EXHIBIT 1(k)
THE BEAR ▇▇▇▇▇▇▇ COMPANIES INC.
$2,000,000,000 IncomeNotes(SM)
DISTRIBUTION AGREEMENT
June 19, 2003
BEAR, ▇▇▇▇▇▇▇ & CO. INC.
▇▇▇ ▇▇▇▇▇▇▇ ▇▇▇▇▇▇
▇▇▇ ▇▇▇▇, ▇▇▇ ▇▇▇▇ ▇▇▇▇▇
and
the Agents listed on Schedule A hereto
Ladies and Gentlemen:
This DISTRIBUTION AGREEMENT dated as of June 19, 2003 (this
"Agreement"), by and among The Bear ▇▇▇▇▇▇▇ Companies Inc., a Delaware
corporation (the "Company"), Bear, ▇▇▇▇▇▇▇ & Co. Inc. (referred to herein as
"Bear ▇▇▇▇▇▇▇" or the "Lead Agent") and the agents listed on Schedule A hereto
(individually, an "Agent" and collectively, the "Agents" or "you"). As used
herein, the terms "Agent", "Agents" and "you" shall include the Lead Agent.
The Company confirms its agreement with you with respect to the
issue and sale by the Company of up to $2,000,000,000 aggregate principal amount
of its Medium Term Notes, Series B, also known as IncomeNotes(SM) (the "Notes"),
with maturities of nine months or more from date of issue. The Notes are to be
issued pursuant to an indenture dated as of May 31, 1991, as supplemented by the
First Supplemental Indenture, dated January 29, 1998 (the "Indenture") between
the Company and JPMorgan Chase Bank (formerly, The Chase Manhattan Bank), as
trustee (the "Trustee"). As of the date hereof, the Company has authorized the
issuance of up to $2,000,000,000 aggregate principal amount of Notes pursuant to
the terms of this Agreement. It is understood, however, that the Company may
from time to time authorize the issuance of additional Notes and that such Notes
may be distributed through or sold to you pursuant to the terms of this
Agreement, all as though the issuance of such Notes were authorized as of the
date hereof. You are authorized to engage the services of any other broker or
dealer in connection with the offer or sale of the Notes purchased by you as
principal for resale to others, but without the prior approval of the Company,
you are not authorized to appoint subagents.
This Agreement provides both for the sale of Notes by the Company
directly to purchasers in which case you will act as an agent of the Company in
soliciting Note purchasers, and (as may from time to time be agreed to by the
Company and you) to you as principal for resale to purchasers. Additional terms
of any sale of Notes to you as principal will be set out in a Terms Agreement
(hereafter defined) relating to such sale, all as more fully provided herein.
Subject to the terms and conditions contained in this Agreement, and
subject to the reservation by the Company of the right to sell Notes directly on
its own behalf, the Company hereby (i) appoints each of you as an agent of the
Company for the purpose of soliciting and receiving offers to purchase Notes
from the Company, and you hereby agree to use your reasonable best efforts to
solicit and receive offers to purchase Notes upon terms acceptable to the
Company at such times and in such amounts as the Company shall from time to time
specify and in accordance with the terms hereof and (ii) agrees that whenever
the Company determines to sell Notes to you as principal pursuant to this
Agreement, such Notes shall be sold pursuant to a Terms Agreement (as defined in
Section 2(b) hereof) relating to such sale in accordance with the provisions of
Section 2(b) hereof between the Company and the Lead Agent, pursuant to which
the Lead Agent shall purchase such Notes as principal for resale to the public
or for resale to one or more of the other Agents, each of whom will purchase as
principal for resale to the public or to other dealers, as further set forth in
this Agreement. This Agreement shall not be construed to create either an
obligation on the part of the Company to sell any Notes or an obligation of any
of the Agents to purchase Notes. You will make reasonable efforts to assist the
Company in obtaining performance by each purchaser whose offer to purchase Notes
from the Company has been solicited by you as agent and accepted by the Company,
but you shall not have liability to the Company in the event any such purchase
is not consummated for any reason. So long as this Agreement shall be in effect,
the Company shall not (except as otherwise provided in this Agreement) solicit
or accept offers to purchase Notes through any agents other than you.
The Company has filed with the Securities and Exchange Commission
(the "Commission") for the registration of the Notes under the Securities Act of
1933, as amended (the "1933 Act"), and the offering thereof from time to time in
accordance with Rule 415 of the rules and regulations of the Commission under
the 1933 Act (the "Regulations"), Registration Statement No. 333-104455 on Form
S-3, which is a new registration statement and also constitutes Post-Effective
Amendment No. 1 to Registration Statement No. 333-76894. Such registration
statement has been declared effective by the Commission. Such registration
statement, as amended at the date of this Agreement and as from time to time
amended and supplemented hereafter (and any further registration statements
which may be filed by the Company for the purpose of registering additional
Notes and in connection with which this Agreement is included as an exhibit),
including all exhibits, documents and financial statements incorporated by
reference pursuant to Item 12 of Form S-3, is referred to herein as the
"Registration Statement".
The Company has filed with the Commission pursuant to Rule 424 under
the 1933 Act a supplement to the form of prospectus included in the Registration
Statement for the purpose of supplying information in respect of the public
offering of the Notes. The form of prospectus included in the Registration
Statement is hereinafter referred to as the "Basic Prospectus", and such
supplemented form of prospectus (including any information appendixed thereto),
in the form in which it was filed with the Commission pursuant to Rule 424
(including the Basic Prospectus as so supplemented), is hereinafter referred to
as the "Prospectus Supplement". The Prospectus Supplement, together with any
supplement that sets forth only the terms of a particular issue of the Notes
(each, a "Pricing Supplement") (including any information appendixed thereto)
are referred to collectively as the "Final Prospectus". Any preliminary
prospectus supplement (including any information appendixed thereto) to the
Basic
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Prospectus which describes the Notes and the offering thereof and is used prior
to filing of the Final Prospectus is referred to as a "Preliminary Final
Prospectus". Any reference herein to the Registration Statement, the Basic
Prospectus, any Preliminary Final Prospectus or the Final Prospectus shall be
deemed to refer to and include the documents incorporated by reference therein
pursuant to Item 12 of Form S-3 which were filed under the Securities Exchange
Act of 1934, as amended (the "1934 Act"), and any reference herein to the terms
"amend", "amendment" or "supplement" with respect to the Registration Statement,
the Basic Prospectus, any Preliminary Final Prospectus or the Final Prospectus
shall be deemed to refer to and include the filing of any document under the
1934 Act after the date of this Agreement or the issue date of the Basic
Prospectus, any Preliminary Final Prospectus, or the Final Prospectus, as the
case may be, deemed to be incorporated therein by reference. The Final
Prospectus shall also include any revised prospectus provided to any Agent by
the Company for use in connection with the offering of the Notes which is not
required to be filed by the Company pursuant to Rule 424(b), from and after the
time it is first provided to such Agent for such use.
1. Representations and Warranties.
(a) The Company represents and warrants to each Agent as of the date
hereof, as of the date of each acceptance by the Company of an offer for the
purchase of Notes (whether through any Agent as agent or to the Lead Agent as
principal), as of the date of each delivery of Notes (whether through any Agent
as agent or to any Agent as principal) (the date, time and place of each such
delivery to the Lead Agent as principal being hereafter referred to as a
"Settlement Date"), and as of the times referred to in Section 6(a) hereof (each
of the times referenced above being referred to hereafter as a "Representation
Date"), as follows:
(i) The Company has been duly incorporated and is validly existing
as a corporation in good standing under the laws of the State of Delaware
with corporate power and authority to own, lease and operate its
properties and to conduct its business as described in the Final
Prospectus and any amendment or supplement thereto; and the Company is
duly qualified as a foreign corporation to transact business, and is in
good standing, in each jurisdiction in which such qualification is
required, whether by reason of the ownership or leasing of property or the
conduct of business, except where the failure to so qualify would not have
a material adverse effect on the financial condition, results of
operations, business or properties of the Company and its subsidiaries
considered as one enterprise (any such material adverse effect being
hereinafter referred to as a "Material Adverse Effect").
(ii) The Company has the corporate power and authority to enter into
this Agreement, to perform its obligations hereunder and under the
Indenture and to issue, sell and deliver the Notes. This Agreement has
been duly and validly authorized, executed and delivered by the Company,
is a valid and binding agreement of the Company and is enforceable as to
the Company in accordance with its terms. The Company meets the
requirements for the use of Form S-3 under the 1933 Act and has prepared
and filed the Registration Statement with the Commission pursuant to the
1933 Act and the Regulations. The Registration Statement has been declared
effective by the Commission. The Indenture has been duly and validly
authorized, executed and delivered by the Company, is a valid and binding
agreement of the Company and is enforceable as to the
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Company in accordance with its terms. The Indenture has been duly
qualified under the Trust Indenture Act of 1939, as amended (the "Trust
Indenture Act").
(iii) (A) At the time the Registration Statement became effective,
the Registration Statement complied, and as of the applicable
Representation Date, and at all times during each period during which
solicitation of offers to purchase Notes have not been suspended or during
which a Final Prospectus may be required to be delivered under the 1933
Act or the Regulations (each a "Marketing Period"), the Registration
Statement (including any post-effective amendment) and the Final
Prospectus (as amended or as supplemented if the Company shall have filed
with the Commission any amendment or supplement to the Registration
Statement or the Final Prospectus and including any filing under the 1934
Act explicitly referenced as to be filed under the caption "Where You Can
Find More Information" in the Final Prospectus) will contain all
statements which are required to be stated therein in accordance with the
1933 Act, the 1934 Act, the Trust Indenture Act, and the Regulations, will
comply with the requirements of the 1933 Act, the 1934 Act, the Trust
Indenture Act, and the Regulations, and will not 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 in the
light of the circumstances in which they were made not misleading, and no
event will have occurred which is required to be set forth in an amendment
or supplement to the Registration Statement or the Final Prospectus which
has not then been set forth in such an amendment or supplement; and each
Basic Prospectus and each Preliminary Final Prospectus, as of the date
filed with the Commission, did not include 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 in light of the
circumstances in which they were made not misleading; provided, however,
that the Company makes no representations and warranties as to information
contained in or omitted from (i) the Registration Statement, the Basic
Prospectus, any Preliminary Final Prospectus, or the Final Prospectus made
in reliance upon and in conformity with information furnished to the
Company in writing by any Agent expressly for use in the Registration
Statement or such Basic Prospectus, any Preliminary Final Prospectus, or
the Final Prospectus, as set forth in Section 7(b), and (ii) the Statement
of Eligibility and Qualification on Form T-1 of the Trustee under the
Trust Indenture Act, except statements or omissions in such Statement made
in reliance upon information furnished to the Trustee by or on behalf of
the Company for inclusion therein.
(B) Without limiting the foregoing, as of the applicable
Representation Date, and during each Marketing Period, the Final
Prospectus (together with the Basic Prospectus) contains, or will contain,
as applicable, all material information with respect to the Company and
its subsidiaries and the Notes (including all information which, according
to the particular nature of the Company and its subsidiaries and the
Notes, is necessary to enable investors and their professional advisers to
make an informed assessment of the assets and liabilities, financial
position, profits and losses and prospects of the Company and its
subsidiaries and of the rights attaching to the Notes) and the statements
of intention, opinion, belief or expectation contained therein are
honestly and reasonably made or held.
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(iv) Neither the Commission nor the "blue sky" or securities
authority of any jurisdiction has issued an order or administrative
proceeding (a "Stop Order") suspending (or the effect of which is to
suspend or otherwise limit) the effectiveness of the Registration
Statement, preventing, suspending or otherwise limiting the use of the
Basic Prospectus, any Preliminary Final Prospectus, the Final Prospectus,
the Registration Statement, or any amendment or supplement thereto,
refusing to permit the effectiveness of the Registration Statement,
suspending the registration or qualification of the Notes or suspending
the qualification of the Indenture, nor has any of such authorities
instituted or, to the knowledge of the Company, threatened to institute
any proceedings with respect to a Stop Order in any jurisdiction in which
the Notes are to be sold, nor, with respect to accuracy as of the
applicable Representation Date, has there been any Stop Order issued or
proceedings with respect to a Stop Order instituted or, to the knowledge
of the Company, threatened on or after the effective date of the
Registration Statement in any jurisdiction.
(v) The documents incorporated by reference in the Final Prospectus
and any amendment or supplement thereto (the "Incorporated Documents"), at
the time they were or hereafter are filed with the Commission (or to the
extent amended at the time of filing of such amendment with the
Commission), complied, or when so filed will comply, in all material
respects with the requirements of the 1933 Act, the 1934 Act or the Trust
Indenture Act, as applicable, and the rules and regulations thereunder and
as of the applicable Representation Date, did not and will not contain an
untrue statement of a material fact or omit to state a material fact
required to be stated therein or necessary to make the statements therein,
in the light of the circumstances under which they are made, not
misleading.
(vi) Since the respective dates as of which information is given in
the Registration Statement and the Final Prospectus, except as otherwise
stated therein or contemplated thereby, there has been no material adverse
change in, or any adverse development which materially affects, the
financial condition, results of operations, business or properties of the
Company and its subsidiaries considered as one enterprise.
(vii) Each subsidiary of the Company which is a "significant
subsidiary", as defined in Rule 405 of Regulation C of the Regulations
(each a "Significant Subsidiary"), has been duly incorporated and is
validly existing as a corporation in good standing under the laws of the
jurisdiction of its incorporation, has the corporate power and authority
to own, lease and operate its properties and to conduct its business as
described in the Final Prospectus and any amendment or supplement thereto
and is duly qualified as a foreign corporation to transact business, and
is in good standing, in each jurisdiction in which such qualification is
required, whether by reason of the ownership or leasing of property or the
conduct of business, except where the failure to so qualify would not have
a Material Adverse Effect; and all of the issued and outstanding capital
stock of each Significant Subsidiary has been duly authorized and validly
issued and is fully paid and nonassessable and was not issued in violation
of or subject to pre-emptive rights, and, except for directors' qualifying
shares and shares of preferred stock of Bear, ▇▇▇▇▇▇▇ Securities Corp.
owned by third party broker-dealers, is owned directly or indirectly by
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the Company free and clear of any security interest, mortgage, pledge,
lien, encumbrance, claim or other defect of title whatsoever.
(viii) The Notes have been duly authorized (or will have been so
authorized prior to each issuance of Notes) and when the Notes have been
executed and authenticated in the manner set forth in the Indenture and
are issued and delivered against payment therefor as provided in this
Agreement, such Notes will have been duly executed, authenticated
(assuming due authentication by the Trustee), issued and delivered, will
constitute valid and legally binding obligations of the Company entitled
to the benefits provided by the Indenture, and will be enforceable as to
the Company in accordance with their terms. The Indenture substantially
complies with the 1933 Act, the Regulations and the Trust Indenture Act,
and the Indenture and the Notes will conform to the descriptions thereof
contained in the Final Prospectus.
(ix) The execution, delivery and performance of this Agreement, the
performance of the Indenture, the issuance, authentication, and sale of
the Notes and the consummation by the Company of the transactions
contemplated hereby and thereby, as of the applicable Representation Date,
do not and will not, (A) conflict with or result in a breach of any of the
terms and provisions of, or constitute a default (or an event which with
notice or lapse of time, or both, would constitute a default) or require
consent under, or result in the creation or imposition of any lien, charge
or encumbrance upon any property or assets of the Company or any of its
subsidiaries pursuant to, the terms of any contract, agreement, indenture,
mortgage, loan agreement, note, lease or other instrument, franchise,
license or permit to which the Company or any of its subsidiaries is a
party or by which the Company or any of its subsidiaries or their
respective properties or assets may be bound or subject and that is
material to the Company and its subsidiaries considered as one enterprise,
or (B) violate or conflict with any provision of the certificate of
incorporation or by-laws of the Company or any of its subsidiaries, or any
law, judgment, decree, order, statute, rule or regulation of any court or
any public, governmental or regulatory agency or body or any arbitrator
having jurisdiction over the Company or any of its subsidiaries, or any of
their respective properties or assets. No consent, approval,
authorization, order, registration, filing, qualification, license or
permit of or with any court or any public, governmental or regulatory
agency or body having jurisdiction over the Company or any of its
subsidiaries, or any of their respective properties or assets, is required
for the execution, delivery and performance of this Agreement, or the
performance of the Indenture and the consummation of the transactions
contemplated hereby and thereby, including the issuance, authentication,
sale and delivery of the Notes, except for (1) such as may be required
under state and foreign securities or "blue sky" laws in connection with
the purchase and distribution of the Notes by any Agent and (2) such as
have been made or obtained or will be made or obtained before the
applicable Representation Date under the 1933 Act and the Trust Indenture
Act.
(x) There are no holders of securities of the Company or any
subsidiary who, pursuant to any agreement, understanding or otherwise,
have any right to have securities of the Company or any subsidiary
registered under the 1933 Act in connection with the offering contemplated
by the Final Prospectus.
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(xi) The accountants who certified the financial statements included
or incorporated by reference in the Company's most recent Annual Report on
Form 10-K which is included or incorporated by reference in the Final
Prospectus, were independent public accountants at the time such
statements were certified and during the periods covered by such
statements as required by the 1933 Act and the Regulations.
(xii) The financial statements of the Company and its consolidated
subsidiaries included or incorporated by reference in the Registration
Statement and the Final Prospectus, and any amendment or supplement
thereto, present fairly the consolidated financial position of the Company
and its consolidated subsidiaries as at the dates indicated and the
consolidated results of their operations for the periods specified; and
said financial statements have been prepared in conformity with generally
accepted accounting principles in the United States (except to the extent
that certain footnote disclosures regarding any stub period may have been
omitted in accordance with the 1934 Act and the rules and regulations
thereunder) applied on a consistent basis.
(xiii) Except as may be set forth or incorporated by reference in
the Final Prospectus, there is no action, suit or proceeding before or by
any court or governmental agency or body or arbitrator, domestic or
foreign, now pending, or, to the knowledge of the Company, threatened
against or affecting, the Company or any Significant Subsidiary which is
required to be disclosed in the Registration Statement or the Final
Prospectus or would have a Material Adverse Effect or would otherwise be
expected to materially and adversely affect the consummation of the
transactions contemplated hereby or by the Indenture; and there are no
contracts or documents of the Company or its Significant Subsidiaries
which are required to be filed as exhibits to, disclosed in or summarized
in the Registration Statement or the Final Prospectus by the 1933 Act or
the Regulations, which have not been (or which will not be, as the case
may be) so filed, disclosed or summarized.
(xiv) The Company and its Significant Subsidiaries possess such
certificates, authorities or permits issued by the appropriate state,
federal or foreign regulatory agencies or bodies necessary to conduct the
business now operated by them, except where the failure to obtain such
certificates, authorities or permits, individually or in the aggregate,
would not have a Material Adverse Effect. Neither the Company nor any of
its Significant Subsidiaries has received any notice of proceedings
relating to the revocation or modification of any such certificate,
authority or permit which, singly or in the aggregate, if the subject of
any unfavorable decision, ruling or finding, would have a Material Adverse
Effect.
(xv) Except as otherwise set forth in the Final Prospectus, the
Notes have been rated "investment grade" by at least one nationally
recognized statistical rating organization.
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2. Solicitations as Agent; Purchases as Principal.
(a) Solicitations as Agent. On the basis of the representations and
warranties herein contained, but subject to the terms and conditions herein set
forth, each Agent agrees, as an agent of the Company, to use its reasonable best
efforts to solicit offers to purchase the Notes upon the terms and conditions
set forth in the Final Prospectus and the Administrative Procedures attached
hereto as Exhibit A, as they may be amended from time to time (the
"Procedures").
The Company reserves the right, in its sole discretion, to suspend
solicitation of purchases of the Notes commencing at any time for any period of
time or permanently. Upon receipt of instructions from the Company, each Agent
will forthwith suspend solicitation of purchases from the Company of the Notes
until such time as the Company has advised each Agent that such solicitation may
be resumed.
Each Agent shall have the right to suspend solicitation of purchases
of the Notes, commencing at any time such Agent reasonably believes that there
has occurred a material adverse change in the condition of the Company and its
subsidiaries, considered as one enterprise, from that then set forth in the
Registration Statement and the Final Prospectus, and ending at the time such
Agent has been reasonably satisfied that adequate and full disclosure of such
adverse change has been made (including, without limitation, any necessary
amendments or supplements to the Registration Statement and the Final
Prospectus); provided, however, that any such Agent shall notify the Company of
its belief prior to or concurrently with any such suspension.
The Company agrees to pay the Lead Agent a commission, in the form
of a discount, equal to the applicable percentage of the principal amount of
each Note sold by the Company as a result of a solicitation made by an Agent, as
set forth in Exhibit B hereto; provided, however, that the Company and the Lead
Agent may agree to a commission greater than or less than the percentages set
forth on Exhibit B hereto, provided that in no case shall the commission exceed
8% of the initial offering proceeds. The Lead Agent and the other Agents will
share such commissions in such proportions as they may agree.
Except as may be otherwise provided in the applicable Pricing
Supplement, each Agent is authorized to solicit orders for the Notes only in
denominations of $1,000 or any amount in excess thereof which is an integral
multiple of $1,000. Each Agent shall have the right to reject any offer to
purchase the Notes received by such Agent which it does not deem reasonable, and
any such rejection shall not be deemed a breach of such Agent's agreement
contained herein. Each Agent shall communicate to the Lead Agent, orally or in
writing, each reasonable offer to purchase Notes received by such Agent as
agent. The Company shall have the sole right to accept offers to purchase the
Notes and may reject any such offer in whole or in part. The purchase price,
interest rate, maturity date and other terms of the Notes shall be agreed upon
by the Company and each Agent and set forth in a Pricing Supplement to be
prepared following each acceptance by the Company of an offer for the purchase
of Notes. All Notes will be sold at 100% of their principal amount unless
otherwise agreed to by the Company and the Agents.
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(b) Purchases as Principal. Each sale of Notes to an Agent as
principal shall be made in accordance with the terms of this Agreement and a
separate agreement, substantially in the form of Exhibit C hereto, to be entered
into on behalf of such Agent(s) by the Lead Agent, which will provide for the
sale of such Notes to, and the purchase and reoffering thereof by, the Lead
Agent as principal. Each such separate agreement (which may be an oral agreement
and confirmed in writing as described below between the Lead Agent and the
Company) is herein referred to as a "Terms Agreement". A Terms Agreement may
also specify certain provisions relating to the reoffering of such Notes by the
Lead Agent. The Lead Agent's agreement to purchase Notes pursuant to any Terms
Agreement shall be deemed to have been made on the basis of the representations,
warranties and agreements of the Company herein contained and shall be subject
to the terms and conditions herein set forth. Except pursuant to a Terms
Agreement, under no circumstances shall you be obligated to purchase any Notes
for your own account. Each Terms Agreement, whether oral and confirmed in
writing (which may be by facsimile transmission) or in writing, shall describe
the Notes to be purchased pursuant thereto by the Lead Agent as principal, and
may specify, among other things, the principal amount of Notes to be purchased,
the interest rate or formula and maturity date or dates of such Notes, the
interest payment dates, if any, the price to be paid to the Company for such
Notes, the initial public offering price at which the Notes are proposed to be
reoffered, the Settlement Date, whether the Notes provide for a survivor's
option or for optional redemption by the Company and on what terms and
conditions, and any other relevant terms. Terms Agreements may take the form of
an exchange of any standard form of written telecommunication between the Lead
Agent and the Company.
An Agent may engage the services of any other broker or dealer in
connection with the resale of the Notes purchased as principal and may allow a
portion of the discount received in connection with such purchase from the
Company to such brokers and dealers on such terms as specified in the applicable
Pricing Supplement. At such time, the Lead Agent, in its sole discretion, shall
specify the requirements for the delivery of certificates, letters and opinions
as are set forth in Section 5 hereof.
(c) Administrative Procedures. Administrative procedures with
respect to the sale of Notes (including Fixed Rate Notes and Floating Rate
Notes, as defined in Procedures), the issue and delivery of certificates
representing the Notes (including Book-Entry Notes, as defined in the
Procedures) and payment for the Notes are set forth in the Procedures. Each
Agent and the Company agree to perform the respective duties and obligations to
be performed by each of them as provided the Procedures. The Procedures may be
amended only by a written agreement between the Company and the Lead Agent, on
behalf of the Agents.
(d) Prospectus Delivery; Marketing Materials. Each of the Agents
shall, as required by applicable law, furnish to each person to whom it sells or
delivers Notes a copy of the Final Prospectus (as then amended or supplemented)
or, if delivery of the Final Prospectus is not required by applicable law,
inform each such person that a copy thereof (as then amended or supplemented)
will be made available upon request. No Agent is authorized to give any
information or to make any representation not contained in the Final Prospectus
or the documents incorporated by reference or specifically referred to therein
in connection with the offer and sale of the Notes. No Agent will use any
marketing materials other than the Final Prospectus in connection with any offer
or sale of the Notes except for marketing materials
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prepared by the Company, if any, and furnished to the Agents together with
written authorization from the Company to the Lead Agent to use the same in
connection with the offering of the Notes. If any Agent elects to distribute
these additional marketing materials under the so called "free writing"
exemption embodied in Section 2(10)(a) of the Securities Act (any such marketing
materials, "Free Writing Materials"), such Agent will use its best efforts to
ensure that any intended recipients of such Free Writing Materials receive a
Final Prospectus either prior to or concurrently with their receipt of the Free
Writing Materials and to cause any such Free Writing Materials to include any
and all legislatively mandated disclaimers concerning securities of the Company
as may be supplied by the Company to the Lead Agent.
(e) An Agent may not confirm sales of Notes to any account over
which it exercises discretionary authority without the prior written approval of
the customer.
(f) The Company acknowledges that the obligations of each Agent are
several and, subject to the provisions of this Section 2, each Agent shall have
complete discretion as to the manner in which it solicits purchasers for the
Notes and as to the identity thereof.
3. Covenants of the Company.
The Company covenants with each Agent as follows:
(a) The Company will notify the Lead Agent, on behalf of the Agents,
and ▇▇▇▇▇▇ ▇▇▇▇▇ ▇▇▇▇▇▇▇▇ & ▇▇▇▇▇▇▇ LLP, Agent counsel ("Agent Counsel")
immediately (i) of the effectiveness of any amendment to the Registration
Statement, (ii) of any request by the Commission for any amendment of or
supplement to the Registration Statement or the Final Prospectus or for any
additional information, (iii) of the mailing or the delivery to the Commission
for filing of any supplement to the Final Prospectus or any document to be filed
pursuant to the 1934 Act which will be incorporated by reference in the Final
Prospectus, (iv) of the issuance by the Commission of a Stop Order suspending
(or the effect of which is to suspend or otherwise limit) the effectiveness of
the Registration Statement (including any post-effective amendment thereto) or
of the initiation, or the threatening, of any proceedings therefor, (v) of the
receipt of any comments from the Commission and (vi) of the receipt by the
Company of any notification with respect to the suspension or limitation of the
qualification of the Notes for sale in any jurisdiction or the initiation, or
threatening, of any proceeding for that purpose. If the Commission or other
authority shall propose or enter a Stop Order at any time, the Company will make
every reasonable effort to prevent the issuance of any such Stop Order and, if
issued, to obtain the withdrawal of such Stop Order as soon as possible.
(b) During any Marketing Period, the Company will comply with all
requirements imposed upon it by the 1933 Act and the Trust Indenture Act, as now
existing and as hereafter amended, and by the Regulations, as from time to time
in force, so far as necessary to permit the continuance of sales of, or dealing
in, the Notes in accordance with the provisions thereof and the Final
Prospectus. If at any time when a prospectus relating to the Notes is required
to be delivered under the 1933 Act or any event shall have occurred as a result
of which, in the judgment of the Company, the Lead Agent or Agent Counsel, the
Final Prospectus as then amended or supplemented includes an untrue statement of
a material fact or omits to state any material fact required to be stated
therein or necessary to make the statements therein, in the light
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of the circumstances under which they were made, not misleading, or if it shall
be necessary at any time to amend or supplement the Final Prospectus or
Registration Statement to comply with the 1933 Act, the Trust Indenture Act or
the Regulations, or if there shall occur any material change affecting any of
the representations and warranties in Section 1, the Company will notify the
Lead Agent promptly and prepare and file with the Commission and all other
applicable bodies an appropriate amendment or supplement (in form and substance
satisfactory to the Lead Agent) which will correct such statement or omission
and will use its best efforts to have any amendment to the Registration
Statement declared effective as soon as possible and will deliver to the Lead
Agent, on behalf of the Agents, without charge, such number of copies thereof as
may be reasonably requested by the Lead Agent.
(c) The Company will promptly deliver to the Lead Agent a copy of
the Registration Statement, including exhibits and all amendments thereto, and
the Company will promptly deliver without charge to the Lead Agent such number
of copies of the Basic Prospectus, any Preliminary Final Prospectus, the Final
Prospectus, the Registration Statement, and all amendments of and supplements to
such documents (including any listing particulars and supplementary listing
particulars), if any, as the Lead Agent may reasonably request.
(d) The Company will endeavor in good faith, in cooperation with you
to timely qualify the Notes for offering and sale under the securities and other
applicable laws of such jurisdictions as you may designate and to maintain such
qualification in effect for so long as required for the distribution thereof;
provided that in no event shall the Company be obligated to qualify to do
business in any jurisdiction where it is not now so qualified or to take action
which would subject it to general service of process in any jurisdiction where
it is not now so subject or to conduct its business in a manner in which it is
not currently so conducting its business.
(e) The Company will make generally available (within the meaning of
Section 11(a) of the 1933 Act and Rule 158 of the Regulations) to its security
holders and to the Lead Agent, on behalf of the Agents, as soon as practicable
an earnings statement which need not be audited but which shall satisfy the
provisions of Section 11(a) of the 1933 Act and Rule 158 of the Regulations.
(f) The Company, during the period when the Final Prospectus is
required to be delivered under the 1933 Act, will file promptly all documents
required to be filed with the Commission pursuant to Section 13 or 14 of the
▇▇▇▇ ▇▇▇.
(g) The Company will apply the proceeds from the sale of the Notes
as set forth under the caption "Use of Proceeds" in the Final Prospectus.
(h) The Company will comply with all provisions of all undertakings
contained in the Registration Statement.
(i) The Company consents to the use of the Final Prospectus or any
amendment or supplement thereto by you and by all dealers to whom the Notes may
be sold, both in connection with the offering or sale of the Notes and for such
period of time thereafter as the Final Prospectus is required by law to be
delivered in connection therewith.
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(j) Suspension of Certain Obligations. The Company shall not be
required to comply with the provisions of subsection (b) of this Section 3 with
respect to an Agent during any period from the time (i) such Agent shall have
suspended solicitation or purchases of the Notes in its capacity as agent
pursuant to a written or oral request from the Company and (ii) such Agent shall
not then hold any Notes as principal purchased pursuant to a Terms Agreement, to
the time the Company shall determine that solicitation of purchases of the Notes
should be resumed or shall subsequently enter into a new Terms Agreement with
the Lead Agent. The Company shall not be required to comply with the provisions
of subsections (a), (b) or (c) of Section 6 with respect to an Agent during any
period from the time the Lead Agent shall have suspended solicitation or
purchases of the Notes by the Lead Agent pursuant to a written or oral request
from the Company to the time the Company shall determine that solicitation of
purchases of the Notes should be resumed or shall subsequently enter into a
Terms Agreement with the Lead Agent.
4. Payment of Expenses.
The Company will pay all expenses incident to the performance of its
obligations under this Agreement, including:
(i) The preparation and filing of the Registration Statement and all
amendments thereto and the Final Prospectus and any amendments or
supplements thereto;
(ii) The preparation and filing of this Agreement;
(iii) The preparation, printing, issuance and delivery of the Notes;
(iv) The fees and disbursements of the Company's accountants and
counsel, of the Trustee and its counsel, and of any Calculation Agent (as
defined in the Final Prospectus);
(v) The reasonable fees and disbursements of Agent Counsel incurred
from time to time in connection with the transactions contemplated hereby;
(vi) The qualification of the Notes under securities laws in
accordance with the provisions of Section 3(d), including filing fees and
the reasonable fees and disbursements of Agent Counsel in connection
therewith and in connection with the preparation of any Blue Sky Survey
and any Legal Investment Survey;
(vii) The printing and delivery to each Agent in quantities as
hereinabove stated of copies of the Registration Statement and any
amendments thereto, and of the Final Prospectus and any amendments or
supplements thereto, and the delivery by such Agent of the Final
Prospectus and any amendments or supplements thereto in connection with
solicitations or confirmations of sales of the Notes;
(viii) The preparation, printing and delivery to each Agent of
copies of the Indenture;
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(ix) Any fees charged by rating agencies for the rating of the
Notes;
(x) The fees and expenses incurred in connection with the listing of
the Notes on any securities exchange;
(xi) The fees and expenses, if any, incurred with respect to any
filing with the NASD; and
(xii) Any advertising and other out-of-pocket expenses of any Agent
incurred with the approval of the Company.
5. Conditions of Obligations.
The obligations of each Agent to solicit offers to purchase the
Notes as agent of the Company, the obligation of any purchaser of Notes sold
through such Agent as agent and the obligation of the Lead Agent to purchase
Notes as principal pursuant to any Terms Agreement will be subject at all times
to the accuracy of the representations and warranties on the part of the Company
herein and 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 herein contained
on its part to be performed and observed and to the following additional
conditions precedent:
(a) No Stop Order or Material Adverse Change. (i) No Stop Order
suspending the effectiveness of the Registration Statement or any part thereof
shall have been issued under the 1933 Act or other applicable law, and no
proceeding under the 1933 Act or the 1934 Act therefor shall have been initiated
or threatened by the Commission, or, with respect to the filing of any Form 8-A
under the 1934 Act, by any U.S. national securities exchange; and all requests
for additional information on the part of the Commission shall have been
complied with or such requests shall have been otherwise satisfied; (ii) the
rating assigned by any U.S. nationally recognized statistical rating
organization to any debt securities or preferred stock of the Company as of the
date of this Agreement shall not have been lowered between the trade date and
the settlement date of any offering of Notes and no such agency shall have
publicly announced since the execution of this Agreement that it has under
surveillance or review, with possible negative implications, its rating of any
of the debt securities or preferred stock of the Company; and (iii) since the
respective dates as of which information is given in the Registration Statement
and the Final Prospectus, except as otherwise stated therein or contemplated
thereby, there shall not have been any material adverse change in, or any
adverse development which materially affects, the financial condition, results
of operations, business or properties of the Company and its subsidiaries
considered as one enterprise, the effect of which is in your reasonable judgment
so material and adverse as to make it impracticable or inadvisable to proceed
with the public offering or the delivery of the Notes on the terms and in the
manner contemplated in the Final Prospectus.
(b) Legal Opinions. On the date hereof, the Lead Agent, on behalf of
the Agents, shall have received the following legal opinions, dated as of the
date hereof and in form and substance satisfactory to the Lead Agent and Agent
Counsel:
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1. Opinion of In-house Company Counsel. The opinion of ▇▇▇▇ ▇.
▇▇▇▇▇▇, Esq., Executive Vice President and General Counsel of the Company, to
the effect that: To the best of such counsel's knowledge, there are no legal or
governmental proceedings pending or threatened that are required to be disclosed
in the Registration Statement, other than those disclosed therein, and there is
no pending legal or governmental proceeding to which the Company or any
subsidiary of the Company is a party or of which any of their property is the
subject that is not described in the Registration Statement, including ordinary
routine litigation incidental to the business, which, if adversely decided, will
have a material adverse effect upon the financial condition, results of
operations, business or properties of the Company and its subsidiaries
considered as one enterprise.
2. Opinion of Company Counsel. The opinion of Cadwalader, ▇▇▇▇▇▇▇▇▇▇
& ▇▇▇▇ LLP, counsel to the Company, to the effect specified in Schedule I
hereto.
3. Opinion of Agent Counsel. The opinion of Agent Counsel, to the
effect specified in Schedule II hereto.
(c) Officers' Certificate. At the date hereof and at each Settlement
Date with respect to any Terms Agreement there shall not have been, since the
respective dates as of which information is given in the Registration Statement
and the Final Prospectus or since the date of such Terms Agreement, any material
adverse change in the financial condition, results of operations, business or
properties of the Company and its subsidiaries considered as one enterprise,
whether or not arising in the ordinary course of business; and the Lead Agent,
on behalf of the Agents, shall have received a certificate of the Chief
Financial Officer, the Controller or Chairman of the Board of the Company, dated
the date hereof, to the effect (i) that there has been no such material adverse
change, (ii) that the other representations and warranties of the Company
contained in Section 1 are true and correct with the same force and effect as
though expressly made at and as of the date of such certificate, (iii) that the
Company has complied in all material respects with all agreements and satisfied
all conditions on its part to be performed or satisfied at or prior to the date
of such certificate, and (iv) that no Stop Order suspending the effectiveness of
the Registration Statement has been issued and no proceedings for that purpose
have been initiated or threatened by the Commission.
(d) Comfort Letter. On the date hereof, the Lead Agent, on behalf of
the Agents, shall have received a letter from Deloitte & Touche LLP, dated as of
the date hereof, to the effect specified in Schedule III hereto.
(e) Other Documents. On the date hereof and on each Settlement Date
with respect to any applicable Terms Agreement, Agent Counsel shall have been
furnished with such documents and opinions as such counsel may reasonably
require for the purpose of enabling such counsel to pass upon the issuance and
sale of Notes as herein contemplated and related proceedings, or in order to
evidence the accuracy and completeness of any of the representations and
warranties, or the fulfillment of any of the conditions, herein contained; and
all proceedings taken by the Company in connection with the issuance and sale of
Notes as herein contemplated shall be satisfactory in form and substance to the
Lead Agent and to Agent Counsel.
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If any condition specified in this Section 5 shall not have been
fulfilled when and as required to be fulfilled, this Agreement and any Terms
Agreement may be terminated as provided in Section 10 hereof and any such
termination shall be without liability of any party to any other party, except
that the covenants set forth in Section 3(e) hereof, the provisions of Section 4
hereof, the indemnity and contribution agreements set forth in Sections 7 and 8
hereof, and the provisions of Sections 9, 11 and 13 hereof shall remain in
effect.
6. Subsequent Documentation Requirements of the Company.
The Company covenants and agrees that:
(a) Subsequent Delivery of Certificates. Each time that the
Registration Statement or the Final Prospectus shall be amended or supplemented
(other than by filing with the Commission of an exhibit to the Registration
Statement or Final Prospectus that does not relate to the Notes, a prospectus
supplement not relating to the Notes or an amendment or a Pricing Supplement
that provides solely for a change in the interest rates, redemption provisions,
amortization schedule or maturities of the Notes or a change in the principal
amount of the Notes remaining to be sold or other information contemplated by
the Final Prospectus to be filed in a Pricing Supplement related to the Notes or
similar changes, or any other change that the Lead Agent reasonably deems
immaterial), or (unless waived by the Lead Agent ) there is filed with the
Commission any document incorporated by reference into the Final Prospectus
(other than any Current Report on Form 8-K relating exclusively to the issuance
of Notes under the Registration Statement, unless the Lead Agent shall otherwise
specify) or (unless waived by the Lead Agent with respect to a particular Terms
Agreement) the Company sells Notes to the Lead Agent pursuant to a Terms
Agreement, the Company shall furnish or cause to be furnished to the Lead Agent,
on behalf of the Agents, forthwith a certificate in form satisfactory to the
Lead Agent to the effect that the statements contained in the certificate
referred to in Section 5(c) hereof which were last furnished to the Lead Agent,
on behalf of the Agents, are true and correct at the time of such amendment,
supplement, filing or sale, 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 Final 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(c), modified as necessary to relate to the
Registration Statement and the Final Prospectus as amended and supplemented to
the time of delivery of such certificate.
(b) Subsequent Delivery of Legal Opinions. Each time that the
Registration Statement or the Final Prospectus shall be amended or supplemented
(other than by filing with the Commission of an exhibit to the Registration
Statement or Final Prospectus that does not relate to the Notes, a prospectus
supplement not relating to the Notes or an amendment or a Pricing Supplement
that provides solely for a change in the interest rates, redemption provisions,
amortization schedule or maturities of the Notes or a change in the principal
amount of the Notes remaining to be sold or solely for the inclusion of
additional financial information or other information contemplated by the Final
Prospectus to be filed in a Pricing Supplement related to the Notes or similar
changes, or any other change that the Lead Agent reasonably deems immaterial),
or (unless waived by the Lead Agent) there is filed with the Commission any
document incorporated by reference into the Final Prospectus (other than any
Current Report on Form 8-K or Quarterly Report on Form 10-Q, unless the Lead
Agent shall otherwise specify), or
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(unless waived by the Lead Agent with respect to a particular Terms Agreement)
the Company sells Notes to the Lead Agent pursuant to a Terms Agreement, the
Company shall furnish or cause to be furnished forthwith to the Lead Agent, on
behalf of the Agents, and to Agent Counsel a letter from counsel last furnishing
the opinion referred to in Section 5(b)(2) hereof to the effect that the Lead
Agent, on behalf of the Agents, may rely on such last opinion to the same extent
as though it was dated the date of such letter authorizing reliance (except that
statements in such last opinion shall be deemed to relate to the Registration
Statement and the Final Prospectus as amended and supplemented to the time of
delivery of such letter authorizing reliance) or, in lieu of such letter,
Cadwalader, ▇▇▇▇▇▇▇▇▇▇ & ▇▇▇▇ LLP, counsel to the Company, or other counsel
satisfactory to the Lead Agent, shall furnish an opinion, dated the date of
delivery of such opinion and in form satisfactory to the Lead Agent, of the same
tenor as the opinion referred to in Section 5(b)(2) hereof, but modified, as
necessary, to relate to the Registration Statement and the Final Prospectus as
amended and supplemented to the time of delivery of such opinion.
(c) Subsequent Delivery of Comfort Letters. Each time that the
Registration Statement or the Final Prospectus shall be amended or supplemented
to include additional financial information or (unless waived by the Lead Agent)
there is filed with the Commission any document incorporated by reference into
the Final Prospectus (other than any Current Report on Form 8-K filed for the
purpose of filing quarterly unaudited consolidated statements of income) which
contains additional financial information or (unless waived by the Lead Agent
with respect to a particular Terms Agreement) the Company sells Notes to the
Lead Agent pursuant to a Terms Agreement, the Company shall cause Deloitte &
Touche LLP, the Company's independent public accountants, or other independent
public accountants retained by the Company, forthwith to furnish to the Lead
Agent, on behalf of the Agents, a letter, dated the date of filing of such
amendment, supplement or document with the Commission, or the date of such sale,
as the case may be, in form satisfactory to the Lead Agent, of the same tenor as
Sections 1 and 2 of the letter referred to in Schedule III hereof but modified
to relate to the Registration Statement and Final Prospectus, as amended and
supplemented to the date of such letter, and of the same general tenor as the
remaining sections of the letter referred to in Schedule III 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 Final Prospectus is amended
or supplemented solely to include financial information as of and for a fiscal
quarter, Deloitte & Touche LLP, or such other independent public accountants
retained by the Company, may limit the scope of such letter to the unaudited
financial statements included in such amendment or supplement unless any other
information included therein of an accounting, financial or statistical nature
is of such a nature that, in the reasonable judgment of the Lead Agent, such
letter should cover such other information.
7. Indemnification.
(a) The Company agrees to indemnify and hold harmless each Agent,
their affiliates (if any) and each person, if any, who controls any Agent within
the meaning of Section 15 of the 1933 Act or Section 20(a) of the 1934 Act,
against any and all losses, liabilities, claims, damages and out-of-pocket
expenses whatsoever (including but not limited to attorneys' fees and any and
all expenses whatsoever reasonably incurred in investigating, preparing or
defending against any litigation, commenced or threatened, or any claim
whatsoever, and any and all
-16-
amounts paid in settlement of any claim or litigation), to which an Agent or any
such person may become subject under the 1933 Act, the 1934 Act or otherwise,
insofar as such losses, liabilities, claims, damages or expenses (or actions in
respect thereof) arise out of or are based upon (i) any untrue statement or
alleged untrue statement of a material fact contained in the Registration
Statement (other than that part of the Registration Statement which shall
constitute the Statement of Eligibility and Qualification on Form T-1 of the
Trustee under the Trust Indenture Act, except for statements or omissions in
such Registration Statement made in reliance upon information furnished to the
Trustee by or on behalf of the Company for inclusion therein), or any related
Basic Prospectus, Preliminary Final Prospectus, or Final Prospectus, or in any
supplement thereto or amendment thereof, or arise out of or are based upon the
omission or alleged omission to state therein a material fact required to be
stated therein or necessary to make the statements therein (in the case of the
Basic Prospectus, any Preliminary Final Prospectus or the Final Prospectus, in
light of the circumstances under which they were made) not misleading or (ii)
any breach or alleged breach of any representation, warranty, covenant or
agreement of the Company contained in this Agreement; provided, however, that
the Company will not be liable to any Agent or any person so controlling such
Agent in any such case to the extent, but only to the extent, that any such
loss, liability, claim, damage or expense arises out of or is based upon (x) any
such untrue statement or alleged untrue statement or omission or alleged
omission made therein in reliance upon and in conformity with written
information furnished to the Company by or on behalf of any Agent through the
Lead Agent expressly for use therein, such written information being as set
forth in the penultimate sentence of subsection (b) below or (y) any failure of
such Agent to deliver the Final Prospectus to a purchaser of Notes as required
by applicable law, if such Final Prospectus would have cured the defect giving
rise to such loss, liability, claim, damage or expense. This indemnity agreement
will be in addition to any liability which the Company may otherwise have,
including under this Agreement.
(b) Each Agent severally, and not jointly, agrees to indemnify and
hold harmless the Company, each of its directors, each of its officers who shall
have signed the Registration Statement, and each other person, if any, who
controls the Company within the meaning of Section 15 of the 1933 Act or Section
20(a) of the 1934 Act against any losses, liabilities, claims, damages and
out-of-pocket expenses whatsoever (including but not limited to attorneys' fees
and any and all out-of-pocket expenses whatsoever reasonably incurred in
investigating, preparing or defending against any litigation, commenced or
threatened, or any claim whatsoever and any and all amounts paid in settlement
of any claim or litigation), to which they or any of them may become subject
under the 1933 Act, the 1934 Act or otherwise, insofar as such losses,
liabilities, claims, damages or expenses (or actions in respect thereof) arise
out of or are based upon any untrue statement or alleged untrue statement of a
material fact contained in the Registration Statement, or any related Basic
Prospectus, any Preliminary Final Prospectus or the Final Prospectus, or in any
amendment thereof or supplement thereto, or arise out of or are based upon the
omission or alleged omission to state therein a material fact required to be
stated therein or necessary to make the statements therein (in the case of the
Basic Prospectus, any Preliminary Final Prospectus or the Final Prospectus, in
light of the circumstances under which they were made) not misleading, in each
case to the extent, but only to the extent, that any such loss, liability,
claim, damage or expense arises out of or is based upon any such untrue
statement or alleged untrue statement or omission or alleged omission made
therein in reliance upon and in conformity with written information furnished to
the Company by or on behalf of such Agent through the Lead Agent expressly for
use therein. For all purposes of this Agreement, the
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identification of the name of, and the principal amount of Notes to be purchased
by, each of the Agents, the amounts of the selling concession and reallowance,
and the stabilization language set forth under the heading "Plan of
Distribution" in the Basic Prospectus constitute the only information furnished
in writing by or on behalf of any Agent expressly for inclusion in any Basic
Prospectus or Preliminary Final Prospectus, the Final Prospectus, or the
Registration Statement (as from time to time amended or supplemented), or any
amendment or supplement thereto. This indemnity will be in addition to any
liability which any Agent may otherwise have, including under this Agreement;
provided, however, that in no case shall any Agent be liable or responsible for
any amount in excess of the discounts and commissions received by such Agent.
(c) Promptly after receipt by an indemnified party under subsection
(a) or (b) above of notice of the commencement of any action, such indemnified
party shall, if a claim in respect thereof is to be made against the
indemnifying party under such subsection, notify each party against whom
indemnification is to be sought in writing of the commencement thereof (but the
failure to so notify an indemnifying party shall not relieve it from any
liability which it may have under this Section 7 except to the extent that it
has been prejudiced in any material respect by such failure or from any
liability which it may have otherwise). In case any such action is brought
against any indemnified party, and it notifies an indemnifying party of the
commencement thereof, the indemnifying party will be entitled to participate
therein, and to the extent it may elect by written notice delivered to the
indemnified party promptly after receiving the aforesaid notice from such
indemnified party, to assume the defense thereof with counsel satisfactory to
such indemnified party. Notwithstanding the foregoing, the indemnified party or
parties shall have the right to employ its or their own counsel in any such
case, but the fees and expenses of such counsel shall be at the expense of such
indemnified party or parties unless (i) the employment of such counsel shall
have been authorized in writing by one of the indemnifying parties in connection
with the defense of such action, (ii) the indemnifying parties shall not have
employed counsel to have charge of the defense of such action within a
reasonable time after notice of commencement of the action, or (iii) such
indemnified party or parties shall have reasonably concluded that there may be
defenses available to it or them which are different from or additional to those
available to one or all of the indemnifying parties (in which case the
indemnifying parties shall not have the right to direct the defense of such
action on behalf of the indemnified party or parties, it being understood,
however, that the indemnifying party shall not, in connection with any one such
claim, action or proceeding or separate but substantially similar or related
claims, actions or proceedings in the same jurisdiction arising out of the same
general allegations or circumstances, be liable for the fees and expenses of
more than one separate firm (together with appropriate local counsel) at any
time for the indemnified party or parties, which firm shall be designated in
writing by the indemnified party or parties), in any of which events such fees
and expenses shall be borne by the indemnifying parties. Anything in this
Section 7 to the contrary notwithstanding, an indemnifying party shall not be
liable for any settlement of any claim or action effected without its written
consent; provided, however, that such consent was not unreasonably withheld.
8. Contribution.
In order to provide for contribution in circumstances in which the
indemnification provided for in Section 7 hereof is for any reason held to be
unavailable from the Company or is insufficient to hold harmless a party
indemnified thereunder, the Company and each Agent shall
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contribute to the aggregate losses, claims, damages, liabilities and
out-of-pocket expenses of the nature contemplated by such indemnification
provision (including any investigation, legal and other expenses incurred in
connection with, and any amount paid in settlement of, any action, suit or
proceeding or any claims asserted, but after deducting in the case of losses,
claims, damages, liabilities and expenses suffered by the Company, any
contribution received by the Company from persons, other than the Agents, who
may also be liable for contribution, including persons who control the Company
within the meaning of Section 15 of the 1933 Act or Section 20(a) of the 1934
Act, officers of the Company who signed the Registration Statement and directors
of the Company) to which the Company and one or more of the Agents may be
subject, in such proportions as is appropriate to reflect the relative benefits
received by the Company on the one hand and such Agent or Agents on the other
from the offering of the Notes or, if such allocation is not permitted by
applicable law or indemnification is not available as a result of the
indemnifying party not having received notice as provided in Section 11 hereof,
in such proportion as is appropriate to reflect not only the relative benefits
referred to above but also the relative fault of the Company on the one hand and
such Agent or Agents on the other in connection with the statements or omissions
which resulted in such losses, claims, damages, liabilities or expenses, as well
as any other relevant equitable considerations. The relative benefits received
by the Company on the one hand and such Agent or Agents on the other shall be
deemed to be in the same proportion as the total proceeds from the offering (net
of discounts and commissions but before deducting expenses) received by the
Company bear to the discounts and commissions received by such Agent or Agents,
respectively, in each case as set forth in the table on the cover page of the
Final Prospectus as amended or supplemented with respect to a particular issue
of Notes. The relative fault of the Company on the one hand and of such Agent or
Agents on the other shall be determined by reference to, among other things,
whether the untrue or alleged untrue statement of a material fact or the
omission or alleged omission to state a material fact relates to information
supplied by the Company or such Agent or Agents and the parties' relative
intent, knowledge, access to information and opportunity to correct or prevent
such statement or omission. The Company and each Agent agree that it would not
be just and equitable if contribution pursuant to this Section 8 were determined
by pro rata allocation (even if all Agents were treated as one entity for such
purpose) or by any other method of allocation which does not take account of the
equitable considerations referred to above. Notwithstanding the provisions of
this Section 8, (i) no Agent shall be required to contribute any amount in
excess of the amount by which the total price at which the applicable Notes
purchased by it and distributed to the public were offered to the public exceeds
the amount of any damages which such Agent has otherwise been required to pay by
reason of such untrue or alleged untrue statement or omission or alleged
omission, and (ii) no person guilty of fraudulent misrepresentation (within the
meaning of Section 11(f) of the ▇▇▇▇ ▇▇▇) shall be entitled to contribution from
any person who was not guilty of such fraudulent misrepresentation. For purposes
of this Section 8, each person, if any, who controls an Agent within the meaning
of Section 15 of the 1933 Act or Section 20(a) of the 1934 Act shall have the
same rights to contribution as such Agent, and each person, if any, who controls
the Company within the meaning of Section 15 of the 1933 Act or Section 20(a) of
the 1934 Act, each officer of the Company who shall have signed the Registration
Statement and each director of the Company shall have the same rights to
contribution as the Company, subject in each case to clauses (i) and (ii) of the
preceding sentence of this Section 8. Any party entitled to contribution will,
promptly after receipt of notice of commencement of any action, suit or
proceeding against such party in
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respect of which a claim for contribution may be made against another party or
parties under this Section 8, notify such party or parties from whom
contribution may be sought, but the omission to so notify such party or parties
shall not relieve the party or parties from whom contribution may be sought from
any obligation it or they may have under this Section 8 or otherwise. No party
shall be liable for contribution with respect to any action or claim settled
without its consent; provided, however, that such consent was not unreasonably
withheld.
9. Representations and Agreements to Survive Delivery.
All representations, warranties, covenants and agreements contained
in this Agreement or any Terms Agreement, or contained in certificates of
officers of the Company submitted pursuant hereto, shall remain operative and in
full force and effect, regardless of any investigations made by or on behalf of
each Agent or any controlling person of such Agent, or by or on behalf of the
Company, any of its officers and directors or any controlling person thereof,
and shall survive each delivery of and payment for any of the Notes.
10. Termination.
(a) Termination of this Agreement. This Agreement may be terminated
for any reason, at any time either by the Company by giving notice of such
termination to the Lead Agent or the Agents, or by any Agent as to such Agent by
the giving of notice of such termination to the Company, in each case in
accordance with Section 10(d) hereof.
(b) Termination of a Terms Agreement. The Lead Agent may, and upon
the request of an Agent with respect to any Notes being purchased by such Agent
shall, terminate any Terms Agreement, immediately by giving notice to the
Company, at any time prior to the Settlement Date relating thereto, if: (i) any
domestic or international event or act or occurrence has materially disrupted,
or in the opinion of the Lead Agent or such requesting Agent will in the
immediate future materially disrupt, the securities markets in the United
States; (ii) a general suspension of, or a general limitation on prices for,
trading in securities on the New York Stock Exchange, Inc., the American Stock
Exchange LLC or in the over-the-counter market shall have occurred; (iii) a
banking moratorium shall have been declared either by Federal or New York State
authorities; (iv) there shall have occurred any outbreak or material escalation
of hostilities or other calamity or crisis the effect of which on the financial
markets of the United States or on the United States is such as to make it, in
the judgment of the Lead Agent or such requesting Agent, impracticable to market
the Notes or to enforce contracts for the sale of the Notes; (v) any restriction
materially adversely affecting the distribution of the Notes which was not in
effect on the date of the applicable Terms Agreement shall have become
effective; or (vi) there shall have been such change in the market for the
securities of the Company or securities in general or in national or
international political, financial or economic conditions or currency exchanges
rates or exchange controls as in the judgment of the Lead Agent or such
requesting Agent makes it inadvisable to proceed with the offering, sale and
delivery of the Notes on the terms contemplated by the Final Prospectus.
(c) General. In the event of any such termination, no party will
have liability to the other parties hereto or to the Terms Agreement so
terminated, except that (i) the Agents shall be entitled to any commissions
earned in accordance with Section 2(a) hereof (provided, that no
-20-
commissions shall be payable in respect of any sale of Notes which are the
subject of a Terms Agreement that is terminated pursuant to Section 10(b) of
this Agreement); (ii) in the event of a termination of any Terms Agreement
pursuant to Section 10(b) hereof, the Agents who have purchased Notes under such
Terms Agreement shall be entitled to reimbursement by the Company only for
actual accountable out-of-pocket expenses incurred by such Agents; (iii) if at
the time of termination (A) any Agent shall own any Notes purchased pursuant to
a Terms Agreement with the intention of reselling them or (B) an offer to
purchase any of the Notes has been accepted by the Company but the time of
delivery to the purchaser of the Notes 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 (iv) the covenant set
forth in Section 3(e) hereof, the provisions of Section 4 hereof, the indemnity
and contribution agreements set forth in Sections 7 and 8 hereof, and the
provisions of Sections 9, 11 and 13 hereof shall remain in effect (except that
the Company shall no longer be required to comply with the provisions of Section
3(e) after it has made generally available to its security holders an earnings
statement, which need not be audited, covering a twelve-month period beginning
after the date of the last sale of Notes hereunder (including sales to an Agent
under a Terms Agreement) which shall satisfy the provisions of Section 11(a) of
the 1933 Act and the Regulations).
(d) Any notice of termination pursuant to this Section 10 may be by
telephone, telex, or telecopy, and shall be confirmed in writing by letter.
11. Notices.
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 each Agent will be directed to
the Lead Agent at the following address: Bear, ▇▇▇▇▇▇▇ & Co. Inc., ▇▇▇ ▇▇▇▇▇▇▇
▇▇▇▇▇▇, ▇▇▇ ▇▇▇▇, ▇▇▇ ▇▇▇▇ ▇▇▇▇▇, Attention: MTN Desk, Corporate Bond Trading,
Fixed Income Department; or, if sent to the Company shall be directed to it at
The Bear ▇▇▇▇▇▇▇ Companies Inc., ▇▇▇ ▇▇▇▇▇▇▇ ▇▇▇▇▇▇, ▇▇▇ ▇▇▇▇, ▇▇▇ ▇▇▇▇ ▇▇▇▇▇,
Attention: Chief Financial Officer.
12. Parties.
This Agreement and any Terms Agreement shall inure to the benefit of
and be binding upon each Agent and the Company and their respective successors.
Nothing expressed or mentioned in this Agreement or any Terms 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 Sections 7 and 8 and their
heirs and legal representatives, any legal or equitable right, remedy or claim
under or in respect of this Agreement or any Terms Agreement or any provision
herein or therein contained. This Agreement and any Terms Agreement and all
conditions and provisions hereof and thereof are intended to be for the sole and
exclusive benefit of the parties hereto and thereto and their respective
successors and said controlling persons and officers and directors and their
heirs and legal representatives, and for the benefit of no other person, firm or
corporation. No purchaser of Notes shall be deemed to be a successor by reason
merely of such purchase.
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13. Governing Law.
This Agreement and the rights and obligations of the parties created
hereby shall be governed by and construed in accordance with the laws of the
State of New York applicable to agreements made and to be performed in such
State. Any suit, action or proceeding brought by the Company against any Agent
in connection with or arising under this Agreement shall be brought solely in
the state or federal court or appropriate jurisdiction located in the Borough of
Manhattan, The City of New York.
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If the foregoing is in accordance with your understanding of our
agreement, please sign and return to the Company a counterpart hereof, whereupon
this instrument along with all counterparts will become a binding agreement
among the Company and each of you in accordance with its terms.
Very truly yours,
THE BEAR ▇▇▇▇▇▇▇ COMPANIES
INC.
By: /s/ ▇▇▇▇▇▇▇ ▇▇▇▇▇▇▇
-------------------------------------
Title: Treasurer
CONFIRMED AND ACCEPTED, as
of the date first above written:
BEAR, ▇▇▇▇▇▇▇ & CO. INC.
By: /s/ ▇. ▇▇▇▇▇▇ Millet
------------------------------------
Title: Senior Managing Director of
Debt Capital Markets
▇.▇. ▇▇▇▇▇▇▇ & SONS, INC.
By: /s/ ▇▇▇▇▇ ▇. ▇▇▇▇▇▇
------------------------------------
Title: Vice President
BB&T CAPITAL MARKETS
By: /s/ ▇▇▇▇ ▇. ▇▇▇▇▇▇
-------------------------------------
Title: Senior Vice President Capital
Markets
CITIGROUP GLOBAL MARKETS INC.
By: /s/ ▇▇▇▇ ▇▇▇▇▇▇▇▇
-------------------------------------
Title: Director
▇▇▇▇▇▇ ▇. ▇▇▇▇▇ & CO., L.P.
By: /s/ ▇▇▇▇ ▇▇▇▇▇▇
-------------------------------------
Title:General Principal
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FIDELITY CAPITAL MARKETS,
A DIVISION OF NATIONAL FINANCIAL
SERVICES LLC
By: /s/ ▇▇▇▇ ▇▇▇
-------------------------------------
Title: Senior Vice President
MELLON FINANCIAL MARKETS, LLC
By: /s/ ▇▇▇▇▇ ▇▇▇▇▇▇▇
-------------------------------------
Title: Vice President, Corporate
Trader
PRUDENTIAL FINANCIAL INCORPORATED
By: /s/ ▇▇▇▇▇▇▇▇▇ ▇. ▇▇▇▇▇▇▇
-------------------------------------
Title: Managing Director
UBS FINANCIAL SERVICES INC.
By: /s/ ▇▇▇▇▇ ▇▇▇▇▇▇▇
-------------------------------------
Title: Senior Vice President
WACHOVIA SECURITIES, INC.
By: /s/ ▇▇▇▇ ▇. ▇▇▇▇
-------------------------------------
Title: Vice President
▇▇▇▇▇ FARGO INVESTMENT SERVICES, LLC
By:/s/ ▇▇▇▇▇▇▇ ▇. ▇▇▇▇▇▇▇▇▇
-------------------------------------
Title: Senior Vice President
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SCHEDULE A
▇.▇. ▇▇▇▇▇▇▇ & Sons, Inc.
▇▇▇ ▇▇▇▇▇ ▇▇▇▇▇▇▇▇▇
▇▇. ▇▇▇▇▇, ▇▇ ▇▇▇▇▇
Attention: ▇▇▇▇ ▇▇▇ ▇▇▇▇▇▇▇
BB&T Capital Markets
▇ ▇▇▇▇▇ ▇▇▇ ▇▇▇▇▇▇
▇▇▇▇▇▇▇▇ ▇▇ ▇▇▇▇▇
Attention: ▇▇▇▇▇ ▇▇▇▇▇▇▇
Citigroup Global Markets Inc.
▇▇▇ ▇▇▇▇▇▇▇▇▇ ▇▇▇▇▇▇
▇▇▇ ▇▇▇▇, ▇▇ ▇▇▇▇▇
Attention: Medium-Term Note Department
▇▇▇▇▇▇ ▇. ▇▇▇▇▇ & Co., L.P.
▇▇▇▇▇ ▇▇▇▇▇▇▇▇▇▇ ▇▇▇▇
▇▇. ▇▇▇▇▇, ▇▇ ▇▇▇▇▇
Attention: ▇▇▇▇▇ ▇▇▇▇▇▇▇
Fidelity Capital Markets
▇▇▇ ▇▇▇▇▇▇▇ ▇▇▇▇., Mail Zone: Z2H
▇▇▇▇▇▇, ▇▇ ▇▇▇▇▇
Attention: ▇▇▇▇▇ ▇▇▇▇▇
Mellon Financial Markets, LLC
▇▇▇▇▇ ▇▇▇▇
▇▇▇ ▇▇▇▇▇▇ ▇▇▇▇▇▇
▇▇▇▇▇▇▇▇▇▇, ▇▇ ▇▇▇▇▇-▇▇▇▇
Attention: ▇▇▇▇▇ ▇▇▇▇▇▇▇
Prudential Financial Incorporated
▇ ▇▇▇ ▇▇▇▇ ▇▇▇▇▇
▇▇▇ ▇▇▇▇, ▇▇ ▇▇▇▇▇
Attention: ▇▇▇▇▇ ▇▇▇▇▇
UBS Financial Services Inc.
▇▇▇ ▇▇▇▇▇▇ ▇▇▇▇
▇▇▇▇▇▇▇▇▇, ▇▇ ▇▇▇▇▇
Attention: ▇▇▇ ▇▇▇▇▇▇▇
Wachovia Securities, Inc.
▇▇▇ ▇▇▇▇ ▇▇▇▇ ▇▇
▇▇▇▇ ▇▇▇▇▇ ▇▇▇ ▇▇▇▇▇
▇▇▇▇▇▇▇▇, ▇▇ ▇▇▇▇▇
Attention: ▇▇▇▇▇▇ ▇▇▇▇▇
▇▇▇▇▇ Fargo Investment Services, LLC
Corporate Bond Trader
▇▇▇ ▇▇▇ ▇▇▇, ▇▇▇▇▇ ▇▇▇▇
▇▇▇▇▇▇▇, ▇▇ ▇▇▇▇▇
Attention: ▇▇▇▇▇ ▇▇▇▇▇▇▇
EXHIBIT A
ADMINISTRATIVE PROCEDURES
The Bear ▇▇▇▇▇▇▇ Companies Inc. (the "Company") is offering its
Medium Term Notes, Series B, also known as IncomeNotes(SM) (the "Notes"), with
maturities of nine months or more from the date of issue, on a continuing basis.
The Notes will be offered by Bear, ▇▇▇▇▇▇▇ & Co. Inc. (the "Lead Agent"), ▇.▇.
▇▇▇▇▇▇▇ & Sons, Inc., BB&T Capital Markets, Citigroup Global Markets Inc.,
▇▇▇▇▇▇ ▇. ▇▇▇▇▇ & Co., L.P., Fidelity Capital Markets, a division of National
Financial Services LLC, Mellon Financial Markets, LLC, Prudential Financial
Incorporated, UBS Financial Services Inc., Wachovia Securities, Inc. and ▇▇▇▇▇
Fargo Investment Services, LLC (collectively with the Lead Agent, the "Agents")
pursuant to a Distribution Agreement among the Company and the Agents, dated as
of the date hereof (the "Distribution Agreement") and, if applicable, one or
more terms agreements between the Company and the Lead Agent, substantially in
the form attached to the Distribution Agreement as Exhibit C (each a "Terms
Agreement"). The Notes are being resold by the Lead Agent (and by any Agent that
purchases the Notes from the Lead Agent) (i) directly to customers of the Agents
or (ii) to selected broker-dealers (the "Selling Group") for distribution to
their customers pursuant to a Master Selected Dealer Agreement (a "Dealer
Agreement"), attached to the Distribution Agreement as Exhibit D. The Agents
have agreed to use their reasonable best efforts to solicit offers to purchase
Notes. The Notes will be unsecured senior debt and have been registered with the
Securities and Exchange Commission (the "Commission"). The Notes will be issued
pursuant to an indenture dated as of May 31, 1991, as amended, between the
Company and JPMorgan Chase Bank (formerly, The Chase Manhattan Bank).
Unless otherwise set forth in the applicable Pricing Supplement,
each tranche of Notes will be issued in book-entry form and represented by one
or more fully registered global notes without coupons (each, a "Book-Entry
Note") held by the Trustee, as agent for the Depository Trust Corporation
("DTC") and recorded in the book-entry system maintained by DTC. Each Book-Entry
Note will have the annual interest rate, maturity and other terms set forth in
the relevant Pricing Supplement. Owners of beneficial interests in a Book-Entry
Note will be entitled to physical delivery of Notes issued in certificated form
equal in principal amount to their respective beneficial interests only upon
certain limited circumstances described in the Indenture. The Book-Entry Notes
will be issued in accordance with DTC procedures, as in effect from time to
time. In the event of any conflict between such DTC procedures and the
administrative procedures explained below, the DTC procedures shall govern.
Administrative responsibilities will be handled for the Company by
its Treasury Department. The Company will advise the Agents and the Trustee in
writing of those persons handling administrative responsibilities with whom the
Agents and the Trustee are to communicate regarding offers to purchase Notes and
the details of their delivery.
Notes will be issued in accordance with the administrative
procedures set forth herein. To the extent the procedures set forth below
conflict with or omit certain of the provisions of the Notes, the Indenture, the
Company's Officers' Certificate setting forth the terms of the Notes, dated
April 23, 2003, the Distribution Agreement or the Final Prospectus, the
A-1
relevant provisions of the Notes, the Indenture, the Company's Officers'
Certificate, the Distribution Agreement and the Final Prospectus shall control.
Capitalized terms used herein that are not otherwise defined shall have the
meanings ascribed thereto in the Distribution Agreement, the Final Prospectus in
the form most recently filed with the Commission pursuant to Rule 424 of the
Securities Act, or the Indenture.
Administrative Procedures For Notes
In connection with the qualification of Notes 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 obligations under a Letter of Representations from the Company and the
Trustee to DTC, dated June 19, 2003, and a Medium-Term Note Certificate
Agreement between the Trustee and DTC (the "Certificate Agreement"), dated
December 2, 1988, and its obligations as a participant in DTC, including DTC's
Same-Day Funds Settlement System ("SDFS"). Subject to the provisions above, the
procedures set forth below may be modified in compliance with DTC's then
applicable procedures, upon agreement by the Company, the Trustee and the Lead
Agent.
Price to Public: Each Note will be offered to the public at 100% of the
principal amount thereof, plus accrued interest, if any, or
such other amount indicated in the applicable Pricing
Supplement.
Maturities: Each Note will mature on a date (the "Maturity Date") not less
than nine months after the date of delivery by the Company of
such Note. Notes will mature on each date selected by the
initial purchaser and agreed to by the Company, as set forth
in the applicable Pricing Supplement.
Issuance: All Notes having the same terms will be represented initially
by a single Book-Entry Note. Each Book-Entry Note will be
dated and issued as of the date of its authentication by the
Trustee. Each Book-Entry Note will bear an original issue date
(the "Original Issue Date"). The Original Issue Date shall
remain the same for all Notes subsequently issued upon
registration of transfer, exchange or substitution of an
original Note regardless of their dates of authentication.
Identification
Numbers: The Company will arrange, on or prior to commencement of a
program for the offering of the Notes, with the CUSIP Service
Bureau (the "CUSIP Service Bureau") of Standard & Poor's
Corporation ("Standard & Poor's") for the reservation of a
series of CUSIP numbers (including tranche numbers),
consisting of approximately 900 CUSIP numbers and for future
assignment to the Book-Entry Notes. The Company has or will
obtain from the CUSIP Service Bureau a written list of such
series of reserved CUSIP numbers and will deliver to the Lead
Agent, the Trustee and DTC such written list of 900 CUSIP
numbers of such series. The Company will assign CUSIP numbers
to Notes as described below under "Procedure for Rate Setting
and Posting". The Company will notify the CUSIP Service Bureau
periodically of the CUSIP numbers that it has
A-2
assigned to the Notes. When necessary, the Company will
reserve additional CUSIP numbers for assignment to the
Book-Entry Notes. Upon obtaining such additional CUSIP numbers
the Company shall deliver such additional CUSIP numbers to the
Lead Agent, the Trustee and DTC.
Registration: Unless otherwise specified by DTC, Book-Entry Notes will be
issued only in fully registered form without coupons. Each
Book-Entry Note will be registered in the name of Cede & Co.,
as nominee for DTC, on the security register maintained by the
Security Registrar under the Indenture. The beneficial owner
of a Note issued in book-entry form (i.e., an owner of a
beneficial 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.
Transfers: Transfers of a Book-Entry Note will be accomplished by book
entries made by DTC and, in turn, by Participants (and in
certain cases, one or more indirect participants in DTC)
acting on behalf of beneficial transferors and transferees of
such 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 Trustee, 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 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
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numbers of the exchanged Book-Entry Notes will, in accordance
with CUSIP Service Bureau procedures, be cancelled and not
immediately reassigned. Notwithstanding the foregoing, if the
Book-Entry Notes to be exchanged exceed $500,000,000 in
aggregate principal amount, one replacement Book-Entry Note
will be authenticated and issued to represent $500,000,000 of
principal amount of the exchanged Book-Entry Notes and an
additional Book-Entry Note or Notes will be authenticated and
issued to represent any remaining principal amount of such
Book-Entry Notes (See "Denominations" below).
Denominations: Unless otherwise specified in an applicable Pricing
Supplement, the Notes will be issued in denominations of
$1,000 or in multiples of $1,000. Book-Entry Notes will be
denominated in principal or face amounts not in excess of
$500,000,000. If one or more Notes having an aggregate
principal or face amount in excess of $500,000,000 would, but
for the preceding sentence, be represented by a single
Book-Entry Note, then one Book-Entry Note will be issued to
represent each $500,000,000 principal or face amount of such
Note or Notes and an additional Book-Entry Note will be issued
to represent any remaining principal amount of such Note or
Notes. In such case, each of the Book-Entry Notes representing
such Note or Notes shall be assigned the same CUSIP number.
Issue Price: Unless otherwise specified in an applicable Pricing
Supplement, each Note will be issued at the percentage of
principal amount specified in the Final Prospectus relating to
such Note.
Interest: Each Note will bear interest at either a fixed rate (each a
"Fixed Rate Note") or a floating rate (each a "Floating Rate
Note"), which may be zero during all or any part of the term
in the case of certain Notes issued at a price representing a
substantial discount from the principal amount payable on the
Maturity Date, Redemption Date, Optional Repayment Date or
repayment date on exercise of a Survivor's Option, as the case
may be. Interest on each Note will accrue from the Original
Issue Date of such Note for the first interest period, and
from the previous Interest Payment Date on which interest has
been paid for all subsequent interest periods. Except as set
forth hereafter, each payment of interest on a Note will
include interest accrued through the calendar day before the
current Interest Payment Date (or the Maturity Date,
Redemption Date, Optional Repayment Date or repayment date on
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exercise of a Survivor's Option in the case of the last
Interest Accrual Period). If an Interest Payment Date (or the
Maturity Date, Redemption Date, Optional Repayment Date or
repayment date on exercise of a Survivor's Option, as the case
may be) for any Fixed Rate Note falls on a day that is not a
Business Day, any payment of principal, premium, if any, or
interest will be paid on the next Business Day. No interest
will accrue on such payment for a period from and after the
originally scheduled Interest Payment Date (or the Maturity
Date, Redemption Date, Optional Repayment Date or repayment
date on exercise of a Survivor's Option, as the case may be)
to the date that payment is made. If an Interest Payment Date
(or the Maturity Date, Redemption Date, Optional Repayment
Date or repayment date on exercise of a Survivor's Option, as
the case may be) for any Floating Rate Note falls on a day
that is not a Business Day, any payment of principal, premium,
if any, or interest will be made on the next Business Day.
However, in the case of a LIBOR Note, if such day falls in the
next calendar month, such Interest Payment Date will be the
preceding day that is a Business Day with respect to such
LIBOR Note. No interest will accrue on such payment for a
period from and after the originally scheduled Interest
Payment Date (or the Maturity Date, Redemption Date, Optional
Repayment Date or repayment date on exercise of a Survivor's
Option, as the case may be) to the date that payment is made.
Each pending deposit message described under Settlement
Procedure "C" below will be routed to Standard & Poor's, which
will use the message to include certain information regarding
the related Notes in the appropriate daily bond report
published by Standard & Poor's.
Each Note will bear interest from and including its Original
Issue Date at the rate per annum set forth thereon and in the
applicable Pricing Supplement until the principal amount
thereof is paid, or made available for payment, in full.
Unless otherwise specified in the applicable Pricing
Supplement, interest on each Note (other than a zero-coupon
note) will be payable either monthly, quarterly, semi-annually
or annually on each Interest Payment Date (or on the Maturity
Date, Redemption Date, Optional Repayment Date or repayment
date on exercise of a Survivor's Option, as the case may be).
Interest will be payable to the person in whose name a Note is
registered at the close of business on the Regular Record Date
next preceding each Interest Payment Date; provided, however,
that interest payable on the Maturity Date, Redemption Date,
Optional Repayment Date or repayment date on exercise of a
Survivor's Option, as the case may be, will be payable to the
person to whom principal shall be payable.
The interest rates the Company will agree to pay on
newly-issued Notes are subject to change without notice by the
Company from time to time, but no such change will affect any
Notes already issued or as to which an offer to purchase has
been accepted by the Company. The Interest Payment Dates for a
Note will be specified in the applicable Note and Pricing
Supplement. The Regular Record Date with respect to any
Interest Payment Date will be the 15th calendar day prior to
such Interest Payment Date, whether or not such date shall be
a Business Day, except that the Regular Record Date for the
final Interest Payment Date will be the final Interest Payment
Date. Each payment of interest on a Note shall include accrued
interest from and including the Original Issue Date or from
and including the last day in respect of which interest has
been paid (or duly
A-5
provided for), as the case may be, to, but excluding, the
Interest Payment Date, Maturity Date, Redemption Date,
Optional Repayment Date or repayment date on exercise of a
Survivor's Option, as the case may be.
Calculation of
Interest: Unless otherwise specified in the applicable Pricing
Supplement, interest on the Notes (including interest for
partial periods) will be calculated on the basis set forth in
the Final Prospectus.
Business Day: "Business Day" means, unless otherwise specified in the
applicable Pricing Supplement, any day that (i) is not a
Saturday or Sunday, (ii) in New York City, is not a day on
which banking institutions generally are authorized or
required by law or executive order to close, and (iii) if the
interest rate formula basis is LIBOR, any day on which
dealings or deposits in US dollars are transacted in the
London interbank market.
Payments of
Principal
and Interest: Promptly after each Regular Record Date, the Trustee will
deliver to, in a form acceptable to, the Company and DTC,
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 an Interest Payment Date coinciding with the
Maturity Date, Redemption Date, Optional Repayment Date or
repayment date on exercise of a Survivor's Option, as the case
may be) and the total of such amounts. The Company will
confirm with the Trustee and DTC 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. On such
Interest Payment Date (other than on the Maturity Date,
Redemption Date, Optional Repayment Date or repayment date on
exercise of a Survivor's Option, as the case may be), the
Company will pay to the Trustee, and the Trustee in turn will
pay to DTC, such total amount of interest due, at the times
and in the manner set forth below under "Manner of Payment".
Payments on the
Maturity Date: On or about the first Business Day of each month, the Trustee
will deliver to the Company and DTC a written list of
principal, premium, if any, and interest to be paid on each
Book-Entry Note representing Notes maturing or subject to
redemption (pursuant to a sinking fund or otherwise) or
repayment in the following month. The Trustee, the Company and
DTC will confirm the amounts of such principal, premium, if
any, and interest payments with respect to each Book-Entry
Note on or about the fifth Business Day preceding the Maturity
Date of such Book-Entry Note. On the Maturity Date, Redemption
Date, Optional Repayment Date or repayment date on exercise of
a Survivor's Option, as the case may be, the Company will pay
to the Trustee, and the Trustee in turn will pay to DTC, the
principal amount of such Book-Entry Note, together with
interest and premium, if any, due on such Maturity Date,
Redemption Date, Optional
A-6
Repayment Date or repayment date on exercise of a Survivor's
Option, as the case may be, at the times and in the manner set
forth below under "Manner of Payment".
Manner of
Payment: The total amount of any principal, premium, if any, and
interest due on Book-Entry Notes on any Interest Payment Date,
Maturity Date, Redemption Date, Optional Repayment Date or
repayment date on exercise of a Survivor's Option, as the case
may be, shall be paid by the Company to the Trustee in
immediately available funds 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 Company with the Trustee, by
wire transfer to the Trustee or as otherwise agreed with the
Trustee. The Company will confirm such instructions in writing
to the Trustee. Prior to 10:00 a.m., New York City time, on
the Maturity Date, Redemption Date, Optional Repayment Date or
repayment date on exercise of a Survivor's Option, as the case
may be, or as soon as possible thereafter, the Trustee will
make payment to DTC in accordance with existing arrangements
between DTC and the Trustee, in funds available for immediate
use by DTC, each payment of interest, principal and premium,
if any, due on a Book-Entry Note on such date. On each
Interest Payment Date (other than on the Maturity Date,
Redemption Date, Optional Repayment Date or repayment date on
exercise of a Survivor's Option, as the case may be) the
Trustee will pay DTC such interest payments 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 the
respective Participants with payments in amounts proportionate
to their respective holdings in principal amount of beneficial
interest in such Book-Entry Note as are recorded in the
book-entry system maintained by DTC. Neither the Company nor
the Trustee shall have any direct responsibility or liability
for the payment by DTC of the principal of, or premium, if
any, or interest on, the Notes 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 Note, or as applicable law may otherwise require.
Procedure for
Rate Setting
and Posting: The Company and the Agents will discuss, from time to time,
the aggregate principal amounts, the Maturity Dates, the Issue
Price, the interest rates, and the other terms of the Notes
that may be sold as a result of the solicitation of orders by
the Agents. If the Company decides to set interest rates borne
by any Notes in respect of which the Agents are to solicit
orders (the setting of such interest rates to be referred to
herein as
A-7
"Posting"), or if the Company decides to change interest rates
previously posted by it, it will promptly advise the Agents of
the prices and interest rates to be posted. The Company will
assign a separate CUSIP number for each tranche of Notes to be
posted, and will so advise and notify the Trustee and Lead
Agent of said assignment by telephone and/or by telecopier or
other form of electronic transmission prior to Posting. The
Lead Agent will, in turn, include the assigned CUSIP number on
all Posting notices communicated to the Agents and Selling
Group members.
Offering
of Notes: In the event that there is a Posting, the Lead Agent will
communicate to each of the Agents and Selling Group members
the terms of, along with the interest rates to be borne by,
each tranche of Notes that is the subject of the Posting.
Thereafter, the Lead Agent, along with the other Agents and
the Selling Group, will solicit offers to purchase the Notes
accordingly.
Purchase of Notes
by the Lead
Agent: The Lead Agent will, no later than 4:00 p.m. (New York City
time) on the sixth day subsequent to the day on which such
Posting occurs, or if such sixth day is not a Business Day, on
the preceding Business Day, or on such other Business Day and
time as shall be mutually agreed upon by the Company and the
Agents (any such day, a "Trade Day"), (i) complete, execute
and deliver to the Company a Terms Agreement that sets forth,
among other things, the amount of each tranche that the Lead
Agent is offering to purchase or (ii) inform the Company that
none of the Notes of a particular tranche will be purchased by
the Lead Agent.
Acceptance and
Rejection of
Orders: Unless otherwise agreed by the Company and the Agents, the
Company has the sole right to accept orders to purchase Notes
and may reject any such order in whole or in part. Unless
otherwise instructed by the Company, the Lead Agent will
promptly advise the Company by telephone of all offers to
purchase Notes received by any Agent, other than those
rejected by such Agent in whole or in part in the reasonable
exercise of its discretion. Unless otherwise specified in an
applicable Pricing Supplement, no order for less than $1,000
principal amount of Notes will be accepted. Upon receipt of a
completed and executed Terms Agreement from the Lead Agent,
the Company will (i) promptly execute and return such Terms
Agreement to the Lead Agent or (ii) inform the Lead Agent that
its offer to purchase the Notes of a particular tranche has
been rejected, in whole or in part. The Lead Agent will
thereafter promptly inform the other Agents and participating
Selling Group members of the action taken by the Company.
A-8
Preparation of
Pricing
Supplement: If any offer to purchase a Note is accepted by or on behalf of
the Company, the Company will provide a Pricing Supplement
(substantially in the form attached to the Distribution
Agreement as Exhibit E) reflecting the terms of such Note and
will have filed such Pricing Supplement with the Commission in
accordance with the applicable paragraph of Rule 424(b) under
the Act and will supply a copy thereof (or additional copies
if requested) to the Lead Agent and one copy to the Trustee,
by no later than 11:00 a.m. New York City time on the Business
Day immediately following the Trade Day. The Lead Agent will
cause a Final Prospectus and Pricing Supplement to be
delivered to each of the other Agents and Selling Group
members that purchased such Notes, and each of these, in turn,
will, pursuant to the terms of the Distribution Agreement and
the Master Selected Dealer Agreement, cause to be delivered a
copy of the applicable Pricing Supplement to each purchaser of
Notes from such Agent or Selling Group member. In each
instance that a Pricing Supplement is prepared, the Agents
will affix the Pricing Supplement to Final Prospectuses prior
to their use. Outdated Pricing Supplements and Final
Prospectuses to which they are attached (other than those
retained for files) will be destroyed.
Delivery of
Confirmation
and Final
Prospectus to
Purchaser by
Lead Agent: Subject to "Suspension of Solicitation; Amendment or
Supplement" below, each Agent will deliver a Final Prospectus
as herein described with respect to each Note sold by it. For
each offer to purchase a Note solicited by an Agent and
accepted by or on behalf of the Company, the Lead Agent will
issue a confirmation to the purchaser, setting forth the terms
of such Note and other applicable details described above and
delivery and payment instructions. In addition, such Agent
will deliver to such purchaser the Final Prospectus in
relation to such Note prior to or together with the earlier of
any written offer of such Note, delivery of the confirmation
of sale or delivery of the Note.
Settlement: The receipt of immediately available funds by the Company in
payment for Notes and the authentication and issuance of the
Book-Entry Note representing such Notes shall constitute
"Settlement" with respect to such Notes. All orders accepted
by the Company will be settled within one to three Business
Days pursuant to the timetable for Settlement set forth below,
unless the Company and the purchaser agree to Settlement on a
later date, which date shall be specified upon acceptance of
such offer; provided, however, that in all cases the Company
will notify the Trustee on the date issuance instructions are
given.
A-9
Settlement
Procedures: In the event of a purchase of Notes by any Agent, as
principal, appropriate Settlement details, if different from
those set forth below, will be set forth in the applicable
Terms Agreement to be entered into between the Lead Agent and
the Company pursuant to the Distribution Agreement. Settlement
Procedures with regard to each Note sold by an Agent, as agent
for the Company, shall be as follows:
A. After the acceptance of an offer by the Company with
respect to a Note, the Lead Agent will communicate the
following details of the terms of such offer (the "Note
Sale Information") to the Company by telephone confirmed
in writing or by facsimile transmission or other
acceptable written means:
1. Principal amount of the purchase;
2. In the case of a Fixed Rate Note, the interest
rate, or in the case of a Floating Rate Note, the
initial interest rate, the Interest Reset Dates,
the Interest Payment Dates, the Interest Rate
Index, Maturity Date, Interest Rate Basis, Spread
or Multiplier, if any and the Minimum Rate or
Maximum Rate, if any;
3. Settlement Date;
4. Maturity Date;
5. Purchase Price;
6. Lead Agent's commission determined pursuant to
Section 2(a) of the Distribution Agreement;
7. Net proceeds to the Company;
8. Trade Date;
9. If a Note is redeemable by the Company, such of
the following as are applicable:
(i) The date on and after which such Note may be
redeemed (the "Redemption Commencement
Date"),
(ii) Initial redemption price (% of par), and
(iii) Amount (% of par) that the initial
redemption price shall decline (but not
below par) on each anniversary of the
Redemption Commencement Date;
A-10
10. Whether the Note has a Survivor's Option;
11. If a zero-coupon note, the total amount of
original issue discount, the yield to maturity and
the initial accrual period of original issue
discount;
12. DTC Participant Number of the institution through
which the customer will hold the beneficial
interest in the Book-Entry Note; and
13. Such other terms as are necessary to complete the
applicable form of Note.
B. The Company will advise the Trustee by telephone
(confirmed in writing and signed by an authorized person
at any time on the same date) or by facsimile
transmission signed by an authorized person of the
information set forth in Settlement Procedure "A" above
and the name of the Lead Agent. The Company will assign
a CUSIP number to the Book-Entry Note representing such
Note. The Company will notify the Trustee and the Lead
Agent of such CUSIP number by telephone as soon as
practicable.
C. The Trustee will communicate to DTC and the Lead Agent
through DTC's Participant Terminal System, a pending
deposit message specifying the following Settlement
information:
1. The information received in accordance with
Settlement Procedure "A".
2. The numbers of the participant accounts maintained
by DTC on behalf of the Trustee and the Lead
Agent.
3. The initial Interest Payment Date for such Note,
number of days by which such date succeeds the
related DTC record date (which term means the
Regular Record Date, or in the case of Floating
Rate Notes which reset weekly, the date five
calendar days immediately preceding the applicable
Interest Payment Date), and if then calculated,
the amount of interest payable on such Initial
Interest Payment Date (which amount shall have
been confirmed by the Trustee).
4. The CUSIP number of the Book-Entry Note
representing such Notes.
5. The frequency of interest payments.
6. The frequency of interest rate resets.
A-11
7. Whether such Book-Entry Note represents any other
Notes issued or to be issued (to the extent then
known).
D. The Trustee will complete and deliver 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 and maintain possession of such
Book-Entry 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 to (i)
debit such Note to the Trustee's participant account and
credit such Note to the participant account of such
Agent maintained by DTC and (ii) debit the settlement
account of such Agent and credit the settlement account
of the Trustee maintained by DTC, in an amount equal to
the price of such Note less the Lead Agent's commission.
The entry of such a deliver order shall be deemed to
constitute a representation and warranty by the Trustee
to DTC that (a) the Book-Entry Note representing such
Note has been issued and authenticated and (b) the
Trustee is holding such Book-Entry Note pursuant to the
Certificate Agreement.
H. The Lead Agent will enter an SDFS deliver order through
DTC's Participant Terminal System instructing DTC to (i)
debit such Note to the Lead Agent's participant account
and credit such Note to the participant accounts of the
Participants to whom such Note is to be credited
maintained by DTC and (ii) debit the settlement accounts
of such Participants and credit the settlement account
of the Lead Agent maintained by DTC, in an amount equal
to the price of the Note so credited to their accounts.
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 an amount equal to the amount credited to the
Trustee's DTC participant account in accordance with
Settlement Procedure "G".
K. Upon request by the Company, the Trustee will send a
copy of the Book-Entry Note representing such Note by
first-class mail to the Company.
A-12
L. The Lead Agent will confirm the purchase of each Note to
the purchaser thereof either by transmitting to the
Participant to whose account such Note has been credited
a confirmation order through DTC's Participant Terminal
System or by mailing a written confirmation to such
purchaser. In all cases the Final Prospectus, as most
recently amended or supplemented, must accompany or
precede such confirmation.
M. Upon request by the Company, the Trustee will send to
the Company a statement setting forth the principal
amount of Notes outstanding as of that date under the
Indenture and setting forth the CUSIP number(s) assigned
to, and a brief description of, any orders which the
Company has advised the Trustee but which have not yet
been settled.
Settlement
Procedures
Timetable: In the event of a purchase of Notes by the Lead Agent, as
principal, appropriate Settlement details, if different from
those set forth below, will be set forth in the applicable
Terms Agreement to be entered into between the Lead Agent and
the Company pursuant to the Distribution Agreement. For orders
of Notes solicited by an Agent, as agent, and accepted by the
Company, Settlement Procedures "A" through "M" 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 4:00 p.m. on the Trade Day.
B 5:00 p.m. on the Trade Day.
C 2:00 p.m. on the Business Day
before the Settlement Date.
D 10:00 a.m. on the Settlement Date.
E 12:00 p.m. on the Settlement Date.
F 12:30 p.m. on the Settlement Date.
G-H 2:00 p.m. on the Settlement Date.
I 4:45 p.m. on the Settlement Date.
▇-▇ 5:00 p.m. on the Settlement Date.
M At the request of the Company.
NOTE: The Final Prospectus as most recently amended or
supplemented must accompany or precede any written
confirmation given to the customer (Settlement Procedure
"L"). Settlement Procedure "I" is subject to extension
in accordance
A-13
with any extension Fedwire closing deadlines and in the
other events specified in the SDFS operating procedures
in effect on the Settlement Date. If Settlement of a
Note is rescheduled or cancelled, the Trustee will
deliver to DTC, through DTC's Participant Terminal
System, a cancellation message to such effect by no
later than 2:00 p.m., New York City time, on the
Business Day immediately preceding the scheduled
Settlement Date.
Failure to
Settle: If the Trustee fails to enter an SDFS deliver order with
respect to a Note pursuant to Settlement Procedure "G", the
Trustee may 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 Notes having the same terms and having a principal
amount that is at least equal to the principal amount of such
Note to be debited. If withdrawal messages are processed with
respect to all the Notes issued or to be issued represented by
a Book-Entry Note, the Trustee will cancel such Book-Entry
Note in accordance with the Indenture, make appropriate
entries in its records and so advise the Company. The CUSIP
number assigned to such Book-Entry Note shall, in accordance
with CUSIP Service Bureau procedures, be cancelled and not
immediately reassigned. If withdrawal messages are processed
with respect to one or more, but not all, 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 such Notes and shall be cancelled immediately
after issuance, and the other of which shall represent the
remaining Notes previously represented by the surrendered
Book-Entry Note and shall bear the CUSIP number of the
surrendered Book-Entry Note. If the purchase price for any
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
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 an Agent in the performance of its obligations hereunder or
under the Distribution Agreement, the Company will reimburse
such Agent on an equitable basis for its loss of the use of
funds during the period when they were credited to the account
of the Company.
Notwithstanding the foregoing, upon any failure to settle with
respect to a 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-14
one or more, but not all, of Notes that were to have been
represented by a Book-Entry Note, the Trustee will provide, in
accordance with Settlement Procedures "D" and "E", for the
authentication and issuance of a Book-Entry Note representing
the other Notes to have been represented by such Book-Entry
Note and will make appropriate entries in its records.
Procedure for
Rate Changes: Each time a decision has been reached to change rates, the
Company will promptly advise the Agents of the new rates, who
will forthwith suspend solicitation of purchases of Notes at
the prior rates. The Agents may telephone the Company with
recommendations as to the changed interest rates.
Suspension of
Solicitation;
Amendment
or Supplement: Subject to the Company's representations, warranties and
covenants contained in the Distribution Agreement, the Company
may instruct the Agents to suspend at any time for any period
of time or permanently, the solicitation of orders to purchase
Notes. Upon receipt of such instructions (which may be given
orally or in writing), each Agent will forthwith suspend
solicitation until such time as the Company has advised it
that solicitation of offers to purchase may be resumed.
In the event that at the time the Company suspends
solicitation of offers to purchase there shall be any orders
outstanding for settlement, the Company will promptly advise
the Agents and the Trustee whether such orders may be settled
and whether copies of the Final Prospectus as in effect at the
time of the suspension may be delivered in connection with the
settlement of such orders. The Company will have the sole
responsibility for such decision and for any arrangements
which may be made in the event that the Company determines
that such orders may not be settled or that copies of such
Final Prospectus may not be so delivered.
If the Company decides to amend or supplement the Registration
Statement or the Final Prospectus, it will promptly advise the
Lead Agent, on behalf of the Agents, and furnish the Lead
Agent, on behalf of the Agents, and the Trustee with the
proposed amendment or supplement and with such certificates
and opinions as are required, all to the extent required by
and in accordance with the terms of the Distribution
Agreement. Subject to the provisions of the Distribution
Agreement, the Company may file with the Commission any
supplement to the Final Prospectus relating to the Notes. The
Company will provide the Lead Agent, on behalf of the Agents,
and the Trustee with copies of any such supplement, and
confirm to the Lead Agent that such supplement has been filed
with the Commission.
A-15
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 the purchasers, it being understood
by all parties that payments made by the Trustee to either the
Company or the Agents shall be made only to the extent that
funds are provided to the Trustee for such purpose.
Advertising
Costs: The Company shall have the sole right to approve the form and
substance of any advertising an Agent may initiate in
connection with such Agent's solicitation to purchase the
Notes. The expense of such advertising will be solely the
responsibility of such Agent, unless otherwise agreed to by
the Company.
A-16
EXHIBIT B
IncomeNotes(SM) COMMISSION SCHEDULE
Maturity Ranges Commission*
------------------------------------------------------- ---------------
More than 9 months to less than 2 years.............. .20%
2 years to less than 3 years......................... .40
3 years to less than 4 years......................... .63
4 years to less than 5 years......................... .80
5 years to less than 7 years......................... 1.00
7 years to less than 10 years........................ 1.28
10 years to less than 15 years....................... 1.50
15 years to less than 20 years....................... 2.00
20 years or more .................................... 2.50
* The Lead Agent may agree with the Company in respect of the sale of any Note
to accept a commission other than one based upon the specified ranges of
maturity, in which case such commission will be set forth in the Pricing
Supplement applicable to such Note, provided, however, that in no case shall
the commission exceed 8% of the initial offering proceeds.
B-1
EXHIBIT C
THE BEAR ▇▇▇▇▇▇▇ COMPANIES INC.
IncomeNotes(SM)
Form of Terms Agreement
_____ _, 200_
The Bear ▇▇▇▇▇▇▇ Companies Inc.
▇▇▇ ▇▇▇▇▇▇▇ ▇▇▇▇▇▇
▇▇▇ ▇▇▇▇, ▇▇▇ ▇▇▇▇ ▇▇▇▇▇
The terms of the Notes shall be as follows:
If fixed rate notes:
Principal Amount:
Public Offering Price:
Purchase Price by Bear ▇▇▇▇▇▇▇:
Settlement Date and Time:
Place of Delivery:
Methods of and Specified Funds
for Payment of Purchase Price:
Interest Rate:
Interest Accrual Date:
Interest Payment Dates:
Maturity Date:
Optional Repayment Date(s):
Optional Redemption Date(s):
CUSIP:
Minimum Denominations:
Survivor's Option:
Additional Terms:
C-1
If floating rate notes:
Base Rate:
Principal Amount:
Public Offering Price:
Purchase Price by Bear ▇▇▇▇▇▇▇:
Settlement Date and Time:
Place of Delivery:
Methods of and Specified Funds
for Payment of Purchase Price:
Initial Interest Rate:
Interest Payment Date(s):
Interest Reset Date(s):
Interest Reset Period:
Index Maturity:
Interest Payment Period:
Maximum Interest Rate:
Minimum Interest Rate:
Spread:
Maturity Date:
Optional Repayment Date(s):
Optional Redemption Date(s):
Calculation Agent:
CUSIP:
Minimum Denominations:
Survivor's Option:
Additional Terms:
C-2
BEAR, ▇▇▇▇▇▇▇ & CO. INC.
By _________________________________
Name:
Title:
THE BEAR ▇▇▇▇▇▇▇ COMPANIES INC.
By _________________________________
Name:
Title:
C-3
EXHIBIT D
BEAR
▇▇▇▇▇▇▇
MASTER SELECTED DEALER AGREEMENT
August 21, 2002
Ladies and Gentlemen:
In connection with registered public offerings of securities for
which we are acting as lead manager or co-manager of an underwriting syndicate
or unregistered offerings of securities for which we are acting as lead manager
or co-manager of the initial purchasers, or institutions acting in a similar
capacity, you may be offered the right as a selected dealer to purchase as
principal a portion of such securities. This will confirm our mutual agreement
as to the general terms and conditions applicable to your participation in any
such selected dealer group.
1. Applicability of this Agreement. The terms and conditions of this
letter agreement (this "Agreement") shall be applicable to any offering of
securities ("Securities"), whether pursuant to a registration statement filed
under the Securities Act of 1933, as amended (the "Securities Act"), or exempt
from registration thereunder, in respect of which Bear ▇▇▇▇▇▇▇ (acting for its
own account or for the account of any underwriting or similar group or
syndicate) is responsible for managing or otherwise implementing the sale of the
Securities to selected dealers ("Selected Dealers") and has expressly informed
you that such terms and conditions shall be applicable. Any such offering of
Securities to you as a Selected Dealer is hereinafter called an "Offering". In
the case of any Offering where we are acting for the account of any underwriting
or similar group or syndicate ("Underwriters"), the terms and conditions of this
Agreement shall be for the benefit of, and binding upon, such Underwriters,
including, in the case of any Offering where we are acting with others as
representatives of Underwriters, such other representatives.
2. Conditions of Offering; Acceptance and Purchases. Any Offering will be
subject to delivery of the Securities and their acceptance by us and any other
Underwriters, may be subject to the approval of all legal matters by counsel and
the satisfaction of other conditions, and may be made on the basis of
reservation of Securities or an allotment against subscription. We will advise
you by wire, telex, facsimile or other electronic data transmission or other
medium of written communication ("in writing", which term, in the case of any
Offering described in Section 3(a) or 3(b) hereof, may include a prospectus or
offering circular) of the particular method and supplementary terms and
conditions (including, without limitation, the information as to prices and the
offering date referred to in Section 3(c) hereof) of any Offering in which you
are invited to participate. To the extent such supplementary terms and
conditions are inconsistent with any provision herein, such terms and conditions
shall supersede any such provision. Unless otherwise indicated in writing by
Bear ▇▇▇▇▇▇▇, acceptances and other communications by you with respect to an
Offering should be sent to the appropriate Syndicate Department of Bear ▇▇▇▇▇▇▇.
We may close the subscription books at any time in our sole discretion without
notice, and we reserve the right to reject any acceptance in whole or in part.
D-1
Unless notified otherwise by us, Securities purchased by you shall be paid
for on such date as we shall determine, on one day's prior notice to you, by
wire transfer payable in immediately available funds to the order of Bear
▇▇▇▇▇▇▇, in an amount equal to the Public Offering Price (as hereinafter
defined) or, if we shall so advise you, at such Public Offering Price less the
Concession (as hereinafter defined). If Securities are purchased and paid for at
such Public Offering Price, such Concession will be paid after the termination
of the provisions of Section 3(c) hereof with respect to such Securities. Unless
notified otherwise by us, payment for and delivery of Securities purchased by
you shall be made through the facilities of The Depository Trust Company, if you
are a member, unless you have otherwise notified us prior to the date specified
in writing to you by us or, if you are not a member, settlement may be made
through a correspondent who is a member pursuant to instructions which you will
send to us prior to such specified date.
3. Representations, Warranties and Agreements.
(a) Registered Offerings. In the case of any Offering of Securities which
are registered under the Securities Act ("Registered Offering"), we will make
available to you as soon as practicable after sufficient copies are made
available to us by the issuer of the Securities such number of copies of each
preliminary prospectus and of the final prospectus relating thereto as you may
reasonably request for the purposes contemplated by the Securities Act and the
Securities Exchange Act of 1934, as amended (the "Exchange Act") and the
applicable rules and regulations of the Securities and Exchange Commission
thereunder.
You represent and warrant that you are familiar with Rule 15c2-8 under the
Exchange Act relating to the distribution of preliminary and final prospectuses
and agree that you will comply therewith. You agree to make a record of your
distribution of each preliminary prospectus and when furnished with copies of
any revised preliminary prospectus, you will promptly forward copies thereof to
each person to whom you have theretofore distributed a preliminary prospectus.
You agree that in purchasing Securities in a Registered Offering you will
rely upon no statement whatsoever, written or oral, other than the statements in
the final prospectus delivered to you by us. You will not be authorized by the
issuer or other seller of Securities offered pursuant to a prospectus or by any
Underwriters to give any information or to make any representation not contained
in the prospectus in connection with the sale of such Securities.
(b) Offerings Pursuant to Offering Circular. In the case of any Offering
of Securities, other than a Registered Offering, which is made pursuant to an
offering circular or other document comparable to a prospectus in a Registered
Offering, we will make available to you as soon as practicable after sufficient
copies are made available to us by the issuer of the Securities such number of
copies of each preliminary offering circular and of the final offering circular
relating thereto as you may reasonably request. You agree that you will comply
with applicable Federal, state and other laws, and the applicable rules and
regulations of any regulatory body promulgated thereunder, governing the use and
distribution of offering circulars by brokers or dealers.
You agree that in purchasing Securities pursuant to an offering circular
you will rely upon no statements whatsoever, written or oral, other than the
statements in the final offering circular delivered to you by us. You will not
be authorized by the issuer or other seller of Securities offered pursuant to an
offering circular or by any Underwriters to give any information
D-2
or to make any representation not contained in the offering circular in
connection with the sale of such Securities.
(c) Offer and Sale to the Public. The Offering of Securities is made
subject to the conditions referred to the prospectus or offering circular
relating to the Offering and to the terms and conditions set forth in this
Agreement. With respect to any Offering of Securities, we will inform you in
writing of the public offering price, the selling concession, the reallowance
(if any) to dealers and the time when you may commence selling Securities to the
public. After such public offering has commenced, we may change the public
offering price, the selling concession and the reallowance to dealers. The
offering price, selling concession and reallowance (if any) to dealers at any
time in effect with respect to an Offering are hereinafter referred to,
respectively, as the "Public Offering Price", the "Concession" and the
"Reallowance". With respect to each Offering of Securities, until the provisions
of this Section 3(c) shall be terminated pursuant to Section 4 hereof, you agree
to offer Securities to the public only at the Public Offering Price, except that
if a Reallowance is in effect, a Reallowance from the Public Offering Price not
in excess of such Reallowance may be allowed as consideration for services
rendered in distribution to dealers who are actually engaged in the investment
banking or securities business who are either (i) members in good standing of
the NASD who agree to abide by the applicable rules of the NASD (see Section
3(e) below) or (ii) foreign banks, dealers or institutions not eligible for
membership in the NASD who represent to you that they will promptly reoffer such
Securities at the Public Offering Price and will abide by the conditions with
respect to foreign banks, dealers and institutions set forth in Section 3(e)
hereof.
(d) Over-Allotment; Stabilization; Unsold Allotments. We may, with respect
to any Offering, be authorized to over-allot in arranging sales to Selected
Dealers, to purchase and sell Securities for long or short account and to
stabilize or maintain the market price of the Securities. You agree that upon
our request at any time and from time to time prior to the termination of the
provisions of Section 3(c) hereof with respect to any Offering, you will report
to us the amount of Securities purchased by you pursuant to such Offering which
then remain unsold by you and will, upon our request at any such time, sell to
us for our account or the account of one or more Underwriters such amount of
such unsold Securities as we may designate at the Public Offering Price less an
amount to be determined by us not in excess of the Concession. If, prior to the
later of (i) the termination of the provisions of Section 3(c) hereof with
respect to any Offering, or (ii) the covering by us of any short position
created by us in connection with such Offering for our account or the account of
one or more Underwriters, we purchase or contract to purchase for our account or
the account of one or more Underwriters in the open market or otherwise any
Securities purchased by you under this Agreement as part of such Offering, you
agree to pay us on demand for the account of the Underwriters an amount equal to
the Concession with respect to such Securities (unless you shall have purchased
such Securities pursuant to Section 2 hereof at the Public Offering Price and
you have not received or been credited with any Concession, in which case we
shall not be obligated to pay such Concession to you pursuant to Section 2) plus
transfer taxes and broker's commissions or dealer's ▇▇▇▇-up and accrued interest
or dividends, if any, paid in connection with such purchase or contract to
purchase.
(e) NASD. You represent and warrant that you are actually engaged in the
investment banking or securities business and either are a member in good
standing of the NASD or, if you are not such a member, you are a foreign bank,
dealer or institution not eligible for membership in the NASD which agrees to
make no sales within the United States, its territories or its possessions or to
persons who are citizens thereof or residents therein, and in making other
D-3
sales to comply with the NASD's interpretation with respect to free-riding and
withholding. You further represent, by your participation in an Offering, that
you have provided to us all documents and other information required to be filed
with respect to you, any related person or any person associated with you or any
such related person pursuant to the supplementary requirements of the NASD's
interpretation with respect to review of corporate financing as such
requirements relate to such Offering.
You agree that, in connection with any purchase or sale of the Securities
wherein a selling concession, discount or other allowance is received or
granted, you will (a) if you are a member of the NASD, comply with all
applicable interpretive material ("IM") and Conduct Rules of the NASD,
including, without limitation, IM 2110-1 (relating to Free-Riding and
Withholding) and Conduct Rule 2740 (relating to Selling Concessions, Discounts
and Other Allowances) or (b) if you are a foreign bank or dealer or institution
not eligible for such membership, comply with IM 2110-1 and with Conduct Rules
2730 (relating to Securities Taken in Trade), 2740 (relating to Selling
Concessions) and 2750 (relating to Transactions With Related Persons) as though
you were such a member and Conduct Rule 2420 (relating to Dealing with
Non-Members) as it applies to a non-member broker or dealer in a foreign
country.
You further agree that, in connection with any purchase of securities from
us that is not otherwise covered by the terms of this Agreement (whether we are
acting as Lead Manager, as member of an underwriting syndicate or a selling
group or otherwise), if a selling concession, discount or other allowance is
granted to you, clauses (a) and (b) of the preceding paragraph will be
applicable.
(f) Relationship among Underwriters and Selected Dealers. We may buy
Securities from or sell Securities to any Underwriter or Selected Dealer and,
with our consent, the Underwriters (if any) and the Selected Dealers may
purchase Securities from and sell Securities to each other at the Public
Offering Price less all or any part of the Concession. We shall have full
authority to take such action as we deem advisable in all matters pertaining to
any Offering under this Agreement. You are not authorized to act as agent for
us, any Underwriter or the issuer or other seller of any Securities in offering
Securities to the public or otherwise. Neither we nor any Underwriter shall be
under any obligation to you except for obligations expressly assumed hereunder
or in writing by us in connection with any Offering. Nothing contained herein or
in any communication in writing from us shall constitute the Selected Dealers an
association or partners with us or any Underwriter or with one another. If the
Selected Dealers, among themselves or with the Underwriters, should be deemed to
constitute a partnership for Federal income tax purposes, then you elect to be
excluded from the application of Subchapter K, Chapter 1, Subtitle A of the
Internal Revenue Code of 1986 and agree not to take any position inconsistent
with that election. You authorize us, in our discretion, to execute and file on
your behalf such evidence of that election as may be required by the Internal
Revenue Service. In connection with any Offering you shall be liable for your
proportionate amount of any tax, claim, demand or liability that may be asserted
against you alone or against one or more Selected Dealers participating in such
Offering, or against us or the Underwriters, based upon the claim that the
Selected Dealers, or any of them constitute an association, an unincorporated
business or other entity, including, in each case, your proportionate amount of
any expense incurred in defending against any such tax, claim, demand or
liability.
(g) Blue Sky Laws. Upon application to us, we shall inform you as to any
advice we have received from counsel concerning the jurisdictions in which
Securities have been qualified
D-4
for sale or are exempt under the securities or blue sky laws of such
jurisdictions, but we do not assume any obligation or responsibility as to your
right to sell Securities in any such jurisdiction.
(h) Compliance with Law. Without limitation of any other provision of this
Agreement, you agree that in selling Securities pursuant to any Offering (which
agreement shall also be for the benefit of the issuer or other sellers of such
Securities), you will comply with all applicable laws, rules and regulations,
including but not limited to all applicable provisions of the Securities Act and
the Exchange Act and all applicable rules and regulations of the Commission, the
NASD and any securities exchange or other regulatory authority having
jurisdiction over you, the issuer or the Offering, in addition to any applicable
laws, rules and regulations specified in Section 3(b) hereof. Without limiting
the foregoing, (i) you agree that, at all times since you were invited to
participate in an Offering of Securities, you have complied with the provisions
of Regulation M applicable to such Offering, in each case after giving effect to
any applicable exemptions and (ii) you represent that your incurrence of
obligations hereunder in connection with any Offering of Securities will not
result in the violation by you of Rule 15c3-1 under the Exchange Act, if such
requirements are applicable to you.
(i) Electronic Distribution. You agree that you will not (i) make
available on your web site or distribute, through the internet or otherwise by
electronic means, the Prospectus or Offering Circular for any Offering, (ii)
accept any indication of interest or confirm or settle any sale of Securities in
any Offering to or through online brokerage accounts or otherwise through your
web site or the internet or (iii) otherwise engage in any distribution of
Securities in any Offering through the internet or by electronic means, except
in each case with our consent. You represent, warrant and agree that any
activity of the kind described in (i), (ii) and (iii) above that you undertake
in connection with any Offering will be in accordance with procedures which the
Commission has approved in writing or to which the Commission has confirmed in
writing that it has no objection, and will in any event be your own
responsibility and at your own expense and risk. You will upon request deliver
to us a copy of any such approval or confirmation from the Commission.
D-5
4. Termination; Supplements and Amendments. This Agreement shall continue
in full force and effect until terminated by a written instrument executed by
each of the parties hereto. This Agreement may be supplemented or amended by us
by written notice thereof to you, and any such supplement or amendment to this
Agreement shall be effective with respect to any Offering to which this
Agreement applies after the date of such supplement or amendment. Each reference
to "this Agreement" herein shall, as appropriate, be to this Agreement as so
amended and supplemented. The terms and conditions set forth in Section 3(c)
hereof with regard to any Offering will terminate at the close of business on
the 30th day after the commencement of the public offering of the Securities to
which such Offering relates, but in our discretion may be extended by us for a
further period not exceeding 30 days and in our discretion, whether or not
extended, may be terminated at any earlier time. All other provisions of this
Agreement shall remain in full force and effect with respect to such Offering.
5. Successors and Assigns. This Agreement shall be binding on, and inure
to the benefit of, the parties hereto and other persons specified in Section 1
hereof, and the respective successors and assigns of each of them.
6. Governing Law. This Agreement and the terms and conditions set forth
herein with respect to any Offering together with such supplementary terms and
conditions with respect to such Offering as may be contained in any
communication in writing from us to you in connection therewith shall be
governed by, and construed in accordance with, the laws of the State of New
York.
Please confirm by signing and returning to us the enclosed copy of this
Agreement that your subscription to or your acceptance of any reservation of any
Securities pursuant to an Offering shall constitute (i) acceptance of and
agreement to the terms and conditions of this Agreement (as supplemented and
amended pursuant to Section 4 hereof); together with and subject to any
supplementary terms and conditions contained in any communication in writing
from us in connection with such Offering, all of which shall constitute a
binding agreement between you and us, individually or as representative of any
Underwriters, (ii) confirmation that your representations and warranties set
forth in Section 3 hereof are true and correct at that time, (iii) confirmation
that your agreements set forth in Sections 2 and 3 hereof have been and will be
fully performed by you to the extent and at the times required thereby and (iv)
in the case of any Offering described in Section 3(a) or 3(b) hereof,
acknowledgment that you have requested and received from us sufficient copies of
the final prospectus or offering circular, as the case may be, with respect to
such Offering in order to comply with your undertakings in Section 3(a) or 3(b)
hereof.
D-6
This Agreement may be executed in any number of counterparts, each of
which shall be deemed to be an original and all of which taken together
constitute but one and the same instrument. Transmission by telecopier or
facsimile transmission of an executed counterpart of this Agreement shall
constitute due and sufficient delivery of such counterpart.
Very truly yours,
BEAR, ▇▇▇▇▇▇▇ & CO. INC.
By: /s/ ▇▇▇▇▇▇▇ Parish
-------------------------------------
Name: ▇▇▇▇▇▇▇ Parish
Title: Senior Managing Director
Confirmed and accepted
as of _______________, 20__
_______________________________________
(Name of Dealer)
By:____________________________________
Name:
Title:
(If person signing is not an officer or a partner,
please attach instrument of authorization)
Address:
Tel:
Fax:
D-7
EXHIBIT E
Form of Pricing Supplement
THE BEAR ▇▇▇▇▇▇▇ COMPANIES INC.
IncomeNotes(SM)
With Maturities of Nine Months or More from Date of Issue
Registration No. 333-104455
Filed Pursuant to Rule 424(b)(3)
Pricing Supplement No. [__]
(To Prospectus dated April 24, 2003,
and Prospectus Supplement dated June 19, 2003)
Trade Date: __ /__/____
Issue Date: __ /__/____
The date of this Pricing Supplement is __ /__/____
--------------------------------------------------------------------------------
Interest
Price to Discounts & Payment
CUSIP# Interest Rate Maturity Date Public Commissions Frequency
--------------------------------------------------------------------------------
--------------------------------------------------------------------------------
Subject to Redemption
--------------------------------------------------------------------------------
First Survivor's Yes/No Date and Terms Aggregate Net
Interest Option of Redemption Principal Proceeds
Payment Amount
--------------------------------------------------------------------------------
--------------------------------------------------------------------------------
E-1
Schedule I
Opinion of Company Counsel
1. Each of the Company, Bear, ▇▇▇▇▇▇▇ & Co. Inc. ("Bear ▇▇▇▇▇▇▇") and Bear,
▇▇▇▇▇▇▇ Securities Corp. ("BSSC") is a corporation duly incorporated,
validly existing and in good standing under the laws of the State of
Delaware, and each of Bear, ▇▇▇▇▇▇▇ International Limited ("BSIL") and
Bear ▇▇▇▇▇▇▇ Holdings Limited ("BSHL") is a corporation duly incorporated
and validly existing in Great Britain and registered in England and Wales,
and each has the corporate power and authority to own, lease and operate
its properties and to carry on its business as described in the Final
Prospectus. Each of the Company, Bear ▇▇▇▇▇▇▇ and BSSC is duly qualified
to transact business and is in good standing as a foreign corporation in
the State of New York and each of BSIL and BSHL is duly qualified to
transact business and is in good standing as a foreign corporation in each
jurisdiction in which such qualification is required, whether by reason of
ownership or leasing of property or conduct of business, except where
failure to so qualify would not have a Material Adverse Effect. The
opinion in the previous sentence, as to the good standing of the Company,
Bear ▇▇▇▇▇▇▇ and BSSC in the State of New York, is based solely on good
standing certificates from the Secretary of State of New York, through the
date hereof, and no opinion is given as to the payment of New York
franchise taxes. All of the outstanding shares of capital stock of Bear
▇▇▇▇▇▇▇ is owned of record and, to our knowledge, beneficially by the
Company and all of the outstanding voting capital stock of BSSC is owned
of record and, to our knowledge, beneficially by Bear ▇▇▇▇▇▇▇; all of the
outstanding shares of capital stock of BSIL is owned of record and, to our
knowledge, beneficially by BSHL and Bear ▇▇▇▇▇▇▇ UK Holdings Limited, a
wholly-owned subsidiary of the Company ("BSUK"); and all of the
outstanding shares of capital stock of BSHL is owned of record and, to our
knowledge, beneficially by BSUK, in each case free and clear, to our
knowledge, of any lien, security interest or other encumbrance.
2. The execution, delivery and performance by the Company of the Indenture
and the consummation by the Company of the transactions contemplated
thereby have been duly authorized by the Company. The Indenture has been
duly executed and delivered by the Company and constitutes a legal, valid
and binding agreement of the Company, enforceable against the Company in
accordance with its terms, subject to applicable bankruptcy, insolvency,
fraudulent conveyance, reorganization, moratorium, receivership or other
laws relating to or affecting creditors' rights generally, and to general
principles of equity (regardless of whether enforcement is sought in a
proceeding at law or in equity).
3. The Company has the corporate power to authorize, create and issue the
Notes, and the Notes, when duly executed by the Company, authenticated by
the Trustee in the manner contemplated in the Indenture, and sold and
delivered by the Company pursuant to the Distribution Agreement, will be
legal, valid and binding obligations of the Company in accordance with
their terms, subject to applicable bankruptcy, insolvency, fraudulent
conveyance, reorganization, moratorium, receivership or other laws
relating to creditors'
Sch. I-1
rights generally, and to general principles of equity (regardless of
whether enforcement is sought in a proceeding at law or in equity), and
will be validly issued and outstanding and entitled to the benefits
provided by the Indenture. The statements in the Final Prospectus under
the captions "Description of Debt Securities" and "Description of Notes"
insofar as they purport to summarize certain provisions of documents
specifically referred to therein, are accurate summaries in all material
respects of such provisions.
4. The Company has the corporate power and authority to execute and deliver
the Distribution Agreement [and the Terms Agreement] and to perform its
obligations thereunder. The execution, delivery and performance by the
Company of the Distribution Agreement [and the Terms Agreement] and the
consummation by the Company of the transactions contemplated thereby have
been duly authorized by the Company. The Distribution Agreement [and the
Terms Agreement] has [have] been duly authorized, executed and delivered
by the Company and constitute[s] [a] legal, valid and binding agreement[s]
of the Company, enforceable against the Company in accordance with its
[their] terms, subject to applicable bankruptcy, insolvency, fraudulent
conveyance, reorganization, moratorium, receivership or other laws
relating to or affecting creditors' rights generally, and to general
principles of equity (regardless of whether enforcement is sought in a
proceeding at law or in equity), and except that the enforcement of rights
with respect to indemnification and contribution obligations may be
limited by applicable law or considerations of public policy.
5. The execution of the Distribution Agreement [and the Terms Agreement], the
delivery of the Distribution Agreement [, the Terms Agreement] and the
Indenture, the consummation of the transactions contemplated thereby and
compliance by the Company with any of the provisions thereof (a) do not
result in a violation of any provision of the Certificate of Incorporation
or By-Laws of the Company or any Applicable Laws applicable to the Company
(other than United States federal and state securities laws, as to which
we express no opinion in this sentence) and (b) do not breach or result in
a violation of, or default under, (i) any material document, agreement or
other instrument of which we are aware to which the Company is a party or
by which it is bound or (ii) any judgment, decree or order known to us
that is applicable to the Company and, pursuant to any Applicable Laws, is
issued by any Governmental Authority having jurisdiction over the Company
or its properties. The execution and delivery by the Company of the
Distribution Agreement [, the Terms Agreement] and the Indenture, or the
consummation by the Company of the transactions contemplated thereby do
not require any Governmental Approval to be obtained on the part of the
Company, except for those that (i) may be required by Rule 424(b)
promulgated under the 1933 Act, (ii) may be required under federal and
state securities or blue sky laws, as to which we express no opinion, or
(iii) have been made or obtained under the 1933 Act or the Trust Indenture
Act.
References in this letter to "Applicable Laws" are to those laws, rules and
regulations of the State of New York and of the United States of America that,
in our experience, are normally applicable to transactions of the type
contemplated by the Transaction Documents, and the General Corporation Law of
the State of Delaware. References in this letter to "Governmental Authorities"
are to executive, legislative, judicial, administrative or regulatory bodies of
the State
Sch. I-2
of New York or the United States of America and the Secretary of State of the
State of Delaware. References in this letter to "Governmental Approval" are to
any consent, approval, license, authorization or validation of, or filing,
recording or registration with, any Governmental Authority pursuant to
Applicable Laws.
6. The Registration Statement, as of its effective date, and the Final
Prospectus, as of its issue date and as of the date hereof, complied and
comply as to form in all material respects with the requirements of the
1933 Act and the Trust Indenture Act and the rules and regulations
thereunder (except that no opinion is expressed herein with respect to the
financial statements and notes thereto, the financial statement schedules
and the other numerical, financial, statistical, quantitative and
accounting data included or incorporated by reference therein or that
should have been included therein).
7. To our knowledge, based upon telephonic confirmation from the Commission,
the Registration Statement was declared effective under the 1933 Act and,
to our knowledge, no stop order suspending the effectiveness of the
Registration Statement has been issued and no proceedings therefor have
been initiated or threatened by the Commission. Any required filing of the
Basic Prospectus, any Preliminary Final Prospectus and the Final
Prospectus, and any supplements thereto, pursuant to Rule 424(b) has been
made in the manner and within the time period required by Rule 424(b).
8. To our knowledge, based upon telephonic confirmation from the Commission,
the Indenture has been qualified under the Trust Indenture Act.
9. The statements made in the Prospectus Supplement under the caption
"Certain US Federal Income Tax Considerations," to the extent such
statements summarize material federal tax consequences of the purchase,
beneficial ownership and disposition of the Notes to the holders thereof
described therein, are correct in all material respects. All such
statements are based upon current law, which is subject to change,
possibly with retroactive effect, and we assume no obligation to update or
supplement this letter to reflect any facts, circumstances, laws, rules or
regulations, or any changes thereto, or any court or other authority or
body decisions or governmental or regulatory authority determinations
which may hereafter occur or come to our attention. Further, there can be
no assurance that the Internal Revenue Service will not take a contrary
position.
We have not ourselves checked the accuracy, completeness or fairness of, or
otherwise verified, the information contained in the Registration Statement or
the Final Prospectus, and we do not pass upon or assume any responsibility
therefor. However, in the course of our review of the Registration Statement and
the Final Prospectus, we have attended certain conferences and participated in
conversations with representatives of the Company, your representatives and
representatives of the Company's independent public accountants. On the basis of
the information which we gained in the course of the representation referred to
above and our examination of the documents referred to herein, considered in
light of our understanding of applicable law and the experience we have gained
through our practice, nothing has come to our attention in the course of our
review of the Registration Statement and the Final Prospectus which causes us to
believe that, as of the effective date of the Registration Statement, the
Registration Statement contained an untrue statement of a material fact or
omitted to state a
Sch. I-3
material fact required to be stated therein or necessary to make the statements
therein not misleading, or that as of its date or as of the date hereof, the
Final Prospectus (including any filing under the 1934 Act explicitly referenced
as to be filed under the caption "Where You Can Find More Information" in the
Final Prospectus) contained or contains any untrue statement of a material fact
or omitted or omits to state any material fact necessary in order to make the
statements therein, in the light of the circumstances under which they were
made, not misleading; it being understood that we express no view as to the
adequacy or accuracy of the financial, numerical, statistical or quantitative
information included or incorporated by reference in the Registration Statement
or the Final Prospectus.
Sch. I-4
Schedule II
Opinion of Agent Counsel
1. The Registration Statement, as of its effective date, and the
Final Prospectus, as of the date thereof (in each case, with the exception of
any information incorporated by reference therein and any numerical, financial,
statistical and quantitative data included therein, as to which we express no
view), appeared on their respective faces to be appropriately responsive in all
material respects to the requirements of the Securities Act of 1933, as amended
(the "1933 Act"), and the rules and regulations thereunder applicable to such
documents as of the relevant date.
In connection with the preparation of the Registration Statement and
the Final Prospectus, we participated in conferences with your representatives
and with certain officers and employees of, and counsel and independent public
accountants for, the Company, at which the contents of the Registration
Statement and the Final Prospectus and related matters were discussed. On the
basis of such participation and review (relying as to materiality to a large
extent upon the opinions of officers and other representations of the Company),
but without independent verification by us of, and without assuming any
responsibility for, the accuracy, completeness or fairness of the statements
contained in the Registration Statement or the Final Prospectus or any amendment
or supplement thereto, no facts have come to our attention that lead us to
believe that the Registration Statement, at the time it became effective,
contained any untrue statement of material fact or omitted to state a material
fact required to be stated therein or necessary to make the statements therein
not misleading, or that the Final Prospectus, as of its date and as of the date
hereof, contained any 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 under which they were made, not misleading, it being understood
that we express no opinion with respect to (i) the financial statements and
notes thereto and related schedules and other financial, numerical, statistical
and accounting data contained in or omitted from the Registration Statement or
the Final Prospectus; (ii) the Form T-1; or (iii) any documents incorporated by
reference into the Registration Statement.
Sch. II-1
Schedule III
Comfort Letter
We have audited the consolidated statements of financial condition of The Bear
▇▇▇▇▇▇▇ Companies Inc. and its subsidiaries (the "Company") as of
________________ and ________________ and the consolidated statements of income,
cash flows and changes in stockholders' equity for the fiscal years ended
________________, _____ and _____, and the related financial statement schedules
all included or incorporated by reference in the Company's Annual Report on Form
10-K for the year ended ________________ incorporated by reference in the
registration statement (No. 333-_____) on Form S-3 filed by the Company under
the Securities Act of 1933 (the "1933 Act"); our reports dated ________________
with respect thereto are also incorporated by reference in that registration
statement. The registration statement, including the Prospectus dated
________________, and the Prospectus Supplement dated ________________ is herein
referred to as the "Registration Statement".
In connection with the Registration Statement:
1. We are independent certified public accountants with respect to the
Company within the meaning of the 1933 Act and the applicable rules and
regulations adopted by the Securities and Exchange Commission ("SEC").
2. In our opinion, the consolidated financial statements and financial
statement schedules audited by us and incorporated by reference in the
Registration Statement comply as to form in all material respects with the
applicable accounting requirements of the 1933 Act and the Securities
Exchange Act of 1934 (the "1934 Act") and the related rules and
regulations adopted by the SEC.
3. We have not audited any financial statements of the Company as of any date
or for any period subsequent to ________; although we have conducted an
audit for the year ended ________________, the purpose (and therefore the
scope) of the audit was to enable us to express our opinion on the
consolidated financial statements as of ________________, and for the year
then ended, but not on the consolidated financial statements for any
interim period within that year. Therefore, we are unable to and do not
express any opinion on the unaudited consolidated statements of financial
condition as of ________, ________, and ________ and the unaudited
consolidated statements of income and cash flows for the three-month
periods ended ________and ________ [,the three-month periods and six-month
periods ended ________ and ________,] [and the three-month periods and the
nine-month periods ended ________ and ________] included in the Company's
Quarterly Report on Form 10-Q for the quarter[s] ended ________, filed
with the SEC and incorporated by reference in the Registration Statement;
or on the financial position, results of operations, or cash flows as of
any other date or for any period subsequent to ________.
Sch. III-1
4. For the purposes of this letter, we have read the minutes and draft
minutes of the meetings and special meetings of the Executive Committee of
the Board of Directors of the Company and Bear, ▇▇▇▇▇▇▇ & Co. Inc. for the
period from ________ to ________. Officials of the Company have advised us
that no draft minutes are available subsequent to ________. We have
carried out other procedures to ________ as follows (our work did not
extend to the period ________ to ________):
(a) With respect to the three-month periods ended ________ and ________
[and the three-month periods and the six-month periods ended
________ and ________] [and the three-month periods and the
nine-month periods ended ________ and ________], we have:
(i) Performed the procedures specified by the American Institute
of Certified Public Accountants for a review of interim
financial information as described in SAS No. 71, Interim
Financial Information, on the unaudited consolidated
statements of financial condition as of ________, the
unaudited consolidated statements of income and cash flows for
the three-month periods ended ________ and ________, [and the
three-month periods and the six-month periods ended ________
and ________,] [and the three-month periods and the nine-month
periods ended ________ and ________] included in the Company's
quarterly report on Form 10-Q for the quarter ended ________,
incorporated by reference in the Registration Statement.
(ii) Inquired of certain officials of the Company who have
responsibility for financial and accounting matters whether
the unaudited consolidated financial statements referred to in
(a)(i) comply as to form in all material respects with the
applicable accounting requirements of the 1934 Act as it
applies to Form 10-Q and the related rules and regulations
adopted by the SEC and are stated on a basis substantially
consistent with that of the audited consolidated financial
statements incorporated by reference in the Registration
Statement.
(b) With respect to the period from ________ to ________, we have:
Been advised by officials of the Company that no fiscal
quarterly unaudited consolidated statement of financial
condition as of any date subsequent to ________ and no fiscal
quarterly unaudited consolidated statement of income for any
period subsequent to ________ and no fiscal quarterly
unaudited consolidated statement of cash flows for any period
subsequent to ________ were available.
The foregoing procedures do not constitute an audit conducted in accordance with
auditing standards generally accepted in the United States of America. Also,
they would not necessarily reveal matters of significance with respect to the
comments in the following paragraph.
Sch. III-2
Accordingly, we make no representations about the sufficiency of the foregoing
procedures for your purposes.
5. Nothing came to our attention as a result of the foregoing procedures,
however, that caused us to believe that:
(a) (i) Any material modifications should be made to the unaudited
consolidated financial statements described in 4(a)(i),
incorporated by reference in the Registration Statement, for
them to be in conformity with accounting principles generally
accepted in the United States of America.
(ii) The unaudited consolidated financial statements described in
4(a)(i) do not comply as to form in all material respects with
the applicable accounting requirements of the 1934 Act as it
applies to Form 10-Q and the related rules and regulations
adopted by the SEC.
(b) (i) For the period ________ to ________, there were any decreases,
as compared with the corresponding period in the preceding
year, in consolidated revenues, revenues net of interest
expense, or net income, except in all instances for changes,
increases, or decreases that the Registration Statement
discloses have occurred or may occur [and except that
consolidated ________ decreased from the corresponding period
in the preceding year].
6. As mentioned in 4(b), Company officials have advised us that no fiscal
quarterly unaudited consolidated statement of financial condition as of
any date subsequent to ________, no fiscal quarterly unaudited
consolidated statement of income for any period subsequent to ________ and
no fiscal quarterly unaudited consolidated statement of cash flows for any
period subsequent to ________ are available; accordingly, the procedures
carried out by us with respect to changes in financial statement items
have, of necessity, been even more limited than those with respect to the
earlier periods referred to in 4. We have inquired of certain officials of
the Company who have responsibility for financial and accounting matters
whether (a) at ________ there was any change in the preferred or common
stock or increase in short or long-term indebtedness of the Company as
compared with amounts shown on the ________ unaudited consolidated
statement of financial condition incorporated by reference in the
Registration Statement or (b) for the period ________ to ________ there
were any decreases, as compared with the corresponding period in the
preceding year, in consolidated revenues, revenues net of interest
expense, or net income.
Those officials referred to above stated that (a) at ______ there was [no
change] in the common or preferred stock other than purchases of common
stock treasury shares and the issuances of common shares out of treasury
[and retirement of preferred stock of $_____] or in the short-term
indebtedness other than a net [increase][decrease] in short-term
borrowings [due to additional net bank borrowings, commercial paper, and
medium-term notes and other] of approximately $________ [due ______] and
in the long-term
Sch. III-3
indebtedness other than the retirements/maturities of long-term borrowings
of approximately $_____ and issuances of the following:
___________________, and (b) for the period _____ to _____, Company
officials have informed us that no fiscal quarterly information subsequent
to ______ is available as to whether there were decreases, as compared
with the corresponding period in the preceding year, in consolidated
revenues, revenues net of interest expense, or net income.
7. For the purposes of this letter, we have also read the following, included
or incorporated by reference in the Registration Statement on the
indicated pages:
Item Page Description
Annual Report for [_____________________]
a. [ ] "Selected Financial Data." All amounts excluding "Employees".
b. [ ] "Management's Discussion and Analysis of Financial Condition and
Results of Operations". All dollar, share and per share amounts and
percentages under the headings "Results of Operations" and
"Liquidity and Capital Resources".
10-K Report for [_____________________]
c. Exhibit 12, "Statement Re Computation of Ratio of Earnings to Fixed
Charges."
Quarterly Report on Form 10-Q for the Period Ended [_____________________]
d. [ ] "Management's Discussion and Analysis of Financial Condition and
Results of Operations". All dollar, share and per share amounts and
percentages under the headings "Results of Operations" and
"Liquidity and Capital Resources".
e. Exhibit 12, "Statement Re Computation of Ratio of Earnings to Fixed
Charges."
Quarterly Report on Form 10-Q for the Period Ended [__________________]
f. [ ] "Management's Discussion and Analysis of Financial Condition and
Results of Operations". All dollar, share and per share amounts and
percentages under the headings "Results of Operations" and
"Liquidity and Capital Resources".
g. Exhibit 12, "Statement Re Computation of Ratio of Earnings to Fixed
Charges."
Sch. III-4
Quarterly Report on Form 10-Q for the Period Ended [___________]
h. [ ] "Management's Discussion and Analysis of Financial Condition and
Results of Operations." All dollar, share and per share amounts and
percentages under the headings "Results of Operations" and
"Liquidity and Capital Resources."
i. Exhibit 12, "Statement Re Computation of Ratio of Earnings to Fixed
Charges."
Prospectus dated [_________________]
j. [ ] "Ratio of Earnings to Fixed Charges."
Prospectus Supplement dated [__________]
k. [ ] "Summary of the Offering", "Risk Factors", "Description of Notes",
ranking summaries regarding outstanding indebtedness of the Company
and its subsidiaries at ______________.
8. Our audit of the consolidated financial statements for the periods
referred to in the introductory paragraph of this letter comprised audit
tests and procedures deemed necessary for the purpose of expressing an
opinion on such financial statements taken as a whole. For none of the
periods referred to therein, nor for any other period, did we perform
audit tests for the purpose of expressing an opinion on individual
balances of accounts or summaries of selected transactions such as those
enumerated above, and, accordingly, we express no opinion thereon.
9. However, for the purposes of this letter, we have performed the following
additional procedures, which were applied as indicated with respect to the
items outlined in 7 above.
a. With respect to items 7.a., 7.b., 7.d., 7.f. and 7.h., we (i)
compared the dollar and share amounts to the respective amounts in
the Company's audited consolidated financial statements for the
applicable periods indicated or to the Company's unaudited
consolidated financial statements for the three-month periods ended
______________ and ______________, and the three and six-month
periods ended ______________ and ______________, and the three and
nine-month periods ended______________ and ______________,
incorporated by reference in the Registration Statement, to the
extent such amounts are included in or can be derived from such
statements and found them to be in agreement; (ii) compared other
dollar and share amounts to amounts shown in the Company's
accounting records or analyses prepared by the Company and found
them to be in agreement; (iii) proved the arithmetic accuracy of the
percentages based on the data in the above-mentioned financial
statements, accounting records, and analyses; and (iv) compared
amounts in the analyses prepared by the Company with amounts shown
in the Company's accounting records and found them to be in
agreement.
Sch. III-5
b. With respect to items 7.c., 7.e., 7.g., 7.i. and 7.j., we (i)
compared the amounts of Earnings Before Taxes on Income, Net Income
and the amounts of Interest Fixed Charge to the respective amounts
in the Company's audited consolidated financial statements for the
applicable periods indicated or to the Company's unaudited
consolidated financial statements for the three-months periods ended
______________ and ______________, and the three and six-month
periods ended ______________ and ______________, and the three and
nine-month periods ended ______________ and ______________,
incorporated by reference in the Registration Statement, and found
them to be in agreement; (ii) proved the arithmetic accuracy of the
Interest Factor in Rents Fixed Charge by multiplying rent expense
per the Company's accounting records by one-third; (iii) compared
the amount of interest adjusted fixed charge, weighted average
common and common equivalent shares outstanding and other dollar
amounts to amounts in analyses prepared by the Company and found
them to be in agreement (we make no comment regarding the
completeness or appropriateness of the Company's determination of
what constitutes interest adjusted fixed charge); (iv) compared the
amounts contained in the analyses described in (iii) above to
amounts in the Company's accounting records and found them to be in
agreement; and (v) proved the arithmetic accuracy of the ratios and
amounts based on the above-mentioned financial statements,
accounting records and analyses.
c. With respect to item 7.k., we compared the dollar amounts shown to
the Company's accounting records and analyses prepared by the
Company and found them to be in agreement.
10. It should be understood that we make no representations regarding
questions of legal interpretation or regarding the sufficiency for your
purposes of the procedures outlined in the preceding paragraph; also, such
procedures would not necessarily reveal any material misstatement of the
amounts or percentages listed above. Further, we have addressed ourselves
solely to the foregoing data as included or incorporated by reference in
the Registration Statement and make no representations regarding the
adequacy of disclosure or regarding whether any material facts have been
omitted.
11. This letter is solely for the information of the addressees and to assist
the underwriters in conducting and documenting their investigation of the
affairs of the Company in connection with the offering of the securities
covered by the Registration Statement and it is not to be used,
circulated, quoted or otherwise referred to within or without the
underwriting group for any other purpose, including but not limited to the
registration, purchase, or sale of securities, nor is it to be filed with
or referred to in whole or in part in the Registration Statement or any
other document, except that reference may be made to it in the
underwriting agreement or any list of closing documents pertaining to the
offering of the securities covered by the Registration Statement.
Sch. III-6