes
and may reject any such offer, in whole or in part. If the Company rejects an
offer, the Company will promptly notify the Agent involved.
Delivery of Prospectus
A copy of the Prospectus as most recently amended or supplemented on
the date of delivery thereof (except as provided below) must be delivered to a
purchaser prior to or together with the earlier of the delivery of (i) the
written confirmation provided for above, and (ii) any Note purchased by such
purchaser. The Company shall ensure that the Presenting Agent receives copies of
the Prospectus and each amendment or supplement thereto (including appropriate
pricing supplements) in such quantities and within such time limits as will
enable the Presenting Agent to deliver such confirmation or Note to a purchaser
as contemplated by these procedures and in compliance with the preceding
sentence. If, since the date of acceptance of a purchaser's offer, the
Prospectus shall have been supplemented solely to reflect any sale of Notes on
terms different from those agreed to between the Company and such purchaser or a
change in posted rates not applicable to such purchaser, such purchaser shall
not receive the Prospectus as supplemented by such new supplement, but shall
receive the Prospectus as supplemented to reflect the terms of the Notes being
purchased by such purchaser and otherwise as most recently amended or
supplemented on the date of delivery of the Prospectus.
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Determination of Settlement Date
All offers accepted by the Company will be settled no later than the
third Business Day next succeeding the date of acceptance unless otherwise
agreed by any purchaser and the Company. The settlement date shall be specified
upon receipt of an offer.
PART II: CERTIFICATED NOTES
Settlement Date
The Company will instruct, by telecopy or other acceptable means, the
Trustee to authenticate and deliver the Notes no later than 2:15 P.M., New York
City time, on the settlement date. Such instructions will be given by the
Company no later than 3:00 P.M., New York City time, on the Business Day prior
to the settlement date unless the settlement date is the date of acceptance by
the Company of the offer to purchase the Notes, in which case such instructions
will be given by the Company by 10:00 A.M., New York City time.
Details for Settlement
For each offer accepted by the Company, the Presenting Agent shall
communicate to the Company's Treasury and Finance Department by telephone,
facsimile transmission or other acceptable means the following information (the
"Purchase Information"):
1. Exact name in which the Note or Notes are to be registered
("registered owner").
2. Exact address of registered owner and, if different, the address for
payment of principal and interest.
3. Taxpayer identification number of registered owner.
4. Principal amount of each Note in authorized denominations to be
delivered to registered owner.
5. Currency or currency unit of such principal amount.
6. The issue price, interest rate, if fixed or, if floating, the initial
interest rate, the interest rate basis, the spread or spread
multiplier, the maximum or minimum interest rates, if any, the index
maturity, the Interest Reset Dates and the
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Interest Payment Dates (as such terms are defined in the Prospectus Supplement)
of each Note, and all other items necessary to complete each Note.
7. Maturity date.
8. Issue date.
9. Settlement date.
10. Presenting Agent's commission (to be paid by the Company upon
settlement).
11. Terms of redemption and Redemption Date, if any.
12. Net proceeds to the Company.
The Issue Date of, and the settlement date for, Notes will be the same.
Before accepting any offer to purchase Notes to be settled in less than three
Business Days, the Company shall verify that the Trustee will have adequate time
to prepare and authenticate the Notes.
After receiving the details for each offer from the Presenting Agent,
the Company will, after recording the details and any necessary calculations,
communicate the Purchase Information by facsimile transmission or other
acceptable means, to the Trustee. The Company will identify in writing to the
Trustee officers of the Company who are authorized to provide such details for
each such offer to the Trustee.
Settlement; Note Deliveries and Cash Payment
Upon the receipt of appropriate documentation and instructions from the
Company, the Trustee will cause the Notes to be prepared and authenticated.
The Trustee will deliver the Notes, in accordance with instructions
from the Company, to the Presenting Agent, as the Company's agent, for the
benefit of the purchaser. The Presenting Agent shall make payment in immediately
available funds directly to the account of the Company in an amount equal to the
face amount of the Notes.
The Presenting Agent, as the Company's agent, will deliver the Notes
(with the written confirmation provided for above) to the purchaser thereof
against payment by such purchaser in immediately available funds. Delivery of
any
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confirmation or Note will be made in compliance with "Delivery of
Prospectus" above.
Fails
In the event that a purchaser shall fail to accept delivery of and make
payment for a Note on the settlement date, the Presenting Agent will notify the
Trustee and the Company, by telephone or other acceptable means. If the Note has
been delivered to the Presenting Agent, as the Company's agent, the Presenting
Agent shall return such Note to the Trustee. If funds have been advanced for the
purchase of such Note, the Trustee will, immediately upon receipt of such Note,
confirm receipt to the Company and the Company shall refund the payment
previously made by the Presenting Agent in immediately available funds.
Such payments will be made on the settlement date, if possible, and in any event
not later than the Business Day following the settlement date. If such fail
shall have occurred for any reason other than the failure of the Presenting
Agent to provide the Purchase Information to the Company or to provide a
confirmation to the purchaser, the Company will reimburse the Presenting Agent
on an equitable basis for its loss of the use of funds during the period when
they were credited to the account of the Company.
Immediately upon receipt of the Note in respect of which the fail
occurred, the Trustee will cause the Security Registrar to make appropriate
entries to reflect the fact that the Note was never issued and will destroy the
Note.
Payment of Interest
On the fifth Business Day immediately preceding each Interest Payment
Date, the Trustee will furnish the Company with the total amount of the interest
payments to be paid on the Certificated Notes on such Interest Payment Date. The
Trustee will provide monthly to the Company's Treasury and Finance Department a
list of the principal and interest to be paid on Certificated Notes maturing in
the next succeeding month, to the extent then known. The Trustee will assume
responsibility for withholding taxes on interest paid as required by law.
Maturity
Upon presentation of each Certificated Note at maturity the Trustee (or
any duly appointed Paying Agent) will pay the principal amount thereof, together
with accrued interest due at maturity out of immediately available funds
provided by the Company. Such payment shall be made in immediately available
funds to the holder of the Note, provided that the Note is presented to the
Trustee (or any such Paying Agent) in time for the Trustee (or such Paying
Agent) to make
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payments in such funds in accordance with its normal procedures. The Company
will provide the Trustee (and any such Paying Agent) with funds available for
immediate use for such purpose. Notes presented at maturity will be canceled by
the Trustee as provided in the Indenture.
Authenticity of Signatures
The Company will cause the Trustee to furnish the Agents from time to
time with the specimen signatures of each of the Trustee's officers, employees
or agents who have been authorized by the Trustee to authenticate Notes, but the
Agents will have no obligation or liability to the Company or the Trustee in
respect of the authenticity of the signature of any officer, employee or agent
of the Company or the Trustee on any Note.
PART III: BOOK-ENTRY NOTES
An owner of a Book-Entry Note will not be entitled to receive a
certificate representing such Note. In connection with the qualification of the
Book-Entry Notes for eligibility in the book-entry system maintained by the
Depositary, Citibank will perform the custodial, document control and
administrative functions described below, in accordance with its respective
obligations under a Letter of Representations (the "Letter of Representations")
from the Company and U.S. Bank to the Depositary and a Medium-Term Note
Certificate Agreement (the "Certificate Agreement") between U.S. Bank and the
Depositary, and its obligations as a participant in the Depositary, including
the Depositary's Same-Day Funds Settlement system ("SDFS").
Issuance
On any date of settlement (as defined under "settlement" below) for one
or more Book-Entry Notes, the Company will issue a Global Certificate or
Certificates in fully registered form without coupons representing in each case
not in excess of $500,000,000 principal amount of all of such Book-Entry Notes
that have the same interest rate, Stated Maturity and terms. Each Global
Certificate will be dated and issued as of the date of its authentication by the
Trustee. No Global Certificate will represent any Certificated Note.
Identification Numbers
The Company will arrange, on or prior to the commencement of a program
for the offering of Book-Entry Notes, with the CUSIP Service Bureau of Standard
& Poor's (the "CUSIP Service Bureau") for the reservation of a series of CUSIP
numbers (including tranche numbers), consisting of approximately 900 CUSIP
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numbers relating to Global Certificates representing the Book-Entry Notes. The
Company will obtain from the CUSIP Service Bureau a written list of such series
of reserved CUSIP numbers and will deliver such list to U.S. Bank and the
Depositary. U.S. Bank will assign CUSIP numbers to Global Certificates as
described below under Settlement Procedure "B". The Depositary will notify the
CUSIP Service Bureau periodically of the CUSIP numbers that the Company has
assigned to Global Certificates. U.S. Bank will notify the Company at any time
when fewer than 100 of the reserved CUSIP numbers remain unassigned to Global
Certificates, and if it deems it necessary, the Company will reserve additional
CUSIP numbers for assignment to Global Certificates representing Book-Entry
Notes. Upon obtaining such additional CUSIP numbers, the Company shall deliver a
list thereof to U.S. Bank and the Depositary.
Registration
Each Global Certificate will be registered in the name of Cede & Co.,
as nominee for the Depositary, on the Securities Register maintained under the
Indenture governing such Global Certificate. The beneficial owner of a
Book-Entry Note (or one or more indirect participants in the Depositary
designated by such owner) will designate one or more participants in the
Depositary (with respect to such Note, the "Participants") to act as agent or
agents for such owner in connection with the book-entry system maintained by the
Depositary, and the Depositary will record in book-entry form, in accordance
with instructions provided by such Participants, a credit balance with respect
to such Note in the account of such Participants. The ownership interest of such
beneficial owner in such Note will be recorded through the records of such
Participants or through the separate records of such Participants and one or
more indirect participants in the Depositary. So long as Cede & Co. is the
registered owner of a Global Certificate, the Depositary will be considered the
sole owner and holder of the Book-Entry Notes represented by such Global
Certificate for all purposes under the Indenture.
Transfers
Transfers of a Book-Entry Note will be accomplished by book entries
made by the Depositary and, in turn, by Participants (and in certain cases, one
or more indirect participants in the Depositary) acting on behalf of beneficial
transferors and transferees of such Note.
Consolidation and Exchange
U.S. Bank may deliver to the Depositary and the CUSIP Service Bureau at
any time a written notice of consolidation specifying (i) the CUSIP numbers of
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two or more Outstanding Global Certificates that represent Book-Entry Notes
having the same interest rate, Stated Maturity and tenor and for which interest
has been paid to the same date, (ii) a date, occurring at least thirty days
after such written notice is delivered and at least thirty days before the next
Interest Payment Date for such Book-Entry Notes, on which such Global
Certificates shall be exchanged for a single replacement Global Certificate and
(iii) a new CUSIP number, obtained from the Company, to be assigned to such
replacement Global Certificate. Upon receipt of such a notice, the Depositary
will send to its participants (including U.S. Bank) a written reorganization
notice to the effect that such exchange will occur on such date. Prior to the
specified exchange date, U.S. Bank will deliver to the CUSIP Service Bureau a
written notice setting forth such exchange date and the new CUSIP number and
stating that, as of such exchange date, the CUSIP numbers of the Global
Certificates to be exchanged will no longer be valid. On the specified exchange
date, U.S. Bank will exchange such Global Certificates for a single Global
Certificate bearing the new CUSIP number and new Issue Date, which shall be the
most recent Interest Payment Date to which interest has been paid or duly
provided for on the predecessor Global Certificates, and the CUSIP numbers of
the exchanged Global Certificates will, in accordance with CUSIP Service Bureau
procedures, be canceled and not immediately reassigned. Notwithstanding the
foregoing, if the Global Certificates to be exchanged exceed $500,000,000 in
aggregate principal amount, one Global Certificate will be authenticated and
issued to represent each $500,000,000 of principal amount of the exchanged
Global Certificates and an additional Global Certificate will be authenticated
and issued to represent any remaining principal amount of such Global
Certificates (see "Denominations" below).
Denominations
Book-Entry Notes will be issued in principal amounts of $1,000 or any
amount in excess thereof that is an integral multiple of $1,000. Global
Certificates will be denominated in principal amounts not in excess of
$500,000,000. If one or more Book-Entry Notes having an aggregate principal
amount in excess of $500,000,000 would, but for the preceding sentence, be
represented by a single Global Certificate, then one Global Certificate will be
issued to represent $500,000,000 principal amount of such Book-Entry Note or
Notes and an additional Global Certificate will be issued to represent any
remaining principal amount of such Book-Entry Note or Notes. In such a case,
each of the Global Certificates representing such Book-Entry Note or Notes shall
be assigned the same CUSIP number.
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Interest
Standard & Poor's will use the information received in the pending
deposit message described under Settlement Procedure "C" below in order to
include the amount of any interest payable and certain other information
regarding the related Global Security in the appropriate weekly bond report
published by Standard & Poor's.
Payments of Principal and Interest
Payments of Interest Only. Promptly after each Regular Record Date,
U.S. Bank will deliver to the Company and the Depositary a written notice
specifying by CUSIP number the amount of interest to be paid on each Global
Certificate on the following Interest Payment Date (other than an Interest
Payment Date coinciding with Maturity) and the total of such amounts. The
Depositary will confirm the amount payable on each Global Certificate on such
Interest Payment Date by reference to the daily bond reports published by
Standard & Poor's. The Company will pay to U.S. Bank, as Paying Agent, the total
amount of interest due on such Interest Payment Date (other than at Maturity),
and Citibank will pay such amount to the Depositary at the times and in the
manner set forth below under "Manner of Payment".
Payments at Maturity. On or about the first Business Day of each month,
U.S. Bank will deliver to the Company, the Depositary and the Trustee a written
list of principal and interest to be paid on each Global Certificate maturing in
the following month. The Company, U.S. Bank and the Depositary will confirm the
amounts of such principal and interest payments with respect to each such Global
Certificate on or about the fifth Business Day preceding the Maturity of such
Global Certificate. The Company will pay to U.S. Bank as the Paying Agent, the
principal amount of such Global Certificate, together with interest due at such
Maturity and U.S. Bank will pay such amount to the Depositary at the times and
in the manner set forth below under "Manner of Payment".
Promptly after payment to the Depositary of the principal and interest
due at the Maturity of such Global Certificate, U.S. Bank will cancel such
Global Certificate and deliver it to the Company. U.S. Bank will from time to
time, on request by the Trustee, deliver to the Trustee a written statement
indicating the total principal amount of outstanding Global Certificates for
which it serves as Trustee as of the immediately preceding Business Day.
Manner of Payment. The total amount of any principal and/or interest
due on Global Certificates on any Interest Payment Date or at Maturity shall be
paid by the Company to U.S. Bank in funds available for use by U.S. Bank as of
9:30
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A.M. (New York City time) on such date. The Company will make such payment
on such Global Certificates by instructing U.S. Bank to withdraw funds from an
account maintained by the Company at U.S. Bank. The Company will confirm such
instruction in writing to U.S. Bank. U.S. Bank will forward to the Company an
appropriate debit advice. Prior to 10:00 A.M. (New York City time) on such date
or as soon as possible thereafter, U.S. Bank will make such payments to the
Depositary in same day funds in accordance with the payment provisions contained
in the Letter of Representations. The Depositary will allocate such payments to
its Participants in accordance with its existing operating procedures. NONE OF
THE COMPANY, THE TRUSTEE NOR U.S. BANK SHALL HAVE ANY RESPONSIBILITY OR
LIABILITY FOR THE PAYMENT BY THE DEPOSITARY TO SUCH PARTICIPANTS OF THE
PRINCIPAL OF AND INTEREST ON THE BOOK-ENTRY NOTES.
Withholding Taxes. The amount of any taxes required under applicable
law to be withheld from any interest payment on a Book-Entry Note will be
determined and withheld by the Participant, indirect participant in the
Depositary or other Person responsible for forwarding payments and materials
directly to the beneficial owner of such Note.
Settlement
The receipt by the Company of immediately available funds in payment
for a Book-Entry Note and the authentication and issuance of the Global
Certificate representing such Note shall constitute "settlement" with respect to
such Book-Entry Note. All orders accepted by the Company will be settled on the
next Business Day pursuant to the timetable for settlement set forth below
unless the Company and the purchaser agree to settlement on a later date.
Settlement Procedures
Settlement Procedures with regard to each Global Certificate sold by
the Company through an Agent, as agent, shall be as follows:
▇. ▇▇▇▇ Agent will advise the Company by telephone of the Purchase
Information with respect to each Book-Entry Note which will be represented by
the Global Certificate which is to be issued.
B. The Company will advise U.S. Bank writing or electronic transmission
of the information set forth in Settlement Procedure "A" above and the name of
such Agent. Each such communication by the Company shall constitute a
representation and warranty by the Company to U.S. Bank, the Trustee and each
Agent that (i) such Global Certificate is then, and at the time of
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issuance and sale thereof will be, duly authorized for issuance and sale by the
Company, (ii) such Global Certificate will conform with the terms of the
Indenture pursuant to which such Global Certificate is issued and (iii) upon
authentication and delivery of such Global Certificate, the aggregate principal
amount of all Notes issued will not exceed $350,000,000 (except for Book-Entry
Notes represented by Global Certificates authenticated and delivered in exchange
for or in lieu of Global Certificates pursuant to Section 304, 305, 306 or 906
of the Indenture and except for Certificated Notes authenticated and delivered
upon registration of, transfer of, in exchange for, or in lieu of Certificated
Notes pursuant to any such Section).
C. U.S. Bank will assign a CUSIP number to such Global Certificate and
advise the Company by telephone of such CUSIP number. U.S. Bank will enter a
pending deposit message through the Depositary's Participant Terminal System,
providing the following settlement information to the Depositary (which will
provide such information to Standard & Poor's), such Agent, and, upon request,
the Trustee under the Indenture pursuant to which each Book-Entry Note which is
represented by the Global Certificate which is to be issued:
1. The information set forth in Settlement Procedure "A".
2. Initial Interest Payment Date for such Book-Entry Note, number of days
by which such date succeeds the related Regular Record Date (which, in the case
of Floating Rate Notes which reset daily or weekly, shall be the date 5 calendar
days immediately preceding the applicable Interest Payment Date, and in the case
of all other Notes shall be the Regular Record Date as defined in the Note) and
amount of interest payable on such Interest Payment Date.
3. CUSIP number of the Global Certificate representing such Book-Entry
Note.
4. Whether such Global Certificate will represent any other Book-Entry Note
(to the extent known at such time).
D. The Trustee will complete the first page of the preprinted note, the
form of which was previously approved by the Company, the Agents and the
Trustee.
E. The Trustee will authenticate the Global Certificate.
F. The Depositary will credit each Book-Entry Note represented by the
Global Certificate to be issued to U.S. Bank's participant account at the
Depositary.
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▇. ▇.▇. Bank will enter an SDFS deliver order through the Depositary's
Participant Terminal System, with respect to each Book-Entry Note represented by
the Global Certificate to be issued, instructing the Depositary to (i) debit
such Book-Entry Note to U.S. Bank's participant account and credit such
Book-Entry Note to such Agent's participant account and (ii) debit such Agent's
settlement account and credit U.S. Bank's settlement account for an amount equal
to the price of such Book-Entry Note less such Agent's commission. The entry of
such a deliver order shall constitute a representation and warranty by U.S. Bank
to the Depositary that (i) the Global Certificate representing such Book-Entry
Note has been issued and authenticated and (ii) U.S. Bank is holding such Global
Certificate pursuant to the Certificate Agreement.
H. The Agent will enter an SDFS deliver order through the Depositary's
Participant Terminal System, with respect to each Book-Entry Note represented by
the Global Certificate to be issued, instructing the Depositary (i) to debit
such Book-Entry Note to such Agent's participant account and credit such
Book-Entry Note to the participant account of the Participant with respect to
such Book-Entry Note and (ii) to debit the settlement account of such
Participant and credit the settlement account of such Agent for an amount equal
to the price of such Book-Entry Note.
I. Transfers of funds in accordance with SDFS deliver orders described
in Settlement Procedures "G" and "H" will be settled in accordance with SDFS
Paying Agent Operating Procedures (as defined in the Letter of Representations)
in effect on the settlement date.
J. U.S. Bank will credit to an account of the Company maintained at
U.S. Bank, funds available for immediate use in the amount transferred to
Citibank in accordance with Settlement Procedure "G".
K. U.S. Bank, as custodian for the Depositary, will hold the Global
Certificate pursuant to the Certificate Agreement. Periodically, U.S. Bank will
send to the Company a statement setting forth the principal amount of Book-Entry
Notes and Global Certificates outstanding as of that date under the Indenture
and setting forth a brief description of any sales of which the Company has
advised U.S. Bank but which have not yet been settled.
▇. ▇▇▇▇ Agent will deliver to the purchaser a copy of the most recent
Prospectus applicable to the Notes with or prior to any written offer of Notes
and the confirmation and payment by the purchaser of the Note.
Such Agent will confirm the purchase of each Book-Entry Note to the
purchaser either by transmitting to the Participant with respect to such
Book-Entry
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Note a confirmation order or orders through the Depositary's institutional
delivery system or by mailing a written confirmation to such purchaser.
Settlement Procedures Timetable
For orders of Book-Entry Notes solicited by an Agent, as agent, and
accepted by the Company for settlement on the first Business Day after the sale
date, Settlement Procedures "A" through "L" set forth above shall be completed
as soon as possible but not later than the respective times (New York City time)
set forth below:
Settlement
Procedure Time
---------- ----
A-B 11:00 A.M. on the sale date
C 2:00 P.M. on the sale date
D 3:00 P.M. on day before settlement date
E 9:00 A.M. on settlement date
G-H 2:00 P.M. on settlement date
I 4:45 P.M. on settlement date
▇-▇ 5:00 P.M. on settlement date
If a sale is to be settled more than one Business Day after the sale
date, Settlement Procedures "A", "B" and "C" shall be completed as soon as
practicable but no later than 11:00 A.M. and 2:00 P.M., as the case may be, on
the first Business Day after the sale date. In connection with a sale which is
to be settled more than one Business Day after the sale date, if the initial
interest rate for a Floating Rate Note is not known at the time that Settlement
Procedure "A" is completed, Settlement Procedures "B" and "C" shall be completed
as soon as such rates have been determined, but no later than 11:00 a.m. and
2:00 p.m., respectively, on the second Business Day before the Settlement Date.
Settlement Procedure "I" is subject to extension in accordance with any
extension of Fedwire closing deadlines and in the other events specified in the
SDFS operating procedures in effect on the settlement date.
If settlement of a Note is rescheduled or canceled, U.S. Bank will
deliver to the Depositary, through the Depositary's Participant Terminal System,
a
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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
Prior to U.S. Bank's entry of an SDFS deliver order with respect to a
Book-Entry Note pursuant to Settlement Procedure "G", U.S. Bank, upon written
request of the Company, shall deliver through the Depositary's Participant
Terminal System, as soon as practicable, but not later than 2:00 p.m. on any
Business Day, a withdrawal message instructing the Depositary to debit such
Book-Entry Note to U.S. Bank's participant account. The Depositary will process
the withdrawal message, provided that U.S. Bank's participant account contains a
principal amount of the Global Certificate representing such Book-Entry Note
that is at least equal to the principal amount to be debited. If a withdrawal
message is processed with respect to all the Book-Entry Notes represented by a
Global Certificate, U.S. Bank will mark such Global Certificate "Canceled", make
appropriate entries in U.S. Bank's records and send such canceled Global
Certificate to the Company. The CUSIP number assigned to such Global Certificate
shall, in accordance with CUSIP Service Bureau procedures, be canceled and not
immediately reassigned. If a withdrawal message is processed with respect to one
or more, but not all, of the Book-Entry Notes represented by a Global
Certificate, U.S. Bank will exchange such Global Certificate for two Global
Certificates, one of which shall represent such Book-Entry Note or Notes and
shall be canceled immediately after issuance and the other of which shall
represent the other Book-Entry Notes previously represented by the surrendered
Global Certificate and shall bear the CUSIP number of the surrendered Global
Certificate.
If the purchase price for any Book-Entry Note is not timely paid to the
Participant with respect to such Note by the beneficial purchaser thereof (or a
Person, including an indirect participant in the Depositary, acting on behalf of
such purchaser), such Participant and, in turn, the Agent for such Note may
enter a deliver order through the Depositary's Participant Terminal System
debiting such Note to such Agent's participant account and crediting such Note
free to the participant account of U.S. Bank and shall notify U.S. Bank and the
Company thereof. Thereafter, U.S. Bank (i) will immediately notify the Company
thereof, once U.S. Bank has confirmed that such Note has been credited to its
participant account, and the Company shall immediately transfer by Fedwire (in
immediately available funds) to such Agent an amount equal to the price of such
Note which was previously transferred to the account of the Company maintained
at U.S. Bank in accordance with Settlement Procedure and (ii) U.S. Bank will
deliver the withdrawal message and take the related actions described in the
preceding paragraph. The Agent will not be entitled to any commission with
respect to any
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Note which the purchaser does not accept and make payment for. Such debits and
credits will be made on the Settlement Date, if possible, and in any event not
later than 5:00 p.m. on the following Business Day. If such failure shall have
occurred for any reason other than failure 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 its loss of the 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 Note, 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 Notes to have been
represented by a Global Certificate, U.S. Bank will provide, in accordance with
Settlement Procedures "D" and "E", for the authentication and issuance of a
Global Certificate representing the other Book-Entry Notes to have been
represented by such Global Certificate and will make appropriate entries in its
records.
A-19
ANNEX B
Ashland Inc.
Terms Agreement
_________, 200_
Credit Suisse First Boston Corporation
▇▇▇▇▇▇ ▇▇▇▇▇▇▇ ▇▇▇▇▇▇
▇▇▇ ▇▇▇▇, ▇▇ ▇▇▇▇▇
▇.▇. ▇▇▇▇▇▇ Securities Inc.
▇▇▇ ▇▇▇▇ ▇▇▇▇▇▇
▇▇▇ ▇▇▇▇, ▇▇ ▇▇▇▇▇
▇▇▇▇▇▇▇ ▇▇▇▇▇ ▇▇▇▇▇▇ Inc.
▇▇▇ ▇▇▇▇▇▇▇▇▇ ▇▇▇▇▇▇
▇▇▇ ▇▇▇▇, ▇▇ ▇▇▇▇▇
Banc of America Securities LLC
Bank of America Corporate Center
▇▇▇ ▇▇▇▇▇ ▇▇▇▇▇ ▇▇▇▇▇▇
▇▇▇▇▇▇▇▇▇, ▇▇ ▇▇▇▇▇
Ladies and Gentlemen:
Ashland Inc. (the "Company") proposes, subject to the terms and
conditions stated herein and in the Distribution Agreement, dated September __,
2001 (the "Distribution Agreement"), between the Company on the one hand and
Credit Suisse First Boston Corporation, ▇.▇. ▇▇▇▇▇▇ Securities Inc., ▇▇▇▇▇▇▇
▇▇▇▇▇ ▇▇▇▇▇▇ Inc. and Banc of America Securities LLC (the "Purchasers") on the
other, to issue and sell to one or more of Credit Suisse First Boston
Corporation, ▇.▇. ▇▇▇▇▇▇ Securities Inc., ▇▇▇▇▇▇▇ ▇▇▇▇▇ ▇▇▇▇▇▇ Inc. and Banc of
America Securities LLC the securities specified in the Schedule hereto (the
"Purchased Securities"). Each of the provisions of the Distribution Agreement
not specifically related to the solicitation by the Agents, as the agents of the
Company, of offers to purchase Securities is incorporated herein by reference in
its entirety, and shall be deemed to be part of this Terms Agreement to the same
extent as if such
B-1
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 4
of the Distribution Agreement which makes reference to the Prospectus shall be
deemed to be a representation and warranty as of the date of 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 the Purchasers and the Purchasers agree to purchase from the
Company the Purchased Securities, at the time and place, in the principal amount
and at the purchase price set forth in the Schedule hereto.
If the foregoing is in accordance with your understanding, please sign
and return to us the counterparts hereof, and upon acceptance hereof by you this
letter and such acceptance hereof, including those provisions of the
Distribution Agreement incorporated herein by reference, shall constitute a
binding agreement between you and the Company.
ASHLAND INC.
By
---------------------------
Title:
Accepted:
[CREDIT SUISSE FIRST BOSTON CORPORATION
By
-----------------------------
Title:]
[▇.▇. ▇▇▇▇▇▇ SECURITIES INC.
By -----------------------------
Title:]
B-2
[▇▇▇▇▇▇▇ ▇▇▇▇▇ ▇▇▇▇▇▇ INC.
By ------------------------------
Title:]
[BANC OF AMERICA SECURITIES LLC
By ------------------------------
Title:]
B-3
SCHEDULE TO ANNEX B
Title of Purchased Securities:
[__%] Medium-Term Notes
Aggregate Principal Amount:
$
-------------
[Price to Public:]
Purchase Price by [Name of Purchaser]:
% of the principal amount of the Purchased Securities, plus accrued
interest 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 [immediately available] funds]
[By wire transfer to a bank account specified by the Company in
[immediately available] funds]]
Time of Delivery:
Closing Location:
Maturity:
Interest Rate:
[ %]
Interest Payment Dates:
[months and dates]
Other Provisions:
B-4
Documents to be Delivered:
The following documents referred to in the Distribution Agreement shall be
delivered as a condition to the Closing:
[(1) The officers' certificate referred to in Section 6(c).]
[(2) The opinions referred to in Section 6(d).]
[(3) The opinion referred to in Section 6(e).]
[(4) The accountants' letter referred to in Section 6(f).]
B-5
ANNEX C-1
FORM OF OPINION OF GENERAL COUNSEL OF ASHLAND INC.
[DATE]
Credit Suisse First Boston Corporation
▇▇▇▇▇▇ ▇▇▇▇▇▇▇ ▇▇▇▇▇▇
▇▇▇ ▇▇▇▇, ▇▇ ▇▇▇▇▇
▇.▇. ▇▇▇▇▇▇ Securities Inc.
▇▇▇ ▇▇▇▇ ▇▇▇▇▇▇
▇▇▇ ▇▇▇▇, ▇▇ ▇▇▇▇▇
▇▇▇▇▇▇▇ ▇▇▇▇▇ ▇▇▇▇▇▇ Inc.
▇▇▇ ▇▇▇▇▇▇▇▇▇ ▇▇▇▇▇▇
▇▇▇ ▇▇▇▇, ▇▇ ▇▇▇▇▇
Banc of America Securities LLC
Bank of America Corporate Center
▇▇▇ ▇▇▇▇▇ ▇▇▇▇▇ ▇▇▇▇▇▇
▇▇▇▇▇▇▇▇▇, ▇▇ ▇▇▇▇▇
Ladies and Gentlemen:
Re: Distribution Agreement by and between
Credit Suisse First Boston Corporation, ▇.▇. ▇▇▇▇▇▇ Securities Inc.,
▇▇▇▇▇▇▇ ▇▇▇▇▇ ▇▇▇▇▇▇ Inc., Banc of America Securities LLC and
Ashland Inc.
I am Vice President and General Counsel of Ashland Inc., a Kentucky
corporation ("Ashland"), and as such I have acted as counsel for Ashland in
connection with the execution and delivery of a Distribution Agreement dated
September __, 2001 (the "Distribution Agreement") between you and Ashland,
providing for the issue and sale by Ashland of up to $350,000,000 aggregate
principal amount of its Medium-Term Notes, Series K, Due Nine Months or More
from Date of Issue (the "Notes"), to be issued pursuant to the Indenture dated
as of September __, 2001 (the "Indenture"), between Ashland and U.S. Bank
National Association, as Trustee.
In that connection, I have examined originals, or copies certified or
otherwise identified to my satisfaction, of such documents, corporate records
and other instruments as I have deemed necessary or appropriate for the purpose
of
C-1-1
this opinion, including (a) the Second Restated Articles of Incorporation of
Ashland, as amended; (b) the By-laws of Ashland, as amended; (c) the
Registration Statement on Form S-3 (File No. 333-o), (the "Registration
Statement"), relating to $600,000,000 aggregate principal amount of securities
of Ashland registered under the Securities Act of 1933, as amended (the "Act");
(d) the prospectus dated September __, 2001 included in the Registration
Statement and the prospectus supplement dated September __, 2001 (such
prospectus together with such prospectus supplement (including all material
incorporated by reference therein) as supplemented or amended to the date hereof
being hereinafter collectively called the "Final Prospectus"); (e) the
Distribution Agreement; (f) the Indenture; (g) the form of the Notes; and (h)
resolutions adopted by the Board of Directors of the Company on
__________________.
Based upon the foregoing, I am of the opinion that:
(a) Ashland has been duly incorporated and is validly existing as a
corporation in good standing under the laws of the Commonwealth of Kentucky with
full corporate power and authority to own its properties and conduct its
business as described in the Final Prospectus [, and is duly qualified to do
business as a foreign corporation under the laws of each jurisdiction which
requires such qualification wherein it owns or leases material properties or
conducts material business except for any jurisdiction wherein failure to be so
qualified would not have a material adverse effect on the business, financial
condition or results of operations of Ashland and its subsidiaries, taken as a
whole.]1
(b) Ashland's authorized equity capitalization is as set forth or
incorporated by reference in the Final Prospectus.
(c) The Indenture has been duly authorized, executed and delivered by
▇▇▇▇▇▇▇, and constitutes a legal, valid and binding instrument enforceable
against Ashland in accordance with its terms (subject to applicable bankruptcy,
reorganization, fraudulent transfers, insolvency, moratorium or other laws
relating to and affecting creditors' rights generally from time to time in
effect). The enforceability of Ashland's obligations is also subject to general
principles of equity (regardless of whether such enforceability is considered in
a proceeding in equity or at law).
--------
1 Language in brackets to be included only in opinion dated the date of the
Distribution Agreement.
C-1-2
(d) The Notes have been duly authorized and, when the terms of any
Notes have been established in accordance with the Indenture and have been
executed, authenticated, issued and delivered against payment therefor
in accordance with the provisions of the Indenture, will constitute legal, valid
and binding obligations of Ashland enforceable against Ashland in accordance
with their terms (subject to applicable bankruptcy, reorganization, fraudulent
transfer, insolvency, moratorium or other laws relating to and affecting
creditors' rights generally from time to time in effect) and will be entitled to
the benefits of the Indenture. The enforceability of Ashland's obligations is
also subject to general principles of equity (regardless of whether such
enforceability is considered in a proceeding in equity or at law).
(e) To the best knowledge of the undersigned (i) there is no pending or
threatened action, suit or proceeding before any court or governmental agency,
authority or body or any arbitrator involving Ashland or any of its
subsidiaries, the probable outcome of which would have a material adverse effect
on the financial condition of Ashland and its subsidiaries taken as a whole and
which is not adequately disclosed in the Final Prospectus; (ii) there is no
franchise, contract or other document of a character required to be described in
the Registration Statement, as amended, or the Final Prospectus or to be filed
as an exhibit to the Registration Statement, as amended, which is not described
or filed as required; and (iii) the statements included or incorporated in the
Registration Statement, as amended, and the Final Prospectus describing any
legal proceedings or contracts or agreements relating to Ashland fairly
summarize such matters in accordance with the rules under the Act.
(f) The Registration Statement, as amended, has become effective under
the Act; to the best knowledge of the undersigned, no stop order suspending the
effectiveness of the Registration Statement, as amended, has been issued, no
proceedings for that purpose have been instituted or threatened, and the
undersigned has no reason to believe that any part of the Registration
Statement, as amended, (other than the Form T-1 and the financial statements
including the notes thereto and related schedules and other financial and
statistical data included therein or incorporated therein by reference, as to
which the undersigned expresses no opinion), when such part became effective or
was incorporated by reference into such Registration Statement, contained any
untrue statement of a material fact or omitted to state any material fact
required to be stated therein or necessary to make the statements therein not
misleading or that the Final Prospectus (other than the financial statements,
including the notes thereto and related schedules and other financial and
statistical data included therein or incorporated therein by reference, as to
which the undersigned expresses no belief), includes any untrue statement of a
material fact or omits to state a material
C-1-3
fact necessary to make the statements therein, in light of the circumstances
under which they were made, not misleading.
(g) The Distribution Agreement has been duly authorized, executed and
delivered by ▇▇▇▇▇▇▇.
(h) To the best knowledge of the undersigned, no consent, approval,
authorization or order of any court or governmental agency or body is required,
insofar as the same may be applicable to Ashland, for the consummation of the
transactions contemplated in the Distribution Agreement, except such as have
been obtained under the Act and the Trust Indenture Act and such as may be
required under the blue sky laws of any jurisdiction in connection with the sale
of the Notes.
(i) Neither the issue and sale of the Notes, nor the consummation of
any other of the transactions contemplated in the Distribution Agreement nor the
fulfillment of the terms thereof will conflict with or violate any provision of
the Second Restated Articles of Incorporation or By-laws of Ashland, each as
amended, or conflict with, result in a material breach of, or constitute a
material default under the terms of any indenture or other agreement or
instrument known to the undersigned and to which Ashland or any of its
subsidiaries is a party or bound, or any order, rule, statute, judgment, decree
or regulation known to the undersigned to be applicable to Ashland or any of its
subsidiaries of any court, regulatory body, administrative agency, governmental
body or arbitrator having jurisdiction over Ashland or any of its subsidiaries.
(j) No holders of securities of Ashland have rights to the registration
of such securities under the Registration Statement.
As to certain of the matters referred to in Paragraph (c), Paragraph
(d), Paragraph (e), Paragraph (f) and Paragraph (h) in the foregoing opinion, I
have relied upon the opinion or letter of ▇▇▇▇▇▇▇, Swaine & ▇▇▇▇▇ dated the date
hereof, a copy of which opinion or letter is attached hereto and the undersigned
believes that you and the undersigned are justified in relying on such opinion
or letter.
C-1-4
I am not a member of the bar of any states other than the Commonwealth
of Kentucky and the State of West Virginia and, accordingly, do not purport to
be an expert on matters of law outside of such jurisdictions. I have, however,
reviewed such of the laws of other jurisdictions as I have deemed necessary and
relevant regarding the matters referred to above which are governed by such law
and have no reason to believe that the opinions stated herein are not correct.
Very truly yours,
Attachment
ANNEX C-2-A
FORM OF OPINION OF
▇▇▇▇▇▇▇, ▇▇▇▇▇▇ & ▇▇▇▇▇
[DATE]
Ashland Inc.
Medium-Term Notes
Ladies and Gentlemen:
We have acted as counsel for Ashland Inc., a Kentucky corporation (the
"Company"), in connection with the execution and delivery of a Distribution
Agreement dated September __, 2001 (the "Distribution Agreement"), between you
and the Company, providing for the issue and sale by the Company of up to
$350,000,000 aggregate principal amount of its Medium-Term Notes, Series K, Due
Nine Months or More from Date of Issue (the "Notes"), to be issued pursuant to
the Indenture dated as of September __, 2001 (the "Indenture"), between the
Company and U.S. Bank National Association, as Trustee.
In that connection, we have examined originals, or copies certified or
otherwise identified to our satisfaction, of such documents, corporate records
and other instruments as we have deemed necessary or appropriate for the purpose
of this opinion, including (a) the Second Restated Articles of Incorporation of
the Company, as amended; (b) the By-laws of the Company, as amended; (c) the
Registration Statement on Form S-3 (No. 333-o) filed with the Securities and
Exchange Commission (the "Commission"), on September __, 2001 (such Registration
Statement, as amended, being hereinafter referred to as the "Registration
Statement"), for registration of $350,000,000 aggregate principal amount of
securities of the Company, to be issued from time to time by the Company, which
Registration Statement also constituted Post-Effective Amendment No. 1 to the
Company's Registration Statement No. 333-36888 with respect to an additional
$251,500,000 aggregate principal amount of securities, under the Securities Act
of 1933, as amended (the "Securities Act") and Post-Effective Amendment No. 2 to
the Company's Registration Statement No. 333-70651 with respect to an additional
$48,500,000 aggregate principal amount of securities, (d) the Prospectus dated
September __, 2001, filed with the Commission pursuant to Rule 424(b) of the
General Rules and Regulations under the Securities Act (together with the
documents incorporated by reference, the "Base Prospectus"), (e) the Prospectus
Supplement dated the date hereof (the "Prospectus Supplement"), filed with the
Commission pursuant to Rule 424(b) of the General Rules and Regulations under
the Securities Act (the Base Prospectus, as supplemented by the Prospectus
Supplement being hereinafter collectively called the "Final Prospectus"); (f)
the Distribution Agreement; (g) the Indenture;
C-2-A-1
(h) the form of the Notes; and (i) certain resolutions adopted by the Board of
Directors of the Company on ______ __, 2001. We have also relied upon advice
from the Commission that the Registration Statement was declared effective on
September __, 2001.
Based on the foregoing, we are of opinion as follows:
(a) The Company has been duly incorporated and is validly existing as a
corporation in good standing under the laws of the Commonwealth of Kentucky,
with full corporate power and authority to own its properties and conduct its
business as described in the Final Prospectus.
(b) The Company's authorized equity capitalization is as set forth or
incorporated by reference in the Final Prospectus and the Notes and the
Indenture conform to the descriptions thereof contained in the Final Prospectus.
(c) Assuming that the Indenture has been duly authorized, executed and
delivered by the Company, the Indenture has been duly qualified under the Trust
Indenture Act of 1939, as amended, and constitutes a legal, valid and binding
instrument enforceable against the Company in accordance with its terms (subject
to applicable bankruptcy, reorganization, fraudulent transfer, insolvency,
moratorium and other laws affecting creditors' rights generally from time to
time in effect). The enforceability of the Company's obligations is also subject
to general principles of equity (regardless of whether such enforceability is
considered in a proceeding in equity or at law).
(d) Assuming that the Notes have been duly authorized, when the terms
of any Notes have been established in accordance with the Indenture and when
such Notes have been executed, authenticated, issued and delivered against
payment therefor in accordance with the provisions of the Indenture and pursuant
to the Distribution Agreement, the Notes will constitute legal, valid and
binding obligations of the Company enforceable against the Company in accordance
with their terms (subject to applicable bankruptcy, reorganization, fraudulent
transfer, insolvency, moratorium and other laws affecting creditors' rights
generally from time to time in effect) and will be entitled to the benefits of
the Indenture. The enforceability of the Company's obligations is also subject
to general principles of equity (regardless of whether such enforceability is
considered in a proceeding in equity or at law).
(e) Neither the issue and sale of the Notes nor the consummation of any
other of the transactions contemplated in the Distribution Agreement nor the
fulfillment of the terms thereof will conflict with, result in a material breach
of, or
C-2-A-2
constitute a material default under, the Second Restated Articles of
Incorporation or By-laws of the Company.
(f) To our knowledge, no consent, approval, authorization or order of
any court or governmental agency or body is required, insofar as the same may be
applicable to the Company, for the consummation of the transactions contemplated
in the Distribution Agreement except such as have been obtained under the
Securities Act.
We are admitted to the Bar of the State of New York and express no
opinion as to the laws of any jurisdiction other than the State of New York and
United States of America. To the extent that our opinions herein are based upon
matters governed by the law of the Commonwealth of Kentucky, we have assumed
without independent investigation, the correctness of, and take no
responsibility for, the opinion dated today of ▇▇▇▇▇ ▇. ▇▇▇▇▇▇▇▇, Esq., Vice
President and General Counsel of the Company.
We are furnishing this letter to you, as Agents, solely for your
benefit. Except, as set forth in the following paragraph, this letter may not be
relied upon by any other person or for any other purpose or use, circulated,
quoted or otherwise referred to for any other purpose. ▇▇▇▇▇ ▇. ▇▇▇▇▇▇▇▇, Esq.
and U.S. Bank National Association, as Trustee, are each entitled to rely on
this letter as fully as if this letter had been addressed to them directly.
Very truly yours,
Credit Suisse First Boston Corporation
▇▇▇▇▇▇ ▇▇▇▇▇▇▇ ▇▇▇▇▇▇
▇▇▇ ▇▇▇▇, ▇▇ ▇▇▇▇▇
▇.▇. ▇▇▇▇▇▇ Securities Inc.
▇▇▇ ▇▇▇▇ ▇▇▇▇▇▇
▇▇▇ ▇▇▇▇, ▇▇ ▇▇▇▇▇
▇▇▇▇▇▇▇ ▇▇▇▇▇ ▇▇▇▇▇▇ Inc.
▇▇▇ ▇▇▇▇▇▇▇▇▇ ▇▇▇▇▇▇
▇▇▇ ▇▇▇▇, ▇▇ ▇▇▇▇▇
Banc of America Securities LLC
Bank of America Corporate Center
▇▇▇ ▇▇▇▇▇ ▇▇▇▇▇ ▇▇▇▇▇▇
▇▇▇▇▇▇▇▇▇, ▇▇ ▇▇▇▇▇
C-2-A-3
[date]
Ashland Inc.
Medium-Term Notes
Ladies and Gentlemen:
We have acted as counsel for Ashland Inc., a Kentucky corporation (the
"Company"), in connection with the execution and delivery of a Distribution
Agreement dated September __, 2001, between you and the Company, providing for
the issue and sale by the Company of up to $350,000,000 aggregate principal
amount of its Medium-Term Notes, Series K, Due Nine Months or More from Date of
Issue, to be issued pursuant to the Indenture dated as of September __, 2001,
between the Company and U.S. Bank National Association, as Trustee.
In that capacity, we participated in conferences with certain officers
of, and with the accountants for, the Company concerning the preparation of (a)
the Registration Statement on Form S-3 (Registration No. 333-o) filed with the
Securities and Exchange Commission (the "Commission") on September __, 2001
(such Registration Statement, as amended, being hereinafter called the
"Registration Statement"), for registration of $350,000,000 aggregate principal
amount of securities of the Company, to be issued from time to time by the
Company, which Registration Statement also constituted Post-Effective Amendment
No. 1 to the Company's Registration Statement No. 333-36888 with respect to an
additional $251,500,000 aggregate principal amount of securities and
Post-Effective Amendment No. 2 to the Company's Registration Statement No.
333-70651 with respect to an additional $48,500,000 aggregate principal amount
of Securities, under the Securities Act of 1933, as amended (the "Securities
Act"); (b) the Prospectus dated September __, 2001, filed with the Commission
pursuant to Rule 424(b) of the General Rules and Regulations under the
Securities Act (together with the documents incorporated therein by reference,
the "Base Prospectus"); and (c) the Prospectus Supplement dated the date hereof
(the "Prospectus Supplement"), filed with the Commission pursuant to Rule 424(b)
of the General Rules and Regulations under the Securities Act (the Base
Prospectus as supplemented by the Prospectus Supplement being hereinafter called
the "Final Prospectus"). Certain of the documents incorporated by reference in
the Registration Statement and Final Prospectus were prepared and filed by the
Company without our participation.
Although we have made certain inquiries and investigations in
connection with the preparation of the Registration Statement and the Final
Prospectus, the limitations inherent in the role of outside counsel are such
that we cannot and do
C-2-B-1
not assume responsibility for the accuracy or completeness of the statements
made in the Registration Statement and Final Prospectus, except insofar as such
statements relate to us and except to the extent set forth in paragraph (b) of
our opinion to you dated the date hereof. Subject to the foregoing, we hereby
advise you that our work in connection with this matter did not disclose any
information that gave us reason to believe that: (i) the Registration Statement,
at the time the Registration Statement became effective, or the Final Prospectus
and each amendment or supplement thereto as of the date hereof (in each case
except the financial statements and other information of an accounting or
financial nature included therein and the Statement of Eligibility (Form T-1)
included as an exhibit to the Registration Statement, as to which we do not
express any view) was not appropriately responsive in all material respects to
the requirements of the Securities Act and the applicable rules and regulations
of the Commission thereunder, or (ii) the Registration Statement, at the time
the Registration Statement became effective, contained an untrue statement of a
material fact or omitted to state a material fact required to be stated therein
or necessary to make the statements therein not misleading, or that the Final
Prospectus or any amendment or supplement thereto, at the date hereof, includes
an untrue statement of a material fact or omits to state a material fact
necessary in order to make the statements therein, in the light of the
circumstances under which they were made, not misleading (in each case except
for the financial statements and other information of an accounting or financial
nature included therein and the Statement of Eligibility (Form T-1) included as
an exhibit to the Registration Statement, as to which we do not express any
view).
We are furnishing this letter to you, as Agents, solely for your
benefit. Except as set forth in the following paragraph, this letter may not be
relied upon by any other person or for any other purpose or used, circulated,
quoted or otherwise referred to for any other purpose.
▇▇▇▇▇ ▇. ▇▇▇▇▇▇▇▇, Esq. and U.S. Bank National Association, as Trustee,
are each entitled to rely on this letter as fully as if this letter had been
addressed to them directly.
Very truly yours,
Credit Suisse First Boston Corporation
▇▇▇▇▇▇ ▇▇▇▇▇▇▇ ▇▇▇▇▇▇
▇▇▇ ▇▇▇▇, ▇▇ ▇▇▇▇▇
C-2-B-2
▇.▇.▇▇▇▇▇▇ Securities Inc.
▇▇▇ ▇▇▇▇ ▇▇▇▇▇▇
▇▇▇ ▇▇▇▇, ▇▇ ▇▇▇▇▇
▇▇▇▇▇▇▇ ▇▇▇▇▇ ▇▇▇▇▇▇ Inc.
▇▇▇ ▇▇▇▇▇▇▇▇▇ ▇▇▇▇▇▇
▇▇▇ ▇▇▇▇, ▇▇ ▇▇▇▇▇
Banc of America Securities LLC
Bank of America Corporate Center
▇▇▇ ▇▇▇▇▇ ▇▇▇▇▇ ▇▇▇▇▇▇
▇▇▇▇▇▇▇▇▇, ▇▇ ▇▇▇▇▇
C-2-B-3
ANNEX D
Accountants' Comfort Letter
Upon execution of the Distribution Agreement and, to the extent provided
in Section 7 of the Distribution Agreement, at each Closing Date, ▇▇▇▇▇ & Young
LLP shall furnish to the Agents or Purchaser, as the case may be, a letter or
letters (which may refer to letters previously delivered to the Agents or
Purchaser, as the case may be), dated as of the date of the Distribution
Agreement or such Closing Date, as the case may be, in form and substance
satisfactory to the Agents or the Purchaser, as the case may be, confirming that
they are independent accountants within the meaning of the Securities Act and
the applicable published rules and regulations thereunder and stating in effect
that:
(i) in their opinion the consolidated financial statements audited by
them and incorporated by reference in the Registration Statements and the
Prospectus comply as to form in all material respects with the applicable
accounting requirements of the Securities Act and the Exchange Act and the
related published rules and regulations;
(ii) on the basis of a reading of the latest available interim
consolidated financial statements of the Company, carrying out certain specified
procedures (but not an audit in accordance with generally accepted auditing
standards) which would not necessarily reveal matters of significance with
respect to the comments set forth in such letter, inquiries of officials of the
Company responsible for financial and accounting matters and other specified
procedures, nothing came to their attention that caused them to believe that:
(A) the unaudited consolidated financial statements, if any, included
or incorporated in the Registration Statements and the Prospectus do not
comply as to form in all material respects with the applicable accounting
requirements and with the published rules and regulations of the Commission
with respect to financial statements included or incorporated in quarterly
reports on Form 10-Q under the Exchange Act, or are not in conformity with
generally accepted accounting principles applied on a basis consistent with
that of the audited financial statements included or incorporated in the
Registration Statement and the Prospectus, except for the accounting changes
discussed in the notes thereto;
(B) with respect to the period subsequent to the date of the most
recent financial statements included or incorporated in the Registration
Statements or Prospectus, (i) at the date of the latest available
consolidated balance sheet read by such accountants or (ii) at a subsequent
specified date not more than five days prior to the date of the letter,
there was any decrease in the working capital
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(but only with respect to the date referred to in the foregoing clause
(i)), any change in capital stock of the Company (except pursuant to
existing stock option, bonus or other similar plans or conversion of
debentures or preferred stock) or increase in long-term debt and debt due
within one year, or decrease in the common stockholders' equity of the
Company and its consolidated subsidiaries (except such changes, increases
or decreases which the Prospectus (directly or by incorporation) discloses
have occurred or may occur) as compared with the amounts shown on the most
recent consolidated balance sheet included or incorporated in the
Registration Statements and the Prospectus;
(C) for the period from the closing date of the most recent
consolidated balance sheet included or incorporated in the Registration
Statements and the Prospectus to the closing date of the latest available
consolidated income statement read by such accountants there were any
decreases, as compared with the corresponding period in the previous year,
in consolidated sales and operating revenues or consolidated net income
except for changes or decreases which the Prospectus (directly or by
incorporation) discloses have occurred or may occur, or which are described
in such letter; or
(D) unaudited pro forma consolidated condensed financial statements,
if any, 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 Securities 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;
(iii) they have performed certain other specified procedures as a result
of which they determined that certain information of an accounting, financial or
statistical nature (which is limited to accounting, financial or statistical
information derived from the general accounting records of the Company and its
subsidiaries) set forth in the Registration Statements and the Prospectus and in
Exhibit 12 to the Registration Statements, including the information included or
incorporated in Items 1, 6 and 7 of the Company's Annual Report on Form 10-K,
incorporated in the Registration Statements and the Prospectus, and the
information included in the "Management's Discussion and Analysis" included or
incorporated in the Company's quarterly reports on Form 10-Q, incorporated in
the Registration Statements and the Prospectus, agrees with the accounting
records of the Company and its subsidiaries excluding any questions of legal
interpretation; and
(iv) they have made a review of any unaudited financial statements
included in the Registration Statement in accordance with standards established
by the
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American Institute of Certified Public Accountants, as indicated in their
report or reports, if any, attached to such letter.
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SCHEDULE I
Agents' Commissions
-------------------
Commission
(percent of
principal amount
Maturity of Note of Note)
---------------- ----------------
Maturity
--------
9 months to less than 12 months .125%
12 months to less than 18 months .150
18 months to less than 24 months .200
24 months to less than 30 months .250
30 months to less than 3 years .300
3 years to less than 4 years .350
4 years to less than 5 years .450
5 years to less than 7 years .500
7 years to less than 10 years .550
10 years to less than 20 years .600
20 years or more .750
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