Exhibit 1.1
PACCAR FINANCIAL CORP.
Medium-Term Notes, Series I
DISTRIBUTION AGREEMENT
To the several Agents September __, 1998
who are signatories hereto
Dear Sirs:
PACCAR Financial Corp., a Washington corporation (the "Company"),
confirms its agreement with you with respect to the issue and sale by the
Company of up to $1,000,000,000 (or the equivalent based upon the applicable
exchange rate at the time of issuance in such foreign currency (which may
include the ECU) as the Company shall designate), aggregate principal amount
of its Medium-Term Notes, Series I (the "Securities") to be issued pursuant
to the indenture, dated as of December 1, 1983 as amended by the first
supplemental indenture dated as of June 19, 1989 (the "Indenture"), between
the Company and Citibank, N.A., as trustee (the "Trustee"). It is
understood, however, that the Company may from time to time authorize the
issuance of additional Securities and that such additional Securities may be
sold pursuant to the terms of this Agreement, as though the issuance of such
Securities were authorized as of the date hereof.
This Distribution Agreement (the "Agreement") provides both for the sale
of Securities by the Company directly to purchasers through the Agents, in
which case the Agents will act as agents of the Company in soliciting
Security purchasers, and (as may from time to time be agreed to by the
Company and the Agents) to the Agents as principals for resale to purchasers.
Additional terms of any sale of Securities to the Agents as principals will
be set out in a Terms Agreement (as hereinafter defined) relating to such
sale, all as more fully provided herein.
Subject to the terms and conditions stated herein and subject to the
reservations by the Company of the right to sell Securities directly to
investors on its own behalf or to one or more underwriters for resale to the
public, the Company hereby (i) appoints the Agents as agents of the Company
for the purpose of soliciting purchases of the Securities from the Company by
others, (ii) agrees that it will sell Securities only to or through the
Agents or other agents appointed from time to time by the Company pursuant to
agreements having terms not more favorable to such agents or the Company than
the terms and conditions of this Agreement and (iii) agrees that whenever the
Company determines to sell Securities directly to the Agents as principals
for resale to others, it will enter into a Terms Agreement relating to such
sale in accordance with the provisions of Section 2(b) hereof. The Company
shall give the Agents prior notice of the
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appointment of any additional agents for the purpose of soliciting purchasers
of the Securities. The Company will notify each Agent of the amount of
Securities from time to time remaining unsold and of such other information
as may be reasonably necessary to prevent inadvertent solicitations for sales
in excess of the amount of Securities then remaining unsold.
SECTION 1. REPRESENTATIONS AND WARRANTIES.
(a) The Company represents and warrants as of the date hereof, as of
the date of each acceptance by the Company of any offer for the purchase of
Securities, as of the date of each delivery of the Securities (the date of
each such delivery to an Agent as principal being hereafter referred to as a
"Settlement Date"), as of the Closing Date hereinafter referred to, and as of
the times referred to in Sections 6(a), 6(b) and 6(c) hereof (in each case a
"Representation Date"), as follows:
(i) A registration statement on Form S-3 with respect to the
Securities has been prepared and filed by the Company under the Securities
Act of 1933, as amended (the "Act"), and the rules and regulations (the
"Rules and Regulations") of the Securities and Exchange Commission (the
"Commission") thereunder, and has become effective. The Indenture has been
qualified under the Trust Indenture Act of 1939, as amended (the "Trust
Indenture Act"). As used in this Agreement, (A) "Preliminary Prospectus"
means each prospectus and amendments or supplements thereof (including all
documents incorporated therein by reference) included in such registration
statement before it became effective under the Act, including any
prospectus filed with the Commission pursuant to Rule 424(a) of the Rules
and Regulations; (B) "Registration Statement" means such registration
statement when it became effective under the Act, as from time to time
amended or supplemented (including all documents incorporated therein by
reference) provided, that if the Company files a registration statement
with the Commission pursuant to Rule 462(b) of the Rules and Regulations
(the "Rule 462(b) Registration Statement"), then, after such filing, all
references to the "Registration Statement" shall also be deemed to include
the Rule 462(b) Registration Statement; (C) "Basic Prospectus" means the
prospectus (including all documents incorporated therein by reference)
included in the Registration Statement; and (D) "Prospectus" means the
Basic Prospectus, together with any prospectus amendments or supplements
(including in each case all documents incorporated therein by reference),
as filed with, or mailed for filing to, the Commission pursuant to
paragraph (b) of Rule 424 of the Rules and Regulations. For purposes of
this Agreement, all references to the Preliminary Prospectus, Registration
Statement, Basic Prospectus or Prospectus or any amendment or supplement
thereto shall be deemed to include any copy filed with the Commission
pursuant to its Electronic Data Gathering, Analysis and Retrieval System
("▇▇▇▇▇").
(ii) The Company meets the requirements for use of Form S-3 under
the Act; the Registration Statement (including all exhibits thereto) and
each Prospectus conform, and will conform as of each applicable
Representation Date, in all material respects with the applicable
requirements of the Act, the Securities Exchange Act of 1934, as
amended (the "Exchange Act"), the Trust Indenture Act, and the rules
and regulations of the Commission under such Acts; the Indenture,
including any amendments and supplements
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thereto, conforms, and will conform as of the applicable Representation
Date, in all material respects with the requirements of the Trust
Indenture Act and the rules and regulations of the Commission
thereunder; and the Registration Statement does not, and will not as of
each applicable Representation Date, contain any untrue statement of a
material fact or omit to state any material fact required to be stated
therein or necessary to make the statements therein not misleading;
each Prospectus delivered to the applicable Agent(s) for use in
connection with the Securities is identical to any electronically
transmitted copies thereof filed with the Commission pursuant to ▇▇▇▇▇,
except to the extent permitted by Regulation S-T; and the Prospectus
does not as of the date hereof, and will not as of each applicable
Representation Date, contain an 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
representation or warranty to any Agent as to information contained in
or omitted from the Registration Statement or any Prospectus in
reliance upon and in conformity with written information furnished to
the Company by such Agent specifically for inclusion therein.
(iii) The Company is not in violation of its corporate charter or
bylaws or in default in the observance or performance of any agreement,
indenture or instrument, the effect of which violation or default would
be material to the Company; the execution, delivery and performance of
this Agreement and any applicable Terms Agreement, the Indenture and
the Securities, and compliance by the Company with the provisions of
the Securities and the Indenture, have been duly authorized by all
necessary corporate action and will not conflict with, result in the
creation or imposition of any lien, charge or encumbrance upon any of
the assets of the Company pursuant to the terms of, or constitute a
default in the observance or performance of, any agreement, indenture
or instrument, or result in a violation of the corporate charter or
bylaws of the Company or any order, rule or regulation of any court or
governmental agency having jurisdiction over the Company or its
properties, the effect of which conflict, lien, charge, encumbrance,
default or violation would be material to the Company; and except as
required by the Act, the Trust Indenture Act, the Exchange Act and
applicable state securities laws, no consent, authorization or order
of, or filing or registration with, any court or governmental agency is
required for the execution, delivery and performance of this Agreement,
any applicable Terms Agreement and the Indenture or in connection with
the sale of Securities hereunder, the failure to obtain which consent,
authorization or order or make which filing or registration would be
material to the Company. The Company has no subsidiaries within the
meaning of Rule 405 of the Rules and Regulations.
(iv) From the dates as of which information is given in the
Registration Statement and each Prospectus, and except as described
therein or in any amendment or supplement thereto (A) there has not
been any material adverse change in the business, properties, financial
condition, results of operations or prospects of the Company, (B) there
has been no material transaction entered into by the Company other than
those in the ordinary course of business, (C) except as disclosed in
the financial statements incorporated by reference in the prospectus,
there has been no dividend or distribution of any kind declared, paid
or made by the Company on its capital stock, and (D) there has been no
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amendment to the support agreement between the Company and PACCAR Inc
("PACCAR") as amended and restated under date of June 19, 1989.
(v) Ernst & Young LLP, whose report appears in the Company's
Annual Report on Form 10-K which is incorporated by reference in the
Prospectus, are independent auditors as required by the Act and the
Rules and Regulations.
(vi) (A) The Indenture has been duly executed and delivered by
the Company, has been validly authorized by the Company and constitutes
the legally binding obligation of the Company enforceable in accordance
with its terms (except as enforcement thereof may be limited by
bankruptcy, insolvency, other laws relating to creditor's rights
generally or by general equity principles and except further as
enforcement thereof may be limited by requirements that a claim with
respect to any debt securities issued under the Indenture that are
payable in a foreign or composite currency (or a foreign or composite
currency judgment in respect of such claim) be converted into U.S.
dollars at a rate of exchange prevailing on a date determined pursuant
to applicable law or by governmental authority to limit, delay or
prohibit the making of payments outside the United States), (B) when
the Securities are offered for sale pursuant hereto and to any
applicable Terms Agreement, they will have been validly authorized for
issuance and sale pursuant to this Agreement or such Terms Agreement
and, upon delivery and payment therefor as provided in this Agreement,
any applicable Terms Agreement and the Indenture will be validly issued
and outstanding, and will constitute legally binding obligations of the
Company enforceable in accordance with their terms (except as
enforcement thereof may be limited by bankruptcy, insolvency, or other
laws relating to creditors' rights generally or by general equity
principles and except further as enforcement thereof may be limited by
requirements that a claim with respect to any Notes payable in a
foreign or composite currency (or a foreign or composite currency
judgment in respect of such claim) be converted into U.S. dollars at a
rate or exchange prevailing on a date determined pursuant to applicable
law or by governmental authority to limit delay or prohibit the making
of payments outside the United States); the Securities will be in a
form previously certified to the Agents and contemplated by the
Indenture and entitled to the benefits of the Indenture, and (C) the
descriptions of the Securities and the Indenture contained in the
Prospectus fairly present the information required with respect thereto
in all material respects.
(vii) PACCAR has been duly incorporated and is validly existing
and in good standing under the laws of the State of Delaware; and the
Company has been duly incorporated, is validly existing and in good
standing under the laws of the State of Washington, is duly qualified
to do business and in good standing as a foreign corporation in each
jurisdiction in which the failure to so qualify and be in good standing
would materially adversely affect its business or financial condition,
and has the power and authority necessary to own or hold its properties
and to conduct the business in which it is presently engaged.
(viii) Except as described in the Prospectus, there is no
material litigation or governmental proceeding pending or, to the
knowledge of the Company, threatened
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against the Company which might result in any material adverse change
in the financial condition, results of operations, business, property
or prospects of the Company or which is required to be disclosed in the
Registration Statement.
(ix) The financial statements filed as part of the Registration
Statement or included in any Preliminary Prospectus or Prospectus
present, and will present as of each applicable Representation Date,
fairly, the financial condition and results of operations of the
Company, at the dates and for the periods indicated therein, and have
been, and will be as of each applicable Representation Date, prepared
in conformity with generally accepted accounting principles applied on
a consistent basis throughout the periods involved; and the supporting
schedules included or incorporated in the Registration Statement
present fairly the information required to be stated therein.
(x) The documents incorporated by reference into the
Preliminary Prospectus or Prospectus have been, and will be as of each
applicable Representation Date, prepared by the Company in conformity
in all material respects with the applicable requirements of the Act
and the Rules and Regulations and the Exchange Act and the rules and
regulations of the Commission thereunder; and such documents have been,
or will be as of each applicable Representation Date, timely filed as
required thereby.
(xi) There are no contracts or other documents which are required
to be filed as exhibits to the Registration Statement by the Act or by
the Rules and Regulations, or which were required to be filed as
exhibits to any document incorporated by reference in any Prospectus by
the Exchange Act or the rules and regulations of the Commission
thereunder, which have not been filed as exhibits to the Registration
Statement or to such document or incorporated therein by reference as
permitted by the Rules and Regulations or the rules and regulations of
the Commission under the Exchange Act, as the case may be.
(xii) All the authorized, issued and outstanding capital stock
of the Company has been duly authorized, is validly issued, fully paid
and nonassessable and is owned, of record and beneficially, by PACCAR,
free and clear of any mortgage, pledge, lien, claim or encumbrance,
except as described in the Prospectus.
(xiii) The Company has all licenses for the conduct of its
business which the failure to have would have a material adverse effect
on the business of the Company.
(xiv) The Medium-Term Note Program under which the Securities
are issued (the "Program"), as well as the Securities, are rated [A1]
by ▇▇▇▇▇'▇ Investors Service, Inc. and [AA-] by Standard & Poor's
Rating Services, or such other rating as to which the Company has have
most recently notified the Agents pursuant to Section 3(e) hereof.
(b) Any certificate signed by any officer of the Company and delivered
to an Agent or to its counsel in connection with an offering of Securities or
the sale of Securities to an Agent as
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principal shall be deemed a representation and warranty by the Company to
such Agent as to the matters covered thereby.
SECTION 2. AGENTS.
(a) SOLICITATIONS AS AGENT. On the basis of the representations and
warranties contained herein, but subject to the terms and conditions herein
set forth, each Agent agrees, as agent of the Company, to use reasonable
efforts to solicit offers to purchase the Securities upon the terms and
conditions set forth in the Prospectus. The Agents shall not appoint
sub-agents. The Agents are authorized to engage the services of any other
broker or dealer in connection with the offer or sale of the Notes purchased
by the Agents as principal for resale to others, and the Agents may allow any
portion of the discount they have received in connection with such purchases
from the Company to such brokers or dealers.
The Agents shall offer the Securities at such times, in such amounts and
maturities and at such rates of interest as the Company shall authorize, but
the Company shall not approve the solicitation of purchases of Securities in
excess of the amount which shall be authorized by the Company from time to
time or in excess of the principal amount of Securities registered pursuant
to the Registration Statement. The Agent will have no responsibility for
maintaining records with respect to the aggregate principal amount of
Securities sold, or of otherwise monitoring the availability of Securities
for sale under the Registration Statement. The Agents shall furnish a copy
of the Prospectus to each offeree to the extent required by the Act. The
Agents shall not offer to sell to or solicit offers to buy from any person in
any state or jurisdiction otherwise than in conformity with the Blue Sky
Memorandum referred to in Section 4.
The Company reserves the right, in its sole discretion, to suspend
solicitation of purchases of the Securities, commencing at any time, for a
period of time or permanently. Promptly after receipt of telephonic,
telegraphic or written notice from the Company, the Agents will suspend
solicitation of purchases of the Securities from the Company until such time
as the Company has advised them that such solicitation may be resumed.
Promptly upon the closing of the sale of any Securities, the Company
agrees to pay the appropriate agent a commission (or allow such Agent a
discount) in the currency in which such Securities are denominated equal to a
percentage of the principal amount of each of the Securities sold by the
Company as a result of a solicitation made by such Agent during the term of
this Agreement as set forth in Schedule A hereto.
The Agents are authorized to solicit orders for the Securities in such
denominations (in U.S. dollars or in another currency), upon such terms and
at such prices as the Company shall authorize and shall be set forth in a
pricing supplement to the Prospectus to be prepared following each acceptance
by the Company of an offer for the purchase of Securities. Unless otherwise
specifically authorized, the Agents shall solicit orders only for the
purchase of Securities (i) at 100 percent of their principal amount and (ii)
denominated in U.S. dollars in the amount of $1,000 or any integral multiple
of $1,000. Each Agent shall communicate to the Company, orally or in writing,
each reasonable offer to purchase Securities received by it as Agent. The
Company shall have the sole right to accept offers to purchase the Securities
and
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may in its absolute discretion reject any such offer in whole or in part.
The Company shall have no liability to any Agent for any commission for its
rejection of any offer or its failure to consummate any sale. Each Agent
shall have the right, in its discretion reasonably exercised, to reject any
offer to purchase the Securities received by it in whole or in part, and any
such rejection shall not be deemed a breach of its agreement contained herein.
(b) PURCHASES AS PRINCIPAL. Each sale of Securities to an Agent as
principal shall be made in accordance with the terms contained herein and
(unless the Company and the Agent shall otherwise agree) in a separate
agreement which will provide for the sale of such Securities to, and the
purchase and reoffering thereof by, the Agent. Each such separate agreement
(which may be an oral agreement) between an Agent and the Company is herein
referred to as a "Terms Agreement." Unless the context otherwise requires,
each reference contained herein to "this Agreement" shall be deemed to
include any applicable Terms Agreement between the Company and an Agent.
Each such Terms Agreement, whether oral or in writing, shall be with respect
to such information (as applicable) as is specified in Exhibit A hereto. An
Agent's commitment to purchase Securities as principal pursuant to any Terms
Agreement or otherwise shall be deemed to have been made on the basis of the
representations and warranties of the Company herein contained and shall be
subject to the terms and conditions herein set forth. Each Terms Agreement
shall specify (i) the principal amount of Securities to be purchased by such
Agent pursuant thereto, (ii) the price to be paid to the Company for such
Securities (which, if not so specified in a Terms Agreement, shall be at a
discount equivalent to the applicable commission set forth in Schedule A
hereto), (iii) the time and place of delivery of and payment for such
Securities, (iv) any provisions relating to the rights of and any default by
any broker or dealer acting together with such Agent in the reoffering of the
Securities, and (v) such other provisions (including further terms of the
Securities) as may be mutually agreed upon. The Agents may utilize a selling
or dealer group in connection with the resale of the Securities purchased and
may reallow to any broker or dealer any portion of the discount or commission
payable pursuant hereto. Such Terms Agreement shall also specify the
requirements for the stand-off agreement, officer's certificate, opinions of
counsel and comfort letter pursuant to Sections 3(l), 5(b), 5(c), 5(e) and
5(f) hereof.
Securities to be purchased by an Agent as principal are herein sometimes
called the "Purchased Securities." Purchased Securities will be represented
by a global certificate (the "Book-Entry Securities") registered in the name
of the depositary (the "Depositary") specified in the Prospectus or by
certificates issued in definitive form (the "Certificated Securities").
Delivery of Certificated Securities shall be made to the Agent and delivery
of Book-Entry Securities shall be made to the Trustee as agent for the
Depositary for the account of the Agent, in either case, against payment by
the Agent of the purchase price to or upon the order of the Company in the
funds specified in the applicable Terms Agreement. Certificated Securities
shall be registered in such names and in such denominations as the Agent may
request not less than two full business days prior to the applicable Closing
Date (as defined below). The Company will have Certificated Securities
available for inspection, checking and packaging by the Agent in the city in
which delivery and payment is to occur, not later than 2 p.m., on the
business day prior to the applicable Closing Date.
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(c) ADMINISTRATIVE PROCEDURES. Administrative procedures respecting
the sale of Securities shall be agreed upon from time to time by the Agents
and the Company (the "Procedures"). The several Agents and the Company agree
to perform the respective duties and obligations specifically provided to be
performed by each of them herein and in the Procedures.
(d) CLOSING DATE. The documents required to be delivered by Section 5
hereof shall be delivered at the offices of ▇▇▇▇▇ & Wood LLP, ▇▇▇ ▇▇▇▇▇ ▇▇▇▇▇
▇▇▇▇▇▇, ▇▇▇ ▇▇▇▇, ▇▇▇ ▇▇▇▇ ▇▇▇▇▇, on the date hereof or, with respect to any
particular Agent, such other date and time as such Agent and the Company may
agree upon in writing (the "Closing Date").
(e) OTHER DEBT SECURITIES. Nothing contained herein shall limit the
right of the Company to authorize and issue debt securities, including
medium-term notes other than the Securities, under the Indenture or otherwise.
(f) RELIANCE. The Company and the Agents agree that any Securities the
placement of which the Agents arrange shall be placed by the Agents, and any
Securities purchased by an Agent shall be purchased, in reliance on the
representations, warranties, covenants and agreements of the Company
contained herein and on the terms and conditions and in the manner provided
herein.
SECTION 3. COVENANTS OF THE COMPANY.
The Company covenants and agrees:
(a) To furnish promptly to each Agent a signed copy of the Registration
Statement as originally filed and each amendment or supplement thereto, and a
copy of each Prospectus with respect to the Securities filed with the
Commission, including all supplements thereto and all documents incorporated
therein by reference, and all consents and exhibits filed therewith. The
Registration Statement and each amendment thereto so furnished to the Agents
will be identical to any electronically transmitted copies thereof filed with
the Commission pursuant to ▇▇▇▇▇, except to the extent permitted by
Regulation S-T.
(b) To deliver promptly to each Agent such number of the following
documents as each Agent may reasonably request: (i) conformed copies of the
Registration Statement (excluding exhibits other than the computation of the
ratios of earnings to fixed charges, the Indenture and this Agreement), (ii)
each Preliminary Prospectus, Basic Prospectus and Prospectus with respect to
the Securities, and (iii) any documents incorporated by reference in any
Prospectus with respect to the Securities (excluding exhibits).
(c) To file with the Commission, during any period in which any
Prospectus is required by law to be delivered in connection with sales of the
Securities, any amendment or supplement to the Registration Statement or any
Prospectus that is required by the Act or the Rules and Regulations, and all
documents, and any amendments to previously filed documents, required to be
filed by the Company pursuant to Section 13(a), 13(c), 14 or 15(d) of the
Exchange Act.
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(d) Prior to filing with the Commission during any period in which the
Prospectus is required by law to be delivered in connection with sales of
Securities (i) any amendment or supplement to the Registration Statement,
(ii) any Prospectus or any amendment or supplement thereto, or (iii) any
document incorporated by reference in any of the foregoing or any amendment
of or supplement to any such incorporated document, to furnish a copy thereof
to the counsel for the Agents and to allow it and its counsel a reasonable
opportunity to comment thereon.
(e) To advise each Agent promptly (i) when any post-effective amendment
to the Registration Statement relating to or covering the Securities becomes
effective, (ii) of any request by the Commission for an amendment or
supplement to the Registration Statement, to any Prospectus, to any document
incorporated by reference in any of the foregoing or for any additional
information, (iii) of the issuance by the Commission of any stop order
suspending the effectiveness of the Registration Statement or any order
directed to any Prospectus or any document incorporated therein by reference
or the initiation or threat of any stop order proceeding or of any challenge
by the Commission to the accuracy or adequacy of any document incorporated by
reference in any Prospectus, (iv) of receipt by the Company of any
notification with respect to the suspension of the qualification of the
Securities for sale in any jurisdiction or the initiation or threat of any
proceeding for that purpose, (v) of the occurrence of any event which causes
the Registration Statement or any Prospectus to contain an untrue statement
of a material fact or omit to state a material fact necessary in order to
make the statements therein not misleading, and (vi) any change in the rating
assigned by any nationally recognized statistical rating organization
("NRSRO") to the Program or any debt securities (including the Securities) of
the Company, or the public announcement by any NRSRO that it has under
surveillance or review, with possible negative implications, its rating of
the Program or any such debt securities, or the withdrawal by an NRSRO of its
rating of the Program or any such debt securities.
(f) If, during any period in which the Prospectus is required by law to
be delivered in connection with sales of the Securities, the Commission shall
issue a stop order suspending the effectiveness of the Registration
Statement, to make every reasonable effort to obtain the lifting of that
order at the earliest possible time.
(g) To make generally available to its security holders, as soon as
practicable but in no event later than 90 days after each twelve-month period
identified below, an earnings statement (in form complying with the
provisions of Section 11(a) of the Act, which need not be certified by
independent certified public accountants unless required by the Act or the
Rules and Regulations) covering the twelve-month period beginning not later
than the first day of the fiscal quarter next following each date which (i)
under Section 11(a) of the Act and the Rules and Regulations is an effective
date of the Registration Statement for purposes of said Section 11(a), and
(ii) is not later than the last sale hereunder.
(h) So long as any of the Securities are outstanding, to furnish to
each Agent not later than the time the Company makes the same generally
available to others, copies of all reports and financial statements furnished
by the Company to any securities exchange on which the Securities are listed
pursuant to requirements of or agreements with such exchange or to the
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Commission pursuant to the Exchange Act or any rule or regulation of the
Commission thereunder.
(i) To endeavor, in cooperation with the Agents, to qualify the
Securities for offering and sale under the applicable securities laws of such
states and other jurisdictions of the United States as we may agree upon and
to maintain such qualifications in effect for as long as may be required for
the distribution of the Securities. The Company will file such statements
and reports as may be required by the laws of each jurisdiction in which the
Securities have been qualified as above provided.
(j) The Company will prepare, with respect to any Securities to be sold
through or to the Agents pursuant to this Agreement, a Pricing Supplement
with respect to such Securities in a form previously approved by the Agents
and will file such Pricing Supplement pursuant to Rule 424(b)(3) (or any rule
succeeding or replacing such rule) under the Act not later than the close of
business of the Commission on the fifth business day after the date on which
such Pricing Supplement is first used.
(k) If at any time during the term of this Agreement any event shall
occur or any condition shall exist as a result of which it is necessary, in
the reasonable opinion of counsel for the Agents or counsel for the Company,
to further amend or supplement the Prospectus in order that the Prospectus
will not include an untrue statement of a material fact or omit to state any
material fact necessary in order to make the statements therein not
misleading in the light of the circumstances existing at the time the
Prospectus is delivered to a purchaser, or if it shall be necessary, in the
reasonable opinion of either of such counsel, to amend or supplement the
Registration Statement or the Prospectus in order to comply with the
requirements of the Act or the Rules and Regulations, immediate notice shall
be given, and confirmed in writing, to the Agents to cease the solicitation
of offers to purchase the Securities in the Agents' capacity as agent and to
cease sales of any Securities the Agents may then own as principal pursuant
to a Terms Agreement, and the Company will promptly prepare and file with the
Commission such amendment or supplement, whether by filing documents pursuant
to the Exchange Act, the Act or otherwise, as may be necessary to correct
such untrue statement or omission or to make the Registration Statement and
Prospectus comply with such requirements. The Company shall not be required
to comply with the provisions of this subsection during any period from the
time (i) the Agents shall have suspended solicitation of purchases of the
Securities in their capacity as agents pursuant to a request from the Company
and (ii) the Agents shall not then hold any Securities as principal purchased
pursuant to a Terms Agreement, to the time the Company shall determine that
solicitation of purchases of the Securities should be resumed or shall
subsequently enter into a new Terms Agreement with the Agents.
(l) If provided in a Schedule, between the date of any Schedule and the
Settlement Date with respect to such Schedule, the Company will not offer or
sell, or enter into any agreement to sell, any debt securities of the Company
(other than the Securities that are to be sold pursuant to such Schedule and
commercial paper for other short-term debt with an original maturity of 270
days or less in the ordinary course of business) without such Agent's prior
consent.
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(m) The Company will use the net proceeds received by it from the
issuance and sale of the Securities in the manner specified in the Prospectus.
SECTION 4. PAYMENT OF EXPENSES.
The Company will pay (i) the costs incident to its authorization,
issuance, sale and delivery of the Securities and any taxes payable in that
connection, (ii) the costs incident to the preparation, printing and filing
under the Act of the Registration Statement and any amendments and exhibits
thereto, (iii) the costs incident to the preparation, printing and filing of
any document and any amendments and exhibits thereto required to be filed by
the Company under the Exchange Act, (iv) the costs of furnishing to the
Agents copies of the Registration Statement as originally filed and each
amendment and post-effective amendment thereof (including exhibits), any
Preliminary Prospectus, Basic Prospectus or Prospectus, any supplement to the
Prospectus and any documents incorporated by reference in any of the
foregoing documents, (v) the fees and disbursements of the Trustee and its
counsel, (vi) the cost of any filings with the National Association of
Securities Dealers, Inc., in respect of the Securities, (vii) the fees and
disbursements of counsel to the Company, (viii) any fees payable to rating
agencies in connection with the rating of the Securities, (ix) the fees and
expenses of qualifying the Securities under the securities laws of the
several jurisdictions as provided in this Agreement and of preparing and
printing a Blue Sky Memorandum and a memorandum concerning the legality of
the Securities as an investment (including reasonable fees and expenses of
counsel for the Agents in connection therewith), and (x) all other costs and
expenses incident to the Company's performance of its obligations under this
Agreement.
In addition, the Company agrees to pay the reasonable fees and
disbursements of ▇▇▇▇▇ & ▇▇▇▇ LLP, counsel for the Agents in connection with
the sale of the Securities.
SECTION 5. CONDITIONS OF OBLIGATIONS.
The obligations of an Agent to solicit offers to purchase the Securities
will be subject to the continued accuracy of the representations and
warranties of the Company contained herein, to the accuracy of the statements
of the Company's officers made in any certificate furnished pursuant to the
provisions hereof, to the performance and observance by the Company of all
covenants and agreements contained herein and to the following additional
conditions:
(a) No stop order suspending the effectiveness of the Registration
Statement shall have been issued and no order shall have been issued by the
Commission suspending or preventing the use of any Prospectus, and no
proceedings for such purpose shall be pending before or threatened by the
Commission.
(b) At the Closing Date, the Agents shall have been received the
opinion, dated as of the delivery date thereof, of ▇▇▇▇▇ ▇. ▇▇▇▇▇▇▇▇,
Assistant General Counsel of PACCAR and counsel for the Company, in form and
substance reasonably satisfactory to the Agents and their counsel, to the
effect that:
11
(i) PACCAR has been duly incorporated and is validly
existing as a corporation in good standing under the laws of the State
of Delaware and the Company has been duly incorporated and is validly
existing as a corporation in good standing under the laws of the State
of Washington.
(ii) The Company has corporate power and authority to own,
lease and operate its properties and conduct its business as described
in the Registration Statement.
(iii) The Company is duly qualified and in good standing as
a foreign corporation to transact business in each jurisdiction in
which the failure so to qualify and be in good standing would
materially adversely affect its business or financial condition.
(iv) The authorized, issued and outstanding capital stock
of the Company is as set forth in the Prospectus and the shares of
issued and outstanding capital stock set forth therein have been duly
authorized and validly issued and are fully paid and non-assessable
and are owned, of record and beneficially, by PACCAR, free and clear
of any mortgage, pledge, lien, claim or encumbrance except as
described in the Prospectus.
(v) This Agreement has been duly authorized, executed and
delivered by the Company and constitutes the valid and binding
agreement of the Company.
(vi) The Indenture has been duly and validly authorized,
executed and delivered by the Company and constitutes the legal, valid
and binding agreement of the Company enforceable in accordance with
its terms (except as enforcement thereof may be limited by bankruptcy,
insolvency, other laws relating to creditor's rights generally or by
general equity principles).
(vii) The Securities are in a form contemplated by the
Indenture and have been duly and validly authorized by all necessary
corporate action and, when executed and authenticated as specified in
the Indenture and delivered against payment therefor in accordance
with this Agreement, will be legal, valid and binding obligations of
the Company enforceable in accordance with their terms (except as
enforcement thereof may be limited by bankruptcy, insolvency, other
laws relating to creditor's rights generally or by general equity
principles).
(viii) Such counsel does not know of any litigation or any
governmental proceeding pending or threatened against the Company
which would affect the subject matter of this Agreement or which is
required to be disclosed in the Prospectus and is not disclosed and
correctly summarized therein.
(ix) Such counsel does not know of any contracts or other
documents which are required to be filed as exhibits to the
Registration Statement by the Act or by the Rules and Regulations, or
which are required to be filed by the Exchange Act or the rules and
regulations of the Commission thereunder as exhibits to any document
incorporated by reference in the Prospectus, which have not been filed
as exhibits to the Registration Statement or to such document or
incorporated therein by reference as permitted by the
12
Rules and Regulations or the rules and regulations of the Commission
under the Exchange Act.
(x) To the best of such counsel's knowledge after due inquiry,
the Company is not in violation of its corporate charter or bylaws, or
in default under any material agreement, indenture or instrument, the
effect of which violation or default would be material to the Company.
(xi) The execution, delivery and performance of this Agreement,
and compliance by the Company with the provisions of the Securities
and the Indenture, will not conflict with, or result in the creation
or imposition of any lien, charge or encumbrance upon any of the
assets of the Company pursuant to the terms of, or constitute a
default under, any agreement, indenture or instrument known to such
counsel after due inquiry, or result in a violation of the corporate
charter or bylaws of the Company or any order, rule or regulation of
any court or governmental agency having jurisdiction over the Company,
or its properties, the effect of which conflict, lien, charge,
encumbrance, default or violation would be material to the Company;
and, except as may be required by the Act, the Trust Indenture Act,
the Exchange Act or state securities laws, no consent, authorization
or order of, or filing or registration with, any court or governmental
agency is required for the execution, delivery and performance by the
Company of this Agreement or any Terms Agreement, the failure to
obtain which consent, authorization or order to make which filing or
registration would be material to the Company.
(xii) The Registration Statement and the Prospectus (except
that no opinion need be expressed as to the financial statements and
other financial data contained therein) comply as to form in all
material respects with the requirements of the Act and the Trust
Indenture Act and the rules and regulations of the Commission under
said Acts, and the documents incorporated by reference in the
Prospectus (except that no opinion need be expressed as to the
financial statements and other financial data contained therein)
comply as to form in all material respects with the applicable
requirements of the Exchange Act and the rules and regulations of the
Commission thereunder; and, to the knowledge of such counsel after due
inquiry, the Registration Statement does not contain any untrue
statement of a material fact or omit to state a material fact required
to be stated therein or necessary to make the statements therein not
misleading and the Prospectus does not contain an 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.
(c) At the Closing Date, the Agents and the Company shall have received
the opinion, dated as of the date of delivery thereof, of ▇▇▇▇▇▇▇ Coie LLP,
counsel for the Company, in form and substance reasonably satisfactory to the
Agents and their counsel, to the effect that:
(i) The descriptions of the Securities and the Indenture in
the Registration Statement and each Prospectus fairly present the
information required with respect thereto by Form S-3 in all
material respects.
13
(ii) The Indenture is qualified under, and complies in all
material respects as to form with, the Trust Indenture Act.
(iii) The Registration Statement has become effective under the
Act; and, to the knowledge of such counsel no stop order suspending its
effectiveness has been issued, and no proceeding for that purpose is
pending or threatened by the Commission, no order of the Commission
directed to any document incorporated by reference in any Prospectus
has been issued and there are no proceedings of the Commission pending
or threatened challenging the accuracy or adequacy of any such document.
(iv) The Registration Statement and the Prospectus (except that
no opinion need be expressed as to the financial statements and other
financial data contained therein) comply as to form in all material
respects with the requirements of the Act and the Trust Indenture Act
and the rules and regulations of the Commission under said Acts, and
the documents incorporated by reference in the Prospectus (except that
no opinion need be expressed as to the financial statements and other
financial data contained therein) comply as to form in all material
respects with the applicable requirements of the Exchange Act and the
rules and regulations of the Commission thereunder; and, to the
knowledge of such counsel after due inquiry, the Registration Statement
does not contain any untrue statement of a material fact or omit to
state a material fact required to be stated therein or necessary to
make the statements therein not misleading and the Prospectus does not
contain an 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.
(d) On or prior to the Closing Date, the Agents shall have been
furnished such documents, certificates and opinions as it may reasonably
request for the purpose of enabling it or ▇▇▇▇▇ & Wood LLP, counsel for the
Agents, to determine the accuracy, completeness or satisfaction of any of the
representations, warranties or conditions herein contained.
(e) At each Closing Date, the Agents shall have received a certificate
of the President, a Vice President, the General Manager, the Treasurer or the
Controller of the Company to the effect that, to the best of such officer's
knowledge, the conditions set forth in Section 5 (a) and (g) have been
satisfied, and as to the continued accuracy of the representations and
warranties of the Company set forth herein.
(f) The Company has furnished to the Agents on the Closing Date a
letter of Ernst & Young LLP, addressed to the Agents and dated the Closing
Date, confirming that they are independent auditors within the meaning of the
Act and are in compliance with the applicable requirements relating to the
qualification of accountants under Rule 2-01 of Regulation S-X of the
Commission, and stating, as of the date of such letter (or with respect to
matters involving changes or developments since the respective dates as of
which specified financial information is given in the Prospectus, as of a
date not more than three days prior to the date of such letter), the
conclusions and findings of such accountants with respect to such financial
information and other matters as reasonably requested by the Agents.
14
(g) No order suspending the sale of the Securities in any jurisdiction
designated pursuant to Section 3(i) hereof shall have been issued, and no
proceeding for that purpose shall have been instituted or, to the knowledge
of the purchasing Agent or the Company, shall be contemplated.
All opinions, letters, evidences and certificates mentioned above or
elsewhere in this Agreement shall be deemed to be in compliance with the
provisions hereof only if they are in form and substance reasonably
satisfactory to ▇▇▇▇▇ & ▇▇▇▇ LLP, counsel to the Agents.
If any conditions specified in this Section shall not have been
fulfilled in all material respects, the agency of any Agent under this
Agreement may be terminated by such Agent by notice to the Company at any
time on or prior to the Closing Date, and such termination shall be without
liability of either the Company or such Agent, except with respect to any
unpaid commission then owing to such Agent by the Company and except that
Sections 3(g), 4, 7, 9 and 13 hereof shall remain in effect.
SECTION 6. ADDITIONAL COVENANTS OF THE COMPANY.
The Company covenants and agrees that:
(a) Each acceptance by the Company of an offer for the purchase of
Securities through an Agent, and each delivery of Securities to an Agent
pursuant to a Terms Agreement, shall be deemed to be an affirmation to such
Agent that the representations and warranties of the Company contained in
this Agreement and in any certificate theretofore delivered to such Agent
pursuant hereto are true and correct at the time of such acceptance, and an
undertaking that such representations and warranties will be true and correct
at the time of delivery to the purchaser or his agent of the Securities
relating to such acceptance, as though made at and as of each such time (it
being understood that such representations and warranties shall relate to the
Registration Statement and the Prospectus as amended or supplemented to each
such time).
(b) Each time that the Registration Statement or the Prospectus shall
be amended or supplemented (other than by an amendment or supplement
providing solely for a change in the interest rates, manner of determining
interest rates, interest payment dates or maturities of the Securities or a
change in the principal amount of Securities remaining to be sold or similar
changes or a supplement to the Prospectus in the form previously furnished to
the Agents relating to a sale of securities otherwise than through an Agent)
or the Company files with the Commission any document incorporated by
reference into the Prospectus or (if required pursuant to the terms of a
Terms Agreement) the Company sells Securities to an Agent pursuant to a Terms
Agreement, the Company shall furnish or cause to be furnished to each Agent
promptly a certificate of the President, a Vice President, the General
Manager, the Treasurer or the Controller of the Company to the effect that
the statements contained in the certificate referred to in Section 5(e)
hereof which was last furnished to such Agent are true and correct at the
time of such amendment or supplement or filing, as the case may be, as though
made at and as of such time (except that such statements shall be deemed to
relate to the Registration Statement and the Prospectus as amended and
supplemented to such time) or, in lieu of such certificate, a certificate of
the same tenor as the certificate referred to in said Section 5(e), modified
as necessary to relate
15
to the Registration Statement and the Prospectus as amended and supplemented
to the time of delivery of such certificate.
(c) Each time that the Registration Statement or the Prospectus shall
be amended or supplemented or the Company files with the Commission any
document incorporated by reference into the Prospectus (other than by an
amendment or supplement providing solely for a change in the interest rates,
manner of determining interest rates, interest payment dates or maturities of
the Securities remaining to be sold or similar changes or a supplement to the
Prospectus in the form previously furnished to the Agents relating to the
sale of securities otherwise than through an Agent) or (if required pursuant
to the terms of a Terms Agreement) the Company sells Securities to an Agent
pursuant to a Terms Agreement, the Company shall cause to be furnished
promptly to each Agent and its counsel the written opinion or opinions of
▇▇▇▇▇ ▇. ▇▇▇▇▇▇▇▇, and/or, at the option of the Company, of ▇▇▇▇▇▇▇ Coie LLP,
dated the date of delivery of such opinion or opinions, of the same tenor as
the opinions referred to in Sections 5(b) and 5(c) hereof, but modified as
necessary, to relate to the Registration Statement and the Prospectus as
amended or supplemented to the time of delivery of such opinion or opinions;
provided, however, that in lieu of such opinion or opinions, counsel may
furnish a letter to the effect that the Agents may rely on a prior opinion of
such counsel which was to the same effect as the opinion in lieu of which
such letter is given to the same extent as though it was dated the date of
such letter authorizing reliance (except that statements in such prior
opinion shall be deemed to relate to the Registration Statement and the
Prospectus as amended or supplemented to the time of delivery of such letter
authorizing reliance).
(d) Each time that the Registration Statement or the Prospectus shall
be amended or supplemented to include additional financial information or the
Company files with the Commission any document incorporated by reference into
the Prospectus which contains additional financial information or (if
required pursuant to the terms of a Terms Agreement) the Company sells
Securities to an Agent pursuant to a Terms Agreement, the Company shall cause
Ernst & Young LLP promptly to furnish each Agent a letter, dated the date of
filing of such amendment, supplement or document with the Commission, in form
satisfactory to each Agent, of the same tenor as the letter referred to in
Section 5(f) hereof but modified to relate to the Registration Statement and
Prospectus, as amended and supplemented to the date of such letter, with such
changes as may be necessary to reflect changes in the financial statements
and other information derived from the accounting records of the Company;
provided, however, that if the Registration Statement or the Prospectus is
amended or supplemented solely to include financial information as of and for
a fiscal quarter, Ernst & Young LLP may limit the scope of such letter to the
unaudited financial statements included in such amendment or supplement
unless there is contained therein any other accounting, financial or
statistical information that, in the reasonable judgment of an Agent, should
be covered by such letter.
SECTION 7. INDEMNIFICATION AND CONTRIBUTION.
(a) The Company shall indemnify and hold harmless each Agent, each
person, if any, who at the written request of such Agent and with the consent
of the Company is participating with such Agent as the Company's agent in the
distribution of the Securities who is an "underwriter" within the meaning of
Section 2(11) of the Act with respect to the distribution of
16
the Securities (the "Participants") and each person, if any, who controls
such Agent or any Participant within the meaning of the Act from and against
any loss, claim, damage or liability, joint or several, and any action in
respect thereof, to which such Agent or such Participant or controlling
person may become subject, under the Act or otherwise, insofar as such loss,
claim, damage, liability or action arises out of, or is based upon, any
untrue statement or alleged untrue statement of a material fact contained in
any Preliminary Prospectus, the Registration Statement, or any Prospectus, or
arises out of, or is 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 shall reimburse such Agent, each
such Participant, and each such controlling person for any legal and other
expenses reasonably incurred, as they are incurred, by it in investigating or
defending or preparing to defend against any such loss, claim, damage,
liability or action; provided, however, that the Company shall not be liable
in any such case to the extent that any such loss, claim, damage, liability
or action arises out of, or is based upon, any untrue statement or alleged
untrue statement or omission or alleged omission made in any Preliminary
Prospectus, the Registration Statement or any Prospectus in reliance upon and
in conformity with written information furnished to the Company by such Agent
specifically for inclusion therein; and provided, further, that as to any
Preliminary Prospectus or Prospectus, this indemnity agreement shall not
inure to the benefit of any Agent, any Participant, or any person controlling
such Agent or any Participant, on account of any loss, claim, damage,
liability or action arising from the sale of Securities to any person by such
Agent or such Participant if such Agent or such Participant failed to send or
give a copy of the then current version of the Prospectus to that person
within the time required by the Act, and the untrue statement or alleged
untrue statement of a material fact or omission or alleged omission to state
a material fact in such earlier Preliminary Prospectus or Prospectus was
corrected in such later Prospectus, unless such failure resulted from
noncompliance by the Company with Section 3(b) or 3(d) hereof. For purposes
of the second proviso to the immediately preceding sentence, under no
circumstances shall any Agent or any Participant be obligated to send or give
any document incorporated by reference or any supplement or amendment to any
document incorporated by reference in any Preliminary Prospectus or any
Prospectus to any person. The foregoing indemnity agreement is in addition
to any liability which the Company may otherwise have to any Agent or any
Participant or any controlling person.
(b) Each Agent shall indemnify and hold harmless the Company, each of
its directors, each of its officers who signed the Registration Statement and
any person who controls the Company within the meaning of the Act from and
against any loss, claim, damage or liability, joint or several, and any
action in respect thereof, to which the Company or any such director, officer
or controlling person may become subject, under the Act or otherwise, insofar
as such loss, claim, damage, liability or action arises out of, or is based
upon, any untrue statement or alleged untrue statement of a material fact
contained in any Preliminary Prospectus, the Registration Statement, or any
Prospectus, or arises out of, or is 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, but in each case
only to the extent that the untrue statement or alleged untrue statement or
omission or alleged omission was made in reliance upon and in conformity with
written information furnished to the Company by such Agent specifically for
inclusion therein, and shall reimburse the Company for any legal and other
expenses reasonably incurred, as they are incurred, by the Company or any
such director, officer or
17
controlling person in investigating or defending or preparing to defend
against such loss, claim, damage, liability or action. The foregoing
indemnity agreement is in addition to any liability which any Agent may
otherwise have to the Company or any of its directors, officers or
controlling persons.
(c) Promptly after receipt by an indemnified party under this Section
of notice of any claim or the commencement of any action, the indemnified
party shall, if a claim in respect thereof is to be made against the
indemnifying party under this Section, notify the indemnifying party in
writing of the claim or the commencement of that action; provided, however,
that the failure to notify the indemnifying party shall not relieve it from
any liability which it may have to an indemnified party otherwise than under
this Section. If any such claim or action shall be brought against an
indemnified party, and it shall notify the indemnifying party thereof, the
indemnifying party shall be entitled to participate therein, and, to the
extent that it wishes, jointly with any other similarly notified indemnifying
party, to assume the defense thereof with counsel reasonably satisfactory to
the indemnified party. After notice from the indemnifying party to the
indemnified party of its election to assume the defense of such claim or
action, the indemnifying party shall not be liable to the indemnified party
under this Section for any legal or other expenses subsequently incurred by
the indemnified party in connection with the defense thereof other than
reasonable costs of investigation; provided, however, that the indemnified
party shall have the right to employ a separate counsel and one local counsel
to represent such indemnified party who may be subject to liability arising
out of any claim in respect of which indemnity may be sought by the
indemnified party against the indemnifying party under this Section if, in
the reasonable judgment of the indemnified party, it is advisable for such
indemnified party to be represented by separate counsel, but the fees and
expenses of such counsel or such local counsel shall be at the expense of
such indemnified party unless (i) the employment of counsel by such
indemnified party has been authorized by the indemnifying party, (ii) the
indemnified party shall have reasonably concluded that there is a conflict of
interest between the indemnifying party and the indemnified party in the
conduct of the defense of such action or additional or different defenses
such that the counsel retained by the indemnifying party to defend the
indemnified party in such action cannot adequately represent the interests of
the indemnified party (in which case the indemnifying party shall not have
the right to direct the defense of such action on behalf of the indemnified
party), or (iii) the indemnifying party shall not in fact have employed
counsel to assume the defense of such action, in each of which cases the fees
and expense of such separate counsel shall be paid by the indemnifying party.
An indemnifying party shall not be liable for any claim or action settled
without its consent.
(d) If the indemnification provided for in this Section shall for any
reason (other than as specified herein) be unavailable to an indemnified
party under Section 7(a) or 7(b) in respect of any loss, claim, damage or
liability, or any action in respect thereof, referred to therein, then each
indemnifying party shall, in lieu of indemnifying such indemnified party,
contribute to the amount paid or payable by such indemnified party as a
result of such loss, claim, damage or liability, or action in respect
thereof, in such proportion as shall be appropriate to reflect the relative
benefits received by the indemnified party and the indemnifying party from
the offering of the Securities, the relative fault of the indemnified party
and the indemnifying party with respect to the statements or omissions which
resulted in such loss, claim, damage or liability, or action in respect
thereof, as well as any other relevant equitable considerations. The relative
18
benefits received by the Company on the one hand and an Agent on the other
with respect to an offering shall be determined in light of the relation of
the total net proceeds from the offering of the Securities (before deducting
expenses) received by the Company to the total commissions received by the
Agent with respect to such offering. The relative fault shall be determined
by reference to whether the untrue or alleged untrue statement of a material
fact or omission or alleged omission to state a material fact relates to
information supplied by the Company or by an Agent, the intent of the parties
and their relative knowledge, access to information and opportunity to
correct or prevent such statement or omission. The Company and the Agents
agree that it would not be just and equitable if contributions pursuant to
this Section 7(d) were to be determined by pro rata allocation or by any
other method of allocation which does not take into account the equitable
considerations referred to herein. The amount paid or payable by an
indemnified party as a result of the loss, claim, damage or liability, or
action in respect thereof, referred to above in this Section 7(d) shall be
deemed to include, for purposes of this Section 7(d), any legal or other
expenses reasonably incurred by such indemnified party in connection with
investigating or defending any such action or claim. Notwithstanding the
provisions of this Section 7(d), no Agent shall be required to contribute any
amount in excess of the amount by which the total price at which the
Purchased Securities were offered by it to the public exceeds the amount of
any damages which it shall have otherwise paid or become liable to pay by
reason of any untrue or alleged untrue statement or omission or alleged
omission. No person guilty of fraudulent misrepresentation (within the
meaning of Section 11(f) of the Act) shall be entitled to contribution from
any person who was not guilty of such fraudulent misrepresentation.
(e) Each Agent represents for purposes of Sections 7(a) and 7(b) that
it has received a copy of the form of Prospectus the Company proposes to mail
for filing with the Commission with respect to the Securities and that the
Agent will be soliciting offers to purchase the Securities (subject to the
conditions hereof) for sale as described therein.
SECTION 8. ASSISTANCE BY THE AGENTS.
Each Agent will make reasonable efforts to assist the Company in
obtaining performance by each purchaser whose offer to purchase Securities
from the Company has been solicited by the Agent and accepted by the Company,
but such Agent shall have no liability to the Company in the event any such
purchase is not consummated for any reason.
SECTION 9. REPRESENTATIONS, WARRANTIES AND AGREEMENTS TO SURVIVE
DELIVERY.
All representations and warranties of the Company contained in this
Agreement, or contained in certificates of officers of the Company submitted
pursuant hereto, shall remain operative and in full force and effect,
regardless of the termination of this Agreement or any investigation made by
or on behalf of any Agent or any person controlling any Agent or by or on
behalf of the Company, and shall survive each delivery of and payment for any
of the Securities.
SECTION 10. TERMINATION.
(a) TERMINATION OF THIS AGREEMENT. This Agreement shall terminate when
the Agents shall have been advised by the Company that all of the Securities
have been sold and the
19
purchase price therefor has been paid. This Agreement may be terminated
(except with respect to offers to purchase Securities which have been
accepted by the Company or a Terms Agreement has been executed) for any
reason, at any time, by either the Company or such Agent, upon the giving of
one day's written or telegraphic notice of such termination to the other.
(b) TERMINATION OF A TERMS AGREEMENT. An Agent may terminate any Terms
Agreement, immediately upon notice to the Company, at any time prior to the
Settlement Date relating there-to (i) if there has been, since the date of
such Terms Agreement or since the respective dates as of which information is
given in the Registration Statement, any material adverse change in the
condition, financial or otherwise, or in the earnings, business affairs or
business prospects of the Company and its subsidiaries considered as one
enterprise, whether or not arising in the ordinary course of business, or
(ii) if there shall have occurred any material adverse change in the
financial markets in the United States or, if such Securities are denominated
and/or payable in, or indexed to, one or more foreign currencies, in the
international financial markets, or any outbreak or escalation of hostilities
or other calamity or crisis or any change or development or event involving a
prospective change in national or international political, financial or
economic conditions, in each case the effect of which is such as to make it,
in the judgment of such Agent(s), impracticable to market the Securities or
enforce contracts for the sale of the Securities, or (iii) if trading in any
securities of the Company has been suspended by the Commission or a national
securities exchange, or if trading generally on either the American Stock
Exchange or the New York Stock Exchange shall have been suspended or
materially limited, or minimum or maximum prices for trading have been fixed,
or maximum ranges for prices for securities have been required, by either of
said exchanges or by order of the Commission or any other governmental
authority, or if a banking moratorium shall have been declared by either
Federal or New York authorities or if a banking moratorium shall have been
declared by the relevant authorities in the country or countries of origin of
any foreign currency or currencies in which the Securities are denominated
or payable, or (iv) if the rating assigned by any NRSRO to any debt
securities of the Company as of the date of any applicable Terms Agreement
shall have been lowered since that date or if any such organization shall
have publicly announced that it has under surveillance or review, with
possible negative implications, its rating of any debt securities of the
Company, or (v) if there shall have come to such Agent's attention any facts
that would cause such Agent to believe that the Prospectus, at the time it
was required to be delivered to a purchaser of Securities, contained an
untrue statement of a material fact or omitted to state a material fact
necessary in order to make the statements therein, in light of the
circumstances existing at the time of such delivery, not misleading.
(c) GENERAL. In the event of a termination of this Agreement, neither
party will have any liability to the other party hereto, except that (i) the
Agents shall be entitled to any commission earned in accordance with the
fourth paragraph on Section 2(a) hereof, (ii) if at the time of termination
(a) an Agent shall own any Securities purchased pursuant to a Terms Agreement
with the intention of reselling them or (b) an offer to purchase any of the
Securities has been accepted by the Company but the time of delivery to the
purchaser or his agent of the Security or Securities relating thereto has not
occurred, the covenants set forth in Sections 3 and 6 hereof shall remain in
effect until such Notes are so resold or delivered, as the case may be, and
(iii) the provisions of Section 4 hereof, the indemnity and contribution
agreements set forth in Section 7 hereof, and the provisions of Sections 9
and 13 hereof shall remain in effect.
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SECTION 11. NOTICES.
Except as otherwise provided herein, all notices and other
communications hereunder shall be in writing and shall be deemed to have been
duly given if mailed or transmitted by any standard form of
telecommunication. Notices to the Agents shall be directed as set forth
below their respective signatures hereto. Notices to the Company shall be
directed to it as follows: PACCAR Financial Corp., ▇▇▇ ▇▇▇▇▇ ▇▇▇▇▇▇ ▇.▇.,
▇▇▇▇▇▇▇▇, ▇▇▇▇▇▇▇▇▇▇ ▇▇▇▇▇, attention: Treasurer.
SECTION 12. PARTIES.
This Agreement shall inure to the benefit of and be binding upon the
several Agents and the Company and their respective successors. Nothing
expressed or mentioned in this Agreement is intended or shall be construed to
give any person, firm or corporation, other than the parties hereto and their
respective successors and the controlling persons and officers and directors
referred to in Section 7 and their heirs and legal representatives, any legal
or equitable right, remedy or claim under or in respect of this Agreement or
any provision herein or therein contained. This Agreement and all conditions
and provisions hereof are intended to be for the sole and exclusive benefit
of the parties hereto and their respective successors and said controlling
persons and officers and directors of their heirs and legal representatives,
and for the benefit of no other person, firm or corporation. No purchaser of
Securities shall be deemed to be a successor by reason merely of such
purchase.
SECTION 13. MISCELLANEOUS.
This Agreement shall be governed by and construed in accordance with the
laws of the State of New York. This Agreement may be executed in
counterparts and the executed counterparts shall together constitute a single
instrument.
Please indicate your acceptance hereof in the space provided for that
purpose below.
Very truly yours,
PACCAR Financial Corp.
By __________________________
21
Accepted:
▇▇▇▇▇▇▇ Lynch, Pierce, ▇▇▇▇▇▇ & ▇▇▇▇▇
Incorporated
By: ______________________________
Title: ___________________________
Dated: __, ▇▇▇▇
▇▇▇▇ ▇▇▇▇▇ ▇▇▇▇▇ Tower
World Financial Center
▇▇▇ ▇▇▇▇, ▇▇ ▇▇▇▇▇-▇▇▇▇
Attention: MTN Product Management
Telephone: (▇▇▇) ▇▇▇-▇▇▇▇
Telecopy: (▇▇▇) ▇▇▇-▇▇▇▇
▇▇▇▇▇▇ ▇▇▇▇▇▇▇ & Co. Incorporated
By: ______________________________
Title: ___________________________
Dated: __, 1998
▇▇▇▇ ▇▇▇▇▇▇▇▇, ▇▇▇ ▇▇▇▇▇
▇▇▇ ▇▇▇▇, ▇▇ ▇▇▇▇▇
Attention: Manager - Continuously
Offered Products
Telephone: (▇▇▇) ▇▇▇-▇▇▇▇
Telecopy: (▇▇▇) ▇▇▇-▇▇▇▇
Copy to:
▇▇▇▇ ▇▇▇▇▇▇▇▇, ▇▇▇▇ ▇▇▇▇▇
▇▇▇ ▇▇▇▇, ▇▇ ▇▇▇▇▇
Attention: ▇▇▇▇▇ ▇▇▇▇▇▇ - Investment Banking Information Center
Telephone: (▇▇▇) ▇▇▇-▇▇▇▇
Telecopy: (▇▇▇) ▇▇▇-▇▇▇▇
22
▇▇▇▇▇▇ Brothers Inc.
By: ______________________________
Title: ___________________________
Dated: __, 1998
3 World Financial ▇▇▇▇▇▇, ▇▇▇▇ ▇▇▇▇▇
▇▇▇ ▇▇▇▇, ▇▇ ▇▇▇▇▇
Attention: Medium-Term Note Department
Telephone: (▇▇▇) ▇▇▇-▇▇▇▇
Telecopy: (▇▇▇) ▇▇▇-▇▇▇▇,
Salomon Brothers Inc
By: ______________________________
Title: ___________________________
Dated: __, ▇▇▇▇
▇▇▇▇▇ ▇▇▇▇▇ ▇▇▇▇▇ ▇▇▇▇▇▇, ▇▇▇▇ ▇▇▇.
▇▇▇ ▇▇▇▇, ▇▇ ▇▇▇▇▇
Attention: Medium-Term Note Department
Telephone: (▇▇▇) ▇▇▇-▇▇▇▇
Telecopy: (▇▇▇) ▇▇▇-▇▇▇▇
23
Exhibit A
The following terms, if applicable, shall be agreed to by the
purchasing Agent and the Company pursuant to each Terms Agreement:
Principal Amount: $_____________
(or principal amount of foreign currency)
Interest Rate:
If Fixed Rate Security, Interest Rate:
If Floating Rate Security:
Interest Rate Basis or Bases:
If LIBOR:
___ LIBOR Reuters
___ LIBOR Telerate
Index Currency
IF CMT Rate:
Designated CMT Telerate Page:
Designated CMT Maturity Index:
Initial Interest Rate:
Initial Interest Reset Date:
Spread or Spread Multiplier, if any:
Interest Rate Reset Date(s):
Index Maturity:
Maximum Interest Rate, if any:
Minimum Interest Rate, if any:
Interest Rate Reset Period:
Interest Payment Period:
Interest Payment Date(s):
Interest Determination Date(s):
Calculation Date:
Calculation Agent:
If Redeemable:
Initial Redemption Date:
Initial Redemption Percentage:
Annual Redemption Percentage Reduction:
If Repayable at Option of Holder:
Optional Repayment Date:
Date of Maturity:
Purchase Price: _____%
24
Settlement Date and Time:
Currency of Denomination:
Denominations (if currency is other than U.S. dollars):
Currency of Payment:
Exchange Rate Agent
Additional Terms:
Also, agreement as to whether the following will be required:
Officer's Certificate pursuant to Section 5(e)
of the Distribution Agreement
Legal Opinions pursuant to Section 5(b) and (c)
of the Distribution Agreement
Comfort Letter pursuant to Section 5(f)
of the Distribution Agreement
Other sales prior to Settlement Date pursuant
to Section 3(l) of the Distribution Agreement
25
SCHEDULE A
As compensation for the services of the Agents hereunder, the Company
shall pay each Agent, on a discount basis, a commission for the sale of each
Security sold through such Agent equal to the principal amount of such
Security multiplied by the appropriate percentage set forth below:
PERCENT OF
MATURITY RANGES PRINCIPAL AMOUNT
---------------- ----------------
From 9 months to less than 1 year .125%
From 1 year to less than 18 months .150
From 18 months to less than 2 years .200
From 2 years to less than 3 years .250
From 3 years to less than 4 years .350
From 4 years to less than 5 years .450
From 5 years to less than 6 years .500
From 6 years to less than 7 years .550
From 7 years to less than 10 years .600
From 10 years to less than 15 years .650
From 15 years to less than 20 years .700
From 20 years to 30 years .750
Beyond 30 years- To be agreed upon by the Company and
the Agent at the time of sale.
26
PACCAR FINANCIAL CORP.
ADMINISTRATIVE PROCEDURES
FOR FIXED AND FLOATING RATE MEDIUM-TERM NOTES, SERIES I
(ATTACHMENT TO THE DISTRIBUTION AGREEMENT
DATED SEPTEMBER __, 1998)
Medium-Term Notes, Series I (the "Notes") in the aggregate principal
amount of up to U.S. $l,000,000,000, or the equivalent in one or more foreign
currencies (which may include the ECU) are to be offered on a continuing
basis by PACCAR Financial Corp. (the "Company") through ▇▇▇▇▇▇▇ ▇▇▇▇▇ & Co.,
▇▇▇▇▇▇▇ Lynch, Pierce, ▇▇▇▇▇▇ & ▇▇▇▇▇ Incorporated, ▇▇▇▇▇▇ ▇▇▇▇▇▇▇ & Co.
Incorporated, ▇▇▇▇▇▇ Brothers, ▇▇▇▇▇▇ Brothers Inc. and Salomon Brothers Inc
who, as agents (each an "Agent", and, collectively, the "Agents"), have
agreed to use their reasonable efforts to solicit offers to purchase the
Notes from the Company. The Agents may also purchase Notes as principal for
resale.
The Notes are being sold pursuant to a Distribution Agreement between
the Company and the Agents, dated September __, 1998 (the "Distribution
Agreement"). The Notes will be issued pursuant to an Indenture (the
"Indenture"), dated as of December 1, 1983, as amended by the first
supplemental indenture dated as of June 19, 1989 between the Company and
Citibank, N.A. as trustee (the "Trustee") . A Registration Statement (the
"Registration Statement", which term shall include any additional
registration statements filed in connection with the Notes as provided in the
Distribution Agreement) with respect to the Notes has been filed with the
Securities and Exchange Commission (the "Commission"). The most recent basic
Prospectus included in the Registration Statement, as supplemented with
respect to the Notes, is herein referred to as the "Prospectus Supplement".
The most recent supplement to the Prospectus with respect to the specific
terms of the Notes is herein referred to as the "Pricing Supplement".
The Notes will either be issued (a) in book-entry form and represented
by one or more fully registered Notes (each, a "Book-Entry Note") delivered
to the Trustee, as agent for The Depository Trust Company ("DTC"), and
recorded in the book-entry system maintained by DTC, or (b) in certificated
form (each, a "Certificated Note") delivered to the purchaser thereof or a
person designated by such purchaser. Owners of beneficial interests in Notes
issued in book-entry form will be entitled to physical delivery of Notes in
certificated form equal in principal amount to their respective beneficial
interests only upon certain limited circumstances described in the Prospectus.
Administrative procedures and specific terms of the offering are
explained below.
General procedures relating to the issuance of all Notes are set forth
in Part I hereof. Additionally, Notes issued in book-entry form will be
issued in accordance with the procedures set forth in Part II hereof and
Notes issued in certificated form will be used in accordance with the
procedures set forth in Part III hereof. Capitalized terms used herein that
are not otherwise defined shall have the meanings ascribed thereto in the
Indenture or the Notes (which in the case of Notes issued in book-entry form
shall be the related Book-Entry Note), as the case may be.
1
PART I: PROCEDURES OF GENERAL
APPLICABILITY
Date of Issuance/ Each Note will be dated as of the date of its
Authentication: authentication by the Trustee. Each Note shall also
bear an original issue date (the "Original Issue
Date") The Original Issue Date shall remain the same
for all Notes subsequently issued upon transfer,
exchange or substitution of an original Note
regardless of their dates of authentication.
Maturities: Each Note will mature on a date selected by the
purchaser and agreed to by the Company which is nine
months or more from its Original Issue Date; provided,
however, that Notes bearing interest at rates
determined by reference to selected indices ("Floating
Rate Notes") will mature on an Interest Payment Date
unless otherwise indicated in the applicable Pricing
Supplement.
Denominations: The Notes generally will be issued in denominations of
U.S. $1,000 and integral multiples thereof. Any Notes
denominated other than in U.S. dollars will be
issuable in denominations as set forth in the
applicable Pricing Supplement and in such Notes.
Registration: Notes will be issued only in fully registered form.
Redemption/Repayment: The Notes will be subject to repayment at the option
of the Holders thereof in accordance with the terms of
the Notes on their respective Optional Repayment
Dates, if any. Optional Repayment Dates, if any, will
be fixed at the time of sale and set forth in the
applicable Pricing Supplement and in the applicable
Note. If no Optional Repayment Dates are indicated
with respect to a Note, such Note will not be
repayable at the option of the Holder prior to
maturity.
The Notes will be subject to redemption by the Company
on and after their respective Redemption Dates, if
any. Redemption Dates, if any, will be fixed at the
time of sale and set forth in the applicable Pricing
Supplement and in the applicable Note. If no
Redemption Dates are indicated with respect to a Note,
such Note will not be redeemable prior to maturity.
Interest: Each Note will bear interest in accordance with its
terms. The Company will advise the Paying Agent by
telecopy of each determination of the interest rate
applicable to each Floating Rate
2
Note promptly after such determination is made by the
Calculation Agent, Citibank, N.A.
Acceptance and
Rejection of Offers: The Company shall have the sole right to accept offers
to purchase Notes from the Company and may reject any
such offer in whole or in part. The Agents shall
communicate to the Company, orally or in writing, each
reasonable offer to purchase Notes from the Company
received by it. Each Agent shall have the right, in
its discretion reasonably exercised, without notice to
the Company, to reject any offer to purchase Notes in
whole or in part, and any such rejection shall not be
a breach of such Agent's agreement contained in the
Distribution Agreement, dated the date hereof, by and
among the Company and the Agents.
Preparation of
Pricing Supplement: If any offer to purchase a Note is accepted by the
Company, the Company will prepare a Pricing Supplement
reflecting the terms of such Note. Information to be
included in the Pricing Supplement shall include:
1. the name of the Company;
2. the title of the securities, including series
designation;
3. the date of the Pricing Supplement and the date of
the Prospectus Supplement to which the Pricing
Supplement relates;
4. the Price to Public (but only if (a) the trade is
being made on an agency basis and (b) such Price
to Public is other than 100%);
5. Net Proceeds to the Company, but only if the trade
is being made on a principal basis and (b) the Net
Proceeds to the Company is other than 100%, less
what would have been the applicable agency
commission; and
6. the information with respect to the terms of the
Notes set forth below (whether or not the
applicable Note is a Book-Entry Note) under
"Procedures for Notes Issued in Book-Entry Form
Settlement Procedures", items 2, 3, 7, 8 and 9;
and
7. any other terms of the Notes not otherwise
specified in the Prospectus or Prospectus
Supplement.
3
The Company shall use its reasonable best efforts to
send such Pricing Supplement by telecopy or overnight
express (for delivery by the close of business on the
applicable trade date, but in no event later than
11:00 A.M. New York City time on the Business Day (as
defined below) following the trade date) to the Agent
which presented the offer to purchase the applicable
Note (the "Presenting Agent") at the following
addresses:
If to ▇▇▇▇▇▇▇ ▇▇▇▇▇ & Co.:
For overnight DELIVERIES only:
Tritech Services
▇▇▇ ▇▇▇▇▇▇▇▇ ▇▇▇▇▇
▇▇▇▇▇▇▇▇▇▇, ▇▇ ▇▇▇▇▇
Attention: Prospectus Operations/
▇▇▇▇▇▇▇ ▇▇▇▇▇▇▇▇▇
Telephone: (▇▇▇) ▇▇▇-▇▇▇▇
Telecopy: (▇▇▇) ▇▇▇-▇▇▇▇/5/6
FOR ALL OTHER DELIVERIES ONLY:
▇▇▇▇▇▇▇ ▇▇▇▇▇ & Co., Tritech Services
▇ ▇▇▇▇▇▇▇▇▇ ▇▇▇▇▇
▇▇▇▇▇▇▇▇▇ ▇▇▇▇ ▇▇▇
▇▇▇▇▇▇▇▇▇▇, ▇▇ ▇▇▇▇▇
Attention: Final Prospectus Unit/
▇▇▇▇▇▇▇ ▇▇▇▇▇▇▇▇▇
Telephone: (▇▇▇) ▇▇▇-▇▇▇▇
Telecopy: (▇▇▇) ▇▇▇-▇▇▇▇/5/6
also, for record keeping purposes,
please send a copy to:
▇▇▇▇▇▇▇ ▇▇▇▇▇ & Co.
▇▇▇▇▇▇▇ Lynch, Pierce, ▇▇▇▇▇▇ & ▇▇▇▇▇
Incorporated
▇▇▇▇▇▇▇ ▇▇▇▇▇ World Headquarters
World Financial Center, ▇▇▇▇▇ ▇▇▇▇▇
▇▇▇▇ ▇▇▇▇▇
▇▇▇ ▇▇▇▇, ▇▇ ▇▇▇▇▇-▇▇▇▇
Attention: MTN Product Management
Telephone: (▇▇▇) ▇▇▇-▇▇▇▇
Telecopy: (▇▇▇) ▇▇▇-▇▇▇▇
With a copy to ▇▇▇▇▇ & Wood LLP
▇▇▇ ▇▇▇▇▇ ▇▇▇▇▇ ▇▇▇▇▇▇
▇▇▇ ▇▇▇▇, ▇▇▇ ▇▇▇▇ ▇▇▇▇▇
Attention: ▇▇▇▇▇▇ ▇. ▇▇▇▇▇▇▇▇
If to ▇▇▇▇▇▇ ▇▇▇▇▇▇▇:
▇▇▇▇▇▇ ▇▇▇▇▇▇▇ & Co. Incorporated
4
▇▇▇▇ ▇▇▇▇▇▇▇▇, ▇▇▇ ▇▇▇▇▇
▇▇▇ ▇▇▇▇, ▇▇ ▇▇▇▇▇
Attention: Medium-Term Note Trading Desk
If to ▇▇▇▇▇▇ Brothers:
Please send copies of Pricing
Supplements prepared in connection with
MTN trades done with ▇▇▇▇▇▇ Brothers to
the following telecopy/addresses:
By telecopy to
▇▇▇▇▇▇ Brothers Inc
c/c ADP
Prospectus Services
▇▇▇ ▇▇▇▇▇▇▇▇▇▇▇ ▇▇▇▇
▇▇▇▇▇▇▇▇, ▇▇ ▇▇▇▇▇
Attention: ▇▇▇▇ ▇▇▇▇
Telecopy: (▇▇▇)▇▇▇-▇▇▇▇
Telephone: (▇▇▇)▇▇▇-▇▇▇▇
and by hand to
▇▇▇▇▇▇ Brothers Inc
3 World Financial Center, ▇▇▇ ▇▇▇▇▇
▇▇▇ ▇▇▇▇, ▇▇▇ ▇▇▇▇ ▇▇▇▇▇-▇▇▇▇
Attention: ▇▇▇▇▇▇▇ ▇▇▇▇▇▇▇
Telephone: (▇▇▇) ▇▇▇-▇▇▇▇
All other notices and inquires should be directed to:
▇▇▇▇▇▇ Brothers Inc
3 World Financial Center, ▇▇▇▇ ▇▇▇▇▇
▇▇▇ ▇▇▇▇, ▇▇▇ ▇▇▇▇ ▇▇▇▇▇-▇▇▇▇
Attention: Medium-Term Note Department
Telecopy: (▇▇▇)▇▇▇-▇▇▇▇
Telephone: (▇▇▇)▇▇▇-▇▇▇▇
Certificated Notes should be delivered to:
Chase Manhattan Bank
4 New York Plaza
Ground Floor
Receive Window
FAO ▇▇▇▇▇▇ Brothers
New York, New York
Attn: ▇▇▇▇▇ ▇▇▇▇▇▇▇▇▇
Telephone: (▇▇▇)▇▇▇-▇▇▇▇
If to ▇▇▇▇▇▇▇ ▇▇▇▇▇ ▇▇▇▇▇▇:
▇▇▇▇▇▇▇ ▇▇▇▇▇ Barney
Brooklyn Army Terminal
▇▇▇ ▇▇▇▇ ▇▇▇▇▇▇
▇▇▇▇▇▇▇▇, ▇▇▇ ▇▇▇▇ ▇▇▇▇▇
Attention: ▇▇▇▇▇ ▇▇▇▇▇▇, 8th Floor
Telephone: (▇▇▇) ▇▇▇-▇▇▇▇
Telecopy: (▇▇▇) ▇▇▇-▇▇▇▇
5
In each instance that a Pricing Supplement is
prepared, the Agents will provide a copy of such
Pricing Supplement to each investor or purchaser of
the relevant Notes or its agent. Pursuant to Rule 434
("Rule 434") of the Securities Act of 1933, as
amended, the Pricing Supplement may be delivered
separately from the Prospectus. Outdated Pricing
Supplements, and the supplemented Prospectuses to
which they are attached (other than those retained for
files) will be destroyed.
Settlement: The receipt of immediately available funds by the
Company in payment for a Note and the authentication
and delivery of such Note shall, with respect to such
Note, constitute "settlement." Offers accepted by the
Company will generally be settled from one to three
Business Days or at a time as the purchaser, the
applicable Agent and the Company shall agree, pursuant
to the timetable for settlement set forth in Parts II
and III hereof under "Settlement Procedures Timetable"
with respect to Book-Entry Notes and Certificated
Notes, respectively. Each such date fixed for
settlement is hereinafter referred to as a
("Settlement Date"). If procedures A and B of the
applicable Settlement Procedures with respect to a
particular offer are not completed on or before the
time set forth under the applicable "Settlement
Procedures Timetable," such offer shall not be settled
until the Business Day following the completion of
settlement procedures A and B or such later date as
the purchaser and the Company shall agree.
In the event of a purchase of Notes by any Agent as
principal, appropriate settlement details will be
between the Agent and the Company pursuant to the
applicable Terms Agreement.
Procedure for Changing
Rates or Other
Variable Terms: When a decision has been reached to change the
interest rate or any other variable term on any Notes
being sold by the Company, the Company will promptly
advise the Agents and the Trustee by facsimile
transmission and the Agents will forthwith suspend
solicitation of offers to purchase such Notes. The
Agents will telephone the Company with recommendations
as to the changed interest rates or other variable
terms.
At such time as the Company advises the Agents
6
and the Trustee of the new interest rates or other
variable terms, the Agents may resume solicitation
of offers to purchase such Notes. Until such time
only "indications of interest" may be recorded.
Immediately after acceptance by the Company of an
offer to purchase Notes at a new interest rate or
new variable term, the Company, the Presenting
Agent and the Trustee shall follow the procedures
set forth under the applicable "Settlement
Procedures." The foregoing procedure for changes
shall in no way affect the Company's right to
suspend all solicitations of offers to purchase
Notes as set forth in the Distribution Agreement.
Suspension of Solicita-
tion; Amendment or
Supplement: Subject to its representations, warranties and
covenants contained in the Distribution Agreement, the
Company may instruct the Agents to suspend
solicitation of to purchase Notes at any time. Upon
receipt of such instructions, the Agents will
forthwith suspend solicitation of offers to purchase
from the Company until such time as the Company has
advised them that solicitation of offers to purchase
may be resumed. If the Company decides to amend or
supplement the Registration Statement (including
incorporating any documents by reference therein or
the Prospectus or any supplement relating to the Notes
other than to change rates or other variable terms
with respect to the offering of the Notes), it will
promptly advise the Agents, Trustee and Agents'
counsel and will furnish the Agents and their counsel
with copies of the proposed amendment or supplement
(including any document proposed to be incorporated by
reference therein). One copy of such filed document,
along with a copy of the cover letter sent to the
Commission, will be delivered or mailed to the Agents
at the following respective addresses: MTN Product
Management, ▇▇▇▇▇▇▇ ▇▇▇▇▇ Money Markets ▇▇▇▇▇ ▇▇▇▇▇,
▇▇▇▇▇ ▇▇▇▇▇▇▇▇▇ ▇▇▇▇▇▇, ▇▇▇▇ ▇▇▇▇▇, ▇▇▇ ▇▇▇▇, ▇▇
▇▇▇▇▇-▇▇▇▇; ▇▇▇▇▇▇ ▇▇▇▇▇▇▇ & ▇▇. ▇▇▇▇▇▇▇▇, ▇▇▇ ▇▇▇▇,
▇▇ ▇▇▇▇▇, Attention: Manager - Continuously Offered
Products; ▇▇▇▇▇▇ Brothers Inc., American Express
Tower--9th Floor, World Financial Center, ▇▇▇ ▇▇▇▇, ▇▇
▇▇▇▇▇, Attention: Medium--Term Note Department or
Salomon Brothers Inc, ▇ ▇▇▇▇▇ ▇▇▇▇▇ ▇▇▇▇▇▇, ▇▇▇▇
▇▇▇▇▇, ▇▇▇ ▇▇▇▇, ▇▇ ▇▇▇▇▇, Attention: Medium-Term Note
Group. For record keeping purposes, one copy of each
such amendment or supplement shall also be mailed or
telecopied to ▇▇▇▇▇ & ▇▇▇▇ LLP, ▇▇▇ ▇▇▇▇▇ ▇▇▇▇▇
▇▇▇▇▇▇, ▇▇▇ ▇▇▇▇, ▇▇▇ ▇▇▇▇ ▇▇▇▇▇, Attention: ▇▇▇▇▇▇ ▇.
7
▇▇▇▇▇▇▇▇, Esq., (▇▇▇) ▇▇▇-▇▇▇▇, telecopier: (212)
839-5599.
In the event that at the time the solicitation of
offers to purchase from the Company is suspended
(other than to change interest rates or other variable
terms) there shall be any offers to purchase Notes
that have been accepted by the Company which have not
been settled, the Company will promptly advise the
Agents and the Trustee whether such offers may be
settled and whether copies of the Prospectus as
theretofore amended and/or supplemented as in effect
at the time of the suspension may be delivered in
connection with the settlement of such offers. The
Company will have the sole responsibility for such
decision and for any arrangements which may be made in
the event that the Company determines that such offers
may not be settled or that copies of the Prospectus
may not be so delivered.
Delivery of
Prospectus: A copy of the most recent Prospectus and the
applicable Pricing Supplement, which pursuant to Rule
434 may be delivered separately from the Prospectus,
must accompany or precede the earlier of (a) the
written confirmation of a sale sent to an investor or
other purchaser or its agent and (b) the delivery of
Notes to an investor or other purchaser or its agent.
The Company will make all such Prospectus deliveries
with respect to all Notes sold directly by the
Company.
Authenticity of
Signatures The Agent will have no obligation or liability to the
Company or the Trustee in respect of the authenticity
of the signature of any officer, employee or agent of
the Company or the Trustee on any Note.
Documents Incorporated
by Reference: The Company shall supply the Agents with an adequate
supply of all documents incorporated by reference in
the Registration Statement.
Business Day: "Business Day" means, unless otherwise stated in the
applicable Pricing Supplement, any day other than
a Saturday or Sunday that is not a day on which
banking institutions are authorized or obligated
by law to close in The City of New York and, with
respect to LIBOR Notes, is also a London Business
Day. As used herein, "London Business Day" means
any day (a) if the Index Currency (as defined
below) is
8
other than the ECU, on which dealings deposits in
such Index Currency are transacted in the London
interbank market or (b) if the Index Currency is
the ECU, that does not appear as an ECU
non-settlement day on the display designated as
"ISDE" on the ▇▇▇▇▇▇ Monitor Money Rates Service
(or is not a day designated as an ECU
non-settlement day by the ECU Banking Association)
or, if ECU non-settlement days do not appear on
that page (and are not so designated), a day that
is not a day on which payments in ECU cannot be
settled in the international interbank market.
Trustee Not to Risk
Funds: Nothing herein shall be deemed to require the Trustee
to risk or expend its own funds in connection with any
payment to the Company, or the Agents, or DTC, or any
Noteholder, it being understood by all parties that
payments made by the Trustee to either the Company, or
the Agents, or DTC, or any Noteholder shall be made
only to the extent that funds are provided to the
Trustee for such purpose.
PART II: PROCEDURES FOR NOTES ISSUED IN BOOK-ENTRY FORM
In connection with the qualification of Notes issued in book-entry form
for eligibility in the book-entry system maintained by DTC, the 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 the Trustee to DTC, and a Medium-Term
Note Certificate Agreement, with respect to the Notes dated October 31, 1988,
between the Trustee and DTC (the "Certificate Agreement"), and its
obligations as a participant in DTC, including DTC's Same-Day Funds
Settlement System ("SDFS").
Issuance: All Fixed Rate Notes issued in book-entry form
having the same Original Issue Date, redemption terms
and/or repayment, specified currency, interest rate,
and Stated Maturity (collectively, the "Fixed Rate
Terms") will be represented initially by a single
global security in fully registered form without
coupons (each, a "Book-Entry Note"); and all Floating
Rate Notes issued in book-entry form having the same
Original Issue Date, specified currency, redemption
and/or repayment terms, base rate upon which interest
may be determined (each, a "Base Rate"), which may be
the Commercial Paper Rate, the Treasury Rate, LIBOR,
the CD Rate, the Federal Funds Rate, the CMT Rate, the
Prime Rate or any other rate set forth by the Company,
Initial Interest Rate, Index Maturity, Spread or
Spread Multiplier, if any, Minimum Interest Rate, if
any, Maximum Interest Rate, if any, and Stated
Maturity
9
(collectively, the "Floating Rate Terms") will be
represented initially by a single Book-Entry Note.
Rate, LIBOR, the CD Rate, the Federal Funds Rate, the
CMT Rate, the Prime Rate or any other rate set forth
by the Company, Initial Interest Rate, Index Maturity,
Spread or Spread Multiplier, if any, Minimum Interest
Rate, if any, Maximum Interest Rate, if any, and
Stated Maturity (collectively, the "Floating Rate
Terms") will be represented initially by a single
Book-Entry Note.
Except as set forth in the Notes, no owner of a
beneficial interest in a Book-Entry Note shall be
entitled to receive any Note issued in certificated
form with respect to such beneficial interest.
Identification: The Company has arranged with the CUSIP Service Bureau
of Standard & Poor's Corporation (the "CUSIP Service
Bureau") for the reservation of one series of CUSIP
numbers, which series consists of approximately 900
CUSIP numbers which have been reserved for and
relating to Book-Entry Notes and the Company has
delivered to each of the Trustee and DTC such list of
such CUSIP numbers. The Company will assign CUSIP
numbers to Book-Entry Notes as described below under
Settlement Procedure C. DTC will notify the CUSIP
Service Bureau periodically of the CUSIP numbers that
the Company has assigned to Book-Entry Notes. The
Trustee will notify the Company at any time when fewer
than 100 of the reserved CUSIP numbers remain
unassigned to Book-Entry Notes, and, if it deems
necessary, the Company will reserve and obtain
additional CUSIP numbers for assignment to Book-Entry
Notes. Upon obtaining such additional CUSIP numbers,
the Company will deliver a list of such additional
numbers to the Trustee and DTC. Book-Entry Notes
having an aggregate principal amount in excess of
$200,000,000 (or the equivalent thereof in one or more
foreign currencies) and otherwise required to be
represented by the same Global Certificate will
instead be represented by two or more Global
Certificates which shall all be assigned the same
CUSIP number.
Registration: Unless otherwise specified by DTC, each Book-Entry
Note will be registered in the name of CEDE & Co., as
nominee for DTC, on the register maintained by the
Trustee under the Indenture. The beneficial owner of a
Note issued in book-entry form (i.e., an owner of a
beneficial
10
interest in a Book-Entry Note) (or one or more
indirect participants in DTC designated by such
owner) will designate one or more participants in
DTC (with respect to such Note issued in
book-entry form, the "Participants") to act as
agent for such beneficial 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 Note issued in
book-entry form in the account of such
Participants. The ownership interest of such
beneficial owner in such Note issued in book-entry
form will be recorded through the records of such
Participants or through the separate records of
such Participants and one or more indirect
participants in DTC.
Neither the Company nor the Trustee shall have any
liability or responsibility for the book-entry system
maintained by DTC. For all purposes under the
Indenture, CEDE & Co. as the registered owner of a
Book-Entry Note shall be considered the sole Holder
of such Note.
Transfers: Transfers of a beneficial interest in 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 Book-Entry Note.
Exchanges: The Trustee may deliver to DTC and the CUSIP Service
Bureau at any time a written notice specifying (a) the
CUSIP numbers of two or more Book-Entry Notes
outstanding on such date that represent Book-Entry
Notes having the same Fixed Rate Terms or Floating
Rate Terms, as the case may be, (other than Original
Issue Dates) and for which interest has been paid to
the same date; (b) a date, occurring at least 30 days
after such written notice is delivered and at least 30
days before the next Interest Payment Date for the
related Notes issued in book-entry form, on which such
Book-Entry Notes shall be exchanged for a single
replacement Book-Entry Note; and (c) a new CUSIP
number, obtained from the Company to be assigned to
such replacement Book-Entry Note. Upon receipt of such
a notice, DTC will send to its Participants (including
the Trustee) a written reorganization notice to the
effect that such exchange will occur on such date.
Prior to the specified exchange date, the Trustee will
deliver to the CUSIP Service Bureau written
11
notice setting forth such exchange date and the new
CUSIP number and stating that, as of such exchange
date, the CUSIP numbers of the Book-Entry Notes to
be exchanged will no longer be valid. On the specified
exchange date, the Trustee will exchange such
Book-Entry Notes for a single Book-Entry Note bearing
the new CUSIP number and the CUSIP numbers of the
exchanged Book-Entry Notes will, in accordance with
CUSIP Service Bureau procedures, be canceled and not
immediately reassigned. Notwithstanding the foregoing,
if the Book-Entry Notes to be exchanged exceed
$200,000,000 the equivalent thereof in one or more
foreign currencies) in aggregate principal amount, one
replacement Book-Entry Note will be authenticated and
issued to represent each $200,000,000 (or the
equivalent thereof in one or more foreign currencies)
of principal amount of the exchanged Book-Entry Notes
and an additional Book-Entry Note will be
authenticated and issued to represent any remaining
principal amount of such Book-Entry Notes (see
"Denominations" below).
Denominations: Unless otherwise provided in the applicable Pricing
Supplement, notes will be issued in denominations
of $1,000 and integral multiples in excess thereof
of $1,000. Book-Entry Notes will be denominated
in principal amounts not in excess of $200,000,000
(or the equivalent thereof in one or more foreign
currencies). If one or more Notes issued in
book-entry form having an aggregate principal
amount in excess of $200,000,000 (or the
equivalent thereof in one or more foreign
currencies) would, but for the preceding sentence,
be represented by a single Book-Entry Note, then
one Book-Entry Note will be issued to represent
$200,000,000 (or the equivalent thereof in one or
more foreign currencies) principal amount of such
Note or Notes issued in book-entry form and an
additional Book-Entry Note or Notes will be issued
to represent any remaining principal amount of
such Note or Notes issued in book-entry form. In
such a case, each of the Book-Entry Notes
representing such Note or Notes issued in
book-entry form shall be assigned the same CUSIP
number.
Payments of Principal
and Interest: PAYMENTS OF INTEREST ONLY. Promptly after each Regular
Record Date, the Trustee will deliver to the Company
and DTC a written notice specifying by CUSIP number
the amount of interest to be paid on each Book-Entry
Note on the following Interest Payment Date (other
than
12
an Interest Payment Date coinciding with Maturity)
and the total of such amounts.
DTC will confirm the amount payable on each Book-Entry
Note on such Interest Payment Date by reference to the
daily bond reports published by Standard & Poor's
Corporation. On such Interest Payment Date, the
Company will pay to the Trustee in immediately
available funds, and the Trustee in turn will pay in
immediately available funds to DTC, such total amount
of interest due (other than at Maturity) which is
payable in U.S. dollars, at the times and in the
manner set forth below under "Manner of Payment." The
Trustee shall make payment of that amount of interest
due and owing on any Book-Entry Notes that
Participants have elected to receive in foreign
currencies directly to such Participants.
NOTICE OF INTEREST PAYMENTS AND REGULAR RECORD
DATES. On the first Business Day of January,
April, July and October of each year, the Trustee
will deliver to the Company and DTC a written list
of Regular Record Dates and Interest Payment Dates
that will occur during the six-month period
beginning on such first Business Day with respect
to Floating Rate Notes issued in book-entry form.
Promptly after each Determination Date for
Floating Rate Notes issued in book-entry form, the
Company will notify Standard & Poor's Corporation
of the interest rates determined on such Interest
Determination Date.
PAYMENTS AT MATURITY. On or about the first
Business Day of each month, the Trustee will
deliver to the Company and DTC a written list of
principal, interest and premium, if any, to be
paid on each Book-Entry Note maturing either at
Stated Maturity or on a Redemption Date in, or for
which Notice of Repayment at the option of the
Holder has been received with respect to, the
following month. The Trustee, the Company and DTC
will confirm the amount of such principal and
interest payments with respect to a Book-Entry
Note on or about the fifth Business Day preceding
the maturity of such Book-Entry Note. At such
maturity, the Company will pay to the Trustee in
immediately available funds, and the Trustee in
turn will pay to DTC in immediately available
funds, the principal amount of such Note, together
with interest and premium, if any, due at such
maturity which are payable in U.S. dollars, at the
times and in the manner set forth below under
"Manner of Payment." The Trustee shall
13
make payment of the principal, premium, if any, and
interest to be paid at maturity of such Book-Entry
Notes that Participants have elected to receive in
foreign currencies directly to such Participants.
If any maturity of a 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 maturity. Promptly
after (i) payment to DTC of the principal,
interest and premium, if any, due at the Maturity
of such Book-Entry Note which are payable in U.S.
dollars and (ii) payment of the principal,
interest and premium, if any, due at the maturity
of such Book-Entry Note to those Participants who
have elected to receive such payments in foreign
currencies, the Trustee will promptly cancel such
Book-Entry Note and periodically destroy groups of
such Notes and deliver a certificate of
destruction to the Company. On the first Business
Day of each month, the Trustee will deliver to the
Company a written statement indicating the total
principal amount of outstanding Book-Entry Notes
as of the close of business on the immediately
preceding Business Day.
MANNER OF PAYMENT. The total amount of any
principal, premium, if any, and interest due on
Book-Entry Notes on any Interest Payment Date or
at maturity or upon redemption or repayment shall
be paid by the Company to the Trustee in funds
available for use by the Trustee as of 9:30 A.M.,
New York City time, on such date. The Company will
make such payment on such Book-Entry Notes by
instructing the Trustee to withdraw funds from an
account maintained by the Trustee at Citibank,
N.A. Prior to 10:00 A.M., New York City time on
such date or as soon as possible thereafter,
following receipt of such funds from the Company,
the Trustee will pay by separate wire transfer
(using Fedwire message entry instructions in a
form previously specified by DTC) to an account at
the Federal Reserve Bank of New York previously
specified by DTC, in funds available for immediate
use by DTC, each payment in U.S. dollars of
interest, principal and premium, if any, due on a
Book-Entry Note on such date. On each Interest
Payment Date, interest payment shall be made to
DTC in same day funds in accordance with existing
arrangements between the Trustee and DTC.
Thereafter on each such date, DTC will pay, in
accordance with its SDFS operating procedures then
in effect, such amounts in funds available for
immediate use to
14
the respective Participants in whose names such
Notes are recorded in the book--entry system
maintained by DTC. Neither the Company nor the
Trustee shall have any responsibility or liability
for the payment in U.S. dollars by DTC to such
Participants of the principal of, premium, if any,
or interest on, the Book-Entry Notes. The Trustee
shall make all payments of principal, premium, if
any, and interest on each Book-Entry Note that
Participants have elected to receive in foreign
currencies directly to such Participants.
WITHHOLDING TAXES. The amount of any taxes required
under applicable law to be withheld from any
interest payment on a Note will be determined and
withheld by the Participant, indirect participant
in DTC or other Person responsible for forwarding
payments and materials directly to the beneficial
owner of such Book-Entry Note.
Settlement
Procedures: Settlement Procedures with regard to each Note in
book-entry form sold by each Agent, as agent of the
Company or purchased by an Agent, as principal,
shall be completed as soon as possible following
the trade, but no later than the times set forth
below:
A. The Presenting Agent will advise the Company by
telecopy of the following Settlement information:
1. Taxpayer identification number of the
purchaser.
2. Principal amount, authorized denomination and
specified currency of the Note.
3. Fixed Rate Notes:
(a) interest rate;
(b) interest payment dates.
Floating Rate Notes:
(a) interest rate basis or bases;
(b) initial interest rate;
(c) spread or spread multiplier, if any;
(d) interest rate reset dates;
(e) interest rate reset period;
(f) interest payment dates;
(g) interest payment period;
(h) record dates;
(i) index maturity, if any;
(j) calculation agent;
(k) maximum interest rate, if any
15
(l) minimum interest rate, if any;
(m) calculation date; and
(n) interest determination dates.
4. Price to public of the Note.
5. Trade date.
6. Settlement Date (Original Issue Date)
7. Maturity Date.
8. Redemption provisions, if any, including:
Redemption Date, Initial Redemption
Percentage and Annual Redemption Reduction
Percentage.
9. Optional Repayment Date(s), if any.
10. Net Proceeds to the Company.
11. Whether the trade is being made on an
agency basis or a principal basis and
the Agent's commission or discount,
as applicable.
12. Currency payment option for specified
currency.
13. Whether such Note is being issued
with Original Issue Discount and the
terms thereof.
14. Exchange Rate Agent, if any.
15. Such other information specified with
respect to the Notes.
B. The Company will provide to the Trustee by
telecopy or other acceptable method
executed by the President, any Vice
President or Treasurer the applicable
settlement information outlined above
received from the agent including the name
of the Agent.
C. The Trustee will assign a CUSIP number to the
Book-Entry Note, and will telephone and advise
the Company and the Presenting Agent of said CUSIP
number.
The Trustee will communicate to DTC and the
Presenting Agent through DTC's Participant Terminal
System, a pending deposit message specifying the
following settlement information:
16
1. The information set forth in Settlement
Procedure A.
2. Identification numbers of the participant
accounts maintained by DTC on behalf of
the Trustee and the Presenting Agent.
3. Identification of the Book-Entry Note of
the Book-Entry Note or Floating Rate
Book-Entry Note.
4. Initial Interest Payment Date for such
Note, number of days by which said date
succeeds the related record date for DTC
purposes (or, in the case of Floating Rate
Notes which reset daily or weekly, the
date which is five calendar days preceding
the Interest Payment Date) and, if then
calculable, the amount of interest payable
on such Interest Payment Date (which
amount shall have been confirmed by the
Trustee).
5. CUSIP number of the Book-Entry Note
representing such Note.
6. Whether such Book-Entry Note represents
any other Notes issued or to be issued in
book-entry form.
DTC will arrange for each pending deposit
message described above to be transmitted to
Standard & Poor's, which will use the
information in the message to include certain
terms of the related Book-Entry Note in the
appropriate daily bond report published by
Standard & Poor's.
D. The Company will complete and deliver to the
Trustee a Book-Entry Note representing such
Note in a form that has been approved by the
Company, the Agents and the Trustee.
E. The Trustee will authenticate the Book-Entry
Note representing such Note.
F. DTC will credit such Note to the participant
account of the Trustee maintained by DTC.
G. The Trustee will enter an SDFS deliver order
through DTC's Participant Terminal System
instructing DTC (I) to debit such Note to the
Trustee's participant account and credit such
Note to the participant account of the
Presenting Agent maintained
17
by DTC and (ii) to debit the settlement account
of the Presenting Agent and credit the
settlement account of the Trustee maintained by
DTC, in an amount equal to the price of such
Note less such Presenting Agent's commission or
discount. Any entry of such deliver order shall
be deemed to constitute a representation and
warranty by the Trustee to DTC that (I) the
Book-Entry Note representing such Note has been
issued and authenticated and (ii) the Trustee
is holding such Book-Entry Note pursuant to the
Medium-Term Note Certificate Agreement.
H. In the case of Book-Entry Notes sold through
the Presenting Agent, as agent, the Presenting
Agent will enter an SDFS deliver order through
DTC's Participant Terminal System instructing
DTC (I) to debit such Note to the Presenting
Agent's participant account and credit such
Note to the participant account of the
Participants maintained by DTC and (ii) to
debit the settlement accounts of such
Participants and credit the settlement account
of the Presenting Agent maintained by DTC, in
an amount equal to the initial public offering
price of such 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. The Trustee will credit to an account of the
Company maintained at the Trustee funds
available for immediate use in the amount
transferred to the Trustee in accordance with
Settlement Procedure G.
K. The Trustee will send a copy of the Book-Entry
Note by first class mail to the Company
together with a statement setting forth the
principal amount of Notes Outstanding as of the
related Settlement Date after giving effect to
such transaction and all other offers to
purchase Notes of which the Company has advised
the Trustee but which have not yet been settled.
L. If such Note was sold through the Presenting
Agent, as agent, the Presenting Agent will
confirm the purchase of such Note to the
purchaser either by transmitting to the
Participant with
18
respect to such Note a confirmation order
through DTC's Participant Terminal System or by
mailing a written confirmation to such
purchaser.
Settlement Procedures
Timetable: For offers to purchase Notes accepted by the
Company, Settlement Procedures "A" through "L" set
forth above shall be completed as soon as possible
but not later than the respective times (New York
City time) set forth below:
Settlement
Procedure Time
---------- ----
A If possible by 2:00 p.m. on the trade
date or within one hour following the
trade
B As soon as practicable following The
trade, but in no event later than
2:00 p.m. on the Business Day
following the trade
C No later than the close of business on
the trade date
D 3:00 p.m. on the Business Day
E 9:00 a.m. on Settlement Date
F 10:00 a.m. on Settlement Date
G-H No later than 2:00 p.m. on Settlement Date
I 4:00 p.m. on Settlement Date
▇-▇ 5:00 p.m. on Settlement Date
Settlement Procedure I is subject to extension in
accordance with any extension of Fedwire closing
deadlines and in the other events specified in the
SDFS operating procedures in effect on the
Settlement Date.
If settlement of a Note issued in book--entry form
is rescheduled or canceled, the Company shall
notify the Trustee thereof, and upon receipt of
such notice the Trustee will deliver to DTC,
through DTC's Participant Terminal System, a
cancellation message to such effect by no later
than 5:00 p.m., New York City time, on the Business
Day immediately preceding the scheduled Settlement
Date.
Fails: If the Trustee fails to enter an SDFS deliver order
with respect to a Book-Entry Note issued in
book--entry form pursuant to Settlement
19
Procedure G, then upon written request (which may
be evidenced by telecopy transmission) of the
Company, the Trustee shall deliver to DTC, through
DTC's Participant Terminal System, as soon as
practicable a withdrawal message instructing DTC to
debit such Note to the participant account of the
Trustee maintained at DTC. DTC will process the
withdrawal message, provided that such participant
account contains a principal amount of the
Book--Entry Note representing such Note that is at
least equal to the principal amount to be debited.
If withdrawal messages are processed with respect
to all the Notes represented by a Book--Entry Note,
the Trustee will ▇▇▇▇ such Book--Entry Note
"canceled," make appropriate entries in its records
and send such canceled Book-Entry Note to the
Company. The CUSIP number assigned to such
Book-Entry Note shall, in accordance with CUSIP
Service Bureau procedures, be canceled and not
immediately reassigned. If withdrawal messages are
processed with respect to a portion of the Notes
represented by a Book-Entry Note, the Trustee will
exchange such Book--Entry Note for two Book--Entry
Notes, one of which shall represent the Notes for
which withdrawal messages are processed and shall
be canceled immediately after issuance, and the
other of which shall represent the other Notes
previously represented by the surrendered
Book-Entry Note and shall bear the CUSIP number of
the surrendered Book-Entry Note.
In the case of any Book-Entry Note sold through the
Presenting Agent, as agent, 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 related Presenting Agent may enter
SDFS deliver orders through DTC's Participant
Terminal System reversing the orders entered
pursuant to Settlement Procedures G and H,
respectively. Thereafter, the 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 default by the applicable Presenting Agent to
perform its obligations hereunder or under the
Distribution Agreement, the Company will reimburse
such Presenting Agent on an equitable basis for its
loss of the use of funds during the period when the
funds were credited to the account of the Company.
20
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 a Note that
was to have been represented by a Book-Entry Note
also representing other Notes, the Trustee will
provide, in accordance with Settlement Procedures D
and E, for the authentication and issuance of a
Book-Entry Note representing such remaining Notes
and will make appropriate entries in its records.
PART III: PROCEDURES FOR NOTES ISSUED IN CERTIFICATED FORM
Denominations: The Certificated Notes will be issued in
denominations of U.S. $1,000 and integral multiples
thereof. Any notes denominated other than in U.S.
dollars will be issuable in denominations as set
forth in the applicable Pricing Supplement and in
such Notes.
Payments of Principal
and Interest: Upon presentment and delivery of the Certificated
Note, the Trustee will pay the principal amount of
each Certificated Note at maturity and the final
installment of interest in immediately available
funds. All other interest payments on a
Certificated Note, other than interest due at
maturity, will be made by check drawn on the
Trustee and mailed by the Trustee to the person
entitled thereto as provided in the Indenture and
Certificated Note. However, holders of $10,000,000
or more in aggregate principal amount of
Certificated Notes (whether having identical or
different terms and provisions) shall be entitled
to receive payments of interest, other than at
maturity, by wire transfer of immediately available
funds if appropriate wire transfer instructions
have been received in writing by the Trustee not
less than 16 days prior to the applicable Interest
Payment Date. Any payment of principal or interest
required to be made on an Interest Payment Date or
at maturity of a Note which is not a Business Day
(as defined below) need not be made on such day,
but may be made on the next succeeding Business Day
with the same force and effect as if made on the
Interest Payment Date or at
Maturity, as the case may be, and no interest shall
accrue for the period from and after such Interest
Payment date of Maturity Date.
21
The Trustee will provide monthly to the Company a
list of the principal and interest in each
currency to be paid on Certificated Notes maturing
in the next succeeding month. The Trustee will be
responsible for withholding taxes on interest paid
as required by applicable law, but shall be
relieved from any such responsibility if it acts
in good faith and in reliance upon an opinion of
counsel.
Certificated Notes presented to the Trustee at
maturity for payment will be canceled by the
Trustee. All canceled Certificated Notes held by
the Trustee shall be destroyed, and the Trustee
shall furnish to the Company a certificate with
respect to such destruction.
Settlement Procedures: Settlement Procedures with regard to each
Certificated Note purchased through any Agent, as
agent, or purchased by an Agent, as principal, shall
be as follows:
A. The Presenting Agent will advise the Company by
telephone of the following Settlement information
with regard to each Note:
1. Exact name in which the Certificated Note(s) is
to be registered (the "Registered Owner").
2. Denomination of the Certificated Note.
3. Fixed Rate Notes:
(a) interest rate;
(b) interest payment dates.
22
Floating Rate Notes:
(a) interest rate basis or bases;
(b) initial interest rate;
(c) spread or spread multiplier, if any;
(d) interest rate reset dates;
(e) interest rate reset period;
(f) interest payment dates;
(g) interest payment period;
(h) record dates;
(i) index maturity, if any;
(j) calculation agent;
(k) maximum interest rate, if any;
(l) minimum interest rate, if any;
(m) calculation date; and
(n) interest determination dates.
4. Price to public
5. Trade date.
6. Settlement Date (Original Issue Date)
7. Maturity Date.
8. Redemption provisions, if any, including:
Initial Redemption Date, Initial Redemption
Percentage and Annual redemption Reduction
Percentage.
9. Net proceeds to the Company.
10. Optional Repayment Date(s), if any.
11. Whether the trade is being made on an agency
basis or a principal basis and the Agent's
commission or discount, as applicable.
12. Currency payment option for specified currency.
13. Whether such Note is being issued with Original
Issue Discount and the terms thereof.
14. Exchange Rate Agent, if any.
15. Such other information specified with respect
to the Notes.
23
B. After receiving such settlement information from
the Agent, the Company will advise the Trustee of
the above settlement information. The Company
will prepare a Pricing Supplement to the
Prospectus and deliver copies to the Agent and the
Trustee and will cause the Trustee to authenticate
and deliver Notes.
C. The Trustee will complete the preprinted 4-ply
Certificated Note packet containing the following
documents in forms approved by the Company, the
Presenting Agent and the Trustee:
1. Certificated Note with Agent's customer
confirmation.
2. Stub 1 - for Trustee.
3. Stub 2 - for Presenting Agent.
4. Stub 3 - for the Company.
D. With respect to each trade, the Trustee will
deliver the Certificated Notes and Stub 2 thereof
to the Presenting Agent at the following
applicable address: ▇▇▇▇▇▇▇ Lynch, Pierce,
▇▇▇▇▇▇ & ▇▇▇▇▇, Incorporated, ▇▇▇▇▇▇▇ ▇▇▇▇▇ Money
Markets Clearance, ▇▇ ▇▇▇▇▇ ▇▇▇▇▇▇, ▇▇▇ ▇▇▇.,
N.S.C.C. Window, ▇▇▇ ▇▇▇▇, ▇▇ ▇▇▇▇▇, Attention: ▇▇
▇▇▇▇▇▇▇▇; ▇▇▇▇▇▇ ▇▇▇▇▇▇▇ & Co. Incorporated at
Bank of New York, Dealer Clearance Department,
1 Wall Street, 3rd Flr., Window 3b, ▇▇▇ ▇▇▇▇, ▇▇
▇▇▇▇▇, Attention: For the Account of ▇▇▇▇▇▇
▇▇▇▇▇▇▇ & Co. Incorporated; ▇▇▇▇▇▇ Brothers,
▇▇▇ ▇▇▇▇▇▇ ▇▇▇▇▇▇, ▇▇▇▇▇▇ ▇▇▇▇, ▇▇ ▇▇▇▇▇,
Attention: ▇▇▇▇▇ ▇▇▇▇▇▇▇▇ or Salomon Brothers Inc,
at the Bank of New York, Dealer Clearance, ▇ ▇▇▇▇
▇▇▇▇▇▇ ▇▇▇ ▇▇▇., ▇▇▇ ▇▇▇▇, ▇▇ ▇▇▇▇▇,
Account: Salomon Brothers Inc. The Trustee will
keep Stub 1. The Presenting Agent will
acknowledge receipt of the Certificated Note
through a broker's receipt and will keep Stub 2.
Delivery of the Certificated Note will be made
only against such acknowledgement of receipt.
Upon determination that the Certificated Note has
been authorized, delivered and completed as
aforementioned, the Presenting Agent will wire the
net proceeds of the Certificated Note after
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deduction of its applicable commission to the
Company pursuant to the standard wire instructions
given by the Company.
E. The Presenting Agent will deliver the Certificated
Note (with confirmation), as well as a copy of the
Prospectus and any applicable Prospectus Supplement
or Supplements received from the Company to the
purchaser against payment in full in immediately
available funds. In all cases, the prospectus,
prospectus supplement and pricing sticker must
accompany or precede the earlier of the written
confirmation of the sale of the Notes or the
delivery of the Notes. If instructed by the
purchaser to deliver the Note and confirmation to
different locations, the Note and the confirmation
will each be accompanied or preceded by the
prospectus, prospectus supplement and pricing
sticker to the Note being delivered.
F. The Trustee will send Stub 3 to the Company.
Settlement Procedures
Timetable: For offers to purchase Certificated Notes accepted by
the Company, Settlement Procedures "A" through "F" set
forth above shall be completed as soon as possible but
not later than the respective times (New York City
time) set forth below:
Settlement
Procedure Time
--------- ----
A-B 3:00 p.m. on Business Day prior to
Settlement Date
C-D 2:15 p.m. on Settlement
E 3:00 p.m. on Settlement
F 5:00 p.m. on Settlement
Failure to Settle: In the event that a purchaser of a Note from the
Company shall either fail to accept delivery of or make
payment for a Certificated Note on the date fixed for
settlement, the Presenting Agent will forthwith
notify the Trustee and the Company by telephone,
confirmed in writing, and return the Certificated
Note to the Trustee. The Trustee, upon receipt of
the Certificated Note from the Presenting Agent,
will immediately advise the Company and the Company
will promptly arrange to credit the account of the
Presenting Agent in an amount of immediately
available funds equal to the amount previously paid
by such Presenting Agent in settlement for the
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Certificated Note. Such credits will be made on the
Settlement Date if possible, and in any event not
later than the Business Day following the Settlement
Date; provided that the Company has received notice
on the same day. If such failure shall have occurred
for any reason other than failure by such Presenting
Agent to perform its obligations hereunder or under
the Distribution Agreement, the Company will
reimburse such Presenting Agent on an equitable
basis for its loss of the use of funds during the
period when the funds were credited to the account
of the Company. Upon receipt of the Certificated
Note in respect of which the failure occurred, the
Trustee will ▇▇▇▇ the note "canceled," make
appropriate entries in its records to reflect the
fact that the Note was never issued, and accordingly
notify the Company in writing.
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