EXHIBIT 1.3
[FORM OF DISTRIBUTION AGREEMENT]
$10,500,000,000
CREDIT SUISSE FIRST BOSTON (USA), INC.
MEDIUM-TERM NOTES
DISTRIBUTION AGREEMENT
October [ ], 2001
Credit Suisse First Boston Corporation
Eleven ▇▇▇▇▇▇▇ ▇▇▇▇▇▇
▇▇▇ ▇▇▇▇, ▇▇▇ ▇▇▇▇ ▇▇▇▇▇-▇▇▇▇
Ladies and Gentlemen:
1. INTRODUCTION. Credit Suisse First Boston (USA), Inc., a Delaware
corporation (the "Issuer"), confirms its agreement with you (the "Distributor")
with respect to the issue and sale from time to time by the Issuer of its
medium-term notes registered under the registration statement referred to in
Section 2(a) (any such medium-term notes being hereinafter referred to as the
"Securities", which expression shall, if the context so admits, include any
permanent global Security). Securities may be offered and sold pursuant to
Section 3 of this Agreement in an aggregate amount not to exceed the amount of
Registered Securities (as defined in Section 2(a) hereof) registered pursuant to
such registration statement reduced by the aggregate amount of any other
Registered Securities sold otherwise than pursuant to Section 3 of this
Agreement. The Securities will be issued under a senior indenture, dated as of
June 1, 2001 (the "Indenture"), between the Issuer and The Chase Manhattan Bank,
as trustee (the "Trustee").
The Securities shall have the terms described in the Prospectus
referred to in Section 2(a) as it may be amended or supplemented from time to
time, including any supplement to the Prospectus that sets forth only the terms
of a particular issue of the Securities (a "Pricing Supplement"). Securities
will be issued, and the terms thereof established, from time to time by the
Issuer in accordance with the Indenture and the Procedures (as defined in
Section 3(d) hereof).
2. REPRESENTATIONS AND WARRANTIES OF THE ISSUER. The Issuer represents
and warrants to, and agrees with, the Distributor as follows:
(a) A registration statement (No. 333-[ ]), including a prospectus,
relating to $10,500,000,000 aggregate amount of securities of the Issuer,
including the Securities (the "Registered Securities") (including a prospectus
which, as supplemented from time to time, shall be used in connection with sales
of the Securities) has been filed with the Securities and
1
Exchange Commission (the "Commission") and has been declared effective under the
Securities Act of 1933, as amended (the "Act"). Such registration statement, as
amended as of the Closing Date (as defined in Section 3(e) hereof), is
hereinafter referred to as the "Registration Statement", and the prospectus
included in such Registration Statement, as supplemented so as generally to
describe the Securities and the terms of the offering of the Securities,
including all material incorporated by reference therein, is hereinafter
referred to as the "Prospectus". Any reference in this Agreement to amending or
supplementing the Prospectus shall be deemed to include the filing of materials
incorporated by reference in the Prospectus after the Closing Date and any
reference in this Agreement to any amendment or supplement to the Prospectus
shall be deemed to include any such materials incorporated by reference in the
Prospectus after the Closing Date. No document has been or will be prepared or
distributed in reliance on Rule 434 under the Act.
(b) On the effective date of the Registration Statement, such
Registration Statement conformed in all respects to the requirements of the Act,
the Trust Indenture Act of 1939, as amended (the "Trust Indenture Act"), and the
rules and regulations of the Commission ("Rules and Regulations") and 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
not misleading, and on the Closing Date, and at each of the times of acceptance
and of delivery referred to in Section 6(a) hereof and at each of the times of
amendment or supplementing referred to in Section 6(b) hereof (the Closing Date
and each such time being herein sometimes referred to as a "Representation
Date"), the Registration Statement and the Prospectus as then amended or
supplemented will conform in all respects to the requirements of the Act, the
Trust Indenture Act and the Rules and Regulations, and neither of such documents
will include any untrue statement of a material fact or will omit to state any
material fact required to be stated therein or necessary to make the statements
therein not misleading, except that the foregoing does not apply to statements
in or omissions from any of such documents based upon written information
furnished to the Issuer by the Distributor specifically for use therein.
(c) The Issuer has been duly incorporated and is an existing
corporation in good standing under the laws of the State of Delaware, with power
and authority (corporate and other) to own its properties and conduct its
business as described in the Prospectus; and the Issuer is duly qualified to do
business as a foreign corporation in good standing in all other jurisdictions in
which its ownership or lease of property or the conduct of its business requires
such qualification.
(d) Each subsidiary of the Issuer has been duly incorporated and is an
existing corporation in good standing under the laws of the jurisdiction of its
incorporation, with power and authority (corporate and other) to own its
properties and conduct its business as described in the Prospectus; and each
subsidiary of the Issuer is duly qualified to do business as a foreign
corporation in good standing in all other jurisdictions in which its ownership
or lease of property or the conduct of its business requires such qualification;
all of the issued and outstanding capital stock of each subsidiary of the Issuer
has been duly authorized and validly issued and is fully paid and nonassessable;
and the capital stock of each subsidiary owned by the Issuer, directly or
through subsidiaries, is owned free from liens, encumbrances and defects.
(e) The Indenture has been duly authorized, executed and delivered by
the Issuer
2
and duly qualified under the Trust Indenture Act and constitutes a valid and
legally binding obligation of the Company enforceable in accordance with its
terms, subject to bankruptcy, insolvency, fraudulent transfer, reorganization,
moratorium and similar laws of general applicability relating to or affecting
creditors' rights and to general equity principles; the Securities have been
duly authorized, and when the Securities have been delivered and paid for
pursuant to this Agreement, the Securities will have been duly executed,
authenticated, issued and delivered and will conform to the description thereof
contained in the Prospectus and will constitute valid and legally binding
obligations of the Issuer enforceable in accordance with their terms, subject to
bankruptcy, insolvency, fraudulent transfer, reorganization, moratorium and
similar laws of general applicability relating to or affecting creditors' rights
and to general equity principles.
(f) No consent, approval, authorization, or order of, or filing with,
any governmental agency or body or any court is required for the consummation of
the transactions contemplated by this Agreement in connection with the issuance
and sale of the Securities by the Issuer, except such as have been obtained and
made under the Act and the Trust Indenture Act and such as may be required under
state securities laws.
(g) The execution, delivery and performance of the Indenture and this
Agreement do not, and the completion, execution and issuance of each particular
Security in accordance with the Indenture, the sale by the Issuer of such
Security in accordance with this Agreement and compliance with the terms and
provisions thereof will not, result in a breach or violation of any of the terms
and provisions of, or constitute a default under, any statute, any rule,
regulation or order of any governmental agency or body or any court, domestic or
foreign, having jurisdiction over the Issuer or any subsidiary of the Issuer or
any of their properties, or any agreement or instrument to which the Issuer or
any such subsidiary is a party or by which the Issuer or any such subsidiary is
bound or to which any of the properties of the Issuer or any such subsidiary is
subject, or the charter or by-laws of the Issuer or any such subsidiary, and the
Issuer has full power and authority to authorize, issue and sell the Securities
as contemplated by this Agreement.
(h) This Agreement (including any agreement with respect to the
offering and sale of particular Securities as contemplated by Section 3) has
been duly authorized, executed and delivered by the Issuer.
(i) Except as disclosed in the Prospectus, the Issuer and its
subsidiaries have good and marketable title to all real properties and all other
properties and assets owned by them, in each case free from liens, encumbrances
and defects that would materially affect the value thereof or materially
interfere with the use made or to be made thereof by them; and except as
disclosed in the Prospectus, the Issuer and its subsidiaries hold any leased
real or personal property under valid and enforceable leases with no exceptions
that would materially interfere with the use made or to be made thereof by them.
(j) The Issuer and its subsidiaries possess adequate certificates,
authorities or permits issued by appropriate governmental agencies or bodies
necessary to conduct the business now operated by them and have not received any
notice of proceedings relating to the revocation or modification of any such
certificate, authority or permit that, if determined adversely to the
3
Issuer or any of its subsidiaries, would individually or in the aggregate have a
material adverse effect on the Issuer and its subsidiaries taken as a whole.
(k) No labor dispute with the employees of the Issuer or any
subsidiary exists or, to the knowledge of the Issuer, is imminent that might
have a material adverse effect on the Issuer and its subsidiaries taken as a
whole.
(l) The Issuer and its subsidiaries own, possess or can acquire on
reasonable terms, adequate trademarks, trade names and other rights to
inventions, know-how, patents, copyrights, confidential information and other
intellectual property (collectively, "intellectual property rights") necessary
to conduct the business now operated by them, or presently employed by them, and
have not received any notice of infringement of or conflict with asserted rights
of others with respect to any intellectual property rights that, if determined
adversely to the Issuer or any of its subsidiaries, would individually or in the
aggregate have a material adverse effect on the Issuer and its subsidiaries
taken as a whole.
(m) Except as disclosed in the Prospectus, there are no pending
actions, suits or proceedings against or affecting the Issuer, any of its
subsidiaries or any of their respective properties that, if determined adversely
to the Issuer or any of its subsidiaries, would individually or in the aggregate
have a material adverse effect on the condition (financial or other), business,
properties or results of operations of the Issuer and its subsidiaries taken as
a whole, or would materially and adversely affect the ability of the Issuer to
perform its obligations under the Indenture or this Agreement, or which are
otherwise material in the context of the sale of the Securities; and no such
actions, suits or proceedings are threatened or, to the Issuer's knowledge,
contemplated.
(n) The financial statements included in the Registration Statement
and Prospectus present fairly the financial position of the Issuer and its
consolidated subsidiaries as of the dates shown and their results of operations
and cash flows for the periods shown, and, except as otherwise disclosed in the
Prospectus, such financial statements have been prepared in conformity with
generally accepted accounting principles in the United States applied on a
consistent basis; and the schedules included in the Registration Statement
present fairly the information required to be stated therein.
(o) Except as disclosed in the Prospectus, since the date of the
latest audited financial statements included in the Prospectus there has been no
material adverse change, nor any development or event involving a prospective
material adverse change, in the condition (financial or other), business,
properties or results of operations of the Issuer and its subsidiaries taken as
a whole, and, except as disclosed in or contemplated by the Prospectus, there
has been no dividend or distribution of any kind declared, paid or made by the
Issuer on any class of its capital stock.
(p) The Issuer is not and, after giving effect to the offering and
sale of the Securities and the application of the proceeds thereof as described
in the Prospectus, will not be an "investment company" as defined in the
Investment Company Act of 1940.
(q) Immediately after any sale of Securities by the Issuer hereunder
or under any
4
Terms Agreement (as defined in Section 3(a)(iii)), the aggregate amount of
Securities which shall have been issued and sold by the Issuer hereunder or
under any Terms Agreement and of any Registered Securities of the Issuer (other
than such Securities) that shall have been issued and sold pursuant to the
Registration Statement will not exceed the amount of debt securities registered
under the Registration Statement.
3. APPOINTMENT AS DISTRIBUTOR; AGREEMENT OF DISTRIBUTOR;
SOLICITATIONS.
(a) (i) Subject to the terms and conditions stated herein, the Issuer
hereby appoints the Distributor as the agent of the Issuer for the purpose of
soliciting or receiving offers to purchase the Securities to be issued by the
Issuer during any Marketing Time. For purposes of this Agreement "Marketing
Time" shall mean any time when no suspension of solicitation of offers to
purchase Securities pursuant to Section 3(c) or Section 4(c) shall be in effect
or any time when either the Distributor shall own any Securities with the
intention of reselling them or the Issuer has accepted an offer to purchase
Securities but the related settlement has not occurred.
(ii) So long as this Agreement shall remain in effect, the Issuer
shall not, without the consent of the Distributor, solicit or accept offers to
purchase Securities otherwise than to or through the Distributor; provided,
HOWEVER, that, subject to all of the terms and conditions of this Agreement, the
foregoing shall not be construed to prevent the Issuer from selling at any time
any Registered Securities in a firm commitment underwriting pursuant to an
underwriting agreement that does not provide for a continuous offering of such
Registered Securities; and PROVIDED, FURTHER, that the Issuer reserves the right
from time to time (i) to sell Securities directly to an investor, and (ii) to
accept a specific offer to purchase Securities solicited by a dealer other than
the Distributor (each an "Other Dealer"), without obtaining the prior consent of
the Distributor, provided that (x) the Issuer shall give the Distributor notice
of its decision to accept such an offer to purchase Securities in advance of
such acceptance and (y) any Other Dealer shall agree to be bound by and subject
to the terms and conditions of this Agreement binding on the Distributor
(including the commission schedule set forth on Exhibit B).
(b) (i) On the basis of the representations and warranties contained
herein, but subject to the terms and conditions herein set forth, the
Distributor agrees, as the agent of the Issuer, to use reasonable efforts when
requested by the Issuer to solicit offers to purchase the Securities upon the
terms and conditions set forth in the Prospectus, as from time to time amended
or supplemented.
(ii) The Distributor shall not have any obligation to purchase
Securities from the Issuer; however, the Distributor may agree from time to time
to purchase Securities as principal for resale to investors and other purchasers
selected by the Distributor. Unless otherwise expressly agreed by the Issuer and
the Distributor as contemplated by clause (v) below, each offer to sell
Securities transmitted by the Distributor and accepted by the Issuer shall
constitute acceptance of an offer to sell such Securities to the Distributor for
resale. In addition, if so specified in a Terms Agreement executed by the Issuer
and the Distributor, the Distributor shall act as representative of the several
underwriters named in such Terms Agreement for resale of the Securities
specified in such Terms Agreement upon the terms and subject to the conditions
specified in such Terms Agreement, this Agreement and in the Prospectus, as
supplemented by the applicable pricing supplement. It is understood that the
Distributor and any underwriters for
5
which it may act as representative propose that they will offer any Securities
which they agree to purchase as principal for sale as set forth in the
Prospectus, as supplemented by the applicable Pricing Supplement.
(iii) Upon acceptance by the Issuer of an offer by the Distributor to
purchase Securities as principal, unless the Issuer and the Distributor execute
a Terms Agreement substantially in the form of Exhibit A hereto (a "Terms
Agreement"), any written confirmation or communication transmitted by the
Distributor to the Issuer or, in the absence of a Terms Agreement or such other
written confirmation or communication, the oral agreement with respect to the
terms of the Securities and of their offer and sale evidenced by the offer
communicated by the Distributor and accepted by the Issuer, in each case
together with the provisions of this Agreement, shall constitute an agreement
between the Distributor and the Issuer for the sale and purchase of such
Securities (whether or not any Terms Agreement or other written confirmation or
communication shall have been executed by the Issuer or the Distributor). Each
purchase of Securities by the Distributor shall, unless otherwise agreed, be at
a discount from the principal amount of each such Security equivalent to the
applicable commission set forth in Exhibit B hereto.
(iv) The Distributor is authorized to engage the services of any other
brokers or dealers in connection with the offer or sale of Securities purchased
by the Distributor as principal for resale to others and may reallow any portion
of the discount received from the Issuer to such brokers or dealers.
(v) If expressly agreed by the Distributor and the Issuer, the
Distributor will solicit offers to purchase Securities from the Issuer through
the Distributor, acting as agent, in accordance with the provisions of this
Agreement. In such event, the Distributor shall communicate to the Issuer,
orally or in writing, each reasonable offer to purchase Securities received by
it as agent; and the Issuer shall have the sole right to accept offers to
purchase the Securities and may reject any such offer, in whole or in part. The
Distributor shall have the right, in its discretion reasonably exercised,
without notice to the Issuer, to reject any offer to purchase Securities
received by it as such agent, in whole or in part, and any such rejection shall
not be deemed a breach of its agreement contained herein. At the time of
delivery of, and payment for, any Securities sold by the Issuer as a result of a
solicitation made by, or offer to purchase received by, the Distributor, acting
on an agency basis, the Issuer agrees to pay the Distributor a commission in
accordance with the schedule set forth in Exhibit B hereto.
(vi) The Distributor shall not have any responsibility for maintaining
records with respect to the aggregate principal amount of Securities sold, or
otherwise monitoring the availability of Securities for sale, under the
Registration Statement.
(vii) No Security which the Issuer has agreed to sell pursuant to this
Agreement shall be deemed to have been purchased and paid for, or sold by the
Issuer, until such Security shall have been delivered to the purchaser thereof
against payment by such purchaser.
(c) Upon receipt of notice from the Issuer as contemplated by Section
4(c) hereof, the Distributor shall suspend its solicitation of offers to
purchase Securities until such time as the Issuer shall have furnished it with
an amendment or supplement to the Registration Statement or
6
the Prospectus, as the case may be, contemplated by Section 4(c) and shall have
advised the Distributor that such solicitation may be resumed.
The Issuer reserves the right, in its sole discretion, to suspend
solicitation of offers to purchase the Securities commencing at any time for any
period of time or permanently. Upon receipt of at least one Business Day's prior
notice from the Issuer, the Distributor will forthwith suspend solicitation of
offers to purchase Securities from the Issuer until such time as the Issuer has
advised the Distributor that such solicitation may be resumed. For the purpose
of the foregoing sentence, "Business Day" shall mean any day that is not a
Saturday or Sunday, and that in The City of New York is not a day on which
banking institutions generally are authorized or obligated by law or executive
order to close.
(d) Administrative procedures respecting the sale of Securities (the
"Procedures") shall be agreed upon from time to time by the Distributor and the
Issuer. The initial Procedures, which are set forth in Exhibit C hereto, shall
remain in effect until changed by agreement between the Issuer and the
Distributor. The Distributor and the Issuer agree to perform the respective
duties and obligations specifically provided to be performed by each of them
herein and in the Procedures. The Issuer will furnish to the Trustee a copy of
the Procedures as from time to time in effect.
(e) The documents required to be delivered by Section 5 hereof shall
be delivered at the office of Cleary, Gottlieb, ▇▇▇▇▇ & ▇▇▇▇▇▇▇▇, ▇▇▇ ▇▇▇▇▇▇▇
▇▇▇▇▇, ▇▇▇ ▇▇▇▇, ▇▇▇ ▇▇▇▇ ▇▇▇▇▇, not later than 9:30 A.M., New York City time,
on the date of this Agreement or at such later time as may be mutually agreed by
the Issuer and the Distributor, which in no event shall be later than the time
at which the Distributor commences solicitation of purchases of Securities
hereunder, such time and date being herein called the "Closing Date". For
purposes of Rule 15c6-1 under the Securities Exchange Act of 1934, as amended
(the "Exchange Act"), the settlement date (if later than the otherwise
applicable settlement date) shall be the date for payment of funds and delivery
of securities for all the Securities sold pursuant to an offering of Securities
having identical terms (including the issue date) and terms of sale (whether or
not set forth in a single Terms Agreement).
4. CERTAIN AGREEMENTS OF THE ISSUER. The Issuer agrees with the
Distributor that it will furnish to Cleary, Gottlieb, ▇▇▇▇▇ & ▇▇▇▇▇▇▇▇, counsel
for the Distributor, one signed copy of the Registration Statement, including
all exhibits, in the form it became effective and of all amendments and
supplements thereto and that, in connection with each offering of Securities:
(a) The Issuer will prepare a Pricing Supplement with respect to any
Securities to be offered and sold to or through the Distributor pursuant to this
Agreement and, after approval of such Pricing Supplement by the Distributor,
will file such Pricing Supplement with the Commission pursuant to and in
accordance with Rule 424(b) under the Act.
(b) The Issuer will advise the Distributor promptly of any proposal to
amend or supplement the Registration Statement or the Prospectus and will afford
the Distributor a reasonable opportunity to comment on any such proposed
amendment or supplement (other than any Pricing Supplement that relates to
Securities not purchased through or by such Distributor), and if the Issuer
effects any amendment or supplementation of the Registration Statement or the
7
Prospectus to which the Distributor objects, the Distributor shall be relieved
of its obligations under Section 3(b) to solicit offers to purchase Securities
until such time as the Issuer shall have filed such further amendments or
supplements such that the Distributor is reasonably satisfied with the
Registration Statement and the Prospectus, as then amended or supplemented; and
the Issuer will also advise the Distributor promptly of the filing and
effectiveness of any such amendment or supplement and of the institution by the
Commission of any stop order proceedings in respect of the Registration
Statement or of any part thereof and will use its best efforts to prevent the
issuance of any such stop order and to obtain as soon as possible its lifting,
if issued.
(c) If, at any time when a prospectus relating to the Securities is
required to be delivered under the Act, any event occurs as a result of which
the Prospectus, as then amended or supplemented, would include an untrue
statement of a material fact or omit to state any material fact necessary to
make the statements therein, in the light of the circumstances under which they
were made when such Prospectus is delivered, not misleading, or if it is
necessary at any such time to amend the Prospectus to comply with the Act, the
Issuer will promptly notify the Distributor by telephone (with confirmation in
writing) to suspend solicitation of offers to purchase the Securities and to
cease making offers or sales of Securities which a Distributor may then own as
principal; and if the Issuer shall decide to amend or supplement the
Registration Statement or the Prospectus, it will promptly advise the
Distributor by telephone (with confirmation in writing) and, subject to the
provisions of subsection (a) of this Section, will promptly prepare and file
with the Commission an amendment or supplement which will correct such statement
or omission or an amendment which will effect such compliance. Notwithstanding
the foregoing, if, at the time any such event occurs or it becomes necessary to
amend the Prospectus to comply with the Act, the Distributor shall own any of
the Securities with the intention of reselling them, or the Issuer has accepted
an offer to purchase Securities but the related settlement has not occurred, the
Issuer, subject to the provisions of subsection (a) of this Section, will
promptly prepare and file with the Commission an amendment or supplement which
will correct such statement or omission or an amendment which will effect such
compliance. Neither the Distributor's consent to, nor its delivery of, any such
amendment or supplement shall constitute a waiver of any of the conditions set
forth in Section 5.
(d) The Issuer will file promptly all documents required to be filed
with the Commission pursuant to Section 13(a), 13(c), 14 or 15(d) of the
Exchange Act. In addition, on or prior to the date on which the Issuer makes any
announcement to the general public concerning earnings or concerning any other
event which is required to be described, or which the Issuer proposes to
describe, in a document filed pursuant to the Exchange Act, the Issuer will
furnish the information contained or to be contained in such announcement to the
Distributor, confirmed in writing and, subject to the provisions of subsections
(a) and (b) of this Section, will cause the Prospectus to be amended or
supplemented to reflect the information contained in such announcement. The
Issuer also will furnish the Distributor with copies of all press releases or
announcements to the general public.
(e) The Issuer will immediately notify the Distributor of any
downgrading in the rating of any debt securities of the Issuer or any proposal
to downgrade the rating of any debt securities of the Issuer by any "nationally
recognized statistical rating organization" (as defined
8
for purposes of Rule 436(g) under the Act), or any public announcement that any
such organization has under surveillance or review its rating of any debt
securities of the Issuer (other than an announcement with positive implications
of a possible upgrading, and no implication of a possible downgrading of such
rating), as soon as the Issuer learns of such downgrading, proposal to downgrade
or public announcement.
(f) As soon as practicable, but not later than 16 months, after the
date of each acceptance by the Issuer of an offer to purchase Securities
hereunder, the Issuer will make generally available to its securityholders an
earnings statement covering a period of at least 12 months beginning after the
later of (i) the effective date of the Registration Statement relating to the
Registered Securities, (ii) the effective date of the most recent post-effective
amendment to the Registration Statement to become effective prior to the date of
such acceptance and (iii) the date of the Issuer's most recent Annual Report on
Form 10-K filed with the Commission prior to the date of such acceptance, which
will satisfy the provisions of Section 11(a) of the Act.
(g) The Issuer will furnish to the Distributor copies of the
Registration Statement, including all exhibits, any related preliminary
prospectus, any related preliminary prospectus supplement, the Prospectus and
all amendments and supplements to such documents (including any Pricing
Supplement), in each case as soon as available and in such quantities as are
reasonably requested.
(h) The Issuer will arrange for the qualification of the Securities
for sale and the determination of their eligibility for investment under the
laws of such jurisdictions as the Distributor designates and will continue such
qualifications in effect so long as required for the distribution.
(i) So long as any Securities are outstanding, the Issuer will furnish
to the Distributor, (i) as soon as practicable after the end of each fiscal
year, a copy of its annual report to stockholders for such year, if any, (ii) as
soon as available, a copy of each report or definitive proxy statement of the
Issuer filed with the Commission under the Exchange Act or mailed to
stockholders, if any, and (iii) from time to time, such other information
concerning the Issuer as the Distributor may reasonably request.
(j) The Issuer will pay, or reimburse the Distributor for, all
expenses incident to the performance of its obligations under this Agreement and
will reimburse the Distributor for any expenses (including fees and
disbursements of counsel) incurred by it in connection with qualification of the
Securities for sale and determination of their eligibility for investment under
the laws of such jurisdictions as the Distributor may designate and the printing
of memoranda relating thereto, for any fees charged by investment rating
agencies for the rating of the Securities, for any filing fee incident to, and
the reasonable fees and disbursements of counsel to the Distributor in
connection with, review by the National Association of Securities Dealers, Inc.
relating to the Securities, for expenses incurred by the Distributor in
distributing the Prospectus and all supplements thereto (including any Pricing
Supplement), any preliminary prospectuses and any preliminary prospectus
supplements, for costs incurred by the Distributor in advertising any offering
of Securities and for the Distributor's reasonable expenses (including the
reasonable fees and disbursements of counsel to the Distributor) incurred in
connection with the establishment or maintenance of the program contemplated by
this Agreement or otherwise in
9
connection with the activities of the Distributor under this Agreement.
(l) Between the date on which the Distributor agrees to purchase
Securities from the Issuer as principal for resale and the date of delivery of
such Securities, the Issuer will not offer or sell, or enter into any agreement
to sell, pledge, or otherwise dispose of, directly or indirectly, or file with
the Commission a registration statement under the Act relating to any of its
debt securities (other than such Securities) in the United States, other than
borrowings under the Issuer's revolving credit agreements and lines of credit,
the private placement of securities and issuances of its commercial paper, or
publicly disclose the intention to make any such offer, sale, pledge or
disposition or filing.
5. CONDITIONS OF OBLIGATIONS. The obligations of the Distributor, as
agent of the Issuer, under this Agreement at any time to solicit offers to
purchase the Securities and to purchase Securities from the Issuer as principal
is subject to the accuracy, on the date hereof, on each Representation Date and
on the date of each such solicitation, of the representations and warranties of
the Issuer herein, to the accuracy, on each such date, of the statements of the
Issuer's officers made pursuant to the provisions hereof, to the performance, on
or prior to each such date, by the Issuer of its obligations hereunder, and to
each of the following additional conditions precedent:
(a) The Prospectus, as amended or supplemented as of any
Representation Date or date of such solicitation, as the case may be, shall have
been filed with the Commission in accordance with the Rules and Regulations and
no stop order suspending the effectiveness of the Registration Statement or of
any part thereof shall have been issued and no proceedings for that purpose
shall have been instituted or, to the knowledge of the Issuer or the
Distributor, shall be contemplated by the Commission.
(b) Neither the Registration Statement nor the Prospectus, as amended
or supplemented as of any Representation Date or date of such solicitation, as
the case may be, shall contain any untrue statement of fact which, in the
opinion of the Distributor, is material or omits to state a fact which, in the
opinion of the Distributor, is material and is required to be stated therein or
is necessary to make the statements therein not misleading.
(c) There shall not have occurred (i) any change, or any development
or event involving a prospective change, in the condition (financial or other),
business, properties or results of operations of the Issuer or its subsidiaries
which, in the judgment of the Distributor, is material and adverse and makes it
impractical or inadvisable to proceed with completion of the public offering or
the sale of and payment for the Securities; (ii) any downgrading in the rating
of any debt securities of the Issuer by any "nationally recognized statistical
rating organization" (as defined for purposes of Rule 436(g) under the Act), or
any public announcement that any such organization has under surveillance or
review its rating of any debt securities of the Issuer (other than an
announcement with positive implications of a possible upgrading, and no
implication of a possible downgrading, of such rating); (iii) any change in
U.S. or international financial, political or economic conditions or currency
exchange rates or exchange controls as would, in the judgment of the
Distributor, be likely to prejudice materially the success of the proposed
issue, sale or distribution of the Securities, whether in the primary market
or in respect of dealings in the secondary market; (iv) any suspension or
limitation of trading in securities generally on the New York Stock Exchange,
or any setting of minimum prices for trading on such exchange, or any
suspension of trading of any securities of the Issuer on any exchange or in
the over-the-counter market; (v) any banking moratorium declared by U.S.
Federal or New York authorities; (vi) any attack on, outbreak or escalation
of hostilities or act of terrorism involving the ▇▇▇▇▇▇ ▇▇▇▇▇▇,
▇▇
any declaration of war by Congress or any other national or international
calamity or emergency if, in the judgment of the Distributor, the effect of
any such attack, outbreak, escalation, act, declaration, calamity or
emergency makes it impractical or inadvisable to proceed with solicitations
of offers to purchase, or sales of, Securities.
(d) With respect to any Security denominated in a currency other than
the U.S. dollar, more than one currency or a composite currency or any Security
the principal or interest of which is indexed to such currency, currencies or
composite currency, there shall not have occurred a suspension or material
limitation in foreign exchange trading in such currency, currencies or composite
currency by a major international bank, a general moratorium on commercial
banking activities in the country or countries issuing such currency, currencies
or composite currency, the outbreak or escalation of hostilities involving, the
occurrence of any material adverse change in the existing financial, political
or economic conditions of, or the declaration of war or a national emergency by,
the country or countries issuing such currency, currencies or composite currency
or the imposition or proposal of exchange controls by any governmental authority
in the country or countries issuing such currency, currencies or composite
currency.
(e) At the Closing Date and, if specified in a Terms Agreement, if
any, at the time of delivery of the Securities described in such Terms
Agreement, the Distributor shall have received an opinion, dated the Closing
Date, or such date of delivery, as the case may be, of the General Counsel of
the Issuer to the effect that:
(i) The Issuer is an existing corporation in good standing under
the laws of the State of Delaware, with corporate power and authority to own its
properties and conduct its business as described in the Prospectus; and the
Issuer is duly qualified to do business as a foreign corporation in good
standing in all other jurisdictions in which its ownership or lease of property
or the conduct of its business requires such qualification;
(ii) The Indenture has been duly authorized, executed and
delivered by the Issuer and has been duly qualified under the Trust Indenture
Act and constitutes a valid and legally binding obligation of the Issuer
enforceable in accordance with its terms, subject to bankruptcy, insolvency,
fraudulent transfer, reorganization, moratorium and similar laws of general
applicability relating to or affecting creditors' rights and to general equity
principles;
(iii) Securities established on or prior to the date of such
opinion has been duly authorized and established in conformity with the
Indenture, and, when the terms of a particular Security and of its issuance and
sale have been duly authorized and established by all necessary corporate action
in conformity with the Indenture, and such Security has been duly completed,
executed, authenticated and issued in accordance with the Indenture and
delivered against payment as contemplated by this Agreement, such Security will
constitute a valid and legally binding obligation of the Issuer enforceable in
accordance with its terms, subject to bankruptcy, insolvency, fraudulent
transfer, reorganization, moratorium and similar laws of general applicability
relating to or affecting creditors' rights and to general equity principles, it
being understood that such counsel may (a) assume that at the time of the
issuance, sale and delivery of each Security the authorization of such series
will not have been modified or rescinded and there will not have occurred any
change in law affecting the validity, legally
11
binding character or enforceability of such Security, (b) assume that neither
the issuance, sale and delivery of any Security, nor any of the terms of such
Security, nor compliance by the Issuer with such terms, will violate any
applicable law, any agreement or instrument then binding upon the Issuer or any
restriction imposed by any court or governmental body having jurisdiction over
the Issuer, and (c) state that as of the date of such opinion a judgment for
money in an action based on Securities denominated in foreign currencies or
currency units in a federal or state court in the United States ordinarily would
be enforced in the United States only in United States dollars, and that the
date used to determine the rate of conversion of the foreign currency or
currency unit in which a particular Security is denominated into United States
dollars will depend upon various factors, including which court renders the
judgment;
(iv) The Registration Statement has become effective under the
Act, the Prospectus was filed with the Commission pursuant to the subparagraph
of Rule 424(b) under the Act specified in such opinion on the date specified
therein, and, to the best of the knowledge of such counsel, no stop order
suspending the effectiveness of the Registration Statement or of any part
thereof has been issued and no proceedings for that purpose have been instituted
or are pending or contemplated under the Act, and the Registration Statement
relating to the Registered Securities, as of its effective date, the
Registration Statement and the Prospectus, as of the Closing Date, and any
amendment or supplement thereto, as of its date, complied as to form in all
material respects with the requirements of the Act, the Trust Indenture Act and
the Rules and Regulations; such counsel has no reason to believe that such
Registration Statement as of its effective date, the Registration Statement or
the Prospectus, as of the Closing Date, or any such amendment or supplement, as
of its date, contained any untrue statement of a material fact or omitted to
state any material fact required to be stated therein or necessary to make the
statements therein not misleading; the descriptions in the Registration
Statement and the Prospectus of statutes, legal and governmental proceedings and
contracts and other documents are accurate and fairly present the information
required to be shown; and such counsel does not know of any legal or
governmental proceedings required to be described in the Prospectus which are
not described as required or of any contracts or documents of a character
required to be described in the Registration Statement or the Prospectus or to
be filed as exhibits to the Registration Statement which are not described and
filed as required; it being understood that such counsel need to express no
opinion as to the financial statements or other financial data contained in the
Registration Statement or the Prospectus;
(v) No consent, approval, authorization or order of, or filing
with, any governmental agency or body or any court is required for the
consummation of the transactions contemplated by this Agreement in connection
with the issuance and sale of the Securities by the Issuer, except such as have
been obtained and made under the Act and the Trust Indenture Act and such as may
be required under state securities laws (it being understood that such counsel
may assume with respect to each particular Security that the inclusion of any
alternative or additional terms in such Security that are not currently
specified in the draft forms of Securities examined by such counsel would not
require the Issuer to obtain any regulatory consent, authorization or approval
or make any regulatory filing in order for the Issuer to issue, sell and deliver
such Security);
(vi) The execution, delivery and performance of the Indenture,
this
12
Agreement and the issuance and sale of the Securities, and compliance with the
terms and provisions thereof, will not result in a breach or violation of any of
the terms and provisions of, or constitute a default under, any statute, any
rule, regulation or order of any governmental agency or body or any court having
jurisdiction over the Issuer or any subsidiary of the Issuer or any of their
properties or any material agreement or instrument to which the Issuer or any
such subsidiary is a party or by which the Issuer or any such subsidiary is
bound or to which any of the properties of the Issuer or any such subsidiary is
subject, or the charter or by-laws of the Issuer or any such subsidiary, and the
Issuer has full power and authority to authorize, issue and sell the Securities
as contemplated by this Agreement (it being understood that such counsel may
assume with respect to each particular Security that the inclusion of any
alternative or additional terms in such Security that are not currently
specified in the draft forms of Securities examined by such counsel will not
cause the issuance, sale or delivery of such Security, the terms of such
Security, or the compliance by the Issuer with such terms, to violate any of the
court orders or laws specified in this paragraph or to result in a default under
or a breach of any of the agreements specified in this paragraph); and
(vii) This Agreement has been duly authorized, executed and
delivered by the Issuer;
PROVIDED, HOWEVER, that, in the case of each such opinion delivered pursuant to
a Terms Agreement, (x) the statements contained in such opinion relating to the
Registration Statement or the Prospectus shall relate to the Registration
Statement or the Prospectus, as the case may be, as amended or supplemented as
of the date of the Issuer's acceptance of the offer to purchase such Securities
and as of the time of delivery of such Securities; (y) such opinion shall relate
to the Securities being delivered on the date of such opinion and not to other
Securities as well; and (z) in lieu of the opinion described in clause (iii),
such opinion shall state that the Securities being delivered on the date of such
opinion, when delivered against payment therefor as contemplated by this
Agreement, will have been duly executed, authenticated, issued and delivered and
will constitute valid and legally binding obligations of the Issuer enforceable
in accordance with their terms, subject only to the exceptions set forth in
clause (iii) as to bankruptcy, insolvency, fraudulent transfer, reorganization,
moratorium and similar laws of general applicability relating to or affecting
creditors' rights and general equity principles, and will conform to the
description thereof contained in the Prospectus as amended or supplemented at
such date of delivery.
(f) At the Closing Date and, if specified in a Terms Agreement, if
any, at the time of delivery of the Securities described in such Terms
Agreement, the Distributor shall have received a certificate, dated the Closing
Date or such date of delivery, as the case may be, signed by any two of the
chairman of the board of directors, the chief executive officer, the president,
the chief financial officer, the chief administrative officer, the chief
accounting officer and any Managing Director of the Issuer in which such
officers, to the best of their knowledge after reasonable investigation, shall
state that the representations and warranties of the Issuer in this Agreement
are true and correct, that the Issuer has complied with all agreements and
satisfied all conditions on its part to be performed or satisfied hereunder at
or prior to the Closing Date or such date of delivery, as the case may be, that
no stop order suspending the effectiveness of the Registration Statement or of
any part thereof has been issued and no proceedings for that purpose
13
have been instituted or are contemplated by the Commission, and that subsequent
to the date of the most recent financial statements in the Prospectus, there has
been no material adverse change, nor any development or event involving a
prospective material adverse change, in the condition (financial or otherwise),
business, properties or results of operations of the Issuer and its subsidiaries
taken as a whole, except as set forth in or contemplated by the Prospectus or as
described in such certificate. In the case of each such certificate delivered
pursuant to a Terms Agreement, the statements contained in such certificate
relating to the Registration Statement or the Prospectus shall relate to the
Registration Statement or the Prospectus, as the case may be, as amended or
supplemented as of the date of the Issuer's acceptance of the offer to purchase
such Securities and as of the time of delivery of such Securities.
(g) At the Closing Date and, if specified in a Terms Agreement, if
any, at the time of delivery of the Securities described in such Terms
Agreement, the Distributor shall have received a letter, dated the Closing Date
or such date of delivery, as the case may be, of KPMG LLP, confirming that they
are independent public accountants within the meaning of the Act and the
applicable published Rules and Regulations thereunder and stating to the effect
that:
(i) in their opinion, the financial statements and schedules and
summary of earnings, if any, examined by them and included in the Prospectus
comply as to form in all material respects with the applicable accounting
requirements of the Act and the related published Rules and Regulations;
(ii) they have performed the procedures specified by the American
Institute of Certified Public Accountants for a review of interim financial
information as described in Statement of Auditing Standards No. 71, Interim
Financial Information, on any unaudited financial statements included in the
Registration Statement;
(iii) on the basis of the review, if any, referred to in clause
(ii) above, a reading of the latest available interim financial statements of
the Issuer, inquiries of officials of the Issuer who have responsibility for
financial and accounting matters and other specified procedures, nothing came to
their attention that caused them to believe that:
(A) the unaudited financial statements, if any, and any summary
of earnings included in the Prospectus do not comply as to form in all material
respects with the applicable accounting requirements of the Act and the related
published Rules and Regulations or any material modifications should be made to
such unaudited financial statements and summary of earnings for them to be in
conformity with generally accepted accounting principles;
(B) if any unaudited "capsule" information is contained in the
Prospectus, the unaudited consolidated net revenues, income before provision for
income taxes and extraordinary items, net income or other amounts constituting
such "capsule" information and described in such letter for the three-, six- and
nine-month periods ended March 31, June 30 and September 30, respectively,
included in the Prospectus, as applicable, do not agree with the corresponding
amounts set forth in the unaudited consolidated financial statements for those
same periods or were not determined on a basis substantially consistent with
that of the corresponding amounts in the audited statements of income;
14
(C) at the date of the latest available balance sheet read by
such accountants, or at a subsequent specified date not more than three business
days prior to the date of this Agreement, there was any change in the capital
stock or any increase in short-term indebtedness or long-term debt of the Issuer
and its consolidated subsidiaries or, at the date of the latest available
balance sheet read by such accountants, there was any decrease in consolidated
net assets, as compared with amounts shown on the latest balance sheet included
in the Prospectus; or
(D) for the period from the closing date of the latest available
income statement included in the Prospectus to the closing date of the latest
available income statement read by such accountants there were any decreases, as
compared with the corresponding period of the previous year and with the period
of corresponding length ended the date of the latest income statement included
in the Prospectus, in consolidated net revenues, income before provision for
income taxes and extraordinary items, net income or in the ratio of earnings to
fixed charges and in the ratio of earnings to combined fixed charges and
preferred stock dividends;
except in all cases set forth in clauses (C) and (D) above, for
changes, increases or decreases which the Prospectus discloses have occurred or
may occur or which are described in such letter; and
(iv) they have compared specified dollar amounts (or percentages
derived from such dollar amounts) and other financial information contained in
the Registration Statement (in each case to the extent that such dollar amounts,
percentages and other financial information are derived from the general
accounting records of the Issuer and its subsidiaries subject to the internal
controls of the Issuer's accounting system or are derived directly from such
records by analysis or computation) with the results obtained from inquiries, a
reading of such general accounting records and other procedures specified in
such letter and have found such dollar amounts, percentages and other financial
information to be in agreement with such results, except as otherwise specified
in such letter.
All financial statements and schedules included in material
incorporated by reference into the Prospectus shall be deemed included in the
Prospectus for purposes of this subsection.
In the case of each such letter delivered pursuant to a Terms
Agreement, the statements contained in such letter relating to the Registration
Statement or the Prospectus shall relate to the Registration Statement or the
Prospectus, as the case may be, as amended or supplemented as of the date of the
Issuer's acceptance of the offer to purchase such Securities and as of the time
of delivery of such Securities.
(h) At the Closing Date and, if specified in a Terms Agreement, if
any, at the time of delivery of the Securities described in such Terms
Agreement, the Distributor shall have received from Cleary, Gottlieb, ▇▇▇▇▇ &
▇▇▇▇▇▇▇▇, counsel for the Distributor, such opinion or opinions, dated the
Closing Date or such date of delivery, as the case may be, with respect to the
validity of the Securities, the Registration Statement, the Prospectus and other
related matters as the Distributor may require, and the Issuer shall have
furnished to such counsel such documents as they request for the purpose of
enabling them to pass upon such matters.
15
(i) The Issuer shall have furnished to the Distributor or its counsel
such further certificates and documents as the Distributor or such counsel
requests.
The Issuer will furnish the Distributor with such conformed copies of
such opinions, certificates, letters and documents as it reasonably requests.
6. ADDITIONAL COVENANTS OF THE ISSUER. The Issuer agrees that:
(a) Each acceptance by the Issuer of an offer for the purchase of
Securities shall be deemed to be an affirmation that its representations and
warranties contained in this Agreement are true and correct at the time of such
acceptance and a covenant that such representations and warranties will be true
and correct at the time of delivery to the purchaser of the Securities as though
made at and as of each such time, it being understood that such representations
and warranties shall relate to the Registration Statement and the Prospectus as
amended or supplemented at each such time. Each such acceptance by the Issuer of
an offer to purchase Securities shall be deemed to constitute an additional
representation, warranty and agreement by the Issuer that, as of the date of
delivery of such Securities to the purchaser thereof, after giving effect to the
issuance of such Securities, of any other Securities to be issued on or prior to
such delivery date and of any other Registered Securities to be issued and sold
by the Issuer on or prior to such delivery date, the aggregate amount of
Registered Securities (including any Securities) which have been issued and sold
by the Issuer will not exceed the amount of Registered Securities registered
pursuant to the Registration Statement.
(b) Each time that the Registration Statement or the Prospectus shall
be amended or supplemented (other than by a Pricing Supplement), the Issuer
shall, unless otherwise waived by the Distributor, (A) concurrently with such
amendment or supplement, if such amendment or supplement shall occur at a
Marketing Time, or (B) immediately at the next Marketing Time if such amendment
or supplement shall not occur at a Marketing Time, furnish the Distributor with
a certificate, dated the date of delivery thereof, of the chairman of the board
of directors, the chief executive officer, the president, the chief financial
officer, the chief administrative officer, the chief accounting officer and any
Managing Director of the Issuer, in form satisfactory to the Distributor, to the
effect that the statements contained in the certificate covering the matters set
forth in Section 5(f) hereof which was last furnished to the Distributor
pursuant to this Section 6(b) are true and correct at the time of such amendment
or supplement, as though made at and as of such time or, in lieu of such
certificate, a certificate of the same tenor as the certificate referred to in
Section 5(f); PROVIDED, HOWEVER, that any certificate furnished under this
Section 6(b) shall relate to the Registration Statement and the Prospectus as
amended or supplemented at the time of delivery of such certificate and, in the
case of the matters set forth in clause (ii) of Section 5(f), to the time of
delivery of such certificate.
(c) At each Representation Date referred to in Section 6(b), the
Issuer shall, unless otherwise waived by the Distributor, (A) concurrently if
such Representation Date shall occur at a Marketing Time, or (B) immediately at
the next Marketing Time if such Representation Date shall not occur at a
Marketing Time, furnish the Distributor with a written opinion or opinions,
dated the date of such Representation Date, of counsel for the Issuer, in form
satisfactory to the Distributor, to the effect set forth in Section 5(e) hereof;
PROVIDED, HOWEVER, that to the extent appropriate such opinion or opinions may
reconfirm matters set forth in a prior
16
opinion delivered at the Closing Date or under this Section 6(c); PROVIDED
FURTHER, HOWEVER, that any opinion or opinions furnished under this Section 6(c)
shall relate to the Registration Statement and the Prospectus as amended or
supplemented at such Representation Date and shall state that the Securities
sold in the relevant Applicable Period (as defined below) have been duly
executed, authenticated, issued and delivered and constitute valid and legally
binding obligations of the Issuer enforceable in accordance with their terms,
subject only to the exceptions set forth in clause (iii) of Section 5(e) hereof
as to bankruptcy, insolvency, fraudulent transfer, reorganization, moratorium
and similar laws of general applicability relating to or affecting creditors'
rights and general equity principles, and conform to the description thereof
contained in the Prospectus as amended or supplemented at the relevant date or
dates for the delivery of such Securities to the purchaser or purchasers
thereof. For the purpose of this Section 6(c), "Applicable Period" shall mean
with respect to any opinion delivered on a Representation Date the period
commencing on the date as of which the most recent prior opinion delivered at
the Closing Date or under this Section 6(c) speaks and ending on such
Representation Date.
(d) At each Representation Date referred to in Section 6(b) on which
the Registration Statement or the Prospectus shall be amended or supplemented to
include additional financial information, the Issuer shall cause KPMG LLP,
unless otherwise waived by the Distributor, (A) concurrently if such
Representation Date shall occur at a Marketing Time, or (B) immediately at the
next Marketing Time if such Representation Date shall not occur at a Marketing
Time, to furnish the Distributor with a letter, addressed jointly to the Issuer
and the Distributor and dated the date of such Representation Date, in form and
substance satisfactory to the Distributor, to the effect set forth in Section
5(g) hereof; PROVIDED, however, that to the extent appropriate such letter may
reconfirm matters set forth in a prior letter delivered at the Closing Date or
pursuant to this Section 6(d); PROVIDED FURTHER, HOWEVER, that any letter
furnished under this Section 6(d) shall relate to the Registration Statement and
the Prospectus as amended or supplemented at such Representation Date, with such
changes as may be necessary to reflect changes in the financial statements and
other information derived from the accounting records of the Issuer.
(e) On each date for the delivery of Securities to the purchaser
thereof, the Issuer shall, if requested by the Distributor, furnish the
Distributor with a written opinion or opinions, dated the date of delivery
thereof, of counsel for the Issuer, in form satisfactory to the Distributor, to
the effect set forth in clauses (i), (ii) and (iii) of Section 5(e) hereof;
PROVIDED, HOWEVER, that any opinion furnished under this Section 6(e) shall
relate to the Prospectus as amended or supplemented at such delivery date and
shall state that the Securities being sold by the Issuer on such delivery date,
when delivered against payment therefor as contemplated by this Agreement, will
have been duly executed, authenticated, issued and delivered and will constitute
valid and legally binding obligations of the Issuer enforceable in accordance
with their terms, subject only to the exceptions set forth in clause (iii) of
Section 5(e) hereof as to bankruptcy, insolvency, fraudulent transfer,
reorganization, moratorium and similar laws of general applicability relating to
or affecting creditors' rights and general equity principles, and will conform
to the description thereof contained in the Prospectus as amended or
supplemented at such settlement date.
(f) The Issuer agrees that any obligation of a person who has agreed
to purchase Securities to make payment for and take delivery of such Securities
shall be subject to (i) the
17
accuracy, on the related settlement date fixed pursuant to the Procedures, of
the Issuer's representation and warranty deemed to be made to the Distributor
pursuant to the last sentence of subsection (a) of this Section 6, and (ii) the
satisfaction, on such settlement date, of each of the conditions set forth in
Sections 5(a), (b) and (c), it being understood that under no circumstance shall
the Distributor have any duty or obligation to exercise the judgment permitted
under Section 5(b) or (c) on behalf of any such person.
7. INDEMNIFICATION AND CONTRIBUTION.
(a) The Issuer will indemnify and hold harmless the Distributor
against any losses, claims, damages or liabilities, joint or several, to which
the Distributor may become subject, under the Act or otherwise, insofar as such
losses, claims, damages or liabilities (or actions in respect thereof) arise out
of or are based upon any untrue statement or alleged untrue statement of any
material fact contained in the Registration Statement, the Prospectus, or any
amendment or supplement thereto, or any related preliminary prospectus or
preliminary prospectus supplement, or arise out of or are based upon the
omission or alleged omission to state therein a material fact required to be
stated therein or necessary to make the statements therein not misleading, and
will reimburse the Distributor for any legal or other expenses reasonably
incurred by the Distributor in connection with investigating or defending any
such loss, claim, damage, liability or action as such expenses are incurred;
PROVIDED, HOWEVER, that the Issuer will not be liable in any such case to the
extent that any such loss, claim, damage or liability arises out of or is based
upon an untrue statement or alleged untrue statement or omission or alleged
omission made in any of such documents in reliance upon and in conformity with
written information furnished to the Issuer by the Distributor specifically for
use therein, unless such loss, claim, damage or liability arises out of the
offer or sale of Securities occurring after the Distributor has notified the
Issuer in writing that such information should no longer be used therein, it
being understood and agreed that the only such information furnished by the
Distributor consists of the information described as such in subsection (b)
below.
(b) The Distributor will indemnify and hold harmless the Issuer
against any losses, claims, damages or liabilities to which the Issuer may
become subject, under the Act or otherwise, insofar as such losses, claims,
damages or liabilities (or actions in respect thereof) arise out of or are based
upon any untrue statement or alleged untrue statement of any material fact
contained in the Registration Statement, the Prospectus or any amendment or
supplement thereto, or any related preliminary prospectus or preliminary
prospectus supplement, or arise out of or are based upon the omission or the
alleged omission to state therein a material fact required to be stated therein
or necessary to make the statements therein not misleading, in each case to the
extent, but only to the extent, that such untrue statement or alleged untrue
statement or omission or alleged omission was made in reliance upon and in
conformity with written information furnished to the Issuer by the Distributor
specifically for use therein, and will reimburse any legal or other expenses
reasonably incurred by the Issuer in connection with investigating or defending
any such loss, claim, damage, liability or action as such expenses are incurred,
unless such loss, claim, damage or liability arises out of the offer or sale of
Securities occurring after the Distributor has notified the Issuer in writing
that such information should no longer be used therein, it being understood and
agreed that the only such information furnished by the Distributor consists of
the following information in the Prospectus furnished on behalf of
18
the Distributor: (i) the ninth paragraph under the caption "Plan of
Distribution" relating to the Distributor's market stabilization activities in
the prospectus supplement; and (ii) the last paragraph under the caption "Plan
of Distribution" in the prospectus supplement.
(c) Promptly after receipt by an indemnified party under this Section
7 of notice of the commencement of any action, such indemnified party will, if a
claim in respect thereof is to be made against the indemnifying party under
subsection (a) or (b) above, notify the indemnifying party of the commencement
thereof; but the omission so to notify the indemnifying party will not relieve
it from any liability which it may have to any indemnified party otherwise than
under subsection (a) or (b) above. In case any such action is brought against
any indemnified party, and it notifies the indemnifying party of the
commencement thereof, the indemnifying party will be entitled to participate
therein and, to the extent that it may wish, to assume the defense thereof, with
counsel satisfactory to such indemnified party (who shall not, except with the
consent of the indemnified party, be counsel to the indemnifying party), and
after notice from the indemnifying party to such indemnified party of its
election so to assume the defense thereof, the indemnifying party will not be
liable to such indemnified party under this Section 7 for any legal or other
expenses subsequently incurred by such indemnified party in connection with the
defense thereof other than reasonable costs of investigation. No indemnifying
party shall, without the prior written consent of the indemnified party, effect
any settlement of any pending or threatened action in respect of which any
indemnified party is or could have been a party and indemnity could have been
sought hereunder by such indemnified party unless such settlement includes an
unconditional release of such indemnified party from all liability on any claims
that are the subject matter of such action.
(d) If the indemnification provided for in this Section 7 is
unavailable or insufficient to hold harmless an indemnified party under
subsection (a) or (b) above, then the indemnifying party shall contribute to the
amount paid or payable by such indemnified party as a result of the losses,
claims, damages or liabilities referred to in subsection (a) or (b) above (i) in
such proportion as is appropriate to reflect the relative benefits received by
the Issuer on the one hand and the Distributor on the other from the offering
pursuant to this Agreement of the Securities which are the subject of the action
or (ii) if the allocation provided by clause (i) above is not permitted by
applicable law, in such proportion as is appropriate to reflect not only the
relative benefits referred to in clause (i) above but also the relative fault of
the Issuer on the one hand and the Distributor on the other in connection with
the statements or omissions which resulted in such losses, claims, damages or
liabilities as well as any other relevant equitable considerations. The relative
benefits received by the Issuer on the one hand and the Distributor on the other
shall be deemed to be in the same proportions as the total net proceeds from the
offering pursuant to this Agreement of the Securities which are the subject of
the action (before deducting expenses) received by the Issuer bear to the total
discounts and commissions received by the Distributor from the offering of such
Securities pursuant to this Agreement. The relative fault 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 Issuer or the Distributor and the
parties' relative intent, knowledge, access to information and opportunity to
correct or prevent such untrue statement or omission. The amount paid by an
indemnified party as a result of the losses, claims, damages or liabilities
referred to in the first sentence of this subsection (d) shall be deemed to
include any
19
legal or other expenses reasonably incurred by such indemnified party in
connection with investigating or defending any action or claim which is the
subject of this subsection (d). Notwithstanding the provisions of this
subsection (d), the Distributor shall not be required to contribute any amount
in excess of the amount by which the total price at which the Securities which
are the subject of the action and which were distributed to the public through
it pursuant to this Agreement or upon resale of Securities purchased by it from
the Issuer exceeds the amount of any damages which the Distributor has otherwise
been required to pay by reason of such untrue or alleged untrue statement or
omission or alleged omission. No person guilty of fraudulent misrepresentation
(within the meaning of Section 11(f) of the Act) shall be entitled to
contribution from any person who was not guilty of such fraudulent
misrepresentation.
(e) The obligations of the Issuer under this Section 7 shall be in
addition to any liability which the Issuer may otherwise have and shall extend,
upon the same terms and conditions, to each person, if any, who controls the
Distributor within the meaning of the Act; and the obligations of the
Distributor under this Section 7 shall be in addition to any liability which the
Distributor may otherwise have and shall extend, upon the same terms and
conditions, to each director of the Issuer, to each officer of the Issuer who
has signed the Registration Statement and to each person, if any, who controls
the Issuer within the meaning of the Act.
8. STATUS OF THE DISTRIBUTOR. In soliciting offers to purchase the
Securities from the Issuer pursuant to this Agreement and in assuming its other
obligations hereunder (other than any obligation to purchase Securities pursuant
to Section 3 hereof), the Distributor is acting solely as agent for the Issuer
and not as principal. In connection with the placement of any Securities by a
Distributor, acting as agent, (a) the Distributor will make reasonable efforts
to assist the Issuer in obtaining performance by each purchaser whose offer to
purchase Securities from the Issuer has been solicited by the Distributor and
accepted by the Issuer, but the Distributor shall have no liability to the
Issuer in the event any such purchase is not consummated for any reason; and (b)
if the Issuer shall default on its obligations to deliver Securities to a
purchaser whose offer it has accepted, the Issuer (i) shall hold the Distributor
harmless against any loss, claim or damage arising from or as a result of such
default by the Issuer, and (ii) in particular, shall pay to the Distributor any
commission to which it would be entitled in connection with such sale.
9. SURVIVAL OF CERTAIN REPRESENTATIONS AND OBLIGATIONS. The respective
indemnities, agreements, representations, warranties and other statements of the
Issuer or its officers and of the Distributor set forth in or made pursuant to
this Agreement will remain in full force and effect, regardless of any
investigation, or statement as to the results thereof, made by or on behalf of
the Distributor, the Issuer or any of their respective representatives, officers
or directors or any controlling person and will survive delivery of and payment
for the Securities. If this Agreement is terminated pursuant to Section 10 or
for any other reason or if for any reason the sale of Securities described in a
confirmation or Terms Agreement referred to in Section 3 by the Issuer to the
Distributor is not consummated, the Issuer shall remain responsible for the
expenses to be paid or reimbursed by it pursuant to Section 4(j) and the
obligations of the Issuer under Sections 4(f) and, 4(i) and the respective
obligations of the Issuer and the Distributor pursuant to Section 7 shall remain
in effect. In addition, if any such termination of this Agreement shall occur
either (i) at a time when the Distributor shall own any of the Securities with
the intention of reselling them or (ii) after the Issuer has accepted an offer
to purchase Securities and prior to
20
the related settlement, the obligations of the Issuer under the second sentence
of Section 4(c), under Sections 4(a), 4(b), 4(d), 4(e), 4(g), 4(h) and 4(k) and,
in the case of a termination occurring as described in (ii) above, under
Sections 3(c), 6(a), 6(e) and 6(f) and under the last sentence of Section 8,
shall also remain in effect.
10. TERMINATION. This Agreement may be terminated for any reason at
any time by the Issuer or by the Distributor upon the giving of one day's
written notice of such termination to the other party hereto; PROVIDED, HOWEVER,
that this Agreement may not be terminated by the giving of such notice following
receipt by the Issuer of a confirmation or Terms Agreement referred to in
Section 3 relating to the purchase of Securities by the Distributor and prior to
delivery of the Securities described in such confirmation or Terms Agreement,
unless the sale and purchase of Securities contemplated thereby is rejected by
the Issuer in accordance with Section 3. Any settlement with respect to
Securities placed by the Distributor on an agency basis occurring after
termination of this Agreement shall be made in accordance with the Procedures
and the Distributor agrees, if requested by the Issuer, to take the steps
therein provided to be taken by the Distributor in connection with such
settlement.
11. SALES OF SECURITIES DENOMINATED IN A CURRENCY OTHER THAN U.S.
DOLLARS OR OF INDEXED SECURITIES. If at any time the Issuer and the Distributor
shall determine to issue and sell Securities denominated in a currency other
than U.S. dollars, which other currency may include a currency unit, or with
respect to which an index is used to determine the amounts of payments of
principal and any premium and interest, the Issuer and the Distributor may
execute and deliver a supplement to this Agreement for the purpose of making any
appropriate additions to and modifications of the terms of this Agreement (and
the Procedures) applicable to such Securities and the offer and sale thereof.
The Issuer will not issue Securities denominated in Yen otherwise than in
compliance with applicable Japanese laws, regulations and policies. In
particular, the Issuer or its designated agent shall submit such reports or
information as may be required from time to time by applicable law, regulations
and guidelines promulgated by Japanese governmental and regulatory authorities
in connection with the issue and offering of the Securities.
12. NOTICES. Except as otherwise provided herein, all notices and
other communications hereunder shall be in writing and shall be deemed to have
been duly given if mailed or transmitted by any standard form of
telecommunication. Notices to Credit Suisse First Boston Corporation shall be
directed to it at Eleven ▇▇▇▇▇▇▇ ▇▇▇▇▇▇, ▇▇▇ ▇▇▇▇, ▇▇▇ ▇▇▇▇ ▇▇▇▇▇-▇▇▇▇,
Attention: Short and Medium Term Finance Department (Facsimile No. (212)
743-5825); and notices to the Issuer shall be directed to it at Eleven ▇▇▇▇▇▇▇
▇▇▇▇▇▇, ▇▇▇ ▇▇▇▇, ▇▇▇ ▇▇▇▇ ▇▇▇▇▇-▇▇▇▇, Attention: Corporate Treasury Department
(Facsimile No.: (▇▇▇) ▇▇▇-▇▇▇▇); or in the case of either party hereto, to such
other address or person as such party shall specify to the other party by a
notice given in accordance with the provisions of this Section 12. Any such
notice shall take effect at the time of receipt.
13. SUCCESSORS. This Agreement will inure to the benefit of and be
binding upon the parties hereto, their respective successors, the officers and
directors and controlling persons referred to in Section 7 and, to the extent
provided in Section 6(f), any person who has agreed to purchase Securities from
the Issuer, and no other person will have any right or obligation
21
hereunder.
14. COUNTERPARTS. This Agreement and any Terms Agreement may be
executed in any number of counterparts, each of which shall be deemed to be an
original, but all such counterparts shall together constitute one and the same
Agreement.
15. APPLICABLE LAW. THIS AGREEMENT AND ANY TERMS AGREEMENT SHALL BE
GOVERNED BY, AND CONSTRUED IN ACCORDANCE WITH, THE LAWS OF THE STATE OF NEW
YORK, WITHOUT REGARD TO PRINCIPLES OF CONFLICTS OF LAWS.
The Issuer hereby submits to the non-exclusive jurisdiction of the
Federal and state courts in the Borough of Manhattan in The City of New York in
any suit or proceeding arising out of or relating to this Agreement or any Terms
Agreement or the transactions contemplated hereby or thereby.
16. AMENDMENTS. This Agreement may be amended or supplemented if, but
only if, such amendment or supplement is in writing and is signed by the Issuer
and the Distributor.
22
If the foregoing correctly sets forth our agreement, please indicate
your acceptance hereof in the space provided for that purpose below.
Very truly yours,
CREDIT SUISSE FIRST BOSTON (USA), INC.
By:____________________________
Name:
Title:
CONFIRMED AND ACCEPTED, as of the
date first above written:
CREDIT SUISSE FIRST BOSTON CORPORATION
By:__________________________
Name:
Title:
23
EXHIBIT A
[FORM OF TERMS AGREEMENT]
CREDIT SUISSE FIRST BOSTON (USA), INC.
("Issuer")
Medium-Term Notes
Due Nine Months or More from Date of Issue
TERMS AGREEMENT
_______________, ▇▇
▇▇▇▇▇▇ ▇▇▇▇▇▇ ▇▇▇▇▇ ▇▇▇▇▇▇ (▇▇▇), Inc.
Eleven ▇▇▇▇▇▇▇ ▇▇▇▇▇▇
▇▇▇ ▇▇▇▇, ▇▇▇ ▇▇▇▇ ▇▇▇▇▇
Attention: Treasury
Ladies and Gentlemen:
We offer to purchase, on and subject to the terms and conditions of
the Distribution Agreement dated _________, 2001 (the "Distribution Agreement"),
the following Notes ("Notes") on the following terms:
Title:
Currency or Currency Units:
Stated Maturity:
Authorized Denominations:
Principal Amount:
Public Offering Price: [___%, subject to change by the undersigned
- The Distributor proposes to reoffer the above
Notes from time to time at market prices prevailing
at the time of sale, at prices related to such
prevailing market prices or at negotiated prices.]
Original Issue Discount Security: Yes ____ No ____
A-1
Purchase Price (to be paid in [New York Clearing House (next day) --
immediately available] funds): ___% [, plus accrued interest, if
any, from the Trade Date to the Settlement Date]
Underwriting Discount (%):
In the case of Fixed Rate Notes, the interest rate and the Interest
Payment Date or Dates and corresponding Regular Record Date or Dates
and whether the maturity can be extended:
In the case of Floating Rate Notes, whether the Floating Rate Note
is a regular Floating Rate Note, an Inverse Floating Rate Note or a
Floating Rate/Fixed Rate Note, the Interest rate formula, Initial
Interest Rate, the Index Maturity, the Spread or Spread Multiplier
(if any), the maximum or minimum Interest rate limitations (if any),
the Interest Reset Dates, the Interest Determination Dates, the
Interest Reset Period, the Calculation Agent, the Calculation Dates,
the Interest Payment Dates and the Regular Record Dates, in each
case to the extent applicable:
In the case of an Index Principal Note or Indexed Interest Rate
Note, the manner of determining the principal amount payable at the
Maturity Date:
In the case of a Dual Currency Note, the Optional Payment
Currency:
In the case of an Amortizing Note, the Amortization Schedule:
In the case of a Renewable Note, the Initial Maturity Date:
Redemption (option of the Issuer), if any:
Redemption Date(s):
Redemption Price(s)(%):
Notice Period:
Repayment (option of the Holder), if any:
Redemption Date(s):
Redemption Price(s)(%):
Notice Period:
Sinking Fund, if applicable:
Trade Date:
Settlement Date (Original Issue Date):
* * * * *
A-2
DETAILS FOR SETTLEMENT
Book-entry Security
[ADDITIONAL PURCHASE INFORMATION -- TO BE COMPLETED BY DISTRIBUTOR,
IF DESIRED, TO THE EXTENT AVAILABLE]
Exact name in which the Note or Notes are to be registered
("registered owner"):
Exact address of registered owner and, if different, the address for
delivery of notices and payment of principal and any premium and
interest:
Taxpayer identification number of registered owner:
Principal amount of each Note in authorized denominations to be
delivered to registered owner:
Exchange rate applicable to purchase Foreign Currency Notes to be
paid for in U.S. dollars:
* * * * *
Our agreement to purchase the Notes hereunder is subject to the
conditions set forth in the Distribution Agreement, including the conditions set
forth in paragraphs (e), (f), (g) and (h) of Section 5 thereof [, and [SPECIFY
ADDITIONAL CONDITIONS, IF ANY]]. If for any reason the purchase by the
undersigned of the Notes is not consummated other than because of a default by
the undersigned or a failure to satisfy a condition set forth in clause (iii),
(iv) or (v) of Section 5(c) of the Distribution Agreement, the Issuer shall
reimburse the undersigned for all out-of-pocket expenses reasonably incurred by
the undersigned in connection with the offering of the Notes and not otherwise
required to be reimbursed pursuant to Section 4 of the Distribution Agreement.
[INSERT ANY ADDITIONAL AGREEMENTS, CONDITIONS, ETC.]
A-3
Unless the undersigned has received notification from the Issuer
within [one Business Day (as defined in the Distribution Agreement)] that the
Issuer does not agree to the terms set forth herein, this Terms Agreement shall
constitute an agreement between the Issuer and the undersigned for the sale and
purchase of the Notes upon the terms set forth herein and in the Distribution
Agreement.
Very truly yours,
CREDIT SUISSE FIRST BOSTON
CORPORATION
By ___________________________________
Name:
Title:
Accepted and agreed to
as of the date set forth above.
CREDIT SUISSE FIRST BOSTON (USA), INC.
By _______________________________
Name:
Title:
A-4
EXHIBIT B
CREDIT SUISSE FIRST BOSTON (USA) INC.
Medium-Term Notes
Due Nine Months or More from Date of Issue
Commission Schedule
Commission Rate
(as a percentage of
Term Principal Amount)
---- ------------------
9 months to less than 12 months .125%
12 months to less than 18 months .150
18 months to less than 2 years .200
2 years to less than 3 years .250
3 years to less than 4 years .350
4 years to less than 5 years .450
5 years to less than 6 years .500
6 years to less than 7 years .550
7 years to less than 10 years .600
10 years to less than 15 years .625
15 years to less than 20 years .700
20 years to less than 30 years .750
30 years and greater To be negotiated
▇-▇
▇▇▇▇▇▇▇ ▇
▇▇▇▇▇▇ ▇▇▇▇▇▇ ▇▇▇▇▇ ▇▇▇▇▇▇ (▇▇▇) INC.
Medium-Term Notes
Due Nine Months or More from Date of Issue
Administrative Procedures
The Medium-Term Notes due nine months or more from date of issue
(the "Notes") are to be offered on a continuing basis by Credit Suisse First
Boston (USA), Inc. (the "Issuer"). Credit Suisse First Boston Corporation (the
"Agent") has agreed to use reasonable efforts to solicit offers to purchase the
Notes. The Agent may, but will not be obligated to, purchase Notes as principal
for its own account. The Notes are being sold pursuant to a
Distribution
Agreement, dated October ____, 2001 (the "Distribution Agreement"), between the
Issuer and the Agent, and will be issued pursuant to an Indenture, dated as of
June 1, 2001 (the "Indenture"), between the Issuer and The Chase Manhattan Bank,
as trustee (the "Trustee"). The Notes will rank equally and ratably with all
other unsecured and unsubordinated indebtedness of the Issuer and will have been
registered under the Securities Act of 1933, as amended (the "Act"). For a
description of the terms of the Notes and the offering and sale thereof, see the
sections entitled "Description of Notes", "Special Provisions Relating to
Foreign Currency Notes", "Foreign Currency Risks", "Certain United State Federal
Income Tax Considerations", "Proposed European Union Directive on Taxation of
Certain Interest Payments" and "Plan of Distribution" in the Prospectus
Supplement relating to the Notes, dated October ___, 2001, attached hereto and
hereinafter referred to as the "Prospectus Supplement", and the sections
entitled "Description of Debt Securities" and "Plan of Distribution" in the
Prospectus relating to the Notes, dated October ___, 2001, attached hereto and
hereinafter referred to as the "Prospectus". Defined terms used but not defined
herein shall have the meanings given to them in the Distribution Agreement, the
Prospectus or the Prospectus Supplement. To the extent the procedures set forth
below conflict with the provisions of the Notes, the Indenture or the
Distribution Agreement, the relevant provisions of the Notes, Indenture and
Distribution Agreement shall control.
The Notes will be represented by Global Notes delivered to The
Depository Trust Company ("DTC") or its nominee and recorded in the book-entry
system maintained by DTC or such nominee ("Book-Entry Notes"). Notes for which
interest is calculated on the basis of a fixed interest rate are referred to
herein as "Fixed Rate Notes". Notes for which interest is calculated at a rate
or rates determined by reference to an interest rate formula are referred to
herein as "Floating Rate Notes".
Administrative procedures are explained below. Administrative and
record-keeping responsibilities will be handled for the Issuer by its Treasury
Operations Department. The Issuer will advise the Agent in writing of those
persons handling administrative responsibilities with whom the Agent is to
communicate regarding offers to purchase Notes and
C-1
the details of their delivery.
PROCEDURES FOR ESTABLISHING THE TERMS OF THE NOTES
The Issuer and the Agent will discuss from time to time the price of
and the rates to be borne by the Notes that may be sold as a result of the
solicitation of offers by the Agent. Once the Agent has recorded any indication
of interest in Notes upon certain terms and communicated with the Issuer, if the
Issuer plans to accept an offer to purchase Notes upon such terms, the Issuer
will prepare a Pricing Supplement to the Prospectus, as then amended or
supplemented, reflecting the terms of such Notes and, after approval from the
Agent, will arrange to have the Pricing Supplement filed with, or transmitted by
a means reasonably calculated to result in filing with, the Securities and
Exchange Commission (the "Commission") via the Commission's ▇▇▇▇▇ System
pursuant to Rule 424(b) under the Act.* No settlements with respect to Notes
upon such terms may occur prior to such transmitting or filing and the Agent
will not, prior to such transmitting or filing, mail confirmations to customers
who have offered to purchase Notes upon such terms. After such transmitting or
filing, sales, mailing of confirmations and settlements may occur with respect
to Notes upon such terms, subject to the provisions of "Delivery of Prospectus"
below.
Pricing Supplements delivered to the Agent will be sent to:
Credit Suisse First Boston Corporation
Eleven Madison Avenue
New York,
New York 10010
Attn: ▇▇▇▇▇▇ ▇▇▇▇▇▇▇
Telephone: (▇▇▇) ▇▇▇-▇▇▇▇
Telecopier: (▇▇▇) ▇▇▇-▇▇▇▇
If the Issuer decides to post rates and a decision has been reached
to change interest rates, the Issuer will promptly notify the Agent. The Agent
will forthwith suspend solicitation of purchases. At that time, the Agent will
recommend and the Issuer will establish rates to be so "posted". Following
establishment of posted rates and prior to the transmitting or filing described
in the preceding paragraph, the Agent may only record indications of interest in
purchasing Notes at the posted rates. Once the Agent has recorded any indication
of interest in Notes at the posted rates and communicated with the Issuer, if
the Issuer plans to accept an offer at the posted rate, the Issuer will prepare
a Pricing Supplement reflecting such posted rate and, after approval from the
Agent, will arrange to have the Pricing Supplement filed, or transmitted by a
means reasonably calculated to result in filing with, the Commission via the
Commission's ▇▇▇▇▇ System pursuant to Rule 424(b) under the Act and will supply
at least one copy of the
----------
* If clause (b)(3) of Rule 424 is applicable, such filing shall be made no
later than the fifth business day following the earlier of the date of
determination of the settlement information described below or the date
such Pricing Supplement is first used. If clause (b)(2) or (b)(5) of Rule
424 is applicable, such filing shall be made no later than the second
business day following the earlier of the date of determination of the
settlement information or the date such Pricing Supplement is first used.
C-2
Prospectus, as then amended or supplemented, and bearing such Pricing
Supplement, to the Agent. No settlements at the posted rates may occur prior to
such transmitting or filing and the Agent will not, prior to such transmitting
or filing, mail confirmations to customers who have offered to purchase Notes at
the posted rates. After such transmitting or filing, sales, mailing of
confirmations and settlements may resume, subject to the provisions of "Delivery
of Prospectus" below.
Outdated Pricing Supplements, and copies of the Prospectus to which
they are attached (other than those retained for files), will be destroyed.
SUSPENSION OF SOLICITATION: AMENDMENT OR SUPPLEMENT
As provided in the Distribution Agreement, the Issuer may instruct
the Agent to suspend solicitation of offers to purchase at any time, and upon
receipt of at least one Business Day's prior notice from the Issuer, the Agent
will each forthwith suspend solicitation until such time as the Issuer has
advised it that solicitation of offers to purchase may be resumed.
If the Agent receives the notice from the Issuer contemplated by
Section 3(c) or 4(c) of the Distribution Agreement, it will promptly suspend
solicitation and will only resume solicitation as provided in the Distribution
Agreement. If the Issuer is required, pursuant to Section 4(c) of the
Distribution Agreement, to prepare an amendment or supplement, it will promptly
furnish the Agent with the proposed amendment or supplement; if the Issuer
decides to amend or supplement the Registration Statement or the Prospectus
relating to the Notes, it will promptly advise the Agent and will furnish the
Agent with the proposed amendment or supplement in accordance with the terms of
the Distribution Agreement. The Issuer will promptly file such amendment or
supplement with the Commission, provide the Agent with copies of any such
amendment or supplement, confirm to the Agent that such amendment or supplement
has been filed with the Commission and advise the Agent that solicitation may be
resumed.
Any such suspension shall not affect the Issuer's obligations under
the Distribution Agreement; and in the event that at the time the Issuer
suspends solicitation of offers to purchase there shall be any offers already
accepted by the Issuer outstanding for settlement, the Issuer will have the sole
responsibility for fulfilling such obligations. The Issuer will in addition
promptly advise the Agent and the Trustee if such offers are not to be settled
and if copies of the Prospectus as in effect at the time of the suspension may
not be delivered in connection with the settlement of such offers.
ACCEPTANCE OF OFFERS
The Agent will promptly advise the Issuer, at its option orally or
in writing, of each reasonable offer to purchase Notes received by it, other
than those rejected by the Agent. The Agent may, in its discretion reasonably
exercised, without notice to the Issuer, reject any offer received by it, in
whole or in part. The Issuer will have the sole right to accept offers to
purchase Notes and may reject any such offer, in whole or in part. If the Issuer
accepts or rejects
C-3
an offer, in whole or in part, the Issuer will promptly so notify the Agent.
CONFIRMATION
For each accepted offer, the Agent will issue a confirmation, in
writing, to the purchaser, with a copy to the Issuer's Treasury Operations
Department, setting forth the Purchase Information (as defined below) and
delivery and payment instructions; PROVIDED, HOWEVER, that, in the case of the
confirmation issued to the purchaser, no confirmation shall be delivered to the
purchaser prior to the delivery of the Prospectus referred to below.
DETERMINATION OF SETTLEMENT DATE
The receipt of immediately available funds by the Issuer in payment
for a Note and entry by the Agent of an SDFS deliver order through DTC's
Participant Terminal System to credit such Note to the account of a Participant
(as defined below) purchasing, or acting for the purchase of, such Note, shall,
with respect to such Note, constitute "settlement". All offers accepted by the
Issuer will be settled on the third Business Day next succeeding the date of
acceptance, unless otherwise agreed by the purchaser and the Issuer. The
settlement date shall be specified upon receipt of an offer to purchase.
DELIVERY OF PROSPECTUS
A copy of the Prospectus as most recently amended or supplemented on
the date of delivery thereof (except as provided below) must be delivered to a
purchaser prior to or together with the earlier of the delivery of (i) the
written confirmation provided for above and (ii) any Note purchased by such
purchaser. (For this purpose, entry of an SDFS deliver order through DTC's
Participant Terminal System to credit a Note to the account of a Participant
purchasing, or acting for the purchaser of, a Note shall be deemed to constitute
delivery of such Note.) The Issuer shall ensure that the Agent receives copies
of the Prospectus and each amendment or supplement thereto (including
appropriate Pricing Supplements) in such quantities and within such time limits
as will enable the Agent to deliver such confirmation or Note to a purchaser as
contemplated by these procedures and in compliance with the first sentence of
this paragraph. If, since the date of acceptance of a purchaser's offer, the
Prospectus shall have been supplemented solely to reflect any sale of Notes on
terms different from those agreed to between the Issuer and such purchaser or a
change in posted rates not applicable to such purchaser, such purchaser shall
not receive the Prospectus as supplemented by such new supplement, but shall
receive the Prospectus as supplemented to reflect the terms of the Notes being
purchased by such purchaser and otherwise as most recently amended or
supplemented on the date of delivery of the Prospectus.
In connection with the qualification of the Book-Entry 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 (the "Letter")
from the Issuer and the Trustee to DTC dated as of October ___, 2001, and a
Medium-Term Note Certificate Agreement between the Trustee and DTC dated as of
C-4
December 2, 1988, as amended, and its obligations as a participant in DTC,
including DTC's Same-Day Funds Settlement System ("SDFS").
FORM, DENOMINATIONS AND REGISTRATION
All Book-Entry Notes of the same tenor and having the same issue
date, will be represented initially by a single note (a "Global Note") in fully
registered form without coupons. Unless otherwise stated in the applicable
Pricing Supplement, Book-Entry Notes will represent Notes denominated in U.S.
dollars. Global Notes will be issued in denominations of $1,000 and integral
multiples thereof. Global Notes will be denominated in principal amounts not in
excess of $400,000,000. If one or more Book-Entry Notes having an aggregate
principal amount in excess of $400,000,000 would, but not for the preceding
sentence, be represented by a single Global Note, then one Global Note will be
issued to represent each $400,000,000 principal amount of such Book-Entry Note
or Notes and an additional Global Note will be issued to represent any remaining
principal amount of such Book-Entry Note or Notes. In such a case, each of the
Global Notes representing such Book-Entry note or Notes shall be assigned the
same CUSIP number. Each Global Note will be registered in the name of Cede &
Co., as nominee for DTC, on the security register maintained under the
Indenture. The beneficial owner of a Book-Entry Note (or one or more indirect
participants in DTC designated by such owner) will designate one or more
participants in DTC (with respect to such Note, the "Participants") to act as
agent or agents for such owner in connection with the book-entry system
maintained by DTC, and DTC will record in book-entry form, in accordance with
instructions provided by such Participants, a credit balance with respect to
such Note in the account of such Participants. The ownership interest of such
beneficial owner in such Note will be recorded through the records of such
Participants or through the separate records of such Participants and one or
more indirect participants in DTC.
CUSIP NUMBERS
The Issuer has arranged with the CUSIP Service Bureau of Standard &
Poor's Corporation (the "CUSIP Service Bureau") for the reservation of a series
of CUSIP numbers (including tranche numbers), such series consisting of
approximately 900 CUSIP numbers and relating to Global Notes representing
Book-Entry Notes. The Issuer has obtained from the CUSIP Service Bureau a
written list of such reserved CUSIP numbers and has delivered it to the Trustee
and DTC. The Trustee will assign CUSIP numbers serially to Global Notes as
described below under "Details for Settlement". DTC will notify the CUSIP
Service Bureau periodically of the CUSIP numbers that the Trustee has assigned
to Global Notes. The Trustee will notify the Issuer at the time when fewer than
100 of the reserved CUSIP numbers remain unassigned to the Global Notes; and the
Issuer will reserve additional CUSIP numbers for assignment to Global Notes
representing Book-Entry Notes. Upon obtaining such additional CUSIP numbers, the
Issuer shall deliver a list of such additional CUSIP numbers to the Trustee and
DTC.
TRANSFERS AND EXCHANGES FOR THE PURPOSE OF CONSOLIDATION
Transfers of a Book-Entry Note will be accomplished by book entries
made by
C-5
DTC and, in turn, by Participants (and, in certain cases, one or more indirect
participants in DTC) acting on behalf of beneficial transferors and transferees
of such Note.
The Trustee may upon notice to the Issuer deliver to DTC and the
CUSIP Service Bureau at any time a written notice (a copy of which shall be
attached to the Global Note resulting from such exchange) specifying (i) the
CUSIP numbers of two or more outstanding Global Notes that represent Book-Entry
Notes of the same tenor and having the same issue date, and for which interest
(if any) has been paid to the same date, (ii) a date occurring at least thirty
days after such written notice is delivered and at least thirty days before the
next interest payment date (if any) for such Notes, on which such Global Notes
shall be exchanged for a single replacement Global Note and (iii) a new CUSIP
number to be assigned to such replacement Global 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 a written notice setting forth such exchange date and the new
CUSIP number and stating that, as of such exchange date, the CUSIP numbers of
the Global Notes to be exchanged will no longer be valid. On the specified
exchange date, the Trustee will exchange such Global Notes for a single Global
Note bearing the new CUSIP number and the CUSIP numbers of the exchanged Global
Notes will, in accordance with CUSIP Service Bureau procedures, be canceled and
not immediately reassigned.
NOTICE OF INTEREST PAYMENT DATES AND REGULAR RECORD DATES
To the extent then known, on the first Business Day of March, June,
September and December of each year, the Trustee will deliver to the Issuer and
DTC a written list of record dates and interest payment dates that will occur
with respect to Floating Rate Book-Entry Notes during the six-month period
beginning on such first Business Day.
PAYMENTS OF PRINCIPAL AND INTEREST
(a) PAYMENTS OF INTEREST ONLY. Promptly after each regular record
date, the Trustee will deliver to the Issuer and DTC a written notice specifying
by CUSIP number the amount of interest to be paid on each Global Note on the
following interest payment date (other than an interest payment date coinciding
with maturity) and the total of such amounts. The Issuer will confirm with the
Trustee the amount payable on each Global Note on such interest payment date.
DTC will confirm the amount payable on each Global Note on such interest payment
date by reference to the daily or weekly bond reports published by Standard &
Poor's Corporation. The Issuer will pay to the Trustee the total amount of
interest due on such interest payment date (other than at maturity), and the
Trustee will pay such amount to DTC at the times and in the manner set forth
below under "Manner of Payment".
(b) PAYMENTS AT STATED MATURITY. On or about the first Business Day
of each month, the Trustee will deliver to the Issuer and DTC a written list of
principal and interest to be paid on each Global Note maturing in the following
month. The Issuer, the Trustee and DTC will confirm the amounts of such
principal and interest payments with respect to each such
C-6
Global Note on or about the fifth Business Day preceding the stated maturity of
such Global Note. The Issuer will pay to the Trustee, as the paying agent, the
principal amount of such Global Note, together with interest due at such stated
maturity. Upon surrender of a Global Note, the Trustee will pay such amounts to
DTC at the times and in the manner set forth below under "Manner of Payment". If
any stated maturity of a Global Note representing Book-Entry Notes is not a
Business Day, the payment due on such day shall be made on the next succeeding
Business Day and no interest shall accrue on such payment for the period from
and after such stated maturity. Promptly after payment to DTC of the principal
and any interest due at the stated maturity of such Global Note, the Trustee
will cancel such Global Note and return such Global Note to the Issuer in
accordance with the terms of the Indenture.
(c) PAYMENT UPON REDEMPTION. The Trustee will comply with the terms
of the Letter with regard to redemptions or repayments of the Book-Entry Notes.
In the case of Book-Entry Notes stated by their terms to be redeemable prior to
stated maturity, at least 30 calendar days before the date fixed for redemption
(the "Redemption Date"), the Issuer shall notify the Trustee of the Issuer's
election to redeem such Book-Entry Notes in whole or in part and the principal
amount of such Book-Entry Notes to be so redeemed. At least 15 calendar days but
not more than 30 calendar days prior to the Redemption Date, the Trustee shall
notify DTC of the Issuer's election to redeem such Book-Entry Notes. The Trustee
shall notify the Issuer and DTC of the CUSIP numbers of the particular
Book-Entry Notes to be redeemed either in whole or in part. The Issuer, the
Trustee and DTC will confirm the amounts of such principal and any premium and
interest payable with respect to each such Book-Entry Note on or about the fifth
Business Day preceding the Redemption Date of such Book-Entry Note. The Issuer
will pay the Trustee, in accordance with the terms of the Indenture, the amount
necessary to redeem each such Book-Entry Note or the applicable portion of each
such Book-Entry Note. The Trustee will pay such amount to DTC at the times and
in the manner set forth herein. Promptly after payment to DTC of the amount due
on the Redemption Date for such Book-Entry Note, the Trustee shall cancel any
such Book-Entry Note redeemed in whole and shall deliver it to the Issuer with
an appropriate debit advice. If a Global Note is to be redeemed in part, the
Trustee will cancel such Global Note and issue a Global Note which shall
represent the remaining portion of such Global Note and shall bear the CUSIP
number of the canceled Global Note.
(d) MANNER OF PAYMENT. The total amount of any principal and
interest due on Global Notes on any interest payment date or at Maturity shall
be paid by the Issuer to the Trustee in immediately available funds on such date
available for use as of 9:30 a.m.,
New York City time. The Issuer will make such
payment on such Global Notes by wire transfer to the Trustee. The Issuer will
confirm instructions regarding payment in writing to the Trustee. Prior to 1:00
p.m., New York City time, on each maturity of a Book-Entry Note or as soon as
possible thereafter, the Trustee will pay by separate wire transfer (using
Fedwire message entry instructions in a form previously specified by DTC) to an
account at the Federal Reserve Bank of New York previously specified by DTC in
funds available for immediate use by DTC, each payment of principal (together
with interest thereon) due at maturity on Book-Entry Notes. On each interest
payment date, interest payment shall be made to DTC in same day funds in
accordance with existing arrangements between the Trustee and DTC. Thereafter,
on each such date, DTC will pay, in accordance with its SDFS operating
procedures then in effect, such
C-7
amounts in funds available for immediate use to the respective Participants in
whose names the Book-Entry Notes represented by such Global Notes are recorded
in the book-entry system maintained by DTC. NEITHER THE ISSUER NOR THE TRUSTEE
SHALL HAVE ANY DIRECT RESPONSIBILITY OR LIABILITY FOR THE PAYMENT BY DTC TO SUCH
PARTICIPANTS OF THE PRINCIPAL OF AND ANY PREMIUM AND INTEREST ON THE BOOK-ENTRY
NOTES.
(e) WITHHOLDING TAXES. The amount of any taxes required under
applicable law to be withheld from any interest payment on a Book-Entry Note
will be determined and withheld by the Participant, indirect participant in DTC
or other person responsible for forwarding payments and materials directly to
the beneficial owner of such Note.
DETAILS FOR SETTLEMENT
For each offer for Book-Entry Notes accepted by the Issuer, the
Agent shall communicate to the Issuer's Treasury Operations Department prior to
11:00 a.m., New York City time, on the first Business Day after the sale date
(or on the sale date if such sale is to be settled within one Business Day), by
telephone, telex, facsimile transmission or other acceptable means, the
following information (the "Purchase Information"):
1. Principal amount of the Notes.
2. Stated maturity of the Notes.
3. In the case of Fixed Rate Notes, the interest
rate and interest payment dates of the Notes
and whether such Note is an amortizing Note,
and, if so, the amortization schedule; in the
case of Floating Rate Notes or indexed Notes,
interest rate formula, the spread or spread
multiplier (if any), the maximum or minimum
interest rate limitation (if any), the
calculation agent, the calculation dates, the
initial interest rate, the interest payment
dates, the regular record dates, the index
maturity, the interest determination dates and
the interest reset dates, in each case, to the
extent applicable with respect to the Notes.
4. Redemption and/or repayment provisions, if any,
of the Notes.
5. Trade date of the Notes.
6. Settlement date (issue date) of the Notes.
7. Agent's commission (to be paid in the form of a
discount from the proceeds remitted to the
Issuer upon settlement).
C-8
8. Issue price.
9. Currency or currency unit in which the Notes
are to be denominated and exchange rate
applicable to purchase foreign currency Notes
payable in U.S. dollars.
10. Original issue discount, if any.
11. Net proceeds to the Issuer.
12. Whether the Issuer has the option to extend the stated
maturity of the Note and if so, the extension period, and the
final maturity of such Note.
13. Whether the Note is a renewable Note, and if it
is a renewable Note, the initial maturity date
and the final maturity date.
14. In the case of an indexed Note, any additional information
relevant to determination of the amounts of principal (and
premium, if any) or interest payable.
15. Any additional applicable terms of the Notes.
The issue date of, and the settlement date for, Book-Entry Notes
will be the same. Before accepting any offer to purchase Book-Entry Notes to be
settled in fewer than three Business Days, the Issuer shall verify that the
Trustee will have adequate time to prepare and authenticate the Global Notes.
If the initial interest rate for a Floating Rate Note has not been
determined at the time that the foregoing procedure is completed, the procedures
described in the following two paragraphs shall be completed as soon as such
rate has been determined but no later than 12:00 Noon and 2:00 p.m., each New
York City time, as the case may be, on the Business Day before the settlement
date.
Immediately after receiving the details for each offer for
Book-Entry Notes from the Agent and in any event no later than 12:00 Noon, New
York City time, on the first Business Day after the sale date (or on the sale
date if such sale is to be settled within one Business Day), the Issuer will,
after recording the details and any necessary calculations, communicate the
Purchase Information by telephone, telex, facsimile transmission or other
acceptable means, to the Trustee. Each such instruction given by the Issuer to
the Trustee shall constitute a continuing representation and warranty by the
Issuer to the Trustee and the Agent that (i) the issuance and delivery of such
Note have been duly and validly authorized by the Issuer and (ii) such Note,
when duly issued, shall constitute the valid and legally binding obligation of
the Issuer.
C-9
Immediately after receiving the Purchase Information from the Issuer
and in any event no later than 2:00 p.m., New York City time, on the first
Business Day after the sale date (or on the sale date if such sale is to be
settled within one Business Day), the Trustee will assign a CUSIP number to the
Global Note representing such Book-Entry Note and will telephone the Issuer and
advise the Issuer of such CUSIP number and, as soon thereafter as practicable,
the Issuer shall notify the Agent of such CUSIP number. The Trustee will enter a
pending deposit message through DTC's Participant Terminal System, providing
settlement information to DTC (which shall route such information to Standard &
Poor's Corporation). Standard & Poor's Corporation will use the information
received in the pending deposit message to include the amount of any interest
payable and certain other information regarding the related Global Note in the
appropriate daily or weekly bond report published by Standard & Poor's
Corporation.
SETTLEMENT; GLOBAL NOTE DELIVERY AND CASH PAYMENT
The Issuer will deliver to the Trustee at the commencement of the
program and from time to time thereafter a supply of duly executed Global Notes
adequate to implement the program. Upon the receipt of appropriate instructions
from the Issuer, the Trustee will cause the Global Note to be completed and
authenticated and hold the Global Note for delivery against payment.
Prior to 10:00 a.m., New York City time, on the settlement date, the
Trustee will enter instructions through DTC's Participant Terminal System, using
the function MT II, and DTC will credit such Note to the Trustee's participant
account at DTC. Prior to 2:00 p.m., New York City time, on the settlement Date,
the Trustee will enter an SDFD 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 Agent's participant account and (ii) debit
the Agent's settlement account and credit the Trustee's settlement account for
an amount equal to the price of such Note less such Agent's commission (in
accordance with SDFS operating procedures in effect on the settlement date). The
entry of such a deliver order shall constitute a representation and warranty by
the Trustee to DTC that (i) the Global Note representing such Book-Entry Note
has been executed, delivered and authenticated and (ii) the Trustee is holding
such Global Note pursuant to the relevant Medium-Term Note Certificate Agreement
between the Trustee and DTC.
Prior to 2:00 p.m., New York City time, on the settlement date
unless the Agent is the end purchaser of such Note, the Agent will enter an SDFS
deliver order through DTC's Participant Terminal System instructing DTC (i) to
debit such Note to such Agent's participant account and credit such Note to the
Participant accounts of the Participants with respect to such Note and (ii) to
debit the settlement accounts of such Participants and credit the settlement
account of such Agent for an amount equal to the price of such Note (in
accordance with SDFS operating procedures in effect on the settlement date).
Transfers of funds are subject to extension in accordance with any
extension of Fedwire closing deadlines and in the other events specified in the
SDFS operating procedures in effect on the settlement date.
C-10
The Trustee, upon confirming receipt of such funds, will wire
transfer the amount transferred to the Trustee, in funds available for immediate
use, for the account of the Issuer, to account no. [▇▇▇▇▇▇▇▇] at Citibank, N.A.,
(ABA No. [▇▇▇▇▇▇▇▇▇]) or such other account as the Issuer may have previously
specified to the Trustee.
Unless the Agent is the end purchaser of such Note, such Agent will
confirm the purchase of such Note to the purchaser either by transmitting to the
Participants with respect to such Note a confirmation order or orders through
DTC's institutional delivery system or by mailing a written confirmation to such
purchaser.
FAILS
If settlement of a Book-Entry Note is rescheduled or cancelled, the
Issuer shall notify the Trustee, and upon receipt of such notice, the Trustee
will deliver to DTC, through DTC's Participant Terminal System, a cancellation
message to such effect by no later than 2:00 p.m., New York City time, on the
Business Day immediately preceding the scheduled settlement date.
If the Agent or Trustee has not entered an SDFS deliver order with
respect to a Book-Entry Note, then upon written request (which may be evidenced
by telecopy transmission) of the Issuer, the Trustee shall deliver to DTC,
through DTC's Participant Terminal System, as soon as practicable, but no later
than 2:00 p.m., New York City time, on any Business Day, a withdrawal message
instructing DTC to debit such Note to the Trustee's participant account. DTC
will process the withdrawal message, provided that the Trustee's participant
account contains a principal amount of the Global Note representing such Note
that is at least equal to the principal amount to be debited. If withdrawal
messages are processed with respect to all the Book-Entry Notes represented by a
Global Note, the Trustee will ▇▇▇▇ such Global Note "cancelled", make
appropriate entries in the Trustee's records and send such cancelled Global Note
to the Issuer. The CUSIP number assigned to such Global 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 Book-Entry Notes represented by a Global Note, the
Trustee will exchange such Global Note for two Global Notes, one of which shall
represent such Book-Entry Note or Notes and shall be cancelled immediately after
issuance and the other of which shall represent the remaining Book-Entry Notes
previously represented by the surrendered Global Note and shall bear the CUSIP
number of the surrendered Global Note.
If the purchase price for any Book-Entry Note is not timely paid to
the Participants with respect to such Note by the beneficial purchaser thereof
(or a person, including an indirect participant in DTC, acting on behalf of such
purchaser), such Participants and, in turn, the Agent may enter an SDFS deliver
order through DTC's Participant Terminal System debiting such Note to the
Agent's participant account and crediting such Note to the participant account
of the Trustee and shall notify the Trustee and the Issuer thereof. Thereafter,
the Trustee (i) will immediately notify the Issuer, once the Trustee has
confirmed that such Note has been credited to
C-11
its participant account, and the Issuer shall immediately transfer by Fedwire
(in immediately available funds) to the Agent an amount equal to the price of
such Note which was previously sent by wire transfer to the account of the
Issuer maintained at Citibank, N.A. and (ii) will deliver the withdrawal message
and take the related actions described in the preceding paragraph. Such debits
and credits will be made on the settlement date, if possible, and in any event
not later than 5:00 p.m., New York City time, on the following Business Day. If
the fail shall have occurred for any reason other than failure of the Agent to
provide the Purchase Information to the Issuer or to provide a confirmation to
the purchaser, the Issuer will reimburse the Agent on an equitable basis for its
loss of the use of funds during the period when the funds were credited to the
account of the Issuer.
Notwithstanding the foregoing, upon any failure to settle with
respect to a Book-Entry Note, DTC may take any actions in accordance with its
SDFS operating procedures then in effect. In the event of a failure to settle
with respect to one or more, but not all, of the Book-Entry Notes to have been
represented by a Global Note, the Trustee will provide for the authentication
and issuance of a Global Note representing the other Book-Entry Notes to have
been represented by such Global Note and will make appropriate entries in its
records.
C-12