Exhibit 1(a)
Energen Corporation
$____________ Medium-Term Notes, Series [_]
Due Nine Months or More from Date of Issue
Form of Selling Agency Agreement
____________, 199_
New York, New York
[Agent's Name]
[Agent's Address]
Dear Sirs:
Energen Corporation, an Alabama corporation (the "Company"), confirms
its agreement with each of you with respect to the issue and sale by the Company
of up to $___________ aggregate principal amount of its Medium-Term Notes,
Series A Due Nine Months or More from Date of Issue (the "Notes"). The Notes
will be issued under an indenture (the "Indenture") dated as of ____________,
1998 between the Company and The Bank of New York, as trustee (the "Trustee").
Unless otherwise specifically provided for and set forth in a Pricing Supplement
(as defined below), the Notes will be issued in minimum denominations of $1,000
and in denominations exceeding such amount by integral multiples of $1,000, will
be issued only in fully registered form and will have the interest rates,
maturities and, if applicable, other terms set forth in such Pricing Supplement.
The Notes will be issued, and the terms thereof established, in accordance with
the Indenture and the Medium-Term Notes Administrative Procedures attached
hereto as Exhibit A (the "Procedures") (unless a Terms Agreement (as defined in
Section 2(b)) modifies or otherwise supersedes such Procedures with respect to
the Notes issued pursuant to such Terms Agreement). The Procedures may be
amended only by written agreement of the Company and you after notice to, and
with the approval of, the Trustee. For the purposes of this Agreement, the term
"Agent" shall refer to any of you acting solely in the capacity as agent for the
Company pursuant to Section 2(a) and not as principal (collectively, the
"Agents"), the term "Purchaser" shall refer to one of you acting solely as
principal pursuant to Section 2(b) and not as agent, and the term "you" shall
refer to you collectively whether at any time any of you is acting in both such
capacities or in either such capacity. In acting under this Agreement, in
whatever capacity, each of you is acting individually and not jointly.
1. Representations and Warranties. The Company represents and warrants
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to, and agrees with, you as set forth below in this Section 1. Certain terms
used in this Section 1 are defined in paragraph (d) hereof.
(a) The Company meets the requirements for use of Form S-3 under the
Securities Act of 1933 (the "Act"), and has filed with the Securities and
Exchange Commission (the "Commission") a registration statement on such Form
(File Number: 33-_____), including a basic prospectus, which has become
effective, for the registration under the Act of $400,000,000 aggregate
principal amount of debt and equity securities (the "Securities"), including
the Notes. Such registration statement, as amended at the date of this
Agreement, meets the requirements set forth in Rule 415(a)(1)(ix) or (x)
under the Act and complies in all other material respects with said Rule.
The Company has included in such registration statement, or has filed or
will file with the Commission pursuant to the applicable paragraph of Rule
424(b) under the Act, a supplement or supplements to the form of prospectus
included in such registration statement relating to the Notes and the plan
of distribution thereof (the "Prospectus Supplement"). In connection with
the sale of Notes, the Company proposes to file with the Commission pursuant
to the applicable paragraph of Rule 424(b) under the Act further supplements
to the Prospectus Supplement (each a "Pricing Supplement") specifying the
interest rates, maturity dates and, if appropriate, other similar terms of
the Notes sold pursuant hereto or the offering thereof.
(b) As of the Execution Time, on the Effective Date, when any supplement
to the Prospectus is filed with the Commission, as of the date of a Terms
Agreement and at the date of delivery by the Company of any Notes sold
hereunder (a "Closing Date"), (i) the Registration Statement, as amended as
of any such time, and the Prospectus, as supplemented as of any such time,
and the Indenture will comply in all material respects with the applicable
requirements of the Act, the Trust Indenture Act of 1939 (the "Trust
Indenture Act") and the Securities Exchange Act of 1934 (the "Exchange Act")
and the respective rules thereunder; (ii) the Registration Statement, as
amended as of any such time, did not or will not contain 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;
provided, however, that the Company makes no representations or warranties
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as to (i) that part of the Registration Statement which shall constitute the
Statement of Eligibility and Qualification (Form T-l) under the Trust
Indenture Act of the Trustee or (ii) the information contained in or omitted
from the Registration Statement or the Prospectus (or any supplement
thereto) in reliance upon and in conformity with information furnished in
writing to the Company by any of you specifically for inclusion in the
Registration Statement or the Prospectus (or any supplement thereto).
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(c) As of the time any Notes are issued and sold hereunder, the
Indenture will constitute a legal, valid and binding instrument enforceable
against the Company in accordance with its terms (except insofar as
enforcement may be limited by applicable bankruptcy, reorganization,
fraudulent conveyance, insolvency or other laws affecting creditors' rights
and remedies generally, as may from time to time be in effect, and by the
availability of specific performance or of other equitable relief which is
subject to the discretion of the court before which any proceeding may be
brought) and such Notes will have been duly authorized, executed,
authenticated and, when paid for by the purchasers thereof, will constitute
legal, valid and binding obligations of the Company entitled to the benefits
of the Indenture.
(d) The terms which follow, when used in this Agreement, shall have the
meanings indicated. The term "the Effective Date" shall mean each date that
the Registration Statement and any post-effective amendment or amendments
thereto became or become effective and each date after the date hereof on
which a document incorporated by reference in the Registration Statement is
filed. "Execution Time" shall mean the date and time that this Agreement is
executed and delivered by the parties hereto. "Basic Prospectus" shall mean
the form of basic prospectus relating to the Securities contained in the
Registration Statement at the Effective Date (unless such basic prospectus
has been amended by the Company subsequent to the Effective Date, in which
case "Basic Prospectus" shall mean the form of basic prospectus as so
amended, whether or not filed with the Commission pursuant to Rule 424(b)).
"Prospectus" shall mean the Basic Prospectus as supplemented by the
Prospectus Supplement. "Registration Statement" shall mean the registration
statement referred to in paragraph (a) above, including incorporated
documents, exhibits and financial statements, as amended at the Execution
Time. "Rule 415" and "Rule 424" refer to such rules under the Act. Any
reference herein to the Registration Statement, the Basic Prospectus, the
Prospectus Supplement or the Prospectus shall be deemed to refer to and
include the documents incorporated by reference therein pursuant to Item 12
of Form S-3 which were filed under 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 the terms "amend", "amendment" or "supplement"
with respect to the Registration Statement, the Basic Prospectus, the
Prospectus Supplement or the Prospectus shall be deemed to refer to and
include the filing of any document under the Exchange Act after the
Effective Date of the Registration Statement or the issue date of the Basic
Prospectus, the Prospectus Supplement or the Prospectus, as the case may be,
deemed to be incorporated therein by reference.
(e) Neither the Company nor Alabama Gas Corporation nor Taurus
Exploration, Inc. nor Taurus Exploration U.S.A., Inc. (individually a
"Subsidiary" and collectively the "Subsidiaries") is in violation of its
charter or by-laws or in default in the performance or observance of any
material obligation, agreement, covenant or condition contained in any
contract, agreement or other instrument to which it is a party or by which
it may be bound, the effect of which is material to the Company or either of
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the Subsidiaries, and neither the execution or delivery of this Agreement,
the consummation of the transactions herein contemplated, the fulfillment of
the terms hereof or of the Indenture or the Notes, nor compliance with the
terms and provisions hereof or of the Indenture or the Notes will conflict
with, or result in a breach of, or constitute a default under (i) the
articles of incorporation, by-laws, or any contract, agreement or other
instrument to which the Company or any of the Subsidiaries is a party or by
which it may be bound or (ii) any law, order, rule or regulation applicable
to the Company or any of the Subsidiaries of any court or any federal or
state governmental body having jurisdiction over the Company or any of the
Subsidiaries or over their respective properties.
(f) The Indenture has been duly authorized, executed and delivered and
constitutes a legal, valid and binding instrument enforceable against the
Company in accordance with its terms (subject, as to enforcement of
remedies, to applicable bankruptcy, reorganization, insolvency, moratorium,
fraudulent conveyance or other laws affecting creditors' rights generally
from time to time in effect, and by the availability of specific performance
or of other equitable relief which is subject to the discretion of the court
before which any proceeding may be brought) and has been qualified under the
Trust Indenture Act.
(g) Up to an aggregate principal amount of $__________ of the Notes have
been duly authorized and, when executed and authenticated in accordance with
the provisions of the Indenture and delivered and paid for by the purchasers
thereof, will constitute legal, valid and binding obligations of the Company
and will be entitled to the benefits of the Indenture.
(h) Neither the execution or delivery of this Agreement, the
consummation of the transactions herein contemplated, the fulfillment of the
terms hereof or of the Indenture or the Notes, nor compliance with the terms
and provisions hereof or of the Indenture or the Notes requires any consent,
approval, authorization or order of any court or governmental agency or
body, except such as may 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 as contemplated by
this Agreement.
(i) The Company has filed an annual exemption statement on Form U-3A-2
pursuant to Rule 2 under the Public Utility Holding Company Act of 1935 (the
"1935 Act"), and the Company is exempt from all of the provisions of the
1935 Act except Section 9(a)(2) thereof and has received no notice, request
or inquiry from the Commission terminating or threatening to terminate or
questioning such exemption.
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2. Appointment of Agents; Solicitation by the Agents of Offers to
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Purchase; Sales of Notes to a Purchaser. (a) Subject to the terms and conditions
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set forth herein, the Company hereby authorizes each of the Agents to act as its
agent to solicit offers for the purchase of all or part of the Notes from the
Company.
On the basis of the representations and warranties, and subject to the
terms and conditions set forth herein, each of the Agents agrees, as agent of
the Company, to use its reasonable efforts to solicit offers to purchase the
Notes from the Company upon the terms and conditions set forth in the Prospectus
(and any supplement thereto) and in the Procedures. Each Agent shall make
reasonable efforts to assist the Company in obtaining performance by each
purchaser whose offer to purchase Notes has been solicited by such Agent and
accepted by the Company, but such Agent shall not, except as otherwise provided
in this Agreement, be obligated to disclose the identity of any purchaser or
have any liability to the Company in the event any such purchase is not
consummated for any reason. Except as provided in Section 2(b), under no
circumstances will any Agent be obligated to purchase any Notes for its own
account. It is understood and agreed, however, that any Agent may purchase Notes
as principal pursuant to Section 2(b).
The Company reserves the right, in its sole discretion, to instruct the
Agents to suspend at any time, for any period of time or permanently, the
solicitation of offers to purchase Notes. Upon receipt of instructions from the
Company, the Agents will forthwith suspend solicitation of offers to purchase
Notes from the Company until such time as the Company has advised them that such
solicitation may be resumed. During the period of any such suspension or
suspensions, the Company shall be relieved of its obligation to provide to the
Agents the information, documents, certificates, opinions and letter required
pursuant to Sections 4(g), 4(j), 4(k) and 4(l) hereof. However, whenever such a
suspension is lifted, the Company shall be required to deliver to the Agents,
prior to the resumption of any sale of Securities hereunder, the most recent
information, documents, certificates, opinions and letter which would have been
required except for the suspension.
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 the Notes sold by the Company.
Such commission shall be payable as specified on Schedule I or in the applicable
Terms Agreement.
Subject to the provisions of this Section and to the Procedures, offers
for the purchase of Notes may be solicited by an Agent as agent for the Company
at such time and in such amounts as such Agent deems advisable. The Company may
from time to time offer Notes for sale otherwise than through an Agent;
provided, however, that so long as this Agreement is in effect the Company shall
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not solicit or accept offers to purchase Notes through any agent other than an
Agent.
If the Company shall default in its obligations to deliver Notes to a
purchaser whose offer it has accepted, the Company shall indemnify and hold each
of you harmless against any loss, claim or damage arising from or as a result of
such default by the Company.
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(b) Subject to the terms and conditions stated herein, whenever the
Company and any Agent determine that the Company shall sell Notes directly to
such Agent as Purchaser, such Agent will notify the Company and each such sale
of Notes shall be made in accordance with the terms of this Agreement and a
supplemental agreement relating to such sale. Each such supplemental agreement
(which may be either an oral or written agreement) is herein referred to as a
"Terms Agreement". Each Terms Agreement shall describe the Notes to be purchased
by the Purchaser pursuant thereto and shall specify the aggregate principal
amount of such Notes, the price to be paid to the Company for such Notes, the
maturity date of such Notes, the rate at which interest will be paid on such
Notes, the dates on which interest will be paid on such Notes and the record
date with respect to each such payment of interest, the Closing Date for the
purchase of such Notes, the place of delivery of the Notes and payment therefor,
the method of payment and any requirements for the delivery of opinions of
counsel, certificates from the Company or its officers or a letter from the
Company's independent public accountants as described in Section 6(b). Any such
Terms Agreement may also specify the period of time referred to in Section 4(m).
Any written Terms Agreement may be in the form attached hereto as Exhibit B. The
Purchaser's commitment to purchase Notes shall be deemed to have been made on
the basis of the representations and warranties of the Company herein contained
and shall be subject to the terms and conditions herein set forth.
Delivery of the certificates for Notes sold to the Purchaser pursuant to
a Terms Agreement shall be made not later than the Closing Date agreed to in
such Terms Agreement, against payment of funds to the Company in the net amount
due to the Company for such Notes by the method and in the form set forth in the
Procedures, unless otherwise agreed to between the Company and the Purchaser in
such Terms Agreement.
Unless otherwise agreed to between the Company and the Purchaser in a
Terms Agreement, any Note sold to a Purchaser (i) shall be purchased by such
Purchaser at a price equal to 100% of the principal amount thereof less a
percentage equal to the commission applicable to an agency sale of a Note of
identical maturity and (ii) may be resold by such Purchaser at varying prices
from time to time or, if set forth in the applicable Terms Agreement and Pricing
Supplement, at a fixed public offering price. In connection with any resale of
Notes purchased, a Purchaser may use a selling or dealer group and may reallow
to any broker or dealer any portion of the discount or commission payable
pursuant hereto.
3. Offering and Sale of Notes. Each Agent and the Company agree to
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perform the respective duties and obligations specifically provided to be
performed by them in the Procedures.
4. Agreements. The Company agrees with you that:
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(a) Prior to the termination of the offering of the Notes (including by
way of resale by a Purchaser of Notes), the Company will not file any
amendment of the Registration Statement or supplement to the Prospectus
(except for (i) periodic or current reports filed under the Exchange Act,
(ii) a supplement relating to any offering of Notes providing solely for the
specification of or a change in pricing information including the maturity
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dates, interest rates, issuance prices or other similar terms of any Notes
or (iii) a supplement relating to an offering of Securities other than the
Notes) unless the Company has furnished each of you a copy for your review
prior to filing and given each of you a reasonable opportunity to comment on
any such proposed amendment or supplement. Subject to the foregoing
sentence, the Company will cause each supplement to the Prospectus to be
filed with the Commission pursuant to the applicable paragraph of Rule
424(b) within the time period prescribed and will provide evidence
satisfactory to you of such filing. The Company will promptly advise each of
you (i) when the Prospectus, and any supplement thereto, shall have been
filed with the Commission pursuant to Rule 424(b), (ii) when, prior to
termination of any offering of Notes, any amendment of the Registration
Statement shall have been filed or become effective, (iii) of any request by
the Commission for any amendment of the Registration Statement or supplement
to the Prospectus or for any additional information, (iv) of the issuance by
the Commission of any stop order suspending the effectiveness of the
Registration Statement or the institution or threatening of any proceeding
for that purpose and (v) of the receipt by the Company of any notification
with respect to the suspension of the qualification of the Notes for sale in
any jurisdiction or the initiation or threatening of any proceeding for such
purpose. The Company will use its reasonable efforts to prevent the issuance
of any such stop order and, if issued, to obtain as soon as possible the
withdrawal thereof.
(b) If, at any time when a prospectus relating to the Notes is required
to be delivered under the Act, any event occurs as a result of which the
Prospectus as then supplemented would include any untrue statement of a
material fact or omit to state any material fact necessary to make the
statements therein, in the light of the circumstances under which they were
made, not misleading, or if it shall be necessary to amend the Registration
Statement or to supplement the Prospectus to comply with the Act or the
Exchange Act or the respective rules thereunder, the Company promptly will
(i) notify each of you to suspend solicitation of offers to purchase Notes
(and, if so notified by the Company, each of you shall forthwith suspend
such solicitation and cease using the Prospectus as then supplemented), (ii)
prepare and file with the Commission, subject to the first sentence of
paragraph (a) of this Section 4, an amendment or supplement which will
correct such statement or omission or effect such compliance and (iii)
supply any supplemented Prospectus to each of you in such quantities as you
may reasonably request. If such amendment or supplement, and any documents,
certificates and opinions furnished to each of you pursuant to paragraph (g)
of this Section 4 in connection with the preparation or filing of such
amendment or supplement are satisfactory in all respects to you, you will,
upon the filing of such amendment or supplement with the Commission and upon
the effectiveness of an amendment to the Registration Statement, if such an
amendment is required, resume your obligation to solicit offers to purchase
Notes hereunder.
(c) The Company, during the period when a prospectus relating to the
Notes is required to be delivered under the Act, will file promptly all
documents required to be filed with the Commission pursuant to Section
13(a), 13(c), 14 or 15(d) of the Exchange Act and will furnish to each of
you copies of such documents. In addition, on or prior to the date on which
the Company makes any announcement to the general public concerning earnings
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or concerning any other event which is required to be described, or which
the Company proposes to describe, in a document filed pursuant to the
Exchange Act, the Company will furnish to each of you the information
contained or to be contained in such announcement. The Company also will
furnish to each of you copies of all press releases or announcements
furnished to news or wire services and any other material press releases and
announcements. The Company will promptly notify each of you of (i) any
decrease in the rating of the Notes or any other debt securities of the
Company by any "nationally recognized statistical rating organization" (as
defined for purposes of Rule 436(g) under the Act) or (ii) any notice given
of any intended or potential decrease in any such rating or of a possible
change in any such rating that does not indicate the direction of the
possible change, as soon as the Company learns of any such decrease or
notice.
(d) As soon as practicable, the Company will make generally available to
its security holders and to each of you an earnings statement or statements
of the Company and its subsidiaries which will satisfy the provisions of
Section 11(a) of the Act and Rule 158 under the Act.
(e) The Company will furnish to each of you and your counsel, without
charge, copies of the Registration Statement (including exhibits thereto)
and, so long as delivery of a prospectus may be required by the Act, as many
copies of the Prospectus and any supplement thereto as you may reasonably
request.
(f) The Company will arrange for the qualification of the Notes for sale
under the laws of such jurisdictions as any of you may designate, will
maintain such qualifications in effect so long as required for the
distribution of the Notes, and will arrange for the determination of the
legality of the Notes for purchase by institutional investors; provided that
in no event shall the Company be obligated to qualify to do business in any
jurisdiction where it is not now so qualified or to take any action which
would subject it to service of process in suits, other than those arising
out of the offering or sale of the Notes, in any jurisdiction where it is
not now so subject.
(g) The Company shall furnish to each of 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 any of you may from time
to time and at any time prior to the termination of this Agreement
reasonably request.
(h) The Company shall, whether or not any sale of the Notes is
consummated, (i) pay all expenses incident to the performance of its
obligations under this Agreement and any Terms Agreement, including the fees
and disbursements of its accountants and counsel, the cost of printing or
other production and delivery of the Registration Statement, the Prospectus,
all amendments thereof and supplements thereto, the Indenture, this
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Agreement, any Terms Agreement and all other documents relating to the
offering, the cost of preparing, printing, packaging and delivering the
Notes, the fees and disbursements, including fees of counsel, incurred in
compliance with Section 4(f), the fees and disbursements of the Trustee and
the fees of any agency that rates the Notes, (ii) reimburse each of you as
requested for all out-of-pocket expenses (including without limitation
advertising expenses), if any, incurred by you in connection with this
Agreement and (iii) pay the fees and expenses of your counsel incurred in
connection with this Agreement.
(i) Each acceptance by the Company of an offer to purchase Notes will be
deemed to be an affirmation that its representations and warranties
contained in this Agreement are true and correct at the time of such
acceptance, as though made at and as of such time, and a covenant that such
representations and warranties will be true and correct at the time of
delivery to the purchaser of the Notes relating to such acceptance, as
though made at and as of such time (it being understood that for purposes of
the foregoing affirmation and covenant such representations and warranties
shall relate to the Registration Statement and Prospectus as amended or
supplemented at each such time). 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 to be issued and sold by the
Company on or prior to such settlement date, the aggregate amount of
Securities (including any Notes) which have been issued and sold by the
Company will not exceed the lesser of the principal amount of Securities
registered pursuant to the Registration Statement and the limit of the
bonded indebtedness of the Company as approved from time to time by the
Company's shareholders. The Company will inform you promptly upon your
request of the aggregate amount of Securities registered under the
Registration Statement which remain unsold.
(j) Each time that the Registration Statement or the Prospectus is
amended or supplemented (other than by an amendment or supplement relating
to any offering of Securities other than the Notes or providing solely for
the specification of or a change in the maturity dates, the interest rates,
the issuance prices or other similar terms of any Notes sold pursuant
hereto), the Company will deliver or cause to be delivered promptly to each
of you a certificate of the Company, signed by the Chairman of the Board or
the President and the principal financial or accounting officer of the
Company, dated the date of the effectiveness of such amendment or the date
of the filing of such supplement, in form reasonably satisfactory to you, of
the same tenor as the certificate referred to in Section 5(d) 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 and supplemented to the
time of the effectiveness of such amendment or the filing of such
supplement.
(k) Each time that the Registration Statement or the Prospectus is
amended or supplemented (other than by an amendment or supplement (i)
relating to any offering of Securities other than the Notes, (ii) providing
solely for the specification of or a change in the maturity dates, the
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interest rates, the issuance prices or other similar terms of any Notes sold
pursuant hereto or (iii) setting forth or incorporating by reference
financial statements or other information as of and for a fiscal quarter or
fiscal year, unless, in the case of clause (iii) above, in the reasonable
judgment of any of you, such financial statements or other information are
of such a nature that an opinion of counsel should be furnished), the
Company shall furnish or cause to be furnished promptly to each of you a
written opinion of ▇▇▇▇▇▇▇, ▇▇▇▇▇, Rose & ▇▇▇▇▇ (or other counsel reasonably
satisfactory to the Agents), counsel of the Company satisfactory to each of
you, dated the date of the effectiveness of such amendment or the date of
the filing of such supplement, in form satisfactory to each of you, of the
same tenor as the opinion referred to in Section 5(b) hereof but modified to
relate to the Registration Statement and the Prospectus as amended and
supplemented to the time of the effectiveness of such amendment or the
filing of such supplement or, in lieu of such opinion, such counsel may
furnish each of you with a letter to the effect that you may rely on such
last opinion to the same extent as though it were dated the date of such
letter authorizing reliance (except that statements in such last opinion
will be deemed to relate to the Registration Statement and the Prospectus as
amended and supplemented to the time of the effectiveness of such amendment
or the filing of such supplement).
(l) Each time that the Registration Statement or the Prospectus is
amended or supplemented to include or incorporate amended or supplemental
financial information, the Company shall cause its independent public
accountants promptly to furnish each of you a letter, dated the date of the
effectiveness of such amendment or the date of the filing of such
supplement, in form satisfactory to each of you, of the same tenor as the
letter referred to in Section 5(e) hereof 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,
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however, that, if the Registration Statement or the Prospectus is amended or
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supplemented solely to include or incorporate by reference financial
information as of and for a fiscal quarter, the Company's independent public
accountants may limit the scope of such letter, which shall be satisfactory
in form to each of 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, unless, in the
reasonable judgment of any of you, such letter should cover other
information or changes in specified financial statement line items.
(m) During the period, if any, specified (whether orally or in writing)
in any Terms Agreement, the Company shall not, without the prior consent of
the Purchaser thereunder, offer, sell or contract to sell, or otherwise
dispose of, directly or indirectly, or announce the offering of, any debt
securities issued or guaranteed by the Company (other than the Notes being
sold pursuant to such Terms Agreement).
(n) The Company confirms as of the date hereof, and each acceptance by
the Company of an offer to purchase Notes will be deemed an affirmation,
that the Company is in compliance with all provisions of Section 1 of Laws
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of Florida, Chapter 92-198, An Act Relating to Disclosure of Doing Business
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with Cuba, and the Company further agrees that if it commences engaging in
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business with the government of Cuba or with any person or affiliate located
in Cuba after the date the Registration Statement becomes effective with the
Commission or with the Florida Department of Banking and Finance (the
"Department"), whichever date is later, or if the information reported in
the Prospectus, if any, concerning the Company's business with Cuba or with
any person or affiliate located in Cuba changes in any material way, the
Company will provide the Department notice of such business or change, as
appropriate, in a form acceptable to the Department.
(o) The Company will not issue and sell Notes in excess of $__________
unless, as of the Closing Date for each issuance beyond such $__________
limit, the Company furnishes or causes to be furnished to each of you (a)
resolutions of the shareholders of the Company certified by the Secretary of
the Company approving the issuance by the Company of additional bonded
indebtedness, which approval would cover the Notes to be issued on such
Closing Date, (b) resolutions of the Board of Directors of the Company
approving the issuance by the Company of the Notes to be issued on such
Closing Date and (c) the written opinion of ▇▇▇▇▇▇▇ ▇▇▇▇▇ ▇▇▇▇ & White LLP
(or such other counsel reasonably satisfactory to the Agents), counsel for
the Company, satisfactory to each of you, with respect to such issuance, of
the same tenor as the opinions referred to in Sections 5(b)(v) and (x).
5. Conditions to the Obligations of the Agents. The obligations of each
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Agent to solicit offers to purchase the Notes shall be subject to the accuracy
of the representations and warranties on the part of the Company contained
herein as of the Execution Time, on the Effective Date, when any supplement to
the Prospectus is filed with the Commission and as of each Closing Date, to the
accuracy of the statements of the Company made in any certificates pursuant to
the provisions hereof, to the performance by the Company of its obligations
hereunder and to the following additional conditions:
(a) If filing of the Prospectus, or any supplement thereto, is required
pursuant to Rule 424(b), the Prospectus, and any such supplement, shall have
been filed in the manner and within the time period required by Rule 424(b);
and no stop order suspending the effectiveness of the Registration Statement
shall have been issued and no proceedings for that purpose shall have been
instituted or threatened.
(b) The Company shall have furnished to each Agent the opinion of
▇▇▇▇▇▇▇, ▇▇▇▇▇, ▇▇▇▇ & ▇▇▇▇▇ (or such other counsel reasonably satisfactory
to the Agents), counsel for the Company, dated the Execution Time, to the
effect that:
(i) the Company has been duly incorporated and is validly
existing as a corporation in good standing under the laws of the State
of Alabama, with full corporate power and authority to own its
properties and conduct its business as described in the Prospectus, and
is duly qualified to do business as a foreign corporation and is in good
standing under the laws of each jurisdiction which requires such
qualification wherein it owns or leases material properties or conducts
11
material business and wherein the failure to be so qualified would have
a material adverse effect on the business of the Company and the
subsidiaries taken as a whole;
(ii) each of the Subsidiaries has been duly organized and is
validly existing as a corporation in good standing under the laws of the
jurisdiction in which it is chartered or organized, with full corporate
power and authority to own its properties and conduct its business as
described in the Prospectus, and Alabama Gas Corporation is duly
qualified to do business as a foreign corporation and is in good
standing under the laws of each jurisdiction which requires such
qualification wherein it owns or leases material properties or conducts
material business, except where the failure to so qualify does not have
a material adverse effect on the business of the Company and its
subsidiaries as a whole;
(iii) all the outstanding shares of capital stock of each
Subsidiary have been duly and validly authorized and issued and are
fully paid and nonassessable, and, except as otherwise set forth in the
Prospectus, all outstanding shares of capital stock of the Subsidiaries
are owned by the Company either directly or through wholly owned
subsidiaries free and clear of any perfected security interest and, to
the knowledge of such counsel, any other security interests, claims,
liens or encumbrances (with the exception of those encumbrances in the
Indenture);
(iv) the Company's authorized equity capitalization is as set
forth in the Prospectus; and the Notes conform to the description
thereof contained in the Prospectus (subject to the insertion in the
Notes of the maturity dates, the interest rates and other similar terms
thereof which will be described in supplements to the Prospectus as
contemplated by the fourth sentence of Section 1(a) of this Agreement);
(v) the Indenture has been duly authorized, executed and
delivered, has been duly qualified under the Trust Indenture Act, and
constitutes a legal, valid and binding instrument enforceable against
the Company in accordance with its terms (subject, as to enforcement of
remedies, to applicable bankruptcy, reorganization, fraudulent
conveyance, insolvency, moratorium or other laws affecting creditors'
rights generally from time to time in effect, and by the availability of
specific performance or of other equitable relief which is subject to
the discretion of the court before which any proceeding may be brought);
and up to an aggregate principal amount of $__________ of the Notes have
been duly authorized and, when executed and authenticated in accordance
with the provisions of the Indenture and delivered to and paid for by
the purchasers thereof, will constitute legal, valid and binding
obligations of the Company entitled to the benefits of the Indenture
(other than the indemnity provisions contained in Section 8 hereof or
Section 701 of the Indenture as to which such counsel need express no
opinion);
12
(vi) to the knowledge of such counsel, there is no pending or
threatened action, suit or proceeding before any court or governmental
agency, authority or body or any arbitrator involving the Company or any
of its subsidiaries, of a character required to be disclosed in the
Registration Statement which is not adequately disclosed in the
Prospectus, and there is no franchise, contract or other document of a
character required to be described in the Registration Statement or
Prospectus, or to be filed as an exhibit, which is not described or
filed as required; and the statements included or incorporated by
reference in the Prospectus describing material contracts or agreements
relating to the Company fairly summarize such matters;
(vii) the Registration Statement has become effective under the
Act; any required filing of the Prospectus, and any supplements thereto,
pursuant to Rule 424(b) has been or will be made in the manner and
within the time period required by Rule 424(b); to the knowledge of such
counsel, no stop order suspending the effectiveness of the Registration
Statement has been issued and no proceedings for that purpose have been
instituted or threatened; and the Registration Statement and the
Prospectus (other than the financial statements and other financial and
statistical information contained therein as to which such counsel need
express no opinion) comply as to form in all material respects with the
applicable requirements of the Act, the Exchange Act and the Trust
Indenture Act and the respective rules thereunder; and such counsel has
no reason to believe that the Registration Statement at the Effective
Date or at the Execution Time contained any untrue statement of a
material fact or omitted to state any material fact required to be
stated therein or necessary to make the statements therein not
misleading or that the Prospectus includes any untrue statement of a
material fact or omits to state a material fact necessary to make the
statements therein, in the light of the circumstances under which they
were made, not misleading;
(viii) this Agreement has been duly authorized, executed and
delivered by the Company;
(ix) no consent, approval, authorization or order of any court
or governmental agency or body is required for the consummation of the
transactions contemplated herein except such as have been obtained under
the Act and such as may be required under the blue sky laws of any
jurisdiction in connection with the sale of the Notes as contemplated by
this Agreement and such other approvals (specified in such opinion) as
have been obtained;
(x) neither the execution and delivery of the Indenture, the
issue and sale up to an aggregate principal amount of $__________ of the
Notes, nor the consummation of any other of the transactions herein
contemplated nor the fulfillment of the terms hereof will conflict with,
result in a breach or violation of, or constitute a default under any
law or the charter or by-laws of the Company or the terms of any
indenture or other agreement or instrument known to such counsel and to
13
which the Company or any of its Subsidiaries is a party or bound or any
judgment, order, regulation or decree known to such counsel to be
applicable to the Company or any of its Subsidiaries of any court,
regulatory body, administrative agency, governmental body or arbitrator
having jurisdiction over the Company or any of its Subsidiaries;
(xi) to the knowledge of such counsel no holders of securities
of the Company have rights to the registration of such securities under
the Registration Statement;
(xii) the information contained in the Prospectus under the
caption "Certain Tax Considerations" is a fair and accurate summary of
the principal Federal income tax consequences associated with the
ownership of the Notes; and
(xiii) the Company is exempt from all provisions of the 1935 Act
except Section 9(a)(2) thereof.
In rendering such opinion, such counsel may rely (A) as to matters involving the
application of laws of any jurisdiction other than the State of Alabama or the
United States, to the extent deemed proper and specified in such opinion, upon
the opinion of other counsel of good standing believed to be reliable and who
are satisfactory to counsel for the Agent and (B) as to matters of fact, to the
extent deemed proper, on certificates of responsible officers of the Company and
public officials. References to the Prospectus in this paragraph (b) include
any supplements thereto at the date such opinion is rendered.
(c) Each Agent shall have received from Winthrop, ▇▇▇▇▇▇▇, ▇▇▇▇▇▇ &
▇▇▇▇▇▇▇ (or such other counsel reasonably satisfactory to the Company and the
Agents), counsel for the Agents, such opinion or opinions, dated the Execution
Time, with respect to the issuance and sale of the Notes, the Indenture, the
Registration Statement, the Prospectus (together with any supplement thereto)
and other related matters as the Agents may reasonably require, and the Company
shall have furnished to such counsel such documents as they request for the
purpose of enabling them to pass upon such matters.
(d) The Company shall have furnished to each Agent a certificate of the
Company, signed by the Chairman of the Board or the president and the principal
financial or accounting officer of the Company, dated the Execution Time, to the
effect that the signers of such certificate have reviewed the Registration
Statement, the Prospectus, any supplement to the Prospectus and this Agreement
and that:
(i) the representations and warranties of the Company in this
Agreement are true and correct in all material respects on and as of the
date hereof with the same effect as if made on the date hereof 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;
14
(ii) no stop order suspending the effectiveness of the
Registration Statement has been issued and no proceedings for that
purpose have been instituted or, to the Company's knowledge, threatened;
and
(iii) since the date of the most recent financial statements
included in the Prospectus (exclusive of any supplement thereto), there
has been no material adverse change in the condition (financial or
other), earnings, business or properties of the Company and its
subsidiaries, whether or not arising from transactions in the ordinary
course of business, except as set forth in or contemplated in the
Prospectus (exclusive of any supplement thereto).
(e) At the Execution Time, ▇▇▇▇▇▇▇ & ▇▇▇▇▇▇▇ (or such other accountants
reasonably satisfactory to the Company and the Agents) shall have furnished to
each Agent a letter or letters (which may refer to letters previously delivered
to the Agents), dated as of the Execution Time, in form and substance
satisfactory to the Agents, confirming that they are independent accountants
within the meaning of the Act and the Exchange Act and the respective applicable
published rules and regulations thereunder and stating in effect that:
(i) in their opinion the audited financial statements, financial
statement schedules and pro forma financial statements, if any, included
or incorporated by reference in the Registration Statement and the
Prospectus and reported on by them comply as to form in all material
respects with the applicable accounting requirements of the Act and the
Exchange Act and the related published rules and regulations;
(ii) on the basis of a reading of the latest unaudited financial
statements made available by the Company and its subsidiaries; the
performance of the procedures specified by the American Institute of
Certified Public Accountants for a review of interim financial
information as described in SAS No. 71, Interim Financial Information,
-----------------------------
on the latest unaudited financial statements, if any, included or
incorporated by reference in the Prospectus; a reading of the minutes of
the meetings of the stockholders, directors, audit and finance
committees of the Company and its subsidiaries; and inquiries of certain
officials of the Company who have responsibility for financial and
accounting matters of the Company and its subsidiaries as to
transactions and events subsequent to the date of the most recent
audited financial statements included or incorporated in the Prospectus
(it being understood that the foregoing procedures do not constitute an
examination made in accordance with generally accepted auditing
standards and they would not necessarily reveal matters of significance
with respect to the comments made in such letter), nothing came to their
attention which caused them to believe that:
(1) any unaudited financial statements included or
incorporated by reference in the Registration Statement and the
Prospectus do not comply as to form in all material respects with the
applicable accounting requirements of the Exchange Act and the related
published rules and regulations thereunder; and that any material
15
modifications should be made to said unaudited financial statements for
them to be in conformity with generally accepted accounting principles;
(2) with respect to the period subsequent to the date of
the most recent financial statements (other than any capsule
information), audited or unaudited, included or incorporated in the
Registration Statement and the Prospectus, there were any changes, at a
specified date not more than five business days prior to the date of the
letter, in the common stock, preferred stock, current liabilities or
long-term debt of the Company and its subsidiaries or decreases in the
total common stockholders' equity of the Company as compared with the
amounts shown on the most recent balance sheet included or incorporated
in the Registration Statement and the Prospectus, or for the period from
the most recent fiscal year of the Company to the date of the most
recent available financial statements (audited or unaudited) of the
Company there were any decreases, as compared with the corresponding
period in the preceding year in operating revenues, operating income,
other income or net income of the Company and its subsidiaries except in
all instances for changes or decreases set forth in such letter, in
which case the letter shall be accompanied by an explanation by the
Company as to the significance thereof unless said explanation is not
deemed necessary by the Agents; or
(3) the amounts included in any unaudited "capsule"
information included or incorporated in the Registration Statement and
the Prospectus do not agree with the amounts set forth in the unaudited
financial statements for the same periods or were not determined on a
basis substantially consistent with that of the corresponding amounts in
the audited financial statements included or incorporated in the
Registration Statement and the Prospectus;
(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 Statement
and the Prospectus and in Exhibit 12 to the Registration Statement,
including the information included or incorporated in Items 1, 2, 6, 7 and
11 of the Company's Annual Report on Form 10-K, incorporated in the
Registration Statement and the Prospectus, and the information included in
the "Management's Discussion and Analysis of Financial Condition and Results
of Operations" included or incorporated in the Company's Quarterly Reports
on Form 10-Q, incorporated in the Registration Statement and the Prospectus,
agrees with the accounting records of the Company and its subsidiaries,
excluding any questions of legal interpretation;
(iv) if unaudited pro forma financial statements are included or
incorporated in the Registration Statement and the Prospectus, on the basis
of a reading of the unaudited pro forma financial statements, carrying out
certain specified procedures, inquiries of certain officials of the Company
and the acquired company who have responsibility for financial and
16
accounting matters, and proving the arithmetic accuracy of the application
of the pro forma adjustments to the historical amounts in the pro forma
financial statements, nothing came to their attention which caused them to
believe that the pro forma financial statements do not comply in form in all
material respects with the applicable accounting requirements of Rule 11-02
of Regulation S-X or that the pro forma adjustments have not been properly
applied to the historical amounts in the compilation of such statements; and
References to the Prospectus in this paragraph (e) include any
supplement thereto at the date of the letter.
(f) Prior to the Execution Time, the Company shall have furnished to
each Agent such further information, documents, certificates and opinions of
counsel as the Agents may reasonably request.
If any of the conditions specified in this Section 5 shall not have been
fulfilled in all material respects when and as provided in this Agreement, or if
any of the opinions and certificates mentioned above or elsewhere in this
Agreement shall not be in all material respects reasonably satisfactory in form
and substance to such Agents and counsel for the Agents, this Agreement and all
obligations of any Agent 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 5 shall be
delivered at the office of Winthrop, Stimson, ▇▇▇▇▇▇ & ▇▇▇▇▇▇▇, counsel for the
Agents, at ▇▇▇ ▇▇▇▇▇▇▇ ▇▇▇▇ ▇▇▇▇▇, ▇▇▇ ▇▇▇▇, ▇▇▇ ▇▇▇▇ ▇▇▇▇▇-1490, on the date
hereof.
6. Conditions to the Obligations of a Purchaser. The obligations of a
--------------------------------------------
Purchaser to purchase any Notes will be subject to the accuracy of the
representations and warranties on the part of the Company herein as of the date
of the related Terms Agreement and as of the Closing Date for such Notes, to the
performance and observance by the Company of all covenants and agreements herein
contained on its part to be performed and observed and to the following
additional conditions precedent:
(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 stop order suspending the effectiveness of the Registration Statement
17
shall have been issued and no proceedings for that purpose shall have been
instituted or threatened; and shareholder approval sufficient to authorize
the issuance and sale of the Notes to be sold to the Purchaser shall be
obtained by the Company.
(b) To the extent agreed to between the Company and the Purchaser in a
Terms Agreement, the Purchaser shall have received, appropriately updated,
(i) a certificate of the Company, dated as of the Closing Date, to the
effect set forth in Section 5(d) (except that references to the Prospectus
shall be to the Prospectus as supplemented as of the date of such Terms
Agreement), (ii) the opinion of Bradley, Arant, Rose & White (or other
counsel reasonably satisfactory to the Agents), counsel for the Company,
dated as of the Closing Date, to the effect set forth in Section 5(b), (iii)
the opinion of ▇▇▇▇▇▇▇▇, ▇▇▇▇▇▇▇, ▇▇▇▇▇▇ & ▇▇▇▇▇▇▇ (or other counsel
reasonably satisfactory to the Company), counsel for the Purchaser, dated as
of the Closing Date, to the effect set forth in Section 5(c), and (iv)
letter of ▇▇▇▇▇▇▇ & ▇▇▇▇▇▇▇ (or other independent accountants reasonably
satisfactory to the Agents), independent accountants for the Company, dated
as of the Closing Date, to the effect set forth in Section 5(e).
(c) 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.
If any of the conditions specified in this Section 6 shall not have been
fulfilled in all material respects when and as provided in this Agreement and
the applicable Terms Agreement, or if any of the opinions and certificates
mentioned above or elsewhere in this Agreement or such Terms Agreement and
required to be delivered to the Purchaser pursuant to the terms hereof and
thereof shall not be in all material respects reasonably satisfactory in form
and substance to the Purchaser and its counsel, such Terms Agreement and all
obligations of the Purchaser thereunder and with respect to the Notes subject
thereto may be canceled at, or at any time prior to, the respective Closing Date
by the Purchaser. Notice of such cancellation shall be given to the Company in
writing or by telephone or telegraph confirmed in writing.
7. Right of Person Who Agreed to Purchase to Refuse to Purchase. (a) The
------------------------------------------------------------
Company agrees that any person who has agreed to purchase and pay for any Note
pursuant to a solicitation by any of the Agents shall have the right to refuse
to purchase such Note if, at the Closing Date therefor, any condition set forth
in Section 5 or 6, as applicable, shall not be satisfied.
(b) The Company agrees that any person who has agreed to purchase and
pay for any Note pursuant to a solicitation by any of the Agents shall have the
right to refuse to purchase such Note if, subsequent to the agreement to
purchase such Note, any change, condition or development specified in any of
Sections 9(b)(i) through (v) shall have occurred (with the judgment of the Agent
which presented the offer to purchase such Note being substituted for any
judgment of a Purchaser required therein) the effect of which is, in the
judgment of the Agent which presented the offer to purchase such Note, so
material and adverse as to make it impractical or inadvisable to proceed with
the sale and delivery of such Note (it being understood that under no
18
circumstance shall any such Agent have any duty or obligation to the Company or
to any such person to exercise the judgment permitted to be exercised under this
Section 7(b) and Section 9(b)).
8. Indemnification and Contribution. (a) The Company agrees to indemnify
--------------------------------
and hold harmless each of you, the directors, officers, employees and agents of
each of you and each person who controls each of you within the meaning of
either the Act or the Exchange Act against any and all losses, claims, damages
or liabilities, joint or several, to which you, they or any of you or them may
become subject under the Act, the Exchange Act or other Federal or state
statutory law or regulation, at common law or otherwise, insofar as such losses,
claims, damages or liabilities (or actions in respect thereof) arise out of or
are based upon any untrue statement or alleged untrue statement of a material
fact contained in the registration statement for the registration of the
Securities as originally filed or in any amendment thereof, or in the Prospectus
or any preliminary Prospectus, or in any amendment thereof or supplement
thereto, or arise out of or are based upon the omission or alleged omission to
state therein a material fact required to be stated therein or necessary to make
the statements therein not misleading, and agrees to reimburse each such
indemnified party, as incurred, for any legal or other expenses reasonably
incurred by them in connection with investigating or defending any such loss,
claim, damage, liability or action; provided, however, that the Company will not
-------- -------
be liable in any such case to the extent that any such loss, claim, damage or
liability arises out of or is based upon any such untrue statement or alleged
untrue statement or omission or alleged omission made therein in reliance upon
and in conformity with written information furnished to the Company by any of
you specifically for inclusion therein. This indemnity agreement will be in
addition to any liability which the Company may otherwise have.
(b) Each of you agrees to indemnify and hold harmless the Company, each
of its directors, each of its officers who signs the Registration Statement and
each person who controls the Company within the meaning of either the Act or the
Exchange Act, to the same extent as the foregoing indemnity from the Company to
you, but only with reference to written information relating to such of you
furnished to the Company by such of you specifically for inclusion in the
documents referred to in the foregoing indemnity. This indemnity agreement will
be in addition to any liability which you may otherwise have. The Company
acknowledges that the statements set forth in the last paragraph of the cover
page, and under the heading "Plan of Distribution", of the Prospectus Supplement
constitute the only information furnished in writing by any of you for inclusion
in the documents referred to in the foregoing indemnity, and you confirm that
such statements are correct.
(c) Promptly after receipt by an indemnified party under this Section 8
of notice of the commencement of any action, such indemnified party will, if a
claim in respect thereof is to be made against the indemnifying party under this
Section 8, notify the indemnifying party in writing of the commencement thereof;
but the failure so to notify the indemnifying party (i) will not relieve it from
liability under paragraph (a) or (b) above unless and to the extent it did not
otherwise learn of such action and such failure results in the forfeiture by the
indemnifying party of substantial rights and defenses and (ii) will not, in any
event, relieve the indemnifying party from any obligations to any indemnified
party other than the indemnification obligation provided in paragraph (a) or (b)
19
above. The indemnifying party shall be entitled to appoint counsel of the
indemnifying party's choice at the indemnifying party's expense to represent the
indemnified party in any action for which indemnification is sought (in which
case the indemnifying party shall not thereafter be responsible for the fees and
expenses of any separate counsel retained by the indemnified party or parties
except as set forth below); provided, however, that such counsel shall be
-------- -------
satisfactory to the indemnified party. Notwithstanding the indemnifying party's
election to appoint counsel to represent the indemnified party in an action, the
indemnified party shall have the right to employ separate counsel (including
local counsel), and the indemnifying party shall bear the reasonable fees, costs
and expenses of one such separate counsel for all indemnified parties if (i) the
use of counsel chosen by the indemnifying party to represent the indemnified
party would present such counsel with a conflict of interest, (ii) the actual or
potential defendants in, or targets of, any such action include both the
indemnified party and the indemnifying party and the indemnified party shall
have reasonably concluded that there may be legal defenses available to it
and/or other indemnified parties which are different from or additional to those
available to the indemnifying party, (iii) the indemnifying party shall not have
employed counsel satisfactory to the indemnified party to represent the
indemnified party within a reasonable time after notice of the institution of
such action or (iv) the indemnifying party shall authorize the indemnified party
to employ separate counsel at the expense of the indemnifying party.
(d) In the event that the indemnity provided in paragraph (a) or (b) of
this Section 8 is unavailable to or insufficient to hold harmless an indemnified
party for any reason, the Company and each of you agree to contribute to the
aggregate losses, claims, damages and liabilities (including legal or other
expenses reasonably incurred in connection with investigating or defending same)
(collectively "Losses") to which the Company and one or more of you may be
subject in such proportion as is appropriate to reflect the relative benefits
received by the Company and by each of you from the offering of the Notes from
which such Losses arise; provided, however, that in no case shall any of you be
-------- -------
responsible for any amount in excess of the commissions received by such of you
in connection with the sale of Notes from which such Losses arise (or, in the
case of Notes sold pursuant to a Terms Agreement, the aggregate commissions that
would have been received by such of you if such commissions had been payable).
If the allocation provided by the immediately preceding sentence is unavailable
for any reason, the Company and each of you shall contribute in such proportion
as is appropriate to reflect not only such relative benefits but also the
relative fault of the Company and of each of you in connection with the
statements or omissions which resulted in such Losses as well as any other
relevant equitable considerations. Benefits received by the Company shall be
deemed to be equal to the total net proceeds from the offering (before deducting
expenses) of the Notes from which such Losses arise, and benefits received by
each of you shall be deemed to be equal to the total commissions received by
such of you in connection with the sale of Notes from which such Losses arise
(or, in the case of Notes sold pursuant to a Terms Agreement, the aggregate
commissions that would have been received by such of you if such commissions had
been payable). Relative fault shall be determined by reference to whether any
alleged untrue statement or omission relates to information provided by the
Company or any of you. The Company and each of you agree that it would not be
just and equitable if contribution were determined by pro rata allocation or any
other method of allocation which does not take account of the equitable
considerations referred to above. Notwithstanding the provisions of this
paragraph (d), no person guilty of fraudulent misrepresentation (within the
20
meaning of Section 11(f) of the Act) shall be entitled to contribution from any
person who was not guilty of such fraudulent misrepresentation. For purposes of
this Section 8, each person who controls any of you within the meaning of the
Act or the Exchange Act and each director, officer, employee and agent of any of
you shall have the same rights to contribution as you and each person who
controls the Company within the meaning of either the Act or the Exchange Act,
each officer of the Company who shall have signed the Registration Statement and
each director of the Company shall have the same rights to contribution as the
Company, subject in each case to the applicable terms and conditions of this
paragraph (d).
9. Termination. (a) This Agreement will continue in effect until
-----------
terminated as provided in this Section 9. This Agreement may be terminated
either by the Company as to any Agent or by any of you insofar as this Agreement
relates to any Agent, by giving written notice of such termination to such Agent
or the Company, as the case may be. This Agreement shall so terminate at the
close of business on the first business day following the receipt of such notice
by the party to whom such notice is given. In the event of such termination, no
party shall have any liability to the other party hereto, except as provided in
the fourth paragraph of Section 2(a), Section 4(h), Section 8 and Section 10.
(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 any Note to be purchased thereunder, if prior to such time (i)
there shall have occurred, subsequent to the agreement to purchase such Note,
any change, or any development involving a prospective change, in or affecting
the business or properties of the Company and its subsidiaries the effect of
which is, in the judgment of the Purchaser, so material and adverse as to make
it impractical or inadvisable to proceed with the offering or delivery of such
Note, (ii) there shall have been, subsequent to the agreement to purchase such
Note, any decrease in the rating of any of the Company's debt securities by any
"nationally recognized statistical rating organization" (as defined for purposes
of Rule 436(g) under the Act) or any notice given of any intended or potential
decrease in any such rating or of a possible change in any such rating that does
not indicate the direction of the possible change, (iii) trading in any
securities of the Company shall have been suspended by the Commission or a
national securities exchange, or minimum or maximum prices for trading in
securities generally shall have been fixed, or maximum ranges for prices for
securities shall have been required, by either of said exchanges or by order of
the Commission or any other governmental authority (iv) a banking moratorium
shall have been declared by either Federal or New York State authorities or (v)
there shall have occurred any outbreak or escalation of hostilities, declaration
by the United States of a national emergency or war or other calamity or crisis
the effect of which on financial markets is such as to make it, in the judgment
of the Purchaser, impracticable or inadvisable to proceed with the offering or
delivery of such Notes as contemplated by the Prospectus (exclusive of any
supplement thereto which is created after the time of execution of such Terms
Agreement).
10. Survival of Certain Provisions. The respective agreements,
------------------------------
representations, warranties, indemnities and other statements of the Company or
its officers and of you set forth in or made pursuant to this Agreement will
remain in full force and effect, regardless of any investigation made by or on
behalf of you or the Company or any of the directors, officers, employees,
agents or controlling persons referred to in Section 8 hereof, and will survive
21
delivery of and payment for the Notes. The provisions of Sections 4(h) and 8
hereof shall survive the termination or cancellation of this Agreement. The
provisions of this Agreement (including without limitation Section 7 hereof)
applicable to any purchase of a Note for which an agreement to purchase exists
prior to the termination hereof shall survive any termination of this Agreement.
If at the time of termination of this Agreement any Purchaser shall own any
Notes with the intention of selling them, the provisions of Section 4 shall
remain in effect until such Notes are sold by the Purchaser.
11. Notices. All communications hereunder will be in writing and
-------
effective only on receipt, and, if sent to any of you, will be mailed, delivered
or telegraphed and confirmed to such of you, at the address specified in
Schedule I hereto; or, if sent to the Company, will be mailed, delivered or
telegraphed and confirmed to it at the office of Energen Corporation, ▇▇▇▇ ▇▇▇▇▇
▇▇▇▇▇▇ ▇▇▇▇▇, ▇▇▇▇▇▇▇▇▇▇, ▇▇▇▇▇▇▇ ▇▇▇▇▇, Attention: Treasurer.
12. Successors. This Agreement will inure to the benefit of and be
----------
binding upon the parties hereto, their respective successors, the directors,
officers, employees, agents and controlling persons referred to in Section 8
hereof and, to the extent provided in Section 7, any person who has agreed to
purchase Notes, and no other person will have any right or obligation hereunder.
13. Applicable Law. This Agreement will be governed by and construed in
--------------
accordance with the laws of the State of New York.
14. Counterparts. This Agreement may be simultaneously executed in
------------
counterparts, each of which when so executed shall be deemed to be an original.
Such counterparts shall together constitute one and the same instrument.
22
If the foregoing is in accordance with your understanding of our
agreement, please sign and return to us the enclosed duplicate hereof, whereupon
this letter and your acceptance shall represent a binding agreement among the
Company and you.
Very truly yours,
Energen Corporation
By:_____________________________
By:_____________________________
The foregoing Agreement is
hereby confirmed and accepted
as of the date hereof.
[Agent's Name]
By: _________________________
Name:
Title:
23
SCHEDULE I
Commissions:
The Company agrees to pay each Agent a commission equal to the following
percentage of the principal amount of each Note sold on an agency basis by such
Agent:
Maturity Commission Rate
9 months to less than 12 months .125%
12 months to less than 18 months .150%
18 months to less than 2 years .200%
2 years to less than 3 years .250%
3 years to less than 4 years .350%
4 years to less than 5 years .450%
5 years to less than 6 years .500%
6 years to less than 7 years .550%
7 years to less than 8 years .600%
8 years to less than 9 years .600%
9 years to less than 10 years .600%
10 years to less than 15 years .625%
15 years to less than 20 years .700%
20 years to less than 30 years .750%
30 years and beyond *
Unless otherwise specified in the applicable Terms Agreement, the
discount or commission payable to a Purchaser shall be determined on the basis
of the commission schedule set forth above.
Address for Notice to you:
-------------------------
Notices to [Agent's Name] shall be directed to it at [address].
________________________
* To be negotiated between the applicable Agent and the Company.
EXHIBIT A
ENERGEN CORPORATION
Medium-Term Note Administrative Procedures
------------------------------------------
_____________, 1998
The Medium-Term Notes, Due Nine Months or More from Date of Issue (the
"Notes") of Energen Corporation (the "Company") are to be offered on a
continuing basis. [Agent's Name(s)], as agents (each an "Agent"), have agreed to
solicit purchases of Notes issued in fully registered form. The Agents will not
be obligated to purchase Notes for their own account. The Notes are being sold
pursuant to a Selling Agency Agreement between the Company and the agents named
therein (including the Agents) dated the date hereof (the "Agency Agreement").
The Notes will rank equally with all other unsecured and unsubordinated debt of
the Company and have been registered with the Securities and Exchange Commission
(the "Commission"). The Notes will be issued under an Indenture dated as of
__________, 1998 (the "Indenture"), between the Company and The Bank of New
York, as trustee (the "Trustee"). The Trustee will act as the paying agent (the
"Paying Agent") for the payment of principal of and premium, if any, and
interest on the Notes and will perform, as the Paying Agent, unless otherwise
specified, the other duties specified herein.
The Agency Agreement provides that Notes may also be purchased by an
Agent acting solely as principal and not as agent. In the event of any such
purchase, the functions of both the Agent and the beneficial owner under the
administrative procedures set forth below shall be performed by such Agent
acting solely as principal, unless otherwise agreed to between the Company and
such Agent acting as principal.
Each Note will be represented by either a Global Security (as defined
hereinafter) delivered to Cede & Co. ("Cede"), as agent for The Depository Trust
Company ("DTC"), and recorded in the book-entry system maintained by DTC (a
"Book-Entry Note") or a certificate delivered to the Holder thereof or a Person
designated by such Holder (a "Certificated Note"). Only Notes denominated and
payable in U.S. dollars may be issued as Book-Entry Notes. An owner of a Book-
Entry Note will not be entitled to receive a certificate representing such Note.
The procedures to be followed during, and the specific terms of, the
solicitation of orders by the Agents and the sale as a result thereof by the
Company are explained below. Administrative and record-keeping responsibilities
will be handled for the Company by its Treasurer. The Company will advise the
Agents and the Trustee in writing of those persons handling administrative
responsibilities with whom the Agents and the Trustee are to communicate
regarding orders to purchase Notes and the details of their delivery.
Administrative procedures and specific terms of the offering are
explained below. Book-Entry Notes will be issued in accordance with the
administrative procedures set forth in Part I hereof, as adjusted in accordance
with changes in DTC's operating requirements, and Certificated Notes will be
issued in accordance with the administrative procedures set forth in Part II
hereof. Unless otherwise defined herein, terms defined in the Indenture and the
Notes shall be used herein as therein defined. Notes for which interest is
calculated on the basis of a fixed interest rate, which may be zero, are
referred to herein as "Fixed Rate Notes". Notes for which interest is calculated
on the basis of a floating interest rate are referred to herein as "Floating
Rate Notes". To the extent the procedures set forth below conflict with the
provisions of the Notes, the Indenture, DTC's operating requirements or the
Agency Agreement, the relevant provisions of the Notes, the Indenture, DTC's
operating requirements and the Agency Agreement shall control.
PART I
Administrative Procedures for
-----------------------------
Book-Entry Notes
----------------
In connection with the qualification of the Book-Entry Notes for
eligibility in the book-entry system maintained by DTC, Trustee will perform the
custodial, document control and administrative functions described below, in
accordance with its respective obligations under a Letter of Representations
from the Company and Trustee to DTC dated as of the date hereof and a Medium-
Term Note Certificate Agreement between Trustee and DTC, dated as of __________,
19__, and its obligations as a participant in DTC, including DTC's Same-Day
Funds Settlement system ("SDFS").
Issuance: On any date of settlement (as defined under "Settlement"
-------- below) for one or more Book-Entry Notes, the Company
will issue a single global security in fully registered
form without coupons (a "Global Security") representing
up to $___________ principal amount of all such Book-
Entry Notes that have the same original issue date,
original issue discount provisions, if any, Interest
Payment Dates, Regular Record Dates, Interest Payment
Period, redemption, repayment and extension provisions,
if any, Maturity Date, and, in the case of Fixed Rate
Notes, interest rate, or, in the case of Floating Rate
Notes, initial interest rate, Base Rate, Index Maturity,
Interest Reset Period, Interest Reset Dates, Spread or
Spread Multiplier, if any, minimum interest rate, if
any, and maximum interest rate, if any (collectively,
the "Terms"). Each Global Security will be dated and
issued as of the date of its authentication by the
Trustee. Each Global Security will bear an original
issue date, which will be (i) with respect to an
2
original Global Security (or any portion thereof), the
original issue date specified in such Global Security
and (ii) following a consolidation of Global Securities,
with respect to the Global Security resulting from such
consolidation, the most recent Interest Payment Date to
which interest has been paid or duly provided for on the
predecessor Global Securities, regardless of the date of
authentication of such resulting Global Security. No
Global Security will represent any Certificated Note.
Identification
--------------
Numbers The Company has arranged with the CUSIP Service Bureau
------- of Standard & Poor's Corporation (the "CUSIP Service
Bureau") for the reservation of a series of CUSIP
numbers, which series consists of approximately ___
CUSIP numbers and relates to Global Securities
representing Book-Entry Notes and book-entry medium-term
notes issued by the Company with other series
designations. The Company has obtained from the CUSIP
Service Bureau a written list of such reserved CUSIP
numbers and has delivered such list to the Trustee and
DTC. The Company will assign CUSIP numbers to Global
Securities as described below under Settlement Procedure
"B". DTC will notify the CUSIP Service Bureau
periodically of the CUSIP numbers that the Company has
assigned to Global Securities. At any time when fewer
than 100 of the reserved CUSIP numbers remain unassigned
to Global Securities, and, if it deems necessary , the
Company will reserve additional CUSIP numbers for
assignment to Global Securities. Upon obtaining such
additional CUSIP numbers, the Company shall deliver a
list of such additional CUSIP numbers to Trustee and
DTC.
Registration: Global Securities will be issued only in fully
------------ registered form without coupons. Each Global Security
will be registered in the name of CEDE & CO., as nominee
for DTC, on the securities register for the Notes
maintained under the Indenture. The beneficial owner of
a Book-Entry Note (or one or more indirect participants
in DTC designated by such owner) will designate one or
more participants in DTC (with respect to such Book-
Entry Note, the "Participants") to act as agent or
agents for such owner in connection with the book-entry
system maintained by DTC, and DTC will record in book-
entry form, in accordance with instructions provided by
such Participants, a credit balance with respect to such
beneficial owner in such Book-Entry Note in the account
of such Participants. The ownership interest of such
beneficial owner (or such participant) in such Book-
Entry Note will be recorded through the records of such
3
Participants or through the separate records of such
Participants and one or more indirect participants in
DTC.
Transfers: Transfers of a Book-Entry Note will be accomplished by
--------- book entries made by DTC and, in turn, by Participants
(and in certain cases, one or more indirect participants
in DTC) acting on behalf of beneficial transferors and
transferees of such Note.
Exchanges: Upon receipt of instructions from Company, Trustee may
--------- deliver to DTC and the CUSIP Service Bureau at any time
a written notice of consolidation (a copy of which shall
be attached to the resulting Global Security described
below) specifying (i) the CUSIP numbers of two or more
outstanding Global Securities that represent (A) Fixed
Rate Book-Entry Notes having the same Terms and for
which interest has been paid to the same date or (B)
Floating Rate Book-Entry Notes having the same Terms 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 Securities shall be
exchanged for a single replacement Global Security and
(iii) a new CUSIP number, obtained from the Company, to
be assigned to such replacement Global Security. Upon
receipt of such a notice, DTC will send to its
participants (including Trustee) a written
reorganization notice to the effect that such exchange
will occur on such date. Prior to the specified exchange
date, Trustee will deliver to the CUSIP Service Bureau a
written notice setting forth such exchange date and such
new CUSIP number and stating that, as of such exchange
date, the CUSIP numbers of the Global Securities to be
exchanged will no longer be valid. On the specified
exchange date, Trustee will exchange such Global
Securities for a single Global Security bearing the new
CUSIP number and the CUSIP numbers of the exchanged
Global Securities will, in accordance with CUSIP Service
Bureau procedures, be canceled and not reassigned until
the Book-Entry Notes represented by such exchanged
Global Securities have matured or been redeemed.
Notwithstanding the foregoing, if the Global Securities
to be exchanged exceed $200,000,000 in aggregate
principal amount, one Global Security will be
authenticated and issued to represent each $200,000,000
of principal amount of the exchanged Global Securities
and an additional Global Security will be authenticated
and issued to represent any remaining principal amount
of such Global Securities (see "Denominations" below).
4
Maturities: Each Book-Entry Note will mature on a date nine months
---------- or more after the Original Issue Date for such Note. A
Floating Rate Book-Entry Note will mature only on an
Interest Payment Date for such Note.
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 Securities will be
denominated in principal amounts not in excess of
$200,000,000. If one or more Book-Entry Notes having an
aggregate principal amount in excess of $200,000,000
would, but for the preceding sentence, be represented by
a single Global Security, then one Global Security will
be authenticated and issued to represent each
$200,000,000 principal amount of such Book-Entry Note or
Notes and an additional Global Security will be
authenticated and issued to represent any remaining
principal amount of such Book-Entry Note or Notes. In
such a case, each of the Global Securities representing
such Book-Entry Note or Notes shall be assigned the same
CUSIP number.
Interest: General. Interest, if any, on each Book-Entry Note will
-------- -------
accrue from the original issue date for the first
interest period or the last date to which interest has
been paid, if any, for each subsequent interest period,
on the Global Security representing such Book-Entry
Note, and will be calculated and paid in the manner
described in such Book-Entry Note and in the Prospectus
(as defined in the Agency Agreement), as supplemented by
the applicable Pricing Supplement. Unless otherwise
specified therein, each payment of interest on a Book-
Entry Note will include interest accrued to but
excluding the Interest Payment Date (provided that, in
the case of Floating Rate Book-Entry Notes which reset
daily or weekly, interest payments will include accrued
interest to but excluding the Regular Record Date
immediately preceding the Interest Payment Date) or to
but excluding Maturity (other than a Maturity of a Fixed
Rate Book-Entry Note occurring on the 31st day of a
month, in which case such payment of interest will
include interest accrued to but excluding the 30th day
of such month). Interest payable at the Maturity of a
Book-Entry Note will be payable to the Person to whom
the principal of such Note is payable. Standard & Poor's
Corporation will use the information received in the
pending deposit message described under Settlement
Procedure "C" below in order to include the amount of
any interest payable and certain other information
regarding the related Global Security in the appropriate
(daily or weekly) bond report published by Standard &
Poor's Corporation.
5
Regular Record Dates. The Regular Record Date with
--------------------
respect to any Interest Payment Date shall be the date
fifteen calendar days immediately preceding such
Interest Payment Date (whether or not a Business Day).
Interest Payment Dates on Fixed Rate Book-Entry Notes.
-----------------------------------------------------
Unless otherwise specified pursuant to Settlement
Procedure "A" below, interest payments on Fixed Rate
Book-Entry Notes will be made semiannually on
______________ and _____________ of each year and at
Maturity; provided, however, that if an Interest Payment
Date for a Fixed Rate Book-Entry Note is not a Business
Day, the payment due on such day shall be made on the
next succeeding Business Day and no interest shall
accrue on such payment for the period from and after
such Interest Payment Date; provided further, that in
the case of a Fixed Rate Book-Entry Note issued between
a Regular Record Date and an Interest Payment Date, the
first interest payment will be made on the Interest
Payment Date following the next succeeding Regular
Record Date.
Interest Payment Dates on Floating Rate Book-Entry
--------------------------------------------------
Notes. Interest payments will be made on Floating Rate
-----
Book-Entry Notes monthly, quarterly, semi-annually or
annually. Unless otherwise agreed upon, interest will be
payable, in the case of Floating Rate Book-Entry Notes
with a monthly Interest Payment Period, on the third
Wednesday of each month; with a quarterly Interest
Payment Period, on the third Wednesday of March, June,
September and December of each year; with a semi-annual
Interest Payment Period on the third Wednesday of the
two months specified pursuant to Settlement Procedure
"A" below; and with an annual Interest Payment Period,
on the third Wednesday of the month specified pursuant
to Settlement Procedure "A" below; provided, however,
that if an Interest Payment Date for a Floating Rate
Book-Entry Note would otherwise be a day that is not a
Business Day with respect to such Floating Rate Book-
Entry Note, such Interest Payment Date will be the next
succeeding Business Day with respect to such Floating
Rate Book-Entry Note, except in the case of a Floating
Rate Book-Entry Note for which the Base Rate is LIBOR,
if such Business Day is in the next succeeding calendar
month, such Interest Payment Date will be the
immediately preceding Business Day; and provided
further, that in the case of a Floating Rate Book-Entry
Note issued between a Regular Record Date and an
Interest Payment Date, the first interest payment will
be made on the Interest Payment Date following the next
succeeding Regular Record Date.
6
Notice of Interest Payment and Regular Record Dates. On
---------------------------------------------------
the first Business Day of January, April, July and
October of each year, Trustee will deliver to the
Company and DTC a written list of Regular Record Dates
and Interest Payment Dates that will occur with respect
to Book-Entry Notes during the six-month period
beginning on such first Business Day. Promptly after
each Interest Determination Date for Floating Rate Book-
Entry Notes, Trustee as Calculation Agent, will notify
Standard & Poor's Corporation of the interest rates
determined on such Interest Determination Date.
Calculation of Fixed Rate Book-Entry Notes. Interest on Fixed Rate Book
-------------- Entry Notes (including interest for partial periods)
Interest: will be calculated on the basis of a 360-day year of
-------- twelve 30-day months.
Floating Rate Book-Entry Notes. Interest rates on
------------------------------
Floating Rate Book-Entry Notes will be determined as set
forth in the form of Notes. Interest on Floating Rate
Book-Entry Notes, except as otherwise set forth therein,
will be calculated on the basis of actual days elapsed
and a year of 360 days, except that in the case of a
Floating Rate Book-Entry Note for which the Base Rate is
Treasury Rate, interest will be calculated on the basis
of the actual number of days in the year.
Payments of Payment of Interest Only. Promptly after each Regular
----------- Record Date, Paying Agent will deliver to the Company
Principal and and DTC a written notice setting forth, by CUSIP number,
------------- the amount of interest to be paid on each Global
Interest: Security on the following Interest Payment Date (other
-------- than an Interest Payment Date coinciding with Maturity)
and the total of such amounts. DTC will confirm the
amount payable on each Global Security on such Interest
Payment Date by reference to the appropriate (daily or
weekly) bond reports published by Standard & Poor's
Corporation. The Company will pay to Paying Agent, the
total amount of interest due on such Interest Payment
Date (other than at Maturity), and Paying Agent will pay
such amount to DTC, at the times and in the manner set
forth below under "Manner of Payment".
Payments at Maturity. On or about the first Business Day
--------------------
of each month, Paying Agent will deliver to the Company,
DTC and the Trustee a written list of principal and
interest to be paid on each Global Security maturing (on
a Maturity or Redemption Date or otherwise) in the
following month. Company and DTC will confirm the
amounts of such principal and interest payments with
respect to each such Global Security on or about the
fifth Business Day preceding the Maturity of such Global
Security. On or before Maturity, the Company will pay to
7
Paying Agent, the principal amount of such Global
Security, together with interest due at such Maturity.
Paying Agent will pay such amount to DTC at the times
and in the manner set forth below under "Manner of
Payment". If any Maturity of a Global Security
representing Book-Entry Notes is not a Business Day, the
payment due on such day shall be made on the next
succeeding Business Day and no interest shall accrue on
such payment for the period from and after such
Maturity. Promptly after payment to DTC of the principal
and interest due at Maturity of such Global Security,
the Trustee will cancel such Global Security in
accordance with the Indenture and so advise the Company.
Manner of Payment. The total amount of any principal and
-----------------
interest due on Global Securities on any Interest
Payment Date or at Maturity shall be paid by the Company
to Paying Agent in immediately available funds for use
by the Paying Agent on such date. The Company will make
such payment on such Global Securities by instructing
Paying Agent to withdraw funds from an account
maintained by the Company at Paying Agent or by wire
transfer to Paying Agent. The Company will confirm any
such instructions in writing to Paying Agent. Prior to
10 A.M. (New York City time) on the date of Maturity or
as soon as possible thereafter, Paying Agent will pay by
separate wire transfer (using Fedwire message entry
instructions in a form previously agreed to with DTC) to
an account at the Federal Reserve Bank of New York
previously specified by DTC, in funds available for
immediate use by DTC, each payment of principal
(together with interest thereon) due on a Global
Security on such date. On each Interest Payment Date
(other than at Maturity), interest payments shall be
made to DTC, in same day funds in accordance with
existing arrangements between Paying Agent and DTC. On
each such date, DTC will pay, in accordance with its
SDFS operating procedures then in effect, such amounts
in funds available for immediate use to the respective
Participants in whose names the Book-Entry Notes
represented by such Global Securities are recorded in
the book-entry system maintained by DTC. None of the
Company (as issuer or as paying agent), the Trustee or
Paying Agent shall have any direct responsibility or
liability for the payment by DTC to such Participants of
the principal of and interest on the Book-Entry Notes.
Withholding Taxes. The amount of any taxes required
under applicable law to be withheld from any interest
payment on a Book-Entry Note will be determined and
withheld by the Participant, indirect participant in DTC
8
or other Person responsible for forwarding payments and
materials directly to the beneficial owner of such Note.
Procedures upon Company Notice to Trustee Regarding Exercise of Optional
--------------- Reset. Not less than 45 or more than 60 days before an
Company's Exercise Optional Reset Date as set forth in a Book Entry Note,
------------------ the Company will notify the Trustee whether it is
of Optional Reset exercising its option to reset the Interest Rate or
----------------- Spread or Spread Multiplier, as the case may be, for
or Optional such Book-Entry Note, and if so, (i) the new Interest
----------- Rate or Spread or Spread Multiplier, as the case may be,
Extension of for such Book-Entry Note during the period from such
------------ Optional Reset Date to the next Optional Reset Date as
Maturity: set forth in such Book-Entry Note or, if there is no
-------- such next Optional Reset Date, to the Stated Maturity of
such Book-Entry Note (the "Subsequent Interest Period");
and (ii) the provisions, if any, for redemption of such
Book-Entry Note during such Subsequent Interest Period,
including the date or dates on which or the period or
periods during which such redemption may occur during
such Subsequent Interest Period.
Company Notice to Trustee Regarding Exercise of Optional
--------------------------------------------------------
Extension of Maturity. If the Company elects to exercise
---------------------
an option, as set forth in a Book-Entry Note, to extend
the Stated Maturity of such Note, it will so notify the
Trustee no less than 45 or more than 60 days before the
Stated Maturity of such Book-Entry Note, and will
further indicate (i) the new Stated Maturity; (ii) the
Interest Rate or Spread or Spread Multiplier, as the
case may be, and (iii) the provisions, if any, for
redemption of such Book-Entry Note during such extension
period, including the date or dates on which or the
period or periods during which such redemption may occur
during such extension period.
Trustee Notice to DTC Regarding Company's Exercise of
-----------------------------------------------------
Optional Extension or Reset. Upon receipt of notice from
---------------------------
the Company regarding the Company's exercise of either
an optional extension of maturity or an optional reset,
the Trustee will hand-deliver a notice to DTC not less
than 40 days before the Optional Reset Date (in which
case a "Reset Notice") or the Stated Maturity (in which
case an "Extension Notice"), as the case may be, which
Reset Notice or Extension Notice shall identify such
Book-Entry Note by CUSIP number and shall contain the
information required by the terms of the Book-Entry
Note.
Trustee Notice to Company Regarding Option to be Repaid.
-------------------------------------------------------
If, after receipt of either a Reset Notice or an
Extension Notice, DTC exercises the option for repayment
9
by tendering the Global Security representing the Book-
Entry Note to be repaid as set forth in such Note, the
Trustee shall give notice to the Company not less than
22 days before the Optional Reset Date or the old Stated
Maturity, as the case may be, of the principal amount of
Book-Entry Notes to be repaid on such Optional Reset
Date or old Stated Maturity, as the case may be.
Company Notice Regarding New Interest Rate or New Spread
--------------------------------------------------------
or Spread Multiplier. If the Company elects to revoke
--------------------
the Interest Rate or Spread or Spread Multiplier and
establish a higher interest rate or Spread or Spread
Multiplier for an Optional Reset Period or extension
period, as the case may be, it shall, not less than 20
days before such Optional Reset Date or old Stated
Maturity, so notify the Trustee. The Trustee will
immediately thereafter notify DTC of the new Interest
Rate or Spread or Spread Multiplier applicable to such
Book-Entry Note.
Trustee Notice to Company Regarding DTC Revocation of
-----------------------------------------------------
Option to be Repaid. If, after DTC has tendered any
------------------- Book-Entry Notes for repayment
pursuant to an Extension Notice or an Optional Reset
Notice, DTC then revokes such tender for repayment, the
Trustee shall give notice to the Company not less than
five days prior to the Stated Maturity or Optional Reset
Date, as the case may be, of such revocation and of the
principal amount of Book-Entry Notes for which tender
for repayment has been revoked.
Deposit of Repayment Price. On or before any old Stated
-------------------------- Maturity where the Maturity
has been extended, and on or before an Optional Reset
Date, the Company shall deposit with the Paying Agent an
amount of money sufficient to pay the principal amount,
plus interest accrued to such old Stated Maturity or
Optional Reset Date, as the case may be, for all the
Book-Entry Notes or portions thereof which are to be
repaid on such old Stated Maturity or Optional Reset
Date, as the case may be. Such Paying Agent will use
such money to repay such Book-Entry Notes pursuant to
the terms set forth in such Notes.
Procedures upon Company Notice to Trustee Regarding Exercise of Optional
--------------- --------------------------------------------------------
Company's Exercise Redemption. At least 45 days prior to the date on
------------------ ----------
of Optional which it intends to redeem a Book-Entry Note, the
----------- Company will notify the Trustee that it is exercising
Redemption: such option with respect to exercising such option with
---------- respect to such Book-Entry Note on such date.
Trustee Notice to DTC Regarding Company's Exercise of
-----------------------------------------------------
Optional Redemption. After receipt of notice that the
-------------------
Company is exercising its option to redeem a Book-Entry
10
Note, the Trustee will, at least 30 days before the
redemption date for such Book-Entry Note, hand deliver
to DTC a notice identifying such Book-Entry Note by
CUSIP number and informing DTC of the Company's exercise
of such option with respect to such Book-Entry Note.
Deposit of Redemption Price. On or before any redemption
---------------------------
date, the Company shall deposit with Paying Agent an
amount of money sufficient to pay the redemption price,
plus interest accrued to such redemption date, for all
the Book-Entry Notes or portions thereof which are to be
repaid on such redemption date. Such Paying Agent will
use such money to repay such Book-Entry Notes pursuant
to the terms set forth in such Notes.
Payments of Principal Trustee Notice to Company of Option to be Repaid. Upon
--------------------- ------------------------------------------------
and Interest upon receipt of notice of exercise of the option for
----------------- repayment and the Global Securities representing the
Exercise of Optional Book-Entry Notes so to be repaid as set forth in such
-------------------- Notes, the Trustee shall (unless such notice was
Repayment (Except received pursuant to the Company's exercise of an
----------------- optional reset or an optional extension of maturity, in
Pursuant to Company's each of which cases the relevant procedures set forth
--------------------- above are to be followed) give notice to the Company not
Exercise of Optional less than 20 days prior to each Optional Repayment Date
-------------------- of such Optional Repayment Date and of the principal
Reset or Optional amount of Book-Entry Notes to be repaid on such Optional
----------------- Repayment Date.
Extension):
----------
Deposit of Repayment Price. On or prior to any Optional
--------------------------
Repayment Date, the Company shall deposit with such
Paying Agent an amount of money sufficient to pay the
optional repayment price, and accrued interest thereon
to such date, of all the Book-Entry Notes or portions
thereof which are to be repaid on such date. Such Paying
Agent will use such money to repay such Book-Entry Notes
pursuant to the terms set forth in such Notes.
Procedure for Rate The Company and the Agents will discuss from time to
------------------ time the aggregate principal amount of, the issuance
Setting and Posting: price of, and the interest rates to be borne by,
------------------- Book-Entry Notes that may be sold as a result of the
solicitation of orders by the Agents. If the Company
decides to set prices of, and rates borne by, any Book-
Entry Notes in respect of which the Agents are to
solicit orders (the setting of such prices and rates to
be referred to herein as "posting") or if the Company
decides to change prices or rates previously posted by
it, it will promptly advise the Agents of the prices and
rates to be posted.
11
Acceptance and Unless otherwise instructed by the Company, each Agent
-------------- will advise the Company promptly by telephone of all
Rejection of Orders: orders to purchase Book-Entry Notes received by such
------------------- Agent, other than those rejected by it in whole or in
part in the reasonable exercise of its discretion.
Unless otherwise agreed by the Company and the Agents,
the Company has the right to accept orders to purchase
Book-Entry Notes and may reject any such orders in whole
or in part.
Preparation of Pricing If any order to purchase a Book-Entry Note is accepted
---------------------- by or on behalf of the Company, the Company will
Supplement: prepare a pricing supplement (a "Pricing Supplement")
---------- reflecting the applicable interest rates and other terms
of such Book-Entry Note and will arrange to have the
appropriate number of copies thereof filed with the
Commission in accordance with the applicable paragraph
of Rule 424(b) under the Act and will supply at least
ten copies thereof (and additional copies if requested)
to the Agent which presented the order (the "Presenting
Agent"). The Presenting Agent will cause a Prospectus
and Pricing Supplement to be delivered to the purchaser
of such Book-Entry Note.
In each instance that a Pricing Supplement is prepared,
the Presenting Agent will affix the Pricing Supplement
to Prospectuses prior to their use. Outdated Pricing
Supplements (other than those retained for files) will
be destroyed.
Suspension of The Company reserves the right, in its sole discretion,
------------- to instruct the Agents to suspend at any time, for any
Solicitation; period of time or permanently, the solicitation of
------------ orders to purchase Book-Entry Notes. Upon receipt of
Amendment or such instructions, the Agents will forthwith suspend
------------ solicitation until such time as the Company has advised
Supplement: them that such solicitation may be resumed.
----------
In the event that at the time the Company suspends
solicitation of purchases there shall be any orders
outstanding for settlement, the Company will promptly
advise the Agents and the Trustee whether such orders
may be settled and whether copies of the Prospectus as
in effect at the time of the suspension, together with
the appropriate Pricing Supplement, may be delivered in
connection with the settlement of such orders. The
Company will have the sole responsibility for such
decision and for any arrangements that may be made in
the event that the Company determines that such orders
may not be settled or that copies of such Prospectus may
not be so delivered.
12
If the Company decides to amend or supplement the
Registration Statement (as defined in the Agency
Agreement) or the Prospectus, it will promptly advise
the Agents and furnish the Agents with the proposed
amendment or supplement and with such certificates and
opinions as are required, all to the extent required by
and in accordance with the terms of the Agency
Agreement. Subject to the provisions of the Agency
Agreement, the Company may file with the Commission any
such supplement to the Prospectus relating to the Notes.
The Company will provide the Agents, and the Trustee
with copies of any such supplement, and confirm to the
Agents that such supplement has been filed with the
Commission pursuant to the applicable paragraph of Rule
424(b).
Procedures For When the Company has determined to change the interest
-------------- rates of Book-Entry Notes being offered, it will
Rate Changes: promptly advise the Agents and the Agents will forthwith
------------ suspend solicitation of orders. The Agents will
telephone the Company with recommendations as to the
changed interest rates. At such time as the Company has
advised the Agents of the new interest rates, the Agents
may resume solicitation of orders. Until such time only
"indications of interest" may be recorded.
Delivery of A copy of the Prospectus and a Pricing Supplement
----------- relating to a Book-Entry Note must accompany or precede
Prospectus: the earliest of any written offer of such Book-Entry
---------- Note, confirmation of the purchase of such Book-Entry
Note and payment for such Book-Entry Note by its
purchaser. If notice of a change in the terms of the
Book-Entry Notes is received by the Agents between the
time an order for a Book-Entry Note is placed and the
time written confirmation thereof is sent by the
Presenting Agent to a customer or his agent, such
confirmation shall be accompanied by a Prospectus and
Pricing Supplement setting forth the terms in effect
when the order was placed. Subject to "Suspension of
Solicitation; Amendment or Supplement" above, the
Presenting Agent will deliver a Prospectus and Pricing
Supplement as herein described with respect to each
Book-Entry Note sold by it. The Company will make such
delivery if such Book-Entry Note is sold directly by the
Company to a purchaser (other than an Agent).
Confirmation: For each order to purchase a Book-Entry Note solicited
------------ by any Agent and accepted by or on behalf of the
Company, the Presenting Agent will issue a confirmation
to the purchaser, with a copy to the Company, setting
forth the details set forth above and delivery and
payment instructions.
13
Settlement: The receipt by the Company of immediately available
---------- funds in payment for a Book-Entry Note and the
authentication and issuance of the Global Security
representing such Book-Entry Note shall constitute
"settlement" with respect to such Book-Entry Note. All
orders accepted by the Company will be settled on the
third Business Day following the date of sale of such
Book-Entry Note pursuant to the timetable for settlement
set forth below unless the Company and the purchaser
agree to settlement on another day which shall be no
earlier than the next Business Day following the date of
sale.
Settlement Settlement Procedures with regard to each Book-Entry
---------- Note sold by the Company through any Agent, as agent,
Procedures: shall be as follows:
----------
A. The Presenting Agent will advise the Company by
telephone of the following settlement information:
1. Principal amount.
2. Maturity Date.
3. In the case of a Fixed Rate Book-Entry Note, the
interest rate or, in the case of a Floating Rate
Book-Entry Note, the Base Rate, initial interest
rate (if known at such time), Index Maturity,
Interest Reset Period, Interest Reset Dates,
Spread or Spread Multiplier (if any), Minimum
Interest Rate (if any) and Maximum Interest Rate
(if any).
4. Interest Payment Dates and the Interest Payment
Period.
5. Redemption, repayment and extension provisions,
if any.
6. Settlement date.
7. Price.
8. Presenting Agent's commission, determined as
provided in Section 2 of the Agency Agreement.
9. Whether such Book-Entry Note is issued at an
original issue discount and, if so, the total
amount of OID, the yield to maturity and the
initial accrual period OID.
14
B. The Company will assign a CUSIP number to the Global
Security representing such Book-Entry Note and then
advise Trustee by telephone (confirmed in writing at
any time on the same date) or electronic
transmission of the information set forth in
Settlement Procedure "A" above, such CUSIP number
and the name of the Presenting Agent. The Company
will also notify the Presenting Agent by telephone
of such CUSIP number as soon as practicable. Each
such communication by the Company shall constitute a
representation and warranty by the Company to the
Trustee and the Presenting Agent that (i) such Note
is then, and at the time of issuance and sale
thereof will be, duly authorized for issuance and
sale by the Company, and (ii) such Note, and the
Global Security representing such Note, will conform
with the terms of the Indenture for such Note.
C. Trustee will enter a pending deposit message through
DTC's Participant Terminal System providing the
following settlement information to DTC (which shall
route such information to Standard & Poor's
Corporation), and the Presenting Agent:
1. The information set forth in Settlement
Procedure "A".
2. Identification as a Fixed Rate Book-Entry Note
or a Floating Rate Book-Entry Note.
3. Initial Interest Payment Date for such Book-
Entry Note, number of days by which such date
succeeds the related Regular Record Date and
amount of interest payable on such Interest
Payment Date.
4. The Interest Payment Period.
5. CUSIP number of the Global Security representing
such Book-Entry Note.
6. Whether such Global Security will represent any
other Book-Entry Note (to the extent known at
such time).
D. To the extent the Company has not already done so,
the Company will deliver to the Trustee a Global
15
Security in a form that has been approved by the
Company, the Agents and the Trustee.
E. The Trustee will complete such Book-Entry Note,
stamp the appropriate legend, as instructed by DTC,
if not already set forth thereon, and authenticate
the Global Security representing such Book-Entry
Note.
F. DTC will credit such Book-Entry Note to Trustee's
participant account at DTC.
G. Trustee will enter an SDFS deliver order through
DTC's Participant Terminal System instructing DTC to
(i) debit such Book-Entry Note to Trustee's
participant account and credit such Book-Entry Note
to the Presenting Agent's participant account and
(ii) debit the Presenting Agent's settlement account
and credit Trustee's settlement account for an
amount equal to the price of such Book-Entry Note
less the Presenting Agent's commission. The entry of
such a deliver order shall constitute a
representation and warranty by Trustee to DTC that
(i) the Global Security representing such Book-Entry
Note has been issued and authenticated and (ii)
Trustee is holding such Global Security pursuant to
the Medium-Term Note Certificate Agreement between
Trustee and DTC.
H. The Presenting Agent will enter an SDFS deliver
order through DTC's Participant Terminal System
instructing DTC (i) to debit such Book-Entry Note to
the Presenting Agent's participant account and
credit such Book-Entry Note to the participant
accounts of the Participants with respect to such
Book-Entry Note and (ii) to debit the settlement
accounts of such Participants and credit the
settlement account of the Presenting 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
operating procedures in effect on the settlement
date.
J. Trustee will, upon receipt of funds from the
Presenting Agent in accordance with Settlement
Procedure "G", wire transfer to the account of the
Company maintained at _______________, Birmingham,
Alabama (or if directed in writing by the Company,
credit to an account of the Company maintained at
16
Trustee) funds available for immediate use in the
amount transferred to Trustee in accordance with
Settlement Procedure "G".
K. The Presenting Agent will confirm the purchase of
such Book-Entry Note to the purchaser either by
transmitting to the Participants with respect to
such Book-Entry Note a confirmation order or orders
through DTC's institutional delivery system or by
mailing a written confirmation to such purchaser.
Settlement For orders of Book-Entry Notes solicited by any
---------- Agent and accepted by the Company for settlement
Procedures on the first Business Day after the sale date,
---------- Settlement procedures "A" through "K" set forth
Timetable: above shall be completed as soon as possible but
--------- not later than the respective times (New York City
time) set forth below:
Settlement
Procedure Time
--------- ----
A 11:00 A.M. on the sale date
B 12:00 Noon on the sale date
C 2:00 P.M. on the sale date
D 3:00 P.M. on the day before
settlement
E 9:00 A.M. on settlement date
F 10:00 A.M. on settlement date
G-H 2:00 P.M. on settlement date
I 4:45 P.M. on settlement date
J-K 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 12:00 Noon on the first
Business Day after the sale date and no later than 2:00
P.M. on the Business Day before the settlement date,
respectively. If the initial interest rate for a
Floating Rate Book-Entry Note has not been determined at
the time that Settlement Procedure "A" is completed,
Settlement Procedures "B" and "C" shall be completed as
soon as such rate has been determined but no later than
12:00 Noon and 2:00 P.M., respectively, on the 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 SDFS operating procedures in effect on the
settlement date.
17
If settlement of a Book-Entry Note is rescheduled or
canceled, Company will instruct Trustee to deliver to
DTC, through DTC's Participant Terminal System, a
cancellation message to such effect by no later than
12:00 noon on the Business Day immediately preceding the
scheduled settlement date and the Trustee will enter
such message no later than by 2:00 P.M. on the Business
Day immediately preceding the scheduled settlement date.
Failure to Settle: If Trustee fails to enter an SDFS deliver order with
----------------- respect to a Book-Entry Note pursuant to Settlement
Procedure "G", Trustee may deliver to DTC, through DTC's
Participant Terminal System, as soon as practicable, a
withdrawal message instructing DTC to debit such Book-
Entry Note to Trustee's participant account provided
that ▇▇▇▇▇▇▇'s participant account contains a principal
amount of the Global Security 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 Security, the Trustee will mark
such Global Security "canceled" in accordance with the
Indenture and so advise the Company and Trustee will
make appropriate entries in its records and return the
canceled Global Securities to Company. The CUSIP number
assigned to such Global Security shall, in accordance
with CUSIP Service Bureau procedures, be canceled and
not reassigned until the Book-Entry Notes represented by
such Global Security have matured or been redeemed. If a
withdrawal message is processed with respect to one or
more, but not all, of the Book-Entry Notes represented
by a Global Security, Trustee will exchange such Book-
Entry Note for two Global Securities, one of which shall
represent such Book-Entry 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 Security and shall
bear the CUSIP number of the surrendered Global
Security.
If the purchase price for any Book-Entry Note is not
timely paid to the Participants with respect to such
Note by the beneficial purchaser thereof (or a Person,
including an indirect participant in DTC, acting on
behalf of such purchaser), such Participants and, in
turn, the Presenting Agent may enter SDFS deliver orders
through DTC's Participant Terminal System reversing the
orders entered pursuant to Settlement Procedures "H" and
"G", respectively. Thereafter, Trustee will deliver the
withdrawal message and take the related actions
described in the preceding paragraph. If such failure
shall have occurred for any reason other than a default
by the Presenting Agent in the performance of its
obligations hereunder and under the Agency Agreement,
18
then the Company will reimburse the Presenting Agent or
Trustee as applicable, on an equitable basis for the
loss of the use of the funds during the period when they
were credited to the account of the Company.
Notwithstanding the foregoing, upon any failure to
settle with respect to a Book-Entry Note, DTC may take
any actions in accordance with its SDFS operating
procedures then in effect. In the event of a failure to
settle with respect to one or more, but not all, of the
Book-Entry Notes to have been represented by a Global
Security, Trustee will provide, in accordance with
Settlement Procedure "E", for the authentication and
issuance of a Global Security representing the other
Book-Entry Notes to have been represented by such Global
Security and will make appropriate entries in its
records.
Trustee Not to Nothing herein shall be deemed to require the Trustee
-------------- to risk or expend its own funds in connection with any
Risk Funds: payment to the Company, DTC, the Agents or the
---------- purchaser, it being understood by all parties
that payments made by the Trustee to the Company, DTC,
the Agents or the purchaser shall be made only to the
extent that funds are provided to the Trustee for such
purpose.
Payment of Each Agent shall forward to the Company on a monthly
---------- basis, a statement of the out-of-pocket expenses
Expenses: incurred by such Agent during that month that are
-------- reimbursable to it pursuant to the terms of the
Agency Agreement. The Company will remit payment to the
Agents currently on a monthly basis.
Advertising Costs: The Company will determine with the Agents the amount of
----------------- advertising that may be appropriate in soliciting offers
to purchase the Book-Entry Notes. Advertising expenses
will be paid by the Company.
Periodic Periodically, Trustee will send to the Company a
-------- statement setting forth the principal amount of
Statements from Book-Entry Notes Outstanding as of that date and setting
--------------- forth a brief description of any sales of Book-Entry
Trustee: Notes which the Company has advised Trustee but which
------- have not yet been settled.
19
PART II
Administrative Procedures for Certificated Notes
Trustee will serve as registrar and transfer agent in connection with the
Certificated Notes.
Issuance: Each Certificated Note will be dated and issued as of
-------- the date of its authentication by the Trustee. Each
Certificated Note will bear an Original Issue Date,
which will be (i) with respect to an original
Certificated Note (or any portion thereof), its original
issuance date (which will be the settlement date) and
(ii) with respect to any Certificated Note (or portion
thereof) issued subsequently upon transfer or exchange
of a Certificated Note or in lieu of a destroyed, lost
or stolen Certificated Note, the Original Issue Date of
the predecessor Certificated Note, regardless of the
date of authentication of such subsequently issued
Certificated Note.
Registration: Certificated Notes will be issued only in fully
------------ registered form without coupons.
Transfers and A Certificated Note may be presented for transfer or
------------- exchange at the principal corporate trust office of
for Exchanges: Trustee in Jacksonville, Florida. Certificated Notes
------------- will be exchangeable for other Certificated Notes having
identical terms but different authorized denominations
without service charge. Certificated Notes will not be
exchangeable for Book-Entry Notes.
Maturities: Each Certificated Note will mature on a date nine months
---------- or more after the settlement date for such Note. A
Floating Rate Certificated Note will mature only on an
Interest Payment Date for such Note. Any Note
denominated in Japanese yen will mature on a date not
less than one year from the Original Issue Date (as
defined below) for such Note. Any Note denominated in
Pounds Sterling will mature on a date not less than one
year, nor more than five years, after its Original Issue
Date.
Denominations: The denomination of any Certificated Note denominated in
------------- U.S. dollars will be a minimum of $1,000 or any amount
in excess thereof that is an integral multiple of
$1,000. The authorized denominations of Certificated
Notes denominated in any other currency will be
specified pursuant to "Settlement Procedures" below.
Interest: General. Interest, if any, on each Certificated Note
-------- -------
will accrue from the original issue date for the first
interest period or the last date to which interest has
been paid, if any, for each subsequent interest period,
and will be calculated and paid in the manner described
in such Note and in the Prospectus, as supplemented by
the applicable Pricing Supplement. Unless otherwise
specified therein, each payment of interest on a
Certificated Note will include interest accrued to but
excluding the Interest Payment Date (provided that, in
the case of Certificated Notes which reset daily or
weekly, interest payments will include accrued interest
to but excluding the Regular Record Date immediately
preceding the Interest Payment Date) or to but excluding
Maturity (other than a Maturity of a Fixed Rate
Certificated Note occurring on the 31st day of a month,
in which case such payment of interest will include
interest accrued to but excluding the 30th day of such
month).
Regular Record Dates. The Regular Record Dates with
--------------------
respect to any Interest Payment Date shall be the date
fifteen calendar days immediately preceding such
Interest Payment Date (whether or not a Business Day).
Fixed Rate Certificated Notes. Unless otherwise
-----------------------------
specified pursuant to Settlement Procedure "A" below,
interest payments on Fixed Rate Certificated Notes will
be made semiannually on ________ and _________ of each
year and at Maturity; provided, however, that if any
-------- -------
Interest Payment Date for a Fixed Rate Certificated Note
is not a Business Day, the payment due on such day shall
be made on the next succeeding Business Day and no
interest shall accrue on such payment for the period
from and after such Interest Payment Date; provided
--------
further, that in the case of a Fixed Rate Certificated
-------
Note issued between a Regular Record Date and an
Interest Payment Date, the first interest payment will
be made on the Interest Payment Date following the next
succeeding Regular Record Date.
Floating Rate Certificated Notes. Interest payments will
--------------------------------
be made on Floating Rate Certificated Notes monthly,
quarterly, semi-annually or annually. Interest will be
payable, in the case of Floating Rate Certificated Notes
with a monthly Interest Payment Period, on the third
Wednesday of each month; with a quarterly interest
Payment Period, on the third Wednesday of March, June,
September and December of each year; with a semi-annual
Interest Payment Period, on the third Wednesday of the
two months specified pursuant to Settlement Procedure
"A" below; and with an annual Interest Payment Period,
on the third Wednesday of the month specified pursuant
to Settlement Procedure "A" below; provided, however,
-------- -------
that if an Interest Payment Date for a Floating Rate
Certificated Note would otherwise be a day that is not a
Business Day with respect to such Floating Rate
2
Certificated Note, such Interest Payment Date will be
the next succeeding Business Day with respect to such
Floating Rate Certificated Note, except in the case of a
Floating Rate Certificated Note for which the Base Rate
is LIBOR, if such Business Day is in the next succeeding
calendar month, such Interest Payment Date will be the
immediately preceding Business Day; and provided
--------
further, that in the case of a Floating Rate
-------
Certificated Note issued between a Regular Record Date
and an interest Payment Date, the first interest payment
will be made on the Interest Payment Date following the
next succeeding Regular Record Date.
Calculation of Fixed Rate Certificated Note. Interest on Fixed Rate
-------------- Certificated Notes (including interest for partial
Interest: periods) will be calculated on the basis of a 360-day
-------- year of twelve 30-day months.
Floating Rate Certificated Notes. Interest rates on
--------------------------------
Floating Rate Certificated Notes will be determined as
set forth in the form of Notes. Interest on Floating
Rate Certificated Notes, except as otherwise set forth
therein, will be calculated on the basis of actual days
elapsed and a year of 360 days, except that in the case
of a Floating Rate Certificated Note for which the Base
Rate is Treasury Rate, interest will be calculated on
the basis of the actual number of days in the year.
Payments of Interest, if any, on each Certificated Note will be
----------- calculated and and paid in the manner described in such
principal and Note and in the Prospectus, as supplemented by the
------------- applicable Pricing Supplement. Unless otherwise provided
Interest: in the Indenture or the Certificated Note, the first
-------- payment of interest on any Certificated Note originally
issued between a Record Date and an Interest Payment
Date will be made on the next succeeding Interest
Payment Date. Interest payable at the Maturity of a
Certificated Note will be payable to the Person to whom
the principal of such Note is payable. Unless other
arrangements are made, all interest payments (excluding
interest payments made on the Maturity Date) will be
made by check mailed to the person entitled thereto as
provided above; provided, however, that the holder of
-------- -------
$10,000,000 (or the equivalent thereof in other
currencies) or more of Certificated Notes with similar
tenor and terms will be entitled to receive payment by
wire transfer in U.S. dollars.
Within 10 days following each Record Date, the Trustee
will inform the Company of the total amount of the
interest payments to be made by the Company on the next
succeeding Interest Payment Date. The Trustee will
provide monthly to the Company a list of the principal
3
and interest to be paid on Certificated Notes maturing
in the next succeeding month.
Trustee will be responsible for withholding taxes on
interest paid on Certificated Notes as required by
applicable law.
If the Maturity of a Certificated Note is not a Business
Day, the payment due on such day shall be made on the
next succeeding Business Day and no interest shall
accrue on such payment for the period from and after
such Maturity.
Procedures upon Company Notice to Trustee Regarding Exercise of Optional
--------------- --------------------------------------------------------
Company's Exercise Reset. Not less than 45 or more more than 60 days before
------------------ -----
of Optional Reset an Optional Reset Date as set forth in a Certificated
----------------- Note, the Company will notify the Trustee whether it is
or Optional exercising its option to reset the Interest Rate or
----------- Spread or Spread Multiplier, as the case may be, for
Extension of such certificated Note, and if so, (i) the new Interest
------------ Rate or Spread or Spread Multiplier, as the case may be,
Maturity: for such Certificated Note during the period from such
-------- Optional Reset Date to the next Optional Reset Date as
set forth in such Certificated Note or, if there is no
such next Optional Reset Date, to the Maturity Date of
such Certificated Note (the "Subsequent Interest
Period"); and (ii) the provisions, if any, for
redemption of such Certificated Note during such
Subsequent Interest Period, including the date or dates
on which or the period or periods during which such
redemption may occur during such Subsequent Interest
Period.
Company Notice to Trustee Regarding Exercise of Optional
--------------------------------------------------------
Extension of Maturity. If the Company elects to exercise
---------------------
an option, as set forth in a Certificated Note, to
extend the Maturity Date of such Note, it will so notify
the Trustee no less than 45 or more than 60 days before
the Maturity Date of such Certificated Note, and will
further indicate (i) the new Maturity Date; (ii) the
Interest Rate or Spread or Spread Multiplier, as the
case may be, and (iii) the provisions, if any, for
redemption of such Certificated Note during such
extension period, including the date or dates on which
or the period or periods during which such redemption
may occur during such extension period.
Trustee Notice to Holders Regarding Company's Exercise
------------------------------------------------------
of Optional Extension or Reset. Upon receipt of notice
------------------------------
from the Company regarding the Company's exercise of
either an optional extension of maturity or an optional
reset, the Trustee will mail a notice, first class,
postage prepaid, to the Holder not less than 40 days
before the Optional Reset Date (in which case a "Reset
4
Notice") or the Maturity Date (in which case an
"Extension Notice"), as the case may be, which Reset
Notice or Extension Notice shall contain the information
required by the terms of the Certificated Note.
Trustee Notice to Company Regarding Option to be Repaid.
-------------------------------------------------------
If, after receipt of either a Reset Notice or an
Extension Notice, any Holder of a Certificated Note
exercises the option for repayment by tendering the
Certificated Note to be repaid as set forth in the
Certificated Note, the Trustee shall give notice to the
Company not less than 22 days before the Optional Reset
Date or the old Maturity Date, as the case may be, of
the principal amount of Certificated Notes to be repaid
on such Optional Reset Date or old Maturity Date, as the
case may be.
Company Notice Regarding New Interest Rate or New Spread
--------------------------------------------------------
or Spread Multiplier. If the Company elects to revoke
--------------------
the Interest Rate or Spread or Spread Multiplier and
establish a higher interest rate or Spread or Spread
Multiplier for an Optional Reset Period or extension
period, as the case may be, it shall, not less than 20
days before such Optional Reset Date or old Maturity
Date, so notify the Trustee. The Trustee will
immediately thereafter notify the Holder of such
Certificated Note, by first class mail, postage prepaid
of the new Interest Rate or Spread or Spread Multiplier
applicable to such Certificated Note.
Trustee Notice to Company Regarding Holders Revocation
------------------------------------------------------
of Option to be Repaid. If, after the Holder has
----------------------
tendered any Certificated Notes for repayment pursuant
to an Extension Notice or an Optional Reset Notice, such
Holder then revokes such tender for repayment, the
Trustee shall give notice to the Company not less than
five days prior to the Maturity Date or Optional Reset
Date, as the case may be, of such revocation and of the
principal amount of Certificated Notes for which tender
for repayment has been revoked.
Deposit of Repayment Price. On or before any old
--------------------------
Maturity Date where the Maturity has been extended, and
on or before an Optional Reset Date, the Company shall
deposit with the Trustee an amount of money sufficient
to pay the principal amount, plus interest accrued to
such old Maturity Date or Optional Reset Date, as the
case may be, for all the Certificated Notes or portions
thereof which are to be repaid on such old Maturity Date
or Optional Reset Date, as the case may be. Such Trustee
will use such money to repay such Certificated Notes
pursuant to the terms set forth in such Notes.
5
Procedures upon Company Notice to Trustee Regarding Exercise of Optional
--------------- --------------------------------------------------------
Company's Redemption. At least 45 days prior to the date on which
--------- ----------
Exercise of it prior to the date on which it intends to redeem a
----------- Certificated Note, the Company will notify the Trustee
Optional that it is exercising such option with respect to such
-------- Certificated Note on such date.
Redemption:
----------
Trustee Notice to Holders Regarding Company's Exercise
------------------------------------------------------
of Optional Redemption. After receipt of notice that the
----------------------
Company is exercising its option to redeem a
Certificated Note, the Trustee will, at least 30 days
before the redemption date for such Certificated Note,
mail a notice, first class, postage prepaid, to the
Holder of such Certificated Note informing such Holder
of the Company's exercise of such option with respect to
such Certificated Note.
Deposit of Redemption Price. On or before any redemption
---------------------------
date, the Company shall deposit with such Trustee an
amount of money sufficient to pay the redemption price,
plus interest accrued to such redemption date, for all
the Certificated Notes or portions thereof and which are
to be repaid on such redemption date. Such Trustee will
use such money to repay such Certificated Notes pursuant
to the terms set forth in such Notes.
Payments of Trustee Notice to Company of Option to be Repaid. Upon
----------- ------------------------------------------------
Principal and receipt of notice of exercise of the option for
------------- repayment and the Global Securities representing the
Interest Upon Certificated Notes so to be repaid as set forth in such
------------- Notes, the Trustee shall (unless such notice was
Exercise of received pursuant to the Company's exercise of an
----------- optional reset or an optional extension of maturity, in
Optional Repayment each of which cases the relevant procedures set forth
------------------ above are to be followed) give notice to the Company not
(Except Pursuant less than 20 days prior to each Optional Repayment Date
---------------- of such Optional Repaymetn Date and of the principal
to Company's amount of Certificated Notes to be repaid on such
------------ Optional Repayment Date.
Exercise of
-----------
Optional Reset
--------------
or Optional
-----------
Extension):
----------
Deposit of Repayment Price. On or prior to any Optional
--------------------------
Repayment Date, the Company shall deposit with such
Trustee an amount of money sufficient to pay the
optional repayment price, and accrued interest thereon
to such date, of all the Certificated Notes or portions
thereof which are to be repaid on such date. Such
Trustee will use such money to repay such Certificated
Notes pursuant to the terms set forth in such Notes.
6
Procedure for Rate The Company and the Agents will discuss from time to
------------------ time the aggregate principal amount of, the issuance
Setting and price of, and the interest rates to be borne by, Notes
----------- that may be sold as a result of the solicitation of
Posting: orders by the Agents. If the Company decides to set
------- prices of, and rates borne by, any Notes in respect of
which the Agents are to solicit orders (the setting of
such prices and rates to be referred to herein as
"posting") or if the Company decides to change prices or
rates previously posted by it, it will promptly advise
the Agents of the prices and rates to be posted.
Acceptance and Unless otherwise instructed by the Company, each Agent
-------------- will advise the Company promptly by telephone of all
Rejection of orders to purchase Certificated Notes received by such
------------ Agent, other than those rejected by it in whole or in
Orders: part in the reasonable exercise of its discretion.
------ Unless otherwise agreed by the Company and the Agents,
the Company has the sole right to accept orders to
purchase Certificated Notes and may reject any such
orders in whole or in part. Before accepting any order
to purchase a Certificated Note to be settled in less
than three Business Days, the Company shall verify that
the Trustee will have adequate time to prepare and
authenticate such Note.
Preparation of If any order to purchase a Certificated Note is accepted
-------------- by or on behalf of the Company, the Company will prepare
Pricing a pricing supplement (a "Pricing Supplement") reflecting
------- the interest rates and other terms of such Certified
Supplement: Note and will arrange to have the applicable number of
---------- copies thereof filed with the Commission in accordance
with the applicable paragraph of Rule 424(b) under the
Act and will supply at least ten copies thereof (and
additional copies if requested) to the Agent which
presented the order (the "Presenting Agent"). The
Presenting Agent will cause a Prospectus and Pricing
Supplement to be delivered to the purchaser of such
Certificated Note.
In each instance that a Pricing Supplement is prepared,
the Presenting Agent will affix the Pricing Supplement
to Prospectuses prior to their use. Outdated Pricing
Supplements (other than those retained for files) will
be destroyed.
Suspension of The Company reserves the right, in it sole discretion to
------------- instruct the Agents to suspend at any time for any
Solicitation; period of time or permanently, the solicitation of
------------ orders to purchase Certificated Notes. Upon receipt of
Amendment or such instructions, the Agents will forthwith suspend
------------ solicitation until such time as the Company has advised
Supplement: them that such solicitation may be resumed.
----------
In the event that at the time the Company suspends
solicitation of purchases there shall be any orders
7
outstanding for settlement, the Company will promptly
advise the Agents and the Trustee whether such orders
may be settled and whether copies of the Prospectus as
in effect at the time of the suspension, together with
the appropriate Pricing Supplement, may be delivered in
connection with the settlement of such orders. The
Company will have the sole responsibility for such
decision and for any arrangements that may be made in
the event that the Company determines that such orders
may not be settled or that copies of such Prospectus may
not be so delivered.
If the Company decides to amend or supplement the
Registration Statement or the Prospectus, it will
promptly advise the Agents and furnish the Agents with
the proposed amendment or supplement and with such
certificates and opinions as are required, all to the
extent required by and in accordance with the terms of
the Agency Agreement. Subject to the provisions of the
Agency Agreement, the Company may file with the
Commission any supplement to the Prospectus relating to
the Notes. The Company will provide the Agents and the
Trustee with copies of any such supplement, and confirm
to the Agents that such supplement has been filed with
the Commission pursuant to the applicable paragraph of
Rule 424(b).
Procedure for When the Company has determined to change the interest
------------- rates of Certificated Notes being offered, it will
Rate Changes: promptly advise the Agents and the Agents will forthwith
------------ suspend solicitation of orders. The Agents will
telephone the Company with recommendations as to the
changed interest rates. At such time as the Company has
advised the Agents of the new interest rates, the Agents
may resume solicitation of orders. Until such time only
"indications of interest" may be recorded.
Delivery of A copy of the Prospectus and a Pricing Supplement
----------- relating to a Certificated Note must accompany or
Prospectus: precede the earliest of any written offer of such
---------- Certificated Note, confirmation of the purchase of such
Certificated Note and payment for such Certificated Note
by its purchaser. If notice of a change in the terms of
the Certificated Notes is received by the Agents between
the time an order for a Certificated Note is placed and
the time written confirmation thereof is sent by the
Presenting Agent to a customer or his agent, such
confirmation shall be accompanied by a Prospectus and
Pricing Supplement setting forth the terms in effect
when the order was placed. Subject to "Suspension of
Solicitation; Amendment or Supplement" above, the
Presenting Agent will deliver a Prospectus and Pricing
Supplement as herein described with respect to each
Certificated Note sold by it. The Company will make such
delivery if such Certificated Note is sold directly by
the Company to a purchaser (other than any Agent).
Confirmation: For each order to purchase a Certificated Note solicited
------------ by any Agent and accepted by or on behalf of the
Company, the Presenting Agent will issue a confirmation
to the purchaser, with a copy to the Company, setting
forth the details set forth above and delivery and
payment instructions.
Settlement: The receipt by the Company of immediately available
---------- funds in exchange for an authenticated Certificated Note
delivered to the Presenting Agent and the Presenting
Agent's delivery of such Certificated Note against
receipt of immediately available funds shall, with
respect to such Certificated Note, constitute
"settlement". All orders accepted by the Company will be
settled on the third Business Day following the date of
sale pursuant to the timetable for settlement set forth
below, unless the Company and the purchaser agree to
settlement on another day which shall be no earlier than
the next Business Day following the date of sale.
Settlement Settlement Procedures with regard to each Certificated
---------- Note sold by the Company through any Agent, as agent,
Procedures: shall be as follows:
----------
A. The Presenting Agent will advise the Company by
telephone of the following settlement information, in
time for the Trustee to prepare and authenticate the
required Note:
1. Name in which such Certificated Note is to be
registered ("Registered Owner").
2. Address of the Registered Owner and address for
payment of principal and interest.
3. Taxpayer identification number of the Registered
Owner (if available).
4. Principal amount.
5. Maturity Date.
6. In the case of a Fixed Rate Certificated Note,
the interest rate or, in the case of a Floating
Rate Certificated Note, the initial interest rate
(if known at such time), Base Rate, Index
Maturity, Interest Reset Period, Interest Reset
Dates, Spread or Spread Multiplier (if any),
9
Minimum Interest Rate (if any) and Maximum
Interest Rate (if any).
7. Interest Payment Dates and the Interest Payment
Period.
8. Specified Currency and whether the option to
elect payment in a Specified Currency applies and
if the Specified Currency is not U.S. dollars,
the authorized denominations.
9. Redemption, repayment or extension provisions, if
any.
10. Settlement date.
11. Price (including currency).
12. Presenting Agent's commission, determined as
provided in Section 2 of the Agency Agreement.
13. Whether such Certificated Note is issued at an
original issue discount, and, if so, the total
amount of OID, the yield to maturity and the
initial accrual period OID.
B. The Company will advise Trustee by telephone
(confirmed in writing at any time on the sale date)
or electronic transmission of the information set
forth in Settlement Procedure "A" above and the name
of the Presenting Agent. Before accepting any offer
to purchase a Certificated Note to be settled in
less than three Business Days, the Company shall
verify that the Trustee will have adequate time to
prepare and authenticate such Note.
C. The Company will deliver to Trustee a pre-printed
four-ply packet for such Certificated Note, which
packet will contain the following documents in forms
that have been approved by Company, the Agents and
the Trustee:
1. Certificated Note with customer confirmation.
2. Stub One - For Trustee.
3. Stub Two - For the Presenting Agent.
10
4. Stub Three - For the Company.
D. The Trustee will prepare such Certificated Note and
will authenticate such Certificated Note on the
settlement date and deliver it (with the
confirmation) and Stubs One and Two to the
Presenting Agent, all in accordance with the written
directions (or oral instructions confirmed in
writing on the next Business Day) of the Company,
and the Presenting Agent will acknowledge receipt of
the Note by stamping or otherwise marking Stub One
and returning it to the Trustee. Such delivery will
be made only against such acknowledgment of receipt.
In the event that the instructions given by the
Presenting Agent for payment to the account of the
Company are revoked, the Company will as promptly as
possible wire transfer to the account of the
Presenting Agent an amount of immediately available
funds equal to the amount of such payment made.
E. The Presenting Agent will deliver such Certificated
Note (with the confirmation) to the customer against
payment in immediately payable funds. The Presenting
Agent will obtain the acknowledgement of receipt of
such Certificated Note by retaining Stub Two.
F. Trustee will send Stub Three to the Company by
first-class mail.
Settlement For orders of Certificated Notes solicited by any Agent,
---------- as agent, and accepted by the Company, Settlement
Procedures Procedures "A" through "F" set forth above shall be
---------- completed on or before the respective times (New York
Timetable: City time) set forth below:
---------
Settlement
Procedure Time
---------- ----
A 2:00 P.M. on the day before settlement
B-C 3:00 P.M. on the day before settlement
D 2:15 P.M. on settlement date
E 3:00 P.M. on settlement date
F 5:00 P.M. on settlement date
Failure to If a purchaser fails to accept delivery of and make
---------- payment for any Certificated Note, the Presenting Agent
Settle: will notify the Company and Trustee by telephone and
------ return such Certificated Note to the Trustee. Upon
receipt of such notice, the Company will immediately
wire transfer to the account of the Presenting
11
Agent an amount equal to the amount previously credited
to the account of Company in respect of such
Certificated Note. Such wire transfer will be made on
the settlement date, if possible, and in any event not
later than the Business Day following the settlement
date. If the failure shall have occurred for any reason
other than a default by the Presenting Agent in the
performance of its obligations hereunder and under the
Agency Agreement, then the Company will reimburse the
Presenting Agent or Trustee as appropriate, on an
equitable basis for its loss of the use of the funds
during the period when they were credited to the account
of the Company. Immediately upon receipt of the
Certificated Note in respect of which such failure
occurred, the Trustee will cancel such Certificated Note
in accordance with the Indenture and so advise the
Company and Trustee will make appropriate entries in its
records and send such cancelled note or other evidence
of cancellation in accordance with the terms of the
indenture.
Trustee Not to Nothing herein shall be deemed to require the Trustee to
-------------- risk or expend its own funds in connection with any
Risk Funds: payment to the Company, the Agents or the purchaser, it
---------- being understood by all parties that payments made by
the Trustee to the Company, the Agents or the purchaser
shall be made only to the extent that funds are provided
to the Trustee for such purpose.
Payment of Each Agent shall forward to the Company, on a monthly
---------- basis, a statement of the out-of-pocket expenses
Expenses: incurred by such Agent during that month that are
-------- reimbursable to it pursuant to the terms of the Agency
Agreement. The Company will remit payment to the Agents
currently on a monthly basis.
Advertising Costs: The Company will determine with the Agents the amount of
----------------- advertising that may be appropriate in soliciting orders
to purchase the Certificated Notes. Advertising expenses
will be paid by the Company.
Periodic Periodically, Trustee will send to the Company a
-------- statement setting forth the principal amount of
Statements Certificated Notes Outstanding as of that date and
---------- setting forth a brief description of any sales of
from Trustee: Certificated Notes which the Company has advised Trustee
------------ but which have not yet been settled.
12
EXHIBIT B
Energen Corporation
Medium-Term Notes
Due Nine Months or More
from Date of Issue
TERMS AGREEMENT
, 199
------------ --
Attention:
Subject in all respects to the terms and conditions of the Selling
Agency Agreement (the "Agreement") dated , 1998, between [Agent's
-----------
Name] and you, the undersigned agrees to purchase the following Notes of Energen
Corporation:
Aggregate Principal Amount: $
Interest Rate:
Date of Maturity:
Interest Payment Dates:
Regular Record Dates:
Discount or Commission: % of Principal Amount
Purchase Price: % of Principal Amount
[plus accrued interest from
, 199 ]
---------- --
Purchase Date and Time:
Place for Delivery of Notes
and Payment Therefor:
Method of Payment:
Modification, if any, in
the requirements to
deliver the documents
specified in Section 6(b)
of the Agreement:
Period during which additional
Notes may not be sold pursuant
to Section 4(m) of the Agreement:
[Purchaser]
By:
------------------------------
Accepted:
Energen Corporation
By:
--------------------------
Title:
2