EXHIBIT 1.2
THE ▇▇▇▇ DISNEY COMPANY
Medium-Term Notes, Series B
Due Nine Months or More from Date of Issue
DISTRIBUTION AGREEMENT
September 24, ▇▇▇▇
▇▇▇▇ ▇▇ ▇▇▇▇▇▇▇ Securities LLC
Banc One Capital Markets, Inc.
Bear, ▇▇▇▇▇▇▇ & Co. Inc.
Credit Suisse First Boston Corporation
▇▇▇▇▇▇▇, ▇▇▇▇▇ & Co.
HSBC Securities (USA) Inc.
▇.▇. ▇▇▇▇▇▇ Securities Inc.
▇▇▇▇▇▇ Brothers Inc.
▇▇▇▇▇▇▇ Lynch, Pierce, ▇▇▇▇▇▇ & ▇▇▇▇▇ Incorporated
▇▇▇▇▇▇ ▇▇▇▇▇▇▇ & Co. Incorporated
▇▇▇▇▇▇▇ ▇▇▇▇▇ Barney Inc.
The ▇▇▇▇▇▇▇▇ Capital Group, L.P.
Dear Ladies and Gentlemen:
The ▇▇▇▇ Disney Company, a Delaware corporation (the "Company"),
confirms its agreement with each of Banc of America Securities LLC, Banc One
Capital Markets, Inc., Bear, ▇▇▇▇▇▇▇ & Co. Inc., Credit Suisse First Boston
Corporation, ▇▇▇▇▇▇▇, Sachs & Co., HSBC Securities (USA) Inc., ▇.▇. ▇▇▇▇▇▇
Securities Inc., ▇▇▇▇▇▇ Brothers Inc., ▇▇▇▇▇▇▇ Lynch, Pierce, ▇▇▇▇▇▇ & ▇▇▇▇▇
Incorporated, ▇▇▇▇▇▇ ▇▇▇▇▇▇▇ & Co. Incorporated, ▇▇▇▇▇▇▇ ▇▇▇▇▇ Barney Inc.
and The ▇▇▇▇▇▇▇▇ Capital Group, L.P. (each an "Agent" and collectively, the
"Agents") with respect to the issue and sale by the Company of its
Medium-Term Notes, Series B (the "Notes"). The Notes are to be issued
pursuant to the Indenture, dated as of September 24, 2001 (the "Indenture"),
between the Company and ▇▇▇▇▇ Fargo Bank, N.A., a national banking
association, as trustee (the "Trustee"). As of the date hereof, the Company
has authorized the issuance and sale of up to U.S. $6,500,000,000 aggregate
initial offering price (or its equivalent, based upon
the applicable exchange rate at the time of issuance, in such foreign
currencies or composite currencies as the Company shall designate in the
Notes at the time of issuance) of Notes directly or through the Agents
pursuant to the terms of this Agreement. Such Notes are in addition to other
Medium-Term Notes of the Company outstanding at the date hereof. It is
understood, however, that the Company may from time to time authorize the
issuance of additional Notes and that, at the option of the Company, such
Notes may be distributed through or sold to the Agents pursuant to the terms
of this Agreement, all as though the issuance of such Notes were authorized
as of the date hereof.
This Agreement provides both for the sale of Notes by the Company
directly to purchasers, in which case the Agents will act as agents of the
Company in soliciting Note purchasers, and (as may from time to time be
agreed to by the Company and one or more Agents) to such Agent or Agents as
principal for resale to purchasers.
The Company has filed with the Securities and Exchange Commission
(the "Commission") a registration statement on Form S-3 (No. 333-67870) for
the registration of debt securities and other securities, including the
Notes, under the Securities Act of 1933, as amended (the "1933 Act"), and the
offering thereof from time to time in accordance with Rule 415 of the rules
and regulations of the Commission under the 1933 Act (the "1933 Act
Regulations"). Such registration statement has been declared effective by the
Commission and the Indenture has been qualified under the Trust Indenture Act
of 1939, as amended (the "1939 Act"). Such registration statement (and any
further registration statements that may be filed by the Company for the
purpose of registering additional Notes and which the Company and the Agents
agree is to be covered by this Agreement) and the prospectus constituting a
part thereof, together with any prospectus supplement relating to the Notes,
including, in each case, all Incorporated Documents (as hereinafter defined),
as from time to time amended or supplemented by the filing of documents
pursuant to the Securities Exchange Act of 1934, as amended (the "1934 Act"),
or the 1933 Act or otherwise, are referred to herein as the "Registration
Statement" and the "Prospectus," respectively, except that, if any revised
prospectus shall be provided to the Agents by the Company for use in
connection with the offering of the Notes which is not required to be filed
by the Company pursuant to Rule 424(b) of the 1933 Act Regulations, the term
"Prospectus" shall refer to such revised prospectus from and after the time
it is first provided to the Agents for such use. The term "Prospectus" shall
also include any term sheet or abbreviated term sheet as such terms are used
in Rule 434 of the 1933 Act Regulations (each a "Terms Sheet"). The term
"Registration Statement" shall also include any related registration
statement filed pursuant to Rule 462(b) of the 1933 Act Regulations. In
addition, any reference herein to the Registration Statement or the
Prospectus shall be deemed to refer to and include the documents, financial
statements and schedules incorporated by reference therein pursuant to Item
12 of Form S-3 under the 1933 Act, and any reference to any amendment or
supplement to the Registration Statement or the Prospectus shall be deemed to
refer to and include any documents, financial statements and schedules filed
by the Company with the Commission under the 1934 Act after the date hereof,
and so incorporated by reference or deemed incorporated by reference (such
incorporated documents, financial statements and schedules being herein
called the "Incorporated Documents"). Notwithstanding the foregoing, for
purposes of this Agreement any prospectus or prospectus supplement or any
Term Sheets prepared or filed with respect to an offering pursuant to the
Registration Statement of securities other than the Notes shall not be deemed
to have supplemented the Prospectus.
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SECTION 1. REPRESENTATIONS AND WARRANTIES; ADDITIONAL CERTIFICATES.
(a) REPRESENTATIONS AND WARRANTIES. The Company represents and
warrants to each Agent as of the date hereof, as of the date of each
acceptance by the Company of an offer for the purchase of Notes (whether
through an Agent as agent or from an Agent as principal), as of the date of
each delivery of Notes by the Company to the purchasers (the date of each
such delivery to an Agent as principal being hereafter referred to as a
"Settlement Date"), and as of the dates referred to in Section 6(a) hereof
(each of the dates referenced above being referred to hereafter as a
"Representation Date"), as follows:
(i) The Incorporated Documents, when they became effective
or were filed (or, if an amendment with respect to any such
Incorporated Document was filed or became effective, when such
amendment was filed or became effective) with the Commission, as the
case may be, complied in all material respects with the requirements of
the 1934 Act, and any Incorporated Documents filed subsequent to the
date hereof and prior to the termination of the offering of the Notes,
will, when they are filed with the Commission, comply in all material
respects with the requirements of the 1934 Act; no such Incorporated
Document, when it became effective or was filed (or, if an amendment
with respect to any such Incorporated Document was filed or became
effective, when such amendment was filed or became effective) with the
Commission, contained, and no Incorporated Document filed subsequent to
the date hereof and prior to the termination of the offering of the
Notes will contain, an untrue statement of a material fact or omitted,
or will omit, to state a material fact required to be stated therein or
necessary to make the statements therein, in light of the circumstances
under which they were made, not misleading.
(ii) The Registration Statement, at the time it became
effective, complied in all material respects with the provisions of the
1933 Act and the 1933 Act Regulations; at the applicable Representation
Date, the Registration Statement and the Prospectus, and any
supplements or amendments thereto, will comply in all material respects
with the provisions of the 1933 Act and the 1933 Act Regulations; and
the Registration Statement and the Prospectus, and any such supplement
or amendment thereto, at all such times did not and will not contain an
untrue statement of a material fact or omit to state a material fact
required to be stated therein or necessary to make the statements
therein, in light of the circumstances under which they were made, not
misleading; except that this representation and warranty does not apply
to statements or omissions in the Registration Statement, the
Prospectus or any preliminary prospectus, or any amendment or
supplement thereto, made in reliance upon information furnished to the
Company in writing by or on behalf of the Agents expressly for use
therein or to those parts of the Registration Statement which
constitute the Trustee's Statement of Eligibility and Qualification on
Form T-1 under the 1939 Act (the "Form T-1"). There is no contract or
document of a character required to be described in the Registration
Statement or the Prospectus or to be filed as an exhibit to the
Registration Statement which is not described or filed as required.
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(iii) This Agreement, the Indenture, the Notes and any
applicable Terms Agreement have been duly authorized by the Company and
conform in all material respects to the descriptions thereof in the
Prospectus.
(iv) The Indenture (assuming due execution and delivery
thereof by the Trustee) is, and the Notes (when executed by the Company
and authenticated in accordance with the Indenture and delivered to and
paid for by the purchasers thereof) will be, the legal, valid and
binding obligations of the Company, enforceable against the Company in
accordance with their respective terms, except as such enforceability
may be limited by (A) bankruptcy, insolvency, reorganization,
moratorium or other similar laws now or hereafter in effect relating to
or affecting the enforcement of creditors' rights generally, (B)
general principles of equity (regardless of whether such enforcement is
considered in a proceeding in equity or at law), (C) requirements that
a claim with respect to any Notes denominated other than in United
States dollars (or a judgment denominated other than in United States
dollars in respect of such claim) be converted into United States
dollars at a rate of exchange prevailing on a date determined pursuant
to applicable law and (D) governmental authority to limit, delay or
prohibit the making of payments outside the United States or in a
foreign currency or composite currency. The Notes (when executed by the
Company and authenticated in accordance with the terms of the Indenture
and delivered to and paid for by the purchasers thereof) will be
entitled to the benefits of the Indenture (subject to the exceptions
set forth in the preceding sentence).
(v) The Company is a validly existing corporation in good
standing under the laws of Delaware. The Company has full corporate
power and authority to own, lease and operate its properties and to
conduct its business as presently conducted and as described in the
Prospectus; and the Company is duly qualified as a foreign corporation
to transact business and is in good standing in each jurisdiction in
which such qualification is required whether by reason of the ownership
or leasing of property or the conduct of business, except where the
failure to so qualify would not have a material adverse effect on the
consolidated financial condition or earnings of the Company and its
subsidiaries, considered as one enterprise.
(vi) Each of Disney Enterprises, Inc., ABC, Inc. and ▇▇▇▇
Disney World Co. (collectively, the "Significant Subsidiaries") is a
validly existing corporation in good standing under the laws of its
state of incorporation. Each of the Significant Subsidiaries has full
corporate power and authority to own, lease and operate its properties
and to conduct its business as presently conducted and as described in
the Prospectus; and each of the Significant Subsidiaries is duly
qualified as a foreign corporation to transact business and is in good
standing in each United States jurisdiction in which such qualification
is required whether by reason of the ownership or leasing of property
or the conduct of business, except where a failure to so qualify would
not have a material adverse effect on the consolidated financial
condition or earnings of the Company and its subsidiaries, considered
as one enterprise.
(vii) Except as contemplated in the Prospectus or
reflected therein by the filing of any amendment or supplement thereto
or any Incorporated Document, since the date of the most recent
consolidated financial statements included or incorporated by reference
in
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the Registration Statement and the Prospectus, unless the Company
has notified the Agents as provided in Section 3(d) hereof, there has
not been any material adverse change in the consolidated financial
condition or earnings of the Company and its subsidiaries, considered
as one enterprise.
(viii) The Company is not in violation of its Restated
Certificate of Incorporation or Bylaws, as amended. The execution and
delivery of this Agreement by the Company, the issuance and sale of the
Notes and the performance by the Company of its obligations under this
Agreement, the Indenture and any applicable Terms Agreement will not
conflict with or constitute a breach of or a default (with the passage
of time or otherwise) under (A) the Restated Certificate of
Incorporation or Bylaws, as amended, of the Company, (B) subject to the
Company's compliance with any applicable covenants pertaining to its
incurrence of unsecured indebtedness contained therein, any contract,
indenture, mortgage, loan agreement, note, lease or other instrument to
which the Company is a party or by which it may be bound, or to which
any of the properties or assets of the Company is subject, which breach
or default would, singly or in the aggregate, have a material adverse
effect on the consolidated financial condition or earnings of the
Company and its subsidiaries, considered as one enterprise, or (C) any
applicable law, administrative regulation or administrative or court
decree. Except for orders, permits and similar authorizations required
under or by the securities or Blue Sky laws of certain jurisdictions,
any securities exchange on which any of the Notes might be listed or
with respect to Notes which are to be indexed or linked to any foreign
currency, composite currency, commodity, equity index or similar index,
no consent, approval, authorization or other order of any regulatory
body, administrative agency or other governmental body is legally
required for the valid issuance and sale of the Notes. As of the date
of each acceptance by the Company of an offer for the purchase of Notes
and as of the date of each delivery of Notes by the Company, the
Company by such acceptance or delivery, as the case may be, shall be
deemed to represent and warrant to the Agents that, both immediately
before and immediately after giving effect to such acceptance or
delivery, the Company shall be in compliance with the requirements of
any applicable covenants pertaining to its incurrence of unsecured
indebtedness contained in the agreements or instruments referred to in
clause (B) above.
(ix) To the best of the Company's knowledge, the
accountants who have audited and reported upon the financial statements
filed with the Commission as part of the Registration Statement and the
Prospectus are independent accountants as required by the 1933 Act. The
historical financial statements included in the Registration Statement
or Prospectus or incorporated therein by reference fairly present the
consolidated financial position and results of operations of the
Company and its subsidiaries at the respective dates and for the
respective periods to which they apply. Such historical financial
statements have been prepared in accordance with generally accepted
accounting principles consistently applied, except as set forth in the
Registration Statement and Prospectus. The unaudited pro forma
financial statements, if any, together with the related notes and any
supporting schedules included or incorporated by reference in the
Registration Statement and the Prospectus, fairly present the
information shown therein and have been compiled on a basis
substantially consistent with the audited financial statements of
Disney included or incorporated by reference in the Registration
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Statement and the Prospectus; the assumptions on which such unaudited
pro forma financial statements have been prepared are reasonable; and
such unaudited pro forma financial statements have been prepared, and
the pro forma adjustments set forth therein have been applied, in
accordance with the applicable accounting requirements of the 1933 Act
and the 1933 Act Regulations (including, without limitation,
Regulations S-X promulgated by the Commission), and such pro forma
adjustments have been properly applied to the historical amounts in the
compilation of such statements.
(b) ADDITIONAL CERTIFICATIONS. Any certificate signed by any officer of
the Company and delivered to an Agent or to counsel for the Agents in connection
with an offering of Notes shall be deemed a representation and warranty by the
Company to such Agent as to the matters covered thereby on the date of such
certificate.
SECTION 2. SOLICITATIONS AS AGENTS; PURCHASES AS PRINCIPALS.
(a) SOLICITATIONS AS AGENTS. Subject to the terms and conditions stated
herein and subject to the reservation by the Company of the right to sell Notes
directly on its own behalf and to any person, to sell Notes through others
(provided that any other agent will execute an agreement with the Company which
contains substantially the same terms and conditions contained herein), and to
designate and select additional agents to become party to this Agreement, the
Company hereby (i) appoints each Agent as an agent of the Company for the
purpose of soliciting offers to purchase the Notes from the Company by others
and (ii) agrees that whenever the Company determines to sell Notes directly to
an Agent as principal for resale to others, it will enter into a Terms Agreement
relating to such sale in accordance with the provisions of Section 2(b) hereof.
Without the prior written consent of the Company, the Agents are not authorized
to appoint sub-agents or to engage the services of any other broker or dealer in
connection with the offer or sale of the Notes; provided, that without the
Company's consent, the Agents may solicit offers to purchase the Notes from
other brokers or dealers. In connection with the solicitation of offers to
purchase Notes, without the prior consent of the Company, the Agents are not
authorized to provide any written information relating to the Company to any
prospective purchaser other than the Prospectus and the Incorporated Documents.
Each Agent will make reasonable efforts to assist the Company in obtaining
performance by each purchaser whose offer to purchase Notes from the Company has
been solicited by such Agent, as agent, and accepted by the Company, but such
Agent shall not have any liability to the Company in the event any such purchase
is not consummated for any reason.
The Company reserves the right, in its sole discretion, to suspend the
solicitation of offers to purchase the Notes through the Agents commencing at
any time for any period of time or permanently. Upon receipt of instructions
from the Company, the Agents will, as soon as possible, suspend the solicitation
of offers to purchase the Notes from the Company until such time as the Company
has advised the Agents that such solicitation may be resumed.
The Company agrees to pay each Agent a commission, which such Agent is
hereby authorized to deduct from the sales proceeds of each Note sold by the
Company as a result of a solicitation made by such Agent, equal to the
applicable percentage of the principal amount of each such Note, as set forth in
Exhibit A hereto. Without the consent of the Company, no Agent,
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as an agent, may reallow any portion of the commission payable pursuant
hereto to dealers or purchasers in connection with the offer and sale of any
Notes.
As an agent, each Agent is authorized, except during periods of
suspension as provided in this Agreement, to solicit offers to purchase the
Notes. Each Agent shall communicate to the Company, orally or in writing, each
reasonable offer to purchase Notes received by such Agent, as agent. Each Agent
shall have the right in its discretion reasonably exercised to reject any offer
to purchase the Notes received by such Agent which it does not deem reasonable,
and any such rejection shall not be deemed a breach of such Agent's agreements
contained herein. The Company shall have the sole right to accept offers to
purchase the Notes and may reject any such offer in whole or in part, and any
such rejection shall not be deemed to be a breach of any agreement of the
Company contained herein. The purchase price, interest rate, maturity date and
other terms of the Notes agreed upon by the Company shall be set forth in a
pricing supplement to the Prospectus to be prepared following each acceptance by
the Company of an offer for the purchase of Notes (a "Pricing Supplement").
Except as may be otherwise provided in any Pricing Supplement, each Note will be
issued in the denomination of U.S. $1,000 or any amount in excess thereof which
is an integral multiple of U.S. $1,000. All Notes will be sold at 100% of their
principal amount unless otherwise agreed to by the Company. Each Agent
acknowledges and agrees that any funds which such Agent receives in respect of a
purchase of Notes, which purchase has been solicited by such Agent, as agent of
the Company, will be received, held and disposed of by such Agent, as agent of
the Company, subject to the right of such Agent to deduct from the sale proceeds
the applicable commission as set forth on Exhibit A hereto.
If requested by a prospective purchaser of Notes denominated in a
currency other than U.S. dollars, the Agent soliciting the offer to purchase
will use its reasonable efforts to arrange for the conversion of U.S. dollars
into such currency to enable the purchaser to pay for such Notes. Such requests
must be made on or before the third business day preceding the date of delivery
of the Notes, or by such other dates as determined by such Agent. Each such
conversion will be made by the relevant Agent on such terms and subject to such
conditions, limitations and charges as such Agent may from time to time
establish in accordance with its regular foreign exchange practice. All costs of
exchange will be borne by purchasers of the Notes.
(b) PURCHASES AS PRINCIPAL. Each sale of Notes to an Agent as principal
shall be made in accordance with the terms contained herein and pursuant to a
separate agreement which will provide for the sale of such Notes to, and the
purchase and any reoffering thereof by, such Agent. Each such separate agreement
(which may be an oral agreement if confirmed within 24 hours thereafter by an
exchange of any standard form of written telecommunication (including facsimile
transmission) between the Agent and the Company) is herein referred to as a
"Terms Agreement." Unless the context otherwise requires, each reference
contained herein to "this Agreement" shall be deemed to include any applicable
Terms Agreement between the Company and the Agent. Each such Terms Agreement,
whether oral (and confirmed in writing, which confirmation may be by facsimile
transmission) or in writing shall be with respect to such information (as
applicable) as is specified in Exhibit B hereto. An Agent's commitment to
purchase Notes pursuant to any Terms Agreement shall be deemed to have been made
on the basis of the representations and warranties of the Company herein
contained and shall be subject to the terms and conditions herein set forth. The
Agents may offer the Notes they have
7
purchased as principal to other dealers. The Agents may sell Notes to any
dealer at a discount and, unless otherwise specified in the applicable Terms
Agreement, such discount allowed to any dealer will not be in excess of the
discount to be received by such Agent from the Company. Unless otherwise
specified in the applicable Terms Agreement, any Notes sold to an Agent as
principal will be purchased by such Agent at a price equal to 100% of the
principal amount thereof less a percentage equal to the commission applicable
to any agency sale of a Note of identical maturity.
(c) ADMINISTRATIVE PROCEDURES. Administrative procedures with respect
to the sale of Notes shall be agreed upon from time to time by the Agents and
the Company (the "Procedures"). The Procedures initially agreed upon shall be
those set forth in Exhibit C hereto. The Agents and the Company agree to perform
the respective duties and obligations specifically provided to be performed by
the Agents and the Company herein and in the Procedures.
SECTION 3. COVENANTS OF THE COMPANY. The Company covenants with each Agent
as follows:
(a) NOTICE OF CERTAIN EVENTS. The Company will notify the
Agents promptly of (i) the designation and selection of additional
agents to become party to this Agreement, (ii) the designation and
selection of additional agents for the sale of Notes pursuant to any
agreement other than this Agreement, (iii) the effectiveness of any
post-effective amendment to the Registration Statement (other than a
post-effective amendment relating solely to an offering of debt
securities other than the Notes), (iv) the transmittal to the
Commission for filing of any supplement to the Prospectus (other than a
Pricing Supplement or a supplement relating solely to an offering of
securities other than the Notes), (v) the receipt of any comments from
the Commission with respect to the Registration Statement or the
Prospectus (other than any comments relating solely to an offering of
securities other than the Notes), (vi) any request by the Commission
for any amendment to the Registration Statement or any amendment or
supplement to the Prospectus or for additional information (other than
any such request relating solely to an offering of securities other
than the Notes) and (vii) the issuance by the Commission of any stop
order suspending the effectiveness of the Registration Statement or the
initiation of any proceedings for that purpose. The Company will make
every reasonable effort to prevent the issuance of any such stop order
and, if any such stop order is issued, to obtain the lifting thereof at
the earliest possible time unless the Company shall, in its sole
discretion, determine that it is not in its best interest to do so.
(b) NOTICE OF CERTAIN PROPOSED FILING. At or prior to the
filing thereof, the Company will give the Agents notice of its
intention to file any additional registration statement with respect to
the registration of additional Notes to be covered by this Agreement,
any amendment to the Registration Statement or any amendment or
supplement to the Prospectus (other than a Pricing Supplement or an
amendment or supplement relating solely to an offering of debt
securities other than the Notes), whether by the filing of documents
pursuant to the 1934 Act, the 1933 Act or otherwise, and will furnish
the Agents with copies of any such amendment or supplement or other
documents promptly after the filing thereof.
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(c) COPIES OF THE REGISTRATION STATEMENT AND THE PROSPECTUS.
The Company will deliver to the Agents one signed and as many conformed
copies of the Registration Statement (as originally filed) and of each
amendment thereto (including the Incorporated Documents and any
exhibits filed therewith or incorporated by reference therein) as the
Agents may reasonably request. The Company will furnish to the Agents
as many copies of the Prospectus (as amended or supplemented) as the
Agents shall reasonably request so long as the Agents are required to
deliver a Prospectus in connection with sales or solicitations of
offers to purchase the Notes.
(d) REVISIONS OF PROSPECTUS -- MATERIAL CHANGES. So long as
the Agents are required to deliver a Prospectus in connection with
sales or solicitations of offers to purchase the Notes, if any event
shall occur or condition exist as a result of which it is necessary, in
the opinion of counsel for the Company, after consultation with counsel
for the Agents, to further amend or supplement the Prospectus in order
that the Prospectus will not include an untrue statement of a material
fact or omit to state any material fact necessary in order to make the
statements therein, in light of the circumstances existing at the time
it is delivered to a purchaser, not misleading, or if it shall be
necessary, in the opinion of such counsel for the Company, to amend or
supplement the Registration Statement or the Prospectus in order to
comply with the requirements of the 1933 Act or the 1933 Act
Regulations, prompt notice shall be given, and confirmed in writing, to
the Agents to cease the solicitation of offers to purchase the Notes in
their capacity as agents and to cease sales of any Notes the Agents may
then own as principal. In addition, if any Agent holds Notes purchased
for resale pursuant to a Terms Agreement and the Company has given
notice to the Agents pursuant to this subsection (d) within 90 days
after the date of execution of such Terms Agreement, the Company will
prepare and file as soon as practicable an amendment or supplement to
the Prospectus so that the Prospectus, as amended or supplemented, will
not include any untrue statement of a material fact or omit to state
any material fact necessary in order to make the statements therein not
misleading in light of the circumstances existing at the time it is
delivered to the Agents.
(e) COMPLIANCE WITH 1934 ACT; ACCOUNTANTS' CONSENTS. The
Company will (i) comply, in a timely manner, with all applicable
requirements under the 1934 Act relating to the filing with the
Commission of the Company's reports pursuant to Section 13(a),13(c) or
15(d) of the 1934 Act and, if then applicable, of the Company's proxy
statements pursuant to Section 14 of the 1934 Act and (ii) use its best
efforts to obtain the written consent of the Company's independent
accountants as to the incorporation by reference in the Registration
Statement of the audited financial statements reported on by them and
contained in the Company's annual reports on Form 10-K under the 1934
Act.
(f) EARNINGS STATEMENTS. The Company will make generally
available to its security holders, in each case as soon as practicable
but in any event not later than 15 months after the acceptance by the
Company of an offer to purchase Notes hereunder, a consolidated
earnings statement (which need not be audited) covering the
twelve-month period beginning after the latest of (i) the effective
date of the Registration Statement, (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 Company's most recent annual report on Form 10-K filed with the
Commission prior to
9
the date of such acceptance, which earnings statement will satisfy the
provisions of ▇▇▇▇▇▇▇ ▇▇ (▇) ▇▇ ▇▇▇ ▇▇▇▇ ▇▇▇ (▇▇▇, at the option of the
Company, Rule 158 of the 1933 Act Regulations). Nothing in this Section
3(f) shall require the Company to make such earnings statement
available more frequently than once in any period of twelve months.
(g) BLUE SKY QUALIFICATIONS. The Company will endeavor, in
cooperation with the Agents, to qualify the Notes for offering and sale
under the applicable securities laws of such states and other
jurisdictions of the United States as the Agents may reasonably
designate, and will maintain such qualifications in effect for as long
as may be required for the distribution of the Notes; PROVIDED,
HOWEVER, that the Company will promptly notify the Agents of any
suspension or termination of any such qualifications, and PROVIDED,
FURTHER, that the Company shall not be obligated to register or qualify
as a foreign corporation or take any action which would subject it to
general service of process in any jurisdiction where it is not now so
subject.
(h) SUSPENSION OF CERTAIN OBLIGATIONS. The Company shall not
be required to comply with the provisions of subsections (b), (c), (d),
(e) or (g) of this Section 3 during any period from the time the Agents
shall have been notified to suspend the solicitation of offers to
purchase the Notes in their capacity as agents or resales of Notes
purchased pursuant to a Terms Agreement to the time the Company shall
determine that the solicitation of offers to purchase the Notes through
any Agent or Agents or resales as principal of Notes purchased pursuant
to a Terms Agreement by any Agent or Agents should be resumed.
Notwithstanding the foregoing, if any Agent holds Notes purchased for
resale pursuant to a Terms Agreement the Company shall comply with the
provisions of subsections (b), (c), (d), (e) and (g) of this Section 3
during the 90 day period from and including the date of execution of
such Terms Agreement; PROVIDED, HOWEVER, that the Company shall have
the right, in its reasonable business judgment, to suspend such
compliance during such 90 day period for an aggregate of up to 45 days,
in which event such 90 day period shall be extended by the greater of
(i) the number of days included in any such period of suspension and
(ii) 30 days.
SECTION 4. PAYMENT OF EXPENSES. The Company will pay all expenses incident
to the performance of its obligations under this Agreement, including:
(a) The preparation and filing of the Registration Statement
and all amendments thereto and the Prospectus and any amendments or
supplements thereto and all Incorporated Documents;
(b) The preparation, filing and printing of this Agreement;
(c) The preparation, printing, issuance and delivery of the
Notes;
(d) The fees and disbursements of the Trustee and its counsel,
of any calculation agent or exchange rate agent and of The Depository
Trust Company;
(e) The reasonable fees and disbursements of counsel to the
Agents incurred in connection with the execution and delivery of this
Agreement and in connection with the review of subsequent deliveries
pursuant to this Agreement;
10
(f) The qualification of the Notes under securities laws in
accordance with the provisions of Section 3(g) hereof, including filing
fees and the reasonable fees and disbursements of counsel to the Agents
in connection therewith and in connection with the preparation of any
Blue Sky survey;
(g) The printing and delivery to the Agents in quantities as
hereinabove stated of copies of the Registration Statement and any
amendments thereto, and of the Prospectus and any amendments or
supplements thereto, and the delivery by the Agents of the Prospectus
and any amendments or supplements thereto in connection with
solicitations of offers to purchase, or confirmations of sales of, the
Notes;
(h) Any fees charged by rating agencies for the rating of the
Notes;
(i) Any advertising and other out-of-pocket expenses of the
Agents incurred with the prior written approval of the Company; and
(j) Reasonable fees and disbursements in connection with the
subsequent delivery of legal opinions pursuant to Section 6(b) hereof.
SECTION 5. CONDITIONS OF OBLIGATIONS. The obligations of any Agent to solicit
offers to purchase the Notes as agent of the Company and the obligations of
any Agent to purchase Notes pursuant to any Terms Agreement will be subject
at all times to the accuracy, as of the applicable Representation Date, of
the representations and warranties on the part of the Company herein and to
the accuracy, as of the date made, of the statements of the Company's
officers made in any certificate furnished pursuant to the provisions hereof,
to the performance and observance by the Company of all covenants and
agreements herein contained on its part to be performed and observed, and to
the following additional conditions precedent:
(a) OPINION OF COUNSEL TO COMPANY. On the date hereof, the
Agents shall have received an opinion from ▇▇▇▇▇ ▇▇▇▇▇▇▇▇▇▇ LLP,
counsel to the Company, dated as of the date hereof and in form and
substance satisfactory to counsel for the Agents to the effect that:
(i) The Company is a corporation validly
existing and in good standing under the laws of the State of
Delaware.
(ii) The Company has the corporate power and
corporate authority to enter into and perform its obligations
under this Agreement and the Indenture, to borrow money as
contemplated in this Agreement and the Indenture, and to
issue, sell and deliver the Notes.
(iii) This Agreement has been duly authorized,
executed and delivered by the Company.
(iv) The Indenture has been duly authorized by
all necessary corporate action on the part of the Company and
duly executed and delivered by the Company and constitutes a
valid and binding agreement of the Company, enforceable
against the Company in accordance with its terms, subject to
the
11
qualification that the enforceability of the Indenture is
subject to and may be limited by (a) applicable bankruptcy,
insolvency, reorganization, fraudulent transfer, moratorium or
other similar laws relating to or affecting the enforcement of
creditors' rights generally, (b) general principles of equity,
regardless of whether such enforceability is considered in a
proceeding at law or in equity, (c) provisions of law which
may require that a judgment for money damages rendered by a
court in the United States be expressed only in United States
dollars, (d) requirements that a claim with respect to any
Notes denominated other than in U.S. dollars (or a judgment
denominated other than in U.S. dollars in respect of such
claim) be converted into U.S. dollars at a rate of exchange
prevailing on a date determined pursuant to applicable law and
(e) governmental authority to limit, delay or prohibit the
making of payments outside the United States or in foreign
currency, currency units or composite currencies.
(v) No Governmental Approval is required on the
part of the Company in connection with the issuance or sale of
the Notes, other than registration thereof under the 1933 Act,
the qualification of the Indenture under the 1939 Act, and
such registrations or qualifications as may be necessary under
the securities or Blue Sky laws of the various United States
jurisdictions in which the Notes are to be offered or sold.
(vi) The Notes, when the final terms of a
particular Note and its issuance and sale have been
established in accordance with the provisions of the Indenture
and when executed and authenticated in accordance with the
terms of the Indenture and delivered to and paid for by the
purchasers thereof in accordance with the terms of this
Agreement, will constitute valid and binding obligations of
the Company, enforceable against the Company in accordance
with their terms, subject to the qualification that the
enforceability of the Notes is subject to and may be limited
by (a) applicable bankruptcy, insolvency, reorganization,
fraudulent transfer, moratorium or other similar laws relating
to or affecting the enforcement of creditors' rights
generally, (b) general principles of equity, regardless of
whether such enforceability is considered in a proceeding at
law or in equity, (c) provisions of law which may require that
a judgment for money damages rendered by a court in the United
States be expressed only in United States dollars, (d)
requirements that a claim with respect to any Notes
denominated other than in U.S. dollars (or a judgment
denominated other than in U.S. dollars in respect of such
claim) be converted into U.S. dollars at a rate of exchange
prevailing on a date determined pursuant to applicable law and
(e) governmental authority to limit, delay or prohibit the
making of payments outside the United States or in foreign
currency, currency units or composite currencies.
(vii) The Registration Statement has been
declared effective under the 1933 Act and the Indenture has
been qualified under the 1939 Act, and, to the best of such
counsel's knowledge, no stop order suspending the
effectiveness of the Registration Statement has been issued
and no proceedings for that purpose have been instituted or
are pending or contemplated.
12
(viii) The execution and delivery of this
Agreement and the Indenture by the Company, the issuance and
sale of the Notes and the performance by the Company of its
obligations under this Agreement and the Indenture will not
(A) violate the Restated Certificate of Incorporation or
Bylaws, as amended, of the Company, (B) violate any Applicable
Laws or (C) breach or otherwise violate any obligation of or
restriction on the Company under any judgment, decree or
order, applicable to the Company and known to such counsel, of
any court or Governmental Authority entered in any proceeding
to which the Company was or is now a party or by which it is
bound; provided, that such counsel may state that no opinion
is expressed as to the securities or Blue Sky laws of the
various jurisdictions in which any of the Notes are to be
offered.
(ix) The Registration Statement, as of its
effective date, and the Prospectus, as of the date of the
prospectus supplement relating to the Notes, appeared on their
face to comply as to form in all material respects with the
applicable requirements of the 1933 Act and the related
applicable rules and regulations of the Commission thereunder
then in effect, except that in each case such counsel need not
express an opinion as to (i) the Incorporated Documents, (ii)
the financial statements, schedules and other financial and
statistical data included or incorporated by reference therein
or excluded therefrom or (iii) the exhibits to the
Registration Statement, including, without limitation, the
Statement of Eligibility under the 1939 Act of the Trustee on
Form T-1 incorporated by reference therein (the "Form T-1").
(x) The statements in the Prospectus under the
captions "Description of Debt Securities" and "Description of
the Notes," insofar as they purport to summarize certain
provisions of the Notes and the Indenture, fairly present the
information required by Form S-3.
In rendering the opinions set forth above, such counsel may state
that, with respect to Notes the payments of principal or interest on which
will be determined by reference to one or more currency exchange rates,
commodity prices, equity indices or other factors, no opinion is expressed
with respect to the Commodity Exchange Act, as amended, or the rules,
regulations and interpretations of the Commodities Futures Trading Commission
promulgated thereunder.
In rendering the opinions set forth above, the term "Applicable
Laws" shall mean the Delaware General Corporation Law and those laws, rules
and regulations of the States of California and New York and of the United
States of America which such counsel has, in the exercise of customary
diligence, recognized as applicable to the Company or transactions of the
type contemplated by this Agreement; the term "Governmental Authority" shall
mean any California, New York, Delaware or federal executive, legislative,
judicial, administrative or regulatory body; and the term "Governmental
Approval" shall mean any order, consent, permit or approval of any
Governmental Authority pursuant to Applicable Laws.
In addition, such counsel may state that such counsel has not
undertaken to determine independently, and therefore does not assume any
responsibility explicitly or implicitly for, the accuracy, completeness or
fairness of the statements contained or incorporated by reference in
13
the Registration Statement and Prospectus (except as set forth in clause (x)
above). Such counsel may also state that such counsel has participated in
conferences with representatives of the Company and the Agents in the course
of the preparation of the Registration Statement and Prospectus and has
considered the matters required to be stated therein and the statements
contained therein. However, such counsel shall state that, based upon and
subject to the foregoing, nothing has come to such counsel's attention that
causes such counsel to believe that the Registration Statement, as of the
time it became effective, contained an untrue statement of a material fact or
omitted to state a material fact required to be stated therein or necessary
to make the statements therein not misleading or that the Prospectus, as of
the date of this Agreement (and, if the opinion is being given pursuant to
Section 6(b) hereof as a result of the Company having entered into a Terms
Agreement, as of the Settlement Date with respect to such Terms Agreement)
includes an untrue statement of a material fact or omits to state a material
fact necessary to make the statements therein, in light of the circumstances
under which they were made, not misleading (except in each case as to the
financial statements and schedules and other financial and statistical data
included or incorporated by reference therein or excluded therefrom and, in
the case of the Registration Statement, except as to exhibits thereto
(including, without limitation, the Form T-1, as to all of which such counsel
need express no opinion).
(b) OPINION OF COUNSEL EMPLOYED BY COMPANY. On the date
hereof, the Agents shall have received an opinion from ▇▇▇▇▇ ▇.
▇▇▇▇▇▇▇▇, Senior Vice President-Assistant General Counsel, or from
other counsel employed by the Company (provided that such counsel is at
least a Vice President of the Company), dated as of the date hereof and
in form and substance satisfactory to counsel for the Agents, to the
effect that:
(i) The Company and each of the Significant
Subsidiaries is a corporation validly existing and in good
standing under the laws of its state of incorporation.
(ii) Except as set forth in the Prospectus, there
is not pending or, to the best of such counsel's knowledge,
after reasonable inquiry, threatened any action, suit or
proceeding against the Company or any of its subsidiaries
before or by any court or governmental agency or body, which
is likely (to the extent not covered by insurance) to have a
material adverse effect on the consolidated financial
condition or earnings of the Company and its subsidiaries,
considered as one enterprise.
(iii) To the best of such counsel's knowledge,
after reasonable inquiry, there is no contract or document of
a character required to be described in the Registration
Statement or the Prospectus or to be filed as an exhibit to
the Registration Statement which is not described or filed as
required.
(iv) To the best of such counsel's knowledge,
after reasonable inquiry, the Company is not in violation of
its Restated Certificate of Incorporation or Bylaws, as
amended.
(v) To the best of such counsel's knowledge,
after reasonable inquiry, the execution, delivery and
performance of this Agreement and the Indenture will
14
not conflict with or constitute a breach of, or default (with
the passage of time or otherwise) under, any material
contract, indenture, mortgage, loan agreement, note, lease or
other instrument to which the Company is a party or by which
it may be bound, or to which any of the property or assets of
the Company or any of its subsidiaries is subject.
(vi) Each of the Incorporated Documents, as of
the date such document was filed with the Commission, complied
as to form in all material respects with the requirements of
the 1934 Act, except that in each case such counsel need not
express an opinion as to the financial statements, schedules
and other financial data included or incorporated by reference
therein or excluded therefrom.
In addition, such counsel shall state that nothing has come to such
counsel's attention that leads him to believe that either the Registration
Statement at the time such Registration Statement became effective contained
an untrue statement of a material fact or omitted to state a material fact
required to be stated therein or necessary to make the statements therein not
misleading, or the Prospectus as of the date of this Agreement (and, if the
opinion is being given pursuant to Section 6(b) hereof as a result of the
Company having entered into a Terms Agreement, as of the Settlement Date with
respect to such Terms Agreement) contained an untrue statement of a material
fact or omitted to state a material fact required to be stated therein or
necessary to make the statements therein, in light of the circumstances under
which they were made, not misleading, except that such counsel need express
no opinion with respect to the financial statements, schedules and other
financial data included or incorporated by reference therein or excluded
therefrom or the exhibits to the Registration Statement, including the Form
T-1.
(c) OPINION OF AGENTS' COUNSEL. On the date hereof, the Agents
shall have received an opinion from counsel to the Agents, dated as of
the date hereof and in form and substance satisfactory to the Agents.
(d) OFFICER'S CERTIFICATE. On the date hereof (and, if this
certificate is being delivered pursuant to a Terms Agreement, as of the
Settlement Date with respect to such Terms Agreement), the Agents shall
have received a certificate signed by an officer of the Company,
substantially in the form of Appendix I hereto and dated the date
hereof, to the effect that (i) the representations and warranties of
the Company contained in Section 1(a) hereof are true and correct in
all material respects with the same force and effect as though
expressly made at and as of the date of such certificate, (ii) the
Company has complied with all agreements and satisfied all conditions
required by this Agreement or the Indenture on its part to be performed
or satisfied at or prior to the date of such certificate, and (iii) no
stop order suspending the effectiveness of the Registration Statement
has been issued and no proceedings for that purpose have been initiated
or, to the best of such officer's knowledge, threatened by the
Commission. The officer's certificate shall further state that except
as contemplated in the Prospectus or reflected therein by the filing of
any amendment or supplement thereto or any Incorporated Document, at
the date hereof and at each Settlement Date with respect to any Terms
Agreement, there has not been, since the date of the most recent
consolidated financial statements included or incorporated by reference
in the Prospectus, any material adverse
15
change in the consolidated financial condition or earnings of the
Company and its subsidiaries, considered as one enterprise.
(e) COMFORT LETTER. On the date hereof, the Agents shall have
received a letter from the Company's independent certified public
accountants, dated as of the date hereof and in form and substance
satisfactory to the Agents, to the effect that:
(i) They are independent public accountants
with respect to the Company and its subsidiaries within the
meaning of the 1933 Act and the 1933 Act Regulations.
(ii) In their opinion, the consolidated
financial statements and supporting schedule(s) of the Company
and its subsidiaries audited and reported upon by them and
incorporated by reference in the Registration Statement comply
as to form in all material respects with the applicable
accounting requirements of the 1933 Act and the 1933 Act
Regulations with respect to registration statements on Form
S-3 and the 1934 Act and the published rules and regulations
thereunder.
(iii) They have performed specified procedures,
not constituting an audit, including a reading of the latest
available interim consolidated financial statements of the
Company, a reading of the minute books of the Company since
the end of the most recent fiscal year with respect to which
an audit report has been issued, inquiries of and discussions
with certain officials of the Company and certain of its
subsidiaries responsible for financial and accounting matters
with respect to the latest available interim unaudited
consolidated financial statements of the Company, and such
other inquiries and procedures as may be specified in such
letter, and on the basis of such inquiries and procedures
nothing came to their attention that caused them to believe
that: (A) the latest available unaudited consolidated
financial statements of the Company were not fairly presented
in conformity with generally accepted accounting principles in
the United States applied on a basis substantially consistent
with that of the audited financial statements incorporated by
reference therein, or (B) at a specified date not more than
five days prior to the date of such letter, there was any
change in the outstanding capital stock of the Company or any
increase in consolidated long-term debt of the Company or any
decrease in the stockholders' equity of the Company, in each
case as compared with the amounts shown on the most recent
consolidated balance sheet of the Company incorporated by
reference in the Registration Statement and Prospectus or,
during the period from the date of such balance sheet to a
specified date not more than five days prior to the date of
such letter, there were any decreases, as compared with the
corresponding period in the preceding year, in consolidated
revenues or net income of the Company, except in each such
case as set forth in or contemplated by the Registration
Statement and Prospectus or except for such exceptions
enumerated in such letter as shall have been agreed to by the
Agents and the Company.
(iv) In addition to the examination referred to
in their report included or incorporated by reference in the
Registration Statement and the Prospectus, and
16
the limited procedures referred to in clause (iii) above, they
have carried out certain other specified procedures, not
constituting an audit, with respect to certain financial
information which is included or incorporated by reference in
the Registration Statement and Prospectus, which would
normally be covered under auditing procedures and which are
specified by the Agents, and have found such financial
information to be in agreement with the relevant accounting,
financial and other records of the Company identified in such
letter.
(f) OTHER DOCUMENTS. On the date hereof and on each Settlement
Date with respect to any applicable Terms Agreement, counsel to the
Agents shall have been furnished with such documents and opinions as
such counsel may reasonably require for the purpose of enabling such
counsel to pass upon the issuance and sale of Notes as herein
contemplated and related proceedings, or in order to evidence the
accuracy and completeness of any of the representations and warranties
or the fulfillment of any of the conditions herein contained.
If any condition specified in this Section 5 shall not have been
fulfilled when and as required to be fulfilled, this Agreement may be terminated
by any of the Agents (as to itself only) and any Terms Agreement may be
terminated by the Agent party to such Terms Agreement by notice to the Company
at any time and any such termination shall be without liability of any party to
any other party, except that the covenants set forth in Section 3(f) hereof, the
provisions of Section 4 hereof, the indemnity and contribution agreement set
forth in Sections 7 and 8 hereof, and the provisions of Sections 9 and 13 hereof
shall remain in effect.
SECTION 6. SUBSEQUENT DOCUMENTATION REQUIREMENT OF THE COMPANY. The Company
covenants and agrees that so long as Notes are authorized for sale pursuant to
this Agreement and unless the sale of Notes has been suspended as provided in
this Agreement:
(a) SUBSEQUENT DELIVERY OF CERTIFICATES. Each time that the
Registration Statement or the Prospectus shall be amended or
supplemented (other than by (i) a Pricing Supplement or an amendment or
other supplement providing solely for a change in the interest rates of
the Notes or changes in other terms of the Notes or (ii) an amendment
or supplement which relates exclusively to an offering of securities
other than the Notes) or there is filed with the Commission any
document (other than a Current Report on Form 8-K unless delivery of a
certificate is reasonably requested by the Agents with respect to such
filing) incorporated by reference into the Prospectus or the Company
sells Notes to an Agent pursuant to a Terms Agreement, the terms of
which so require, the Company shall use its best efforts to furnish or
cause to be furnished to the Agents or to the Agent party to the Terms
Agreement, as the case may be, promptly following such amendment,
supplement or filing or on the Settlement Date with respect to such
Terms Agreement, as the case may be, a certificate in form satisfactory
to counsel for the Agents to the effect that the statements contained
in the certificate referred to in Section 5(d) hereof, which was last
furnished to the Agents, are true and correct at the time of such
amendment, supplement, filing or sale, as the case may be, as though
made at and as of such time (except that such statements shall be
deemed to relate to the Registration Statement and the Prospectus as
amended and supplemented to such time) or, in lieu of such certificate,
a certificate of the same tenor as the certificate referred to in said
Section
17
5(d), modified as necessary to relate to the Registration Statement and
the Prospectus as amended and supplemented to the time of delivery of
such certificate; PROVIDED, HOWEVER, that in the case of any such
amendment or supplement that relates to Notes which are indexed or
linked to any foreign currency, composite currency, commodity, equity
index or similar index, such certificate shall state that, for purposes
of such certificate, the phrase "or with respect to Notes which are to
be indexed or linked to any currency, composite currency, commodity,
equity index or similar index" appearing in the second sentence of
Section 1(a)(viii) hereof shall be deemed not to apply with respect to
such Notes.
(b) SUBSEQUENT DELIVERY OF LEGAL OPINIONS. Each time that the
Registration Statement or the Prospectus shall be amended or
supplemented (other than by (i) a Pricing Supplement or an amendment or
other supplement providing solely for a change in the interest rates of
the Notes or changes in other terms of the Notes or (ii) an amendment
or supplement providing primarily for the inclusion of additional
financial information, or (iii) an amendment or supplement which
relates exclusively to an offering of securities other than the Notes)
or there is filed with the Commission any document incorporated by
reference into the Prospectus (other than any Annual Report on Form
10-K, Current Report on Form 8-K or Quarterly Report on Form 10-Q
relating primarily to financial statements or other financial
information as of and for any fiscal quarter) or the Company sells
Notes to an Agent pursuant to a Terms Agreement, the terms of which so
require, the Company shall use its best efforts to furnish or cause to
be furnished promptly following such amendment, supplement or filing or
on the Settlement Date with respect to such Terms Agreement, as the
case may be, to the Agents or to the Agent party to the Terms
Agreement, as the case may be (with a copy to counsel to the Agents or
counsel to such Agent, as the case may be), letters substantially in
the form of Appendix II hereto (modified, as necessary, in the case of
a Terms Agreement) from the counsel last furnishing the opinions
referred to in Sections 5(a) and 5(b) hereof or, in lieu of such
letters, letters from other counsel reasonably satisfactory to the
Agents (which, in the case of the opinions referred to in such Section
5(b), shall include ▇▇▇▇▇ ▇. ▇▇▇▇▇▇▇▇, Senior Vice President -
Assistant General Counsel of the Company), dated the date of delivery
of such letter and in form satisfactory to counsel for the Agents, of
the same tenor as the opinions referred to in Sections 5(a) and 5(b)
(other than, in the case of the opinion delivered pursuant to Section
5(b) hereof, the matters covered by Sections 5(b)(i) and 5(b)(iv)(x))
hereof, but modified, as necessary, to relate to the Registration
Statement and the Prospectus as amended and supplemented to the time of
delivery of such opinion; PROVIDED, HOWEVER, that (i) in the case of
any such amendment or supplement that relates to Notes which are
indexed or linked to any foreign currency, composite currency,
commodity, equity index or similar index, the opinions referred to in
Section 5(a) hereof shall not include the exceptions set forth in such
Section 5(a) as to Notes which are to be indexed or linked to any
foreign currency, composite currency, commodity, equity index or
similar index and (ii) if reasonably requested by the Agents, the
counsel delivering the opinions referred to in Section 5(b) shall
expand the opinion rendered pursuant to Section 5(b)(i) to include any
other subsidiary of the Company that, as a result of actions or events
occurring after the date of this Agreement is of substantially similar
materiality to the Company, on a consolidated basis, as each of the
Significant Subsidiaries are as of the date of this Agreement. The
Company shall use its
18
best efforts to furnish or cause to be furnished to the Agents,
promptly following each filing by the Company of a Quarterly Report
on Form 10-Q or an Annual Report on Form 10-K, a letter from the
counsel last furnishing the opinion referred to in Section 5(b) hereof,
or from other counsel reasonably satisfactory to the Agents, dated the
date of delivery of such letter and in form satisfactory to counsel for
the Agents, of the same tenor as the opinion referred to in Section
5(b)(ii) hereof, but modified, as necessary, to relate to the
Registration Statement and Prospectus as amended and supplemented to
the time of delivery of such letter.
(c) SUBSEQUENT DELIVERY OF COMFORT LETTERS. Each time that the
Registration Statement or the Prospectus shall be amended or
supplemented to include additional financial information or there is
filed with the Commission any document incorporated by reference into
the Prospectus which contains additional financial statement
information relating to the Company or the Company sells Notes pursuant
to a Terms Agreement, the terms of which so require, the Company shall
use its best efforts to cause the Company's independent public
accountants promptly following such amendment, supplement or filing or
on the Settlement Date with respect to such Terms Agreement, as the
case may be, to furnish the Agents or to the Agent party to the Terms
Agreement, as the case may be, a letter, dated the date of filing of
such amendment, supplement or document with the Commission, or such
Settlement Date, as the case may be, in form satisfactory to counsel
for the Agents (or such Agent), of the same tenor as the portions of
the letter referred to in clauses (i) and (ii) of Section 5(e) hereof
but modified, as necessary, to relate to the Registration Statement and
Prospectus, as amended and supplemented to the date of such letter, and
of the same general tenor as the portions of the letter referred to in
clause (iii) (other than the information required by clause (B)
thereof, except in the case of a Terms Agreement, the terms of which so
require) and clause (iv) of said Section 5(e) with such changes as may
be necessary to reflect changes in the financial statements and other
information derived from the accounting records of the Company;
PROVIDED, HOWEVER, that if the Registration Statement or the Prospectus
is amended or supplemented primarily to include financial information
as of and for a fiscal quarter, the Company's independent certified
public accountants may limit the scope of such letter to the unaudited
financial statements included in such amendment or supplement.
SECTION 7. INDEMNIFICATION.
(a) INDEMNIFICATION OF THE AGENTS. The Company agrees to indemnify and
hold harmless each Agent and each person, if any, who controls an Agent within
the meaning of Section 15 of the 1933 Act as follows:
(i) against any and all loss, liability, claim, damage and
expense whatsoever (including, subject to the limitations set forth in
subsection (c) below, the reasonable fees and disbursements of counsel
chosen by the Agents), as incurred, insofar as such loss, liability,
claim, damage or expense arises out of any untrue statement or alleged
untrue statement of a material fact contained in the Registration
Statement or the omission or alleged omission therefrom of a material
fact required to be stated therein or necessary to make the statements
therein not misleading, or arises out of any untrue statement or
19
alleged untrue statement of a material fact contained in the Prospectus
or the omission or alleged omission therefrom of a material fact
necessary in order to make the statements therein, in light of the
circumstances under which they were made, not misleading;
(ii) against any and all loss, liability, claim, damage
and expense whatsoever (including, subject to the limitations set forth
in subsection (c) below, the reasonable fees and disbursements of
counsel chosen by the Agents), as incurred, to the extent of the
aggregate amount paid in settlement of any litigation, or investigation
or proceeding by any governmental agency or body, commenced or
threatened, or of any claim whatsoever insofar as such loss, liability,
claim, damage or expense arises out of any such untrue statement or
omission, or any such alleged untrue statement or omission, if such
settlement is effected with the written consent of the Company; and
(iii) against any and all expense whatsoever (including,
subject to the limitations set forth in subsection (c) below, the
reasonable fees and disbursements of counsel chosen by the Agents), as
incurred, reasonably incurred in investigating, preparing or defending
against any litigation, or investigation or proceeding by any
governmental agency or body, commenced or threatened, or any claim
whatsoever, based upon any such untrue statement or omission, or any
such alleged untrue statement or omission; PROVIDED, HOWEVER, that this
indemnity shall not apply to any loss, liability, claim, damage of
expense (A) to the extent arising out of or based upon any untrue
statement or omission or alleged untrue statement or omission made in
reliance upon the Form T-1; or (B) to the extent arising out of any
untrue statement or omission or alleged untrue statement or omission in
the Prospectus if such untrue statement or alleged untrue statement or
omission or alleged omission is corrected in all material respects in
an amendment or supplement to the Prospectus and if, having previously
been furnished by or on behalf of the Company with copies of the
Prospectus, as so amended or supplemented, such Agent thereafter failed
to deliver such Prospectus, as so amended or supplemented, prior to or
concurrently with the sale of a Note or Notes to the person asserting
such loss, liability, claim, damage or expense who purchased such Note
or Notes which are the subject thereof from such Agent; or (C) as to
which such Agent may be required to indemnify the Company pursuant to
the provisions of subsection (b) of this Section 7.
(b) INDEMNIFICATION OF THE COMPANY. Each Agent severally (and not
jointly) agrees to indemnify and hold harmless the Company, its directors, each
of its officers who signed the Registration Statement, and each person, if any,
who controls the Company within the meaning of Section 15 of the 1933 Act
against any and all loss, liability, claim, damage and expense described in the
indemnity contained in subsection (a) of this Section 7, as incurred, but only
with respect to untrue statements or omissions, or alleged untrue statements or
omissions, made in the Registration Statement or the Prospectus in reliance upon
and in conformity with written information furnished to the Company by such
Agent expressly for use in the Registration Statement or the Prospectus.
20
(c) GENERAL.
(i) In case any action, suit or proceeding (including any
governmental or regulatory investigation or proceeding) shall be
brought against any Agent or any person controlling such Agent, based
upon the Registration Statement or the Prospectus and with respect to
which indemnity may be sought against the Company pursuant to this
Section 7, such Agent or controlling person shall promptly notify the
Company in writing, and the Company shall assume the defense thereof,
including the employment of counsel (such counsel to be reasonably
acceptable to such Agent) and payment of all expenses. Any such Agent
or any such controlling person shall have the right to employ separate
counsel in any such action, suit or proceeding and to participate in
the defense thereof, but the fees and expenses of such separate counsel
shall be at the expense of such Agent or such controlling person unless
(A) the employment of such counsel shall have been specifically
authorized in writing by the Company, (B) the Company shall have failed
to assume the defense and employ counsel or (C) the named parties to
any such action, suit or proceeding (including any impleaded parties)
shall include both such Agent or such controlling person and the
Company, and such Agent or such controlling person shall have been
advised by counsel that there may be one or more legal defenses
available to it which are different from, or additional to, those
available to the Company (in which case, if such Agent or such
controlling person notifies the Company in writing that it elects to
employ separate counsel at the expense of the Company, the Company
shall not have the right to assume the defense of such action, suit or
proceeding on behalf of such Agent or such controlling person, it being
understood, however, that the Company shall not, in connection with any
one such action or separate but substantially similar or related
actions in the same jurisdiction arising out of the same general
allegations or circumstances, be liable for the reasonable fees and
expenses of more than one separate firm of attorneys (in addition to
any local counsel) for all such Agents and such controlling persons,
which firm shall be designated in writing by a majority of all such
Agents, on behalf of all of such Agents and such controlling persons).
(ii) In case any action, suit or proceeding (including any
governmental or regulatory investigation or proceeding) shall be
brought against the Company, any of the Company's directors or
officers, or any person controlling the Company, with respect to which
indemnity may be sought against any Agent pursuant to this Section 7,
such Agent shall have the rights and duties given to the Company by
subsection (c)(i) of this Section 7, and the Company, the Company's
directors and officers and any such controlling person shall have the
rights and duties given to the Agents by subsection (c)(i) of this
Section 7.
SECTION 8. CONTRIBUTION. In order to provide for just and equitable contribution
in circumstances in which the indemnity agreement provided for in Section 7
hereof is for any reason held to be unenforceable with respect to the
indemnified parties although applicable in accordance with its terms, the
Company and each Agent shall contribute to the aggregate losses, liabilities,
claims, damages and expenses of the nature contemplated by said indemnity
agreement incurred by the Company and the Agents, as incurred, in such
proportion as is appropriate to reflect the relative benefits received by the
Company on the one hand and each of the Agents participating in the offering
that gave rise to such losses, liabilities, claims, damages
21
and expenses (a "Relevant Agent") on the other hand from the offering of such
Notes. If however, the allocation provided by the immediately preceding
sentence is not permitted by applicable law or if the indemnified party
failed to give the notice required pursuant to Section 7(c) hereof or
pursuant to the last sentence of this Section 8, then the Company and each
Relevant Agent shall contribute to such aggregate losses, liabilities,
claims, damages and expenses incurred by the Company and the Relevant Agents,
as incurred, in such proportion as is appropriate to reflect not only such
relative benefits but also the relative fault of the Company on the one hand
and each Relevant Agent on the other in connection with the statements or
omissions which resulted in such losses, liabilities, claims, damages or
expenses, as well as any other relevant equitable considerations. The
relative benefits received by the Company on the one hand and each Relevant
Agent on the other hand in connection with the offering of such Notes shall
be deemed to be in the same proportion as the total net proceeds from the
sale of such Notes by such Relevant Agent received by the Company (before
deducting expenses) bear to the total commissions or other compensation or
remuneration received by such Relevant Agent in respect thereof. 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 Company or such Relevant Agent and the parties' relative intent,
knowledge, access to information and opportunity to correct or prevent such
statement or omission. If more than one Agent is a Relevant Agent in respect
of a proceeding, each Relevant Agent's obligation to contribute pursuant to
this Section 8 shall be several and not joint, and shall be in the proportion
that the principal amount of the Notes that are the subject of such
proceeding and that were offered and sold through such Relevant Agent bears
to the aggregate principal amount of the Notes that are the subject of such
proceeding. Notwithstanding the provisions of this Section 8, no Agent shall
be required to contribute any amount in excess of the amount by which the
total price at which the Notes purchased by or through it were sold exceeds
the amount of any damages which such Agent has otherwise been required to pay
by reason of such untrue or alleged untrue statement or omission or alleged
omission. No person guilty of fraudulent misrepresentation (within the
meaning of Section 11(f) of the ▇▇▇▇ ▇▇▇) shall be entitled to contribution
from any person who was not guilty of such fraudulent misrepresentation. For
purposes of this Section 8, each person, if any, who controls an Agent within
the meaning of Section 15 of the 1933 Act shall have the same rights to
contribution as such Agent, and each director of the Company, each officer of
the Company who signed the Registration Statement, and each person, if any,
who controls the Company within the meaning of Section 15 of the 1933 Act
shall have the same rights to contribution as the Company. Any party entitled
to contribution pursuant to the first sentence of this Section 8 will,
promptly after receipt of notice of commencement of any action, suit or
proceeding against such party in respect of which a claim for contribution
may be made against another party or parties under this Section 8, notify
such party or parties from whom contribution may be sought, but the omission
to so notify such party or parties shall not relieve the party or parties
from whom contribution may be sought from any other obligation it or they may
have otherwise than under this Section 8; PROVIDED, HOWEVER, that such notice
need not be given if such party entitled to contribution hereunder has
previously given notice pursuant to Section 7(c) hereof with respect to the
same action, suit or proceeding.
SECTION 9. REPRESENTATIONS. WARRANTIES AND AGREEMENTS TO SURVIVE DELIVERY. All
representations, warranties and agreements contained in this Agreement or any
Terms Agreement, or contained in certificates of officers of the Company
submitted pursuant hereto,
22
shall remain operative and in full force and effect, regardless of any
investigation made by or on behalf of any Agent or any controlling person as
defined in Section 15 of the 1933 Act of any Agent, or by or on behalf of the
Company, and shall survive each delivery of and payment for any of the Notes.
SECTION 10. TERMINATION.
(a) TERMINATION OF THIS AGREEMENT. This Agreement (excluding any
Terms Agreement) may be terminated by the Company (i) for any reason at any
time with respect to any Agent or Agents upon the giving of 2 business days'
written notice of such termination to each other party hereto or (ii) at any
time upon notice to each other party hereto if no Notes then remain
authorized for sale pursuant hereto. This Agreement may be terminated by any
Agent (as to itself only) either (x) upon the giving of 2 business days'
written notice of such termination to each other party hereto or (y) at any
time upon notice to the Company if the Company shall have failed to furnish
or cause to be furnished the certificates, opinions or letters referred to in
Section 5 or 6 hereof or if no Notes then remain authorized for sale pursuant
hereto.
(b) TERMINATION OF A TERMS AGREEMENT. An Agent party to a Terms
Agreement may terminate such Terms Agreement (as to itself only) immediately
upon notice to the Company, at any time prior to the Settlement Date relating
thereto if (i) there has been, between the date of such Terms Agreement and
the related Settlement Date, any material adverse change in the consolidated
financial condition or earnings of the Company and its subsidiaries,
considered as one enterprise, (ii) there has occurred any material adverse
change in the financial markets in the United States or any outbreak or
escalation of hostilities or other calamity or crisis, the effect of which is
such as to make it, in the reasonable judgment of such Agent, impracticable
to market the Notes or to enforce contracts for the sale of the Notes, (iii)
trading in any securities of the Company has been suspended (other than
pursuant to a request by the Company with respect to an announcement by the
Company of certain information not constituting a material adverse change,
since the date of such Terms Agreement, in the consolidated financial
condition or earnings of the Company and its subsidiaries, considered as one
enterprise), the effect of which is such as to make it, in the reasonable
judgment of such Agent, impracticable to market the Notes or to enforce
contracts for the sale of the Notes, (iv) trading generally on the New York
Stock Exchange has been suspended, or minimum or maximum prices for trading
have been fixed, or maximum ranges for prices for securities shall have been
required, by such exchange or by order of the Commission or any other
governmental authority, or if a banking moratorium has been declared by
either Federal or New York authorities or if a banking moratorium has been
declared by the relevant authorities in the country or countries of origin of
any foreign currency or currencies in which the Notes are denominated or
payable or (v) after the date of such Terms Agreement the rating assigned by
any nationally recognized securities rating agency to any debt securities of
the Company as of the date of such Terms Agreement shall have been lowered or
any such rating agency shall have publicly announced that it has placed any
debt securities of the Company on what is commonly termed a "watch list" with
negative implications.
(c) GENERAL. In the event of any such termination, no party will have
any liability to any other party hereto, except that (i) a terminating Agent
shall be entitled to any commissions earned in accordance with the third
paragraph of Section 2(a) hereof, (ii) if at the time of termination (A) a
terminating Agent and the Company shall have entered into a Terms
23
Agreement and the Settlement Date with respect thereto shall not yet have
occurred or (B) an offer to purchase any of the Notes has been accepted by
the Company but the time of delivery to the purchaser or his agent of the
Note or Notes relating thereto has not occurred, the covenants set forth in
Sections 3 (subject to the provisions of Section 3(h)) and 6 hereof shall
remain in effect until such Settlement Date or until such Notes are so
delivered, as the case may be, and (iii) the covenant set forth in Section
3(f) hereof, the provisions of Section 4 hereof, the indemnity and
contribution agreements set forth in Sections 7 and 8 hereof, and the
provisions of Sections 9 and 13 hereof shall remain in effect.
SECTION 11. NOTICES. All notices and other communications hereunder shall be in
writing and shall be deemed to have been duly given if mailed or transmitted by
any standard form of telecommunication. Notices to the Agents shall be directed,
as the case may be, to:
Banc of America Securities LLC
Bank of America Corporate Center
▇▇▇ ▇▇▇▇▇ ▇▇▇▇▇ ▇▇▇▇▇▇
▇▇▇▇▇▇▇▇▇, ▇▇▇▇▇ ▇▇▇▇▇▇▇▇ ▇▇▇▇▇
Attention: MTN Desk
Banc One Capital Markets, Inc.
1 Bank ▇▇▇ ▇▇▇▇▇
▇▇▇ ▇▇▇▇▇, ▇▇▇▇▇ ▇▇▇-▇▇▇▇
▇▇▇▇▇▇▇, ▇▇▇▇▇▇▇▇ ▇▇▇▇▇
Attention: Investment Grade Securities
(▇▇▇) ▇▇▇-▇▇▇▇ (voice)
(▇▇▇) ▇▇▇-▇▇▇▇ (fax)
Bear, ▇▇▇▇▇▇▇ & Co. Inc.
▇▇▇ ▇▇▇▇ ▇▇▇▇▇▇
▇▇▇ ▇▇▇▇, ▇▇▇ ▇▇▇▇ ▇▇▇▇▇
Attention: ▇▇▇▇▇ ▇▇▇▇▇▇
Managing Director, MTN Desk
Credit Suisse First Boston Corporation
Fixed Income Department - ▇▇▇ ▇▇▇▇▇
▇▇▇▇▇▇ ▇▇▇▇▇▇▇ ▇▇▇▇▇▇
▇▇▇ ▇▇▇▇, ▇▇▇ ▇▇▇▇ ▇▇▇▇▇
Attention: ▇▇▇▇ ▇▇▇▇▇▇▇▇▇▇
▇▇▇▇▇▇▇, ▇▇▇▇▇ & Co.
▇▇ ▇▇▇▇▇ ▇▇▇▇▇▇
▇▇▇▇ ▇▇▇▇▇
▇▇▇ ▇▇▇▇, ▇▇▇ ▇▇▇▇ ▇▇▇▇▇
Attention: ▇▇▇▇▇ ▇▇▇▇▇▇▇
24
HSBC Securities (USA) Inc.
▇▇▇ ▇▇▇▇▇ ▇▇▇▇▇▇
▇▇▇ ▇▇▇▇, ▇▇▇ ▇▇▇▇ ▇▇▇▇▇
Attention: MTN Trading, 10th Floor
▇.▇. ▇▇▇▇▇▇ Securities Inc.
▇▇▇ ▇▇▇▇ ▇▇▇▇▇▇, ▇▇▇ ▇▇▇▇▇
▇▇▇ ▇▇▇▇, ▇▇▇ ▇▇▇▇ ▇▇▇▇▇
Attention: Medium-Term Note Desk
▇▇▇▇▇▇ Brothers Inc.
Three World ▇▇▇▇▇▇▇▇▇ ▇▇▇▇▇▇
▇▇▇ ▇▇▇▇, ▇▇▇ ▇▇▇▇ ▇▇▇▇▇
Attention: MTN Department, ▇▇▇▇ ▇▇▇▇▇
▇▇▇▇▇▇▇ ▇▇▇▇▇ & ▇▇.
▇▇▇▇▇▇▇ Lynch, Pierce, ▇▇▇▇▇▇ & ▇▇▇▇▇ Incorporated
▇▇▇▇▇▇▇ ▇▇▇▇▇ World Headquarters
World Financial Center
▇▇▇▇▇ ▇▇▇▇▇, ▇▇▇▇ ▇▇▇▇▇
▇▇▇ ▇▇▇▇, ▇▇▇ ▇▇▇▇ ▇▇▇▇▇-▇▇▇▇
Attention: MTN Product Management
▇▇▇▇▇▇ ▇▇▇▇▇▇▇ & Co. Incorporated
▇▇▇▇ ▇▇▇▇▇▇▇▇, ▇▇▇ ▇▇▇▇▇
▇▇▇ ▇▇▇▇, ▇▇▇ ▇▇▇▇ ▇▇▇▇▇
Attention: Manager, Continuously Offered Products
with a copy to:
▇▇▇▇▇▇ ▇▇▇▇▇▇▇ & Co. Incorporated
▇▇▇▇ ▇▇▇▇▇▇▇▇, ▇▇▇▇ ▇▇▇▇▇
▇▇▇ ▇▇▇▇, ▇▇▇ ▇▇▇▇ ▇▇▇▇▇
Attention: Investment Banking Information Center
25
▇▇▇▇▇▇▇ ▇▇▇▇▇ Barney Inc.
Medium-Term Note Department
▇▇▇ ▇▇▇▇▇▇▇▇▇ ▇▇▇▇▇▇
▇▇▇ ▇▇▇▇, ▇▇▇ ▇▇▇▇ ▇▇▇▇▇
(▇▇▇) ▇▇▇-▇▇▇▇ (voice)
(▇▇▇) ▇▇▇-▇▇▇▇ (fax)
The ▇▇▇▇▇▇▇▇ Capital Group, L.P.
▇▇▇ ▇▇▇▇▇ ▇▇▇▇▇▇, ▇▇▇▇ ▇▇▇▇▇
▇▇▇ ▇▇▇▇, ▇▇▇ ▇▇▇▇ ▇▇▇▇▇
Attention: Capital Markets
Notices to the Company shall be directed to it at:
▇▇▇ ▇▇▇▇▇ ▇▇▇▇▇ ▇▇▇▇▇ ▇▇▇▇▇▇
▇▇▇▇▇▇▇, ▇▇▇▇▇▇▇▇▇▇ ▇▇▇▇▇
Attention: Legal Department
SECTION 12. PARTIES. This Agreement shall inure to the benefit of and be
binding upon the Agents (and, in the case of a Terms Agreement, the Agent or
Agents party thereto) and the Company and their respective successors.
Nothing expressed or mentioned in this Agreement is intended or shall be
construed to give any person, firm or corporation, other than the parties
hereto and their respective successors and the controlling persons and
officers and directors referred to in Sections 7 and 8 hereof and their heirs
and legal representatives, any legal or equitable right, remedy or claim
under or in respect of this Agreement or any provisions herein contained.
This Agreement and all conditions and provisions hereof are intended to be
for the sole and exclusive benefit of the parties hereto and their respective
successors and said controlling persons and officers and directors and their
heirs and legal representatives, and for the benefit of no other person, firm
or corporation. No purchaser of Notes shall be deemed to be a successor by
reason merely of such purchase.
SECTION 13. GOVERNING LAWS. THIS AGREEMENT AND THE RIGHTS AND OBLIGATIONS OF
THE PARTIES CREATED HEREBY SHALL BE GOVERNED BY AND CONSTRUED IN ACCORDANCE
WITH THE LAWS OF THE STATE OF NEW YORK, INCLUDING WITHOUT LIMITATION,
SECTIONS 5-1401 AND 5-1402 OF TITLE 14 OF THE NEW YORK GENERAL OBLIGATIONS
LAW AND NEW YORK CIVIL PRACTICE LAW RULE 327(b).
26
If the foregoing is in accordance with your understanding of our
agreement, please sign and return to the Company a counterpart hereof,
whereupon this instrument along with all counterparts will become a binding
agreement between the Agents and the Company in accordance with its terms.
Very truly yours,
THE ▇▇▇▇ DISNEY COMPANY
By:/s/ ▇▇▇▇▇▇▇▇▇ ▇. ▇▇▇▇▇▇▇▇
-----------------------------------
Name: ▇▇▇▇▇▇▇▇▇ ▇. ▇▇▇▇▇▇▇▇
Title: Senior Vice President
and Treasurer
CONFIRMED AND ACCEPTED,
as of September 24, 2001:
BANC OF AMERICA SECURITIES LLC
By: /s/ ▇▇▇▇ ▇▇▇▇▇
--------------------------------
Name: ▇▇▇▇ ▇▇▇▇▇
Title: Principal
BANC ONE CAPITAL MARKETS, INC.
By: /s/ ▇▇▇▇ ▇. ▇▇▇▇▇▇▇▇
--------------------------------
Name: ▇▇▇▇ ▇. ▇▇▇▇▇▇▇▇
Title: Managing Director
BEAR, ▇▇▇▇▇▇▇ & CO. INC.
By: /s/ ▇▇▇▇▇ ▇▇▇▇▇▇▇▇▇-▇▇▇▇▇
--------------------------------
Name: ▇▇▇▇▇ ▇▇▇▇▇▇▇▇▇-▇▇▇▇▇
Title: Senior Managing Director
CREDIT SUISSE FIRST BOSTON CORPORATION
By: /s/ ▇▇▇▇▇▇ ▇. ▇▇▇▇▇▇▇
--------------------------------
Name: ▇▇▇▇▇▇ ▇. ▇▇▇▇▇▇▇
Title: Director
/s/ ▇▇▇▇▇▇▇, ▇▇▇▇▇ & Co.
------------------------------------
(▇▇▇▇▇▇▇, Sachs & Co.)
HSBC SECURITIES (USA) INC.
By: /s/ ▇▇▇▇▇▇ ▇. ▇▇▇▇▇
--------------------------------
Name: ▇▇▇▇▇▇ ▇. ▇▇▇▇▇
Title: Managing Director
▇. ▇. ▇▇▇▇▇▇ SECURITIES INC.
By: /s/ ▇▇▇▇▇▇ ▇. ▇▇▇▇▇▇▇▇▇▇
--------------------------------
Name: ▇▇▇▇▇▇ ▇. ▇▇▇▇▇▇▇▇▇▇
Title: Vice President
▇▇▇▇▇▇ BROTHERS INC.
By: /s/ ▇▇▇▇▇▇ ▇▇▇▇▇▇▇▇
--------------------------------
Name: ▇▇▇▇▇▇ ▇▇▇▇▇▇▇▇
Title: Senior Vice President
▇▇▇▇▇▇▇ LYNCH, PIERCE, ▇▇▇▇▇▇ & ▇▇▇▇▇
INCORPORATED
By: /s/ ▇▇▇▇▇ ▇. ▇▇▇▇▇▇▇▇
---------------------------------
Name: ▇▇▇▇▇ ▇. ▇▇▇▇▇▇▇▇
Title: Authorized Signatory
▇▇▇▇▇▇ ▇▇▇▇▇▇▇ & CO. INCORPORATED
By: /s/ ▇▇▇▇▇▇▇ ▇▇▇▇▇
---------------------------------
Name: ▇▇▇▇▇▇▇ ▇▇▇▇▇
Title: Executive Director
▇▇▇▇▇▇▇ ▇▇▇▇▇ BARNEY INC.
By: /s/ ▇▇▇▇▇▇ ▇. ▇▇▇▇▇▇
----------------------------------
Name: ▇▇▇▇▇▇ ▇. ▇▇▇▇▇▇
Title: Senior Vice President
THE ▇▇▇▇▇▇▇▇ CAPITAL GROUP, L.P.
By: /s/ ▇▇▇▇▇ ▇. ▇▇▇▇▇
----------------------------------
Name: ▇▇▇▇▇ ▇. ▇▇▇▇▇
Title: Principal
EXHIBIT A
Term(1) Commission Rate(2)
------------------------------------------------------ ------------------
More than 9 months but less than 1 year............... 0.125%
From 1 year but less than 18 months................... 0.150%
From 18 months but less than 2 years.................. 0.200%
From 2 years but less than 3 years.................... 0.250%
From 3 years but less than 4 years.................... 0.350%
From 4 years but less than 5 years.................... 0.450%
From 5 years but less than 6 years.................... 0.500%
From 6 years but less than 7 years.................... 0.550%
From 7 years but less than 10 years................... 0.600%
From 10 years but less than 15 years.................. 0.625%
From 15 years but less than 20 years.................. 0.700%
From 20 years but less than 30 years.................. 0.750%
From 30 years......................................... To be determined by
the Company and the
relevant Agent(s)
-------------------
(1) With respect to each Note that is subject to purchase by the Company at
the option of the holder thereof (a "Put Note"), the word "Term" as
used in this Exhibit A refers to the earliest purchase date specified
in the applicable Put Note.
(2) With respect to each Note that is a Discount Security (as defined in
the Indenture), the commission payable to each Agent with respect to
each such Note sold as a result of a solicitation made by such Agent
shall be based on the purchase price of such Note.
A-1
EXHIBIT B
The following terms, if applicable, shall be agreed to by each Agent
and the Company pursuant to each Terms Agreement:
Principal Amount: $__________
(or principal amount of foreign currency or
composite currency)
Interest Rate
If Fixed Rate Note, Interest Rate:
If Floating Rate Note:
Base Rate or Rates:
Initial Interest Rate:
Spread or Spread Multiplier, if any:
Interest Reset Dates:
Interest Payment Dates:
Index Maturity:
CMT Maturity Index, if any:
Interest Determination Dates:
Maximum Interest Rate, if any:
Minimum Interest Rate, if any:
Interest Reset Period:
Interest Payment Period:
Calculation Agent (if other than the Trustee):
If Redeemable:
Earliest Redemption Date:
Redemption Price:
Stated Maturity:
B-1
Final Maturity (for Renewable Notes):
Initial Maturity (for Renewable Notes):
Purchase Price: _____%
Settlement Date and Time:
Currency of Denomination (if currency is other
than U.S. dollar):
Currency of Payment (if currency is other
than U.S. dollar):
Denominations:
Additional Terms:
B-2
EXHIBIT C
THE ▇▇▇▇ DISNEY COMPANY
MEDIUM TERM NOTES, SERIES B
ADMINISTRATIVE PROCEDURES
September 24, 2001
The administrative procedures and specific terms of the offering of
Medium-Term Notes, Series B (the "Notes") on a continuing basis by The ▇▇▇▇
Disney Company (the "Issuer") pursuant to the
Distribution Agreement, dated
September 24, 2001 (as amended, modified or supplemented from time to time,
the "
Distribution Agreement"), between the Issuer and each of Banc of America
Securities LLC, Banc One Capital Markets, Inc., Bear, ▇▇▇▇▇▇▇ & Co. Inc.,
Credit Suisse First Boston Corporation, ▇▇▇▇▇▇▇, ▇▇▇▇▇ & Co., HSBC Securities
(USA) Inc., ▇.▇. ▇▇▇▇▇▇ Securities Inc., ▇▇▇▇▇▇ Brothers Inc., ▇▇▇▇▇▇▇ Lynch,
Pierce, ▇▇▇▇▇▇ & ▇▇▇▇▇ Incorporated, ▇▇▇▇▇▇ ▇▇▇▇▇▇▇ & Co. Incorporated,
▇▇▇▇▇▇▇ ▇▇▇▇▇ Barney Inc. and The ▇▇▇▇▇▇▇▇ Capital Group, L.P. (each an
"Agent" and collectively, the "Agents") are explained below. In the
Distribution Agreement, the Agents have agreed to act as agents of the Issuer
to solicit offers to purchase the Notes. Each Agent, as principal, may
purchase Notes for its own account pursuant to the terms and settlement
details of a terms agreement entered into between the Issuer and such Agent,
as contemplated by the
Distribution Agreement. In the
Distribution Agreement,
the Issuer reserves the right to sell Notes directly on its own behalf and to
or through others.
Each Note will be issued under an indenture between the Issuer and
▇▇▇▇▇ Fargo Bank, N.A., as trustee (the "Trustee"), dated as of September 24,
2001 (the "Indenture"), relating to senior debt securities of the Issuer.
Notes will bear interest at either fixed rates ("Fixed Rate Notes") or
floating rates ("Floating Rate Notes"). Each Note will be represented by
either a Global Security (as defined hereinafter) delivered to the Trustee,
as agent for The Depository Trust Company ("DTC"), and recorded in the
book-entry system maintained by DTC (a "Book-Entry Note") or a certificate
delivered to the Holder thereof or a Person designated by such Holder (a
"Certificated Note"). Owners of beneficial interests in a Global Security
will be entitled to physical delivery of Certificated Notes equal in
principal amount to their respective beneficial interests only under certain
limited circumstances.
The Trustee will act as Paying Agent for the payment of principal of
and interest on the Notes and will perform, as Paying Agent, unless otherwise
specified in the Notes, the Indenture or herein, the other duties specified
herein. Book-Entry Notes will be issued in accordance with the administrative
procedures set forth in Part I hereof, and Certificated Notes will be issued in
accordance with the administrative procedures set forth in Part II hereof. Any
administrative responsibilities, document control and record-keeping functions
to be performed by the Issuer will be performed by its Treasury Department. To
the extent that the procedures set forth herein conflict with any provision of
the Notes (which, in the case of Book-Entry Notes shall be the related Global
Security), the Indenture or the
Distribution Agreement, the relevant provisions
of the Notes, the Indenture or the
Distribution Agreement shall be controlling.
Unless otherwise
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defined herein, terms defined in the Indenture, the Officers' Certificate
establishing the Notes pursuant to Section 2.3(a) of the Indenture or the
Notes shall be used herein as therein defined.
PART I: ADMINISTRATIVE PROCEDURES FOR BOOK ENTRY NOTES
In connection with the qualification of the Book-Entry Notes for
eligibility in the book-entry system maintained by DTC, the Trustee will
perform the custodial, document control and administrative functions
described below, in accordance with its respective obligations under a Letter
of Representations from the Issuer and the Trustee to DTC, dated September
24, 2001, and a Medium-Term Note Certificate Agreement between the Trustee
and DTC, dated May 14, 1991, and its obligations as a participant in DTC,
including DTC's Same-Day Funds Settlement System ("SDFS").
ISSUANCE: On any date of settlement (as defined under
"Settlement" below) for one or more Book-Entry
Notes, the Issuer will issue a single global
security in fully registered form without
coupons (a "Global Security") representing up to
$500,000,000 principal amount of all such Notes
that have the same Stated Maturity and Final
Maturity, Earliest Redemption Date, Redemption
Price and other redemption provisions, if any,
Interest Payment Dates, Regular Record Dates,
Interest Payment Period, original issue
discount, if any, and, additionally, in the case
of Fixed Rate Notes, interest rate and, in the
case of Floating Rate Notes, Initial Interest
Rate, Base Rate or Rates, Index Maturity,
Interest Reset Period, Interest Reset Dates,
Spread or Spread Multiplier, if any, Minimum
Interest Rate, if any, and Maximum Interest
Rate, if any (collectively, the "Terms"). Each
Global Security will be dated and issued as of
the date of its authentication by the Trustee.
Each Global Security will bear interest from the
later of the Original Issue Date specified
therein or from the most recent Interest Payment
Date with respect to such Global Security (or
Predecessor Security) to which interest has been
paid or duly provided for (such later date being
herein referred to as a "Global Interest Accrual
Date"). Book-Entry Notes may only be denominated
and payable in U.S. dollars. No Global Security
will represent any Certificated Note.
IDENTIFICATION 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), which series consists of approximately
900 CUSIP numbers (of which 850 remained
unassigned as of the date hereof) and relates to
Global Securities representing the Book-Entry
Notes. The Issuer has obtained from the CUSIP
Service Bureau a written list of such series of
reserved CUSIP numbers and has delivered to the
Trustee and DTC such
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written list of such CUSIP numbers. The Trustee
will assign CUSIP numbers to Global Securities
as described under Settlement Procedure "B"
below. DTC will notify the CUSIP Service Bureau
periodically of the CUSIP numbers that the
Trustee has assigned to Global Securities. At
any time when fewer than 100 of the reserved
CUSIP numbers of a series remain unassigned to
Global Securities, the Trustee, if it deems
necessary, will reserve additional CUSIP numbers
for assignment to Global Securities representing
Book-Entry Notes. Upon obtaining such additional
CUSIP numbers, the Trustee shall deliver a list
of such additional CUSIP numbers to the Issuer
and DTC.
REGISTRATION: Each Global Security will be registered in the
name of Cede & Co., as nominee for DTC, on the
register of Securities 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.
TRANSFERS: Transfers of a Book-Entry Note will be
accomplished by book entries made by DTC and, in
turn, by Participants (and in certain cases, one
or more indirect participants in DTC) acting on
behalf of beneficial transferors and transferees
of such Note.
EXCHANGES: At the request of the Issuer, the Trustee shall
deliver to DTC and the CUSIP Service Bureau at
any time a written notice of consolidation
specifying (i) the CUSIP numbers of two or more
Outstanding Global Securities that represent
Book-Entry Notes having the same Terms and for
which interest has been paid to the same date,
(ii) a date, occurring at least 30 days after
such written notice is delivered and at least 30
days before the next Interest Payment Date for
such Book- Entry Notes, on which such Global
Securities shall be exchanged for a single
replacement Global Security and (iii) a new
CUSIP number, obtained from the Issuer, to be
assigned to such replacement Global Security.
Upon receipt of such a notice,
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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 Securities to be exchanged will no
longer be valid. On the specified exchange date,
the Trustee will exchange such Global Securities
for a single Global Security bearing the new
CUSIP number, and the CUSIP numbers of the
exchanged Global Securities will, in accordance
with CUSIP Service Bureau customary procedures,
be cancelled and not immediately reassigned.
Notwithstanding the foregoing, if the Global
Securities to be exchanged exceed $500,000,000
in aggregate principal amount, one Global
Security will be authenticated and issued to
represent each $500,000,000 of principal amount
of the exchanged Global Securities and an
additional Global Security will be authenticated
and issued to represent any remaining principal
amount of such Global Securities (see
"Denominations" below).
MATURITIES: Each Book-Entry Note will mature on a date nine
months or more after the settlement date for such
Note.
NOTICE OF REDEMPTION DATES: In the case of a full redemption of all
Book-Entry Notes represented by a single Global
Security, the Trustee will notify DTC, not more
than 60 but not less than 30 days prior to the
Redemption Date with respect to such Global
Security, of the CUSIP number of such Global
Security, the Redemption Date and the Redemption
Price. In the case of a redemption of less than
all Book-Entry Notes represented by a single
Global Security, the Trustee will notify DTC not
more than two Business Days before 60 days, but
not less than two Business Days before 30 days,
prior to the Redemption Date with respect to
such Global Security, of the CUSIP number of
such Global Security, the Redemption Date and
the Redemption Price.
DENOMINATIONS: Book-Entry Notes will be sold in denominations
of $1,000 and any amount in excess thereof that
is an integral multiple of $1,000. Global
Securities will be issued in denominations of
$1,000 and any amount in excess thereof that is
an integral multiple of $1,000 up to a maximum
denomination of $500,000,000. If one or more
Book-Entry Notes having an aggregate principal
amount in excess of $500,000,000 would, but for
the preceding sentence, be represented by a
single
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Global Security, then one Global Security will
be issued to represent each $500,000,000
principal amount of such Book-Entry Note or
Notes and an additional Global Security will be
issued to represent any remaining principal
amount of such Book-Entry Note or Notes. In such
a case, each of the Global Securities
representing such Book-Entry Note or Notes shall
be assigned the same CUSIP number.
INTEREST: GENERAL. Interest on each Book-Entry Note will
accrue from the Global Interest Accrual Date
with respect to the Global Security representing
such Note and will be paid on the Interest
Payment Dates of the Global Security
representing such Book-Entry Note. In the case
of a Global Security originally issued between a
Regular Record Date and the related Interest
Payment Date or on an Interest Payment Date, the
first interest payment will be made on the
Interest Payment Date immediately following the
next Regular Record Date. Each payment of
interest on a Global Security will include
interest accrued to but excluding the Interest
Payment Date or Maturity. See "Calculation of
Interest" below. Interest payable at the
Maturity of a Book-Entry Note will be payable to
the Person to whom the principal of such Note is
payable. Standard & Poor's Corporation will use
the information received in the pending deposit
message described under Settlement Procedure "C"
below in order to include the amount of any
interest payable and certain other information
regarding any Global Security in the appropriate
weekly supplement to the Corporate Registered
Bond Interest Record published by Standard &
Poor's Corporation.
REGULAR RECORD DATES. Except as otherwise
provided with respect to any Book-Entry Note as
specified in the related Global Security, the
Regular Record Date with respect to any Interest
Payment Date for Fixed Rate Book-Entry Notes
shall be the January 15 or July 15, as the case
may be, next preceding the applicable Interest
Payment Date. Except as otherwise provided with
respect to any Book-Entry Note as specified in
the related Global Security, the Regular Record
Date with respect to any Interest Payment Date
for Floating Rate Book-Entry Notes shall be the
fifteenth day (whether or not a Business Day)
next preceding such Interest Payment Date.
FIXED RATE BOOK-ENTRY NOTES. Except as otherwise
provided with respect to any Book-Entry Note as
specified in the related Global Security,
interest payments on Fixed Rate Book-Entry Notes
will be made semiannually on February 1 and
August 1
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of each year, as specified in the related Global
Security, and at Stated Maturity, subject to the
exceptions specified in "Payments of Principal
and Interest" below.
FLOATING RATE BOOK-ENTRY NOTES. Except as
otherwise provided with respect to any
Book-Entry Note as specified in the related
Global Security, interest payments on Floating
Rate Book-Entry Notes will be made monthly,
quarterly, semiannually or annually of each
year, as specified in the related Global
Security, and at Stated Maturity. Except as
otherwise provided with respect to any
Book-Entry Note as specified in the related
Global Security and with respect to Eleventh
District Cost of Funds Rate Notes, subject to
the exceptions specified in "Payments of
Principal and Interest" below, interest will be
payable, in the case of Floating Rate Book-Entry
Notes which pay interest (i) monthly, on the
third Wednesday of each month; (ii) quarterly,
on the third Wednesday of each March, June,
September and December of each year; (iii)
semiannually, on the third Wednesday of each of
the two months specified in the Global Security
representing the applicable Book-Entry Note; and
(iv) annually, on the third Wednesday of the
month specified in the Global Security
representing the applicable Book-Entry Note. In
the case of Eleventh District Cost of Funds Rate
Notes, interest will be payable on the first
calendar day of each March, June, September and
December.
NOTICE OF INTEREST PAYMENT AND REGULAR RECORD
DATES. On the first Business Day of January,
April, July and October of each year, the
Trustee will deliver to the Issuer and DTC a
written list of Regular Record Dates and
Interest Payment Dates (to the extent then
determinable by the Trustee) that will occur
with respect to each Global Security during the
six-month period beginning on such first
Business Day. Promptly after each Interest
Determination Date for Floating Rate Notes, the
calculation agent (the "Calculation Agent") will
notify Standard & Poor's Corporation of the
interest rates determined on such Interest
Determination Date.
CALCULATION OF INTEREST: FIXED RATE BOOK-ENTRY NOTES. Interest on Fixed
Rate Book-Entry Notes (including interest for
partial periods) will be calculated on the basis
of a 360-day year of twelve 30-day months.
FLOATING RATE BOOK-ENTRY NOTES. Interest rates
on Floating Rate Book-Entry Notes will be
determined as set forth in the Global Security
representing the applicable Floating Rate
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Book-Entry Notes. Interest will be calculated in
the case of (a) Commercial Paper Rate Notes,
LIBOR Notes, CD Rate Notes, Federal Funds Rate
Notes, Prime Rate Notes, ▇.▇. ▇▇▇▇▇ Rate Notes,
Eleventh District Cost of Funds Rate Notes and
EURIBOR Notes, on the basis of the actual number
of days in the interest period and a 360-day
year, and (b) Treasury Rate Notes and CMT Rate
Notes, on the basis of the actual number of days
in the interest period and the actual number of
days in the year.
PAYMENTS OF PRINCIPAL
AND INTEREST: 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 Security on the following
Interest Payment Date (other than an Interest
Payment Date coinciding with Stated Maturity)
and the total of such amounts. DTC will check
the amount payable on each Global Security on
such Interest Payment Date as shown in the
appropriate weekly supplements to the Corporate
Registered Bond Interest Record published by
Standard & Poor's Corporation. On such Interest
Payment Date, the Issuer will pay to the Trustee
the total amount of interest due on such
Interest Payment Date (other than at Stated
Maturity), and the Trustee will pay such amount
to DTC at the times and in the manner set forth
below under "Manner of Payment."
If any Interest Payment Date for a Fixed Rate
Book-Entry Note is scheduled to occur on a day
that is not a Business Day with respect to such
Fixed Rate Book-Entry Note, the payment due on
such Interest Payment Date will be made on the
following day that is a Business Day with
respect to such Fixed Rate Book-Entry Note, and
no interest shall accrue on the amount payable
on such Interest Payment Date for the period
from and after such Interest Payment Date to
such following day that is a Business Day.
If any Interest Payment Date for a Floating Rate
Book-Entry Note is scheduled to occur on a day
that is not a Business Day with respect to such
Floating Rate Book-Entry Note, the payment due
on such Interest Payment Date will be made on
the following day that is a Business Day with
respect to such Floating Rate Book-Entry Note,
and no interest shall accrue on the amount
payable on such Interest Payment Date for the
period from and after such Interest Payment Date
to such following day that is a Business Day,
except that in the case of a Floating Rate
Book-Entry Note that is a LIBOR Note or a
EURIBOR Note (or a Floating Rate Book-Entry Note
for
C-7
which LIBOR or EURIBOR is the applicable Base
Rate), if such Business Day is in the next
succeeding calendar month, the payment due on
such Interest Payment Date will be made on the
immediately preceding day that is a Business Day.
PAYMENTS AT 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
Security maturing either at Stated Maturity or
on a Redemption Date occurring in the following
month (to the extent then determinable by the
Trustee). The Issuer, the Trustee and DTC will
confirm the amounts of such principal and
interest payments with respect to each such
Global Security on or about the fifth Business
Day preceding the Maturity of such Global
Security. The Issuer will pay to ▇▇▇▇▇ Fargo
Bank, N.A., as the Paying Agent, the principal
amount of such Global Security, together with
interest due at such Maturity. ▇▇▇▇▇ Fargo Bank,
N.A. will pay such amounts to DTC at the times
and in the manner set forth under "Manner of
Payment" below. If any Maturity of a Global
Security representing Book-Entry Notes is not a
Business Day, the payment due on such day shall
be made on the next succeeding Business Day and
no interest shall accrue on such payment for the
period from and after such Maturity. Promptly
after payment to DTC of the principal and
interest due at the Stated Maturity of such
Global Security, the Trustee will cancel such
Global Security in accordance with the terms of
the Indenture, deliver to the Issuer an
appropriate debit advice and a certificate of
destruction relating to all such cancelled
Global Securities. On the first Business Day of
each month, the Trustee will deliver to the
Issuer by facsimile transmission a written
statement, indicating the total principal amount
of Outstanding Global Securities for which it
serves as trustee as of the immediately
preceding Business Day.
MANNER OF PAYMENT. The total amount of any
principal and interest due on Global Securities
on any Interest Payment Date or at Maturity
shall be debited from an account of the Issuer
maintained at the Trustee with funds available
for immediate use in the amount required for
such payment. 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 interest and principal due on a
Global Security on such date. On each Interest
Payment Date, interest payments shall be made to
DTC in same day funds in
C-8
accordance with existing arrangements between
the Trustee and DTC. Thereafter on each such
date, DTC will pay, in accordance with its SDFS
operating procedures then in effect, such
amounts in funds available for immediate use to
the respective Participants in whose names the
Book-Entry Notes represented by such Global
Securities are recorded in the book-entry system
maintained by DTC. Neither the Issuer (either as
Issuer or as Paying Agent) nor the Trustee shall
have any responsibility or liability for the
payment by DTC to such Participants of the
principal of and interest on the Book-Entry
Notes.
WITHHOLDING TAXES. The amount of any taxes
required under applicable law to be withheld
from any interest payment on a Book-Entry Note
will be determined and withheld by the
Participant, indirect participant in DTC or
other Person responsible for forwarding payments
and materials directly to the beneficial owner
of such Note.
ACCEPTANCE AND REJECTION The Issuer has the sole right to accept offers
OF OFFERS: to purchase Book-Entry Notes and may reject any
such offer in whole or in part. Each Agent may,
in its discretion reasonably exercised, reject
any offer to purchase Book-Entry Notes received
by it in whole or in part. Each Agent will
advise the Issuer promptly by telephone or by
facsimile transmission of all offers to purchase
Book-Entry Notes received by such Agent, other
than those rejected by it.
SETTLEMENT: The receipt by the Issuer of immediately
available funds in payment for a Book-Entry Note
and the authentication and issuance of the
Global Security representing such Note shall
constitute "settlement" with respect to such
Note. Each offer accepted by the Issuer will be
settled on the third Business Day (or, if
acceptance by the Issuer occurs after 4:30 p.m.,
New York time, on the fourth Business Day)
following acceptance of such offer pursuant to
the timetable for settlement set forth below,
unless the Issuer and the purchaser agree to
settlement on another day which shall be no
earlier than the Business Day following
acceptance of such offer.
SETTLEMENT PROCEDURES: In the event of a purchase of Book-Entry Notes
by one or more of the Agents, as principal,
appropriate settlement details, if different
from those set forth below, will be set forth in
an applicable Terms Agreement to be entered into
between such Agent or Agents and the Issuer
pursuant to the
Distribution Agreement.
Settlement Procedures with regard to each
Book-Entry Note sold by the Issuer through an
Agent, as agent, shall
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be as follows:
A. Such Agent will advise the Issuer by
facsimile transmission or orally (if
confirmed within 24 hours by written
telecommunication) of the following
settlement information:
1. Principal amount.
2. Stated Maturity.
3. If such Note is a Fixed Rate Note,
the interest rate. If such Note is a
Floating Rate Note, the following:
a. Base Rate or Base Rates;
b. Initial Interest Rate;
c. Spread or Spread Multiplier,
if any;
d. Interest Reset Dates;
e. Interest Reset Period;
f. Interest Payment Dates;
g. Index Maturity;
h. Interest Payment Period;
i. Calculation Agent (if other than
▇▇▇▇▇ Fargo Bank, N.A.;
j. Maximum Interest Rate, if any;
k. Minimum Interest Rate, if any;
l. Interest Determination Dates;
and
m. Index Currency, if applicable.
4. Earliest Redemption Date, Redemption
Price and other redemption provisions,
if any.
5. Settlement date.
6. Original Issue Price.
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7. Original issue discount, if any.
8. Agent's commission, determined as
provided in Section 2 of the
Distribution Agreement between the
Issuer and such Agent.
9. Additional terms or provisions of such
Note, if any.
10. Net Proceeds to the Issuer.
11. Commission.
12. Discount.
13. Initial Maturity Date (for Renewable
Notes).
14. Final Maturity Date (for Renewable
Notes).
B. The Issuer will advise the Trustee by
telephone (confirmed in writing signed by an
authorized person at any time on the same
date) or facsimile transmission signed by an
authorized person of the information set
forth in Settlement Procedure "A" above and
the name of such Agent.
C. The Trustee will assign a CUSIP number to
the Global Security representing such Note.
The Trustee will notify the Issuer and the
Agent of such CUSIP number by telephone as
soon as practicable.
D. The Trustee will enter a pending deposit
message through DTC's Participant Terminal
System, providing the following settlement
information to DTC, such Agent, and Standard
& Poor's Corporation.
1. The information set forth in
Settlement Procedure "A" above.
2. Numbers of the participant accounts
maintained by DTC on behalf of the
Trustee and the Agent.
3. Identification as a Fixed Rate
Book-Entry Note or a Floating Rate
Book-Entry Note.
4. Initial Interest Payment Date for such
Note, Regular Record Date and amount
of interest
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payable on such Interest Payment Date.
5. Interest Payment Period.
6. CUSIP number of the Global Security
representing such Note.
7. Whether such Global Security will
represent any other Book-Entry Note
(to the extent known at such time).
E. The Issuer will deliver to the Trustee a
pre-printed Global Security to represent
such Note, in a form that has been approved
by the Issuer, the Agents and the Trustee.
F. The Trustee will complete and authenticate
the Global Security representing such Note.
G. DTC will credit such Note to the Trustee's
participant account at DTC.
H. The Trustee will enter an SDFS deliver order
through DTC's Participant Terminal System
instructing DTC to (i) debit such Note to
the Trustee's participant account and credit
such Note to such Agent's participant
account and (ii) debit such 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. The entry of such a deliver
order shall constitute a representation and
warranty by the Trustee to DTC that (i) the
Global Security representing such Book-Entry
Note has been issued and authenticated and
(ii) the Trustee is holding such Global
Security pursuant to the Medium-Term Note
Certificate Agreement between the Trustee
and DTC.
I. Such 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 any amount equal
to the price of such Note.
J. Transfers of funds in accordance with SDFS
deliver orders described in Settlement
Procedures "G" and "H"
C-12
above will be settled in accordance with
SDFS operating procedures in effect on the
settlement date.
K. The Trustee will credit to an account of
the Issuer maintained at the Trustee
funds available for immediate use in the
amount transferred to the Trustee in
accordance with Settlement Procedure "G"
above.
L. The Trustee will retain the Global
Security representing such Note and will
send a photocopy thereof to the Issuer by
first-class mail. The Trustee will send
to the Issuer, at the request of the
Issuer, a written statement setting forth
(i) the principal amount of Notes
Outstanding under the Indenture as of the
date of such report, (ii) a brief
description of any sales of which the
Issuer has advised the Trustee but which
have not yet been settled and (iii) a
description of issuances and retirements
of, payment on and other activity
relating to the Notes during the related
month.
M. 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 institution
delivery system or by mailing a written
confirmation to such purchaser.
SETTLEMENT PROCEDURES For orders of Book-Entry Notes solicited by an
TIMETABLE: Agent, as agent, and accepted by the Issuer for
settlement on the first Business Day after the
sale date, Settlement Procedure "A" through "L"
above shall be completed as soon as possible but
not later than the respective times (
New York
City time) set forth below:
Settlement Procedure Time
-------------------- ----
A................. 11:00 am. on the sale date
B................. 12:00 noon on the sale date
C................. 2:00 p.m. on the sale date
D................. 3:00 p.m. on the sale date
E................. 9:00 a.m. on settlement date
F................. 10:00 a.m. on settlement date
G-I................ 2:00 p.m. on settlement date
▇-▇................ 5:00 p.m. on settlement date
If a sale is to be settled more than one Business
Day after the sale date, Settlement Procedure "A"
shall be completed as soon as practicable but no
later than 11:00 a.m. on the first Business
C-13
Day after the sale date and Settlement
Procedures "B" and "C" shall be completed as
soon as practicable but no later than 12:00 noon
and 2:00 p.m., respectively, on the first
Business Day after the sale date. If the Initial
Interest Rate for a Floating Rate Book-Entry
Note has not been determined at the time that
Settlement Procedure "A" is completed,
Settlement Procedures "B" and "C" shall be
completed as soon as such rate has been
determined but no later than 12:00 noon and 2:00
p.m., respectively, on the second Business Day
before the settlement date. Settlement
Procedures "D" through "L" shall be completed as
soon as possible thereafter but not later than
the respective times (New York City time) set
forth in the preceding table, except that
Settlement Procedures "I" through "L" 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.
If settlement of a Book-Entry Note is
rescheduled or cancelled, the Trustee will
deliver to DTC, through DTC's Participant
Terminal System, a cancellation message to such
effect by no later than 2:00 p.m. on the
Business Day immediately preceding the scheduled
settlement date.
FAILURE TO SETTLE: If the Trustee fails to enter an SDFS deliver
order with respect to a Book-Entry Note pursuant
to Settlement Procedure "G," the Trustee may
deliver to DTC, through DTC's Participant
Terminal System, as soon as practicable, a
withdrawal message instructing DTC to debit such
Note to the Trustee's participant account. DTC
will process the withdrawal message, provided
that the Trustee's participant account contains
a principal amount of the Global Security
representing such Note that is at least equal to
the principal amount to be debited. If a
withdrawal message is processed with respect to
all the Book-Entry Notes represented by a Global
Security, the Trustee will ▇▇▇▇ such Global
Security "cancelled," make appropriate entries
in the Trustee's records and send such cancelled
Global Security to the Issuer. The CUSIP number
assigned to such Global Security shall, in
accordance with CUSIP Service Bureau customary
procedures, be cancelled and not immediately
reassigned. If a withdrawal message is processed
with respect to one or more, but not all, of the
Book-Entry Notes represented by a Global
Security, the Trustee will exchange the Global
Security for two Global Securities, one of which
shall represent such Book-Entry Note or Notes
for which such withdrawal message has been
processed and shall be cancelled immediately
after issuance and the other of which
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shall represent the remaining Book-Entry Notes
previously represented by the surrendered Global
Security and shall bear the CUSIP number of the
surrendered Global Security.
If the purchase price for any Book-Entry Note is
not timely paid to the applicable 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 for such Note, may enter SDFS deliver
orders through DTC's Participant Terminal System
reversing the orders entered pursuant to
Settlement Procedures "H" and "G," respectively.
Thereafter, the Trustee will deliver the
withdrawal message and take the related actions
described in the preceding paragraph. If such
failure shall have occurred for any reason other
than default by the applicable Agent in the
performance of its obligations hereunder or
under the Distribution Agreement, the Issuer
will pay to such Agent an amount equal to the
interest earned by the Issuer with respect to
such 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 such actions as it deems appropriate in
accordance with its SDFS operating procedures
then in effect in order to reverse the orders
entered into DTC's Participant Terminal System
pursuant to Settlement Procedures "H" and "G,"
respectively. In the event of a failure to
settle with respect to one or more, but not all,
of the Book-Entry Notes to have been represented
by a Global Security, the Trustee will provide,
in accordance with Settlement Procedures "D" and
"E," for the authentication and issuance of a
Global Security representing the other
Book-Entry Notes to have been represented by
such Global Security and will make appropriate
entries in its records.
PROCEDURE FOR POSTINGS: The Issuer will periodically contact one or more
Agents for recommended interest rates, coupons
or spreads ("postings") with respect to Notes
being offered. When the Issuer has determined or
changed its postings with respect to Notes being
offered, it will promptly advise the Agents. At
such times as the Issuer is not posting, the
Agents will not solicit firm offers but may
record "indications of interest" only.
PRICING SUPPLEMENTS: Within five Business Days after any sale of Notes,
the Issuer will file or transmit for filing with
the Securities and Exchange Commission (the
"Commission"), in compliance with Rule
C-15
424(b)(3) of the rules and regulations of the
Commission promulgated under the Securities Act
of 1933, as amended, a copy of a pricing
supplement to the Prospectus (as defined in the
Distribution Agreement) relating to such Notes
that reflects the applicable interest rates and
other terms (the "Pricing Supplement") and will
deliver a copy of such Pricing Supplement to
each of the Agents and to the Trustee.
SUSPENSION OF SOLICITATION, The Issuer may instruct the Agents to suspend
AMENDMENT OR SUPPLEMENT: solicitation of offers to purchase Book-Entry
Notes at any time. Upon receipt of such
instructions, each Agent will as soon as
possible suspend such solicitations until such
time as it has been advised by the Issuer that
such solicitations may be resumed. The Issuer
will, consistent with its obligations under the
Distribution Agreement, promptly advise each
Agent and the Trustee whether orders outstanding
at the time such Agent suspends solicitation may
be settled and whether copies of the Prospectus,
as in effect at the time of the suspension,
together with the appropriate Pricing
Supplement, may be delivered in connection with
the settlement of such orders. The Issuer will
have the sole responsibility for such decision
and for any arrangements that may be made in the
event that the Issuer determines that such
orders may not be settled or that copies of such
Prospectus and Pricing Supplement may not be so
delivered.
DELIVERY OF PROSPECTUS: A copy of the most recent Prospectus and of the
applicable Pricing Supplement, if any, must be
provided to a purchaser by the applicable Agent
prior to or at the time of the earlier of (a)
the written confirmation of a sale sent to a
purchaser of Book-Entry Notes or his Agent, and
(b) the date of settlement of any such
Book-Entry Notes (see "Settlement Procedures").
ADVERTISING COSTS: The Issuer will determine with the Agents the
amount and nature of advertising that may be
appropriate in offering the Notes. Advertising
expenses approved in writing by the Issuer in
connection with the solicitation of purchases of
the Notes from the Issuer will be paid by the
Issuer.
PART II: ADMINISTRATIVE PROCEDURES FOR CERTIFICATED NOTES
The Trustee will serve as Registrar in connection with the Certificated
Notes.
ISSUANCE: Each Certificated Note will be dated and issued as
of the date of its authentication by the Trustee.
Each Certificated Note will bear interest from the
later of the Original Issue Date specified therein
or from the most recent Interest Payment Date
C-16
with respect to such Certificated Note (or
Predecessor Security) to which interest has been
paid or duly provided for (such later date being
herein referred to as a "Certificated Interest
Accrual Date").
REGISTRATION: Certificated Notes will be issued only in fully
registered form without coupons.
TRANSFERS AND EXCHANGES: A Certificated Note may be presented for transfer
or exchange at the Corporate Trust office of the
Trustee. Certificated Notes will be exchangeable
for other Certificated Notes having identical terms
but different denominations without service charge.
Certificated Notes will not be exchangeable for
Book-Entry Notes.
MATURITIES: Each Certificated Note will mature on a date nine
months or more from the settlement date for such
Note.
DENOMINATIONS: Certificated Notes will be issued in denominations
of $1,000 or any amount in excess thereof that is
an integral multiple of $1,000.
INTEREST: GENERAL. Interest on each Certificated Note will
accrue from the Certificated Interest Accrual
Date of such Note. In the case of a Certificated
Note originally issued between a Regular Record
Date and the related Interest Payment Date or on
an Interest Payment Date, the first interest
payment will be made on the Interest Payment
Date following the next Regular Record Date.
Each payment of interest on a Certificated Note
will include interest accrued to but excluding
the Interest Payment Date or Maturity. See
"Calculation of Interest" below. Interest will
be payable to the person in whose name a
Certificated Note is registered on the register
of Securities at the close of business on the
Regular Record Date next preceding the
applicable Interest Payment Date; PROVIDED,
HOWEVER, interest payable at Maturity will be
payable to the Person to whom principal of such
Certificated Note is payable.
REGULAR RECORD DATE. The Regular Record Date
with respect to Fixed Rate Certificated Notes
shall be the January 15 or July 15, as the case
may be, next preceding the applicable Interest
Payment Date. The Regular Record Date with
respect to any Interest Payment Date for
Floating Rate Certificated Notes shall be the
fifteenth day (whether or not a Business Day)
next preceding such Interest Payment Date.
FIXED RATE CERTIFICATED NOTES. Interest payments
on Fixed
C-17
Rate Certificated Notes will be made
semiannually on February 1 and August 1 of each
year and at Maturity, subject to the exceptions
specified in "Payments of Principal and
Interest" below.
FLOATING RATE CERTIFICATED NOTES. Interest
payments will be made on Floating Rate
Certificated Notes monthly, quarterly,
semiannually or annually of each year, as
specified in the related Note, and at maturity.
Subject to the exceptions specified in "Payments
of Principal and Interest" below and except with
respect to Eleventh District Cost of Funds Rate
Notes, interest will be payable, in the case of
Floating Rate Certificated Notes which pay
interest (i) monthly, on the third Wednesday of
each month; (ii) quarterly, on the third
Wednesday of March, June, September and December
of each year; (iii) semiannually, on the third
Wednesday of each of the two months specified in
the applicable Certificated Note; and (iv)
annually, on the third Wednesday of the month
specified in the applicable Certificated Note.
In the case of Eleventh District Cost of Funds
Rate Notes, interest will be payable on the
first calendar day of each March, June,
September and December.
CALCULATION OF INTEREST: FIXED RATE CERTIFICATED NOTES. Interest on Fixed
Rate Certificated Notes (including interest for
partial periods) will be calculated on the basis
of a 360-day year of twelve 30-day months.
FLOATING RATE CERTIFICATED NOTES. Interest rates
on Floating Rate Certificated Notes will be
determined as set forth in the applicable Notes.
The Issuer and the Trustee will confirm the
amount of the initial interest payment due on
any Floating Rate Certificated Note for which
the initial Interest Period is shorter or longer
than the Index Maturity. Promptly after each
Interest Determination Date for Floating Rate
Certificated Notes, the Calculation Agent will
notify Standard & Poor's Corporation of the
interest rates determined on such Interest
Determination Date. Interest will be calculated
in the case of (a) Commercial Paper Rate Notes,
LIBOR Notes, CD Rate Notes, Federal Funds Rate
Notes, Prime Rate Notes, ▇.▇. ▇▇▇▇▇ Rate Notes,
Eleventh District Cost of Funds Rate Notes and
EURIBOR Notes, on the basis of the actual number
of days in the interest period and a 360-day
year; and (b) Treasury Rate Notes and CMT Rate
Notes, on the basis of the actual number of days
in the interest period and the actual number of
days in the year.
PAYMENTS OF PRINCIPAL AND The Trustee will pay the principal amount of each
Certificated
C-18
INTEREST: Note at Maturity upon presentation of such Note
to the Trustee. Such payment, together with
payment of interest due at Maturity of such
Note, will be made in funds available for
immediate use by the Holder of such Note.
Certificated Notes presented to the Trustee at
Maturity for payment will be cancelled by the
Trustee in accordance with the terms of the
Indenture and returned to the Issuer. All
interest payments on a Certificated Note (other
than interest due at Maturity) will be made by
check drawn on the Trustee (or another Person
appointed by the Trustee) and mailed by the
Trustee to the Person entitled thereto as
provided in such Note. Following each Regular
Record Date and Special Record Date, the Trustee
will furnish the Issuer with a list of interest
payments to be made on the following Interest
Payment Date for each Certificated Note and in
total for all Certificated Notes. Interest at
Maturity will be payable to the Person to whom
the payment of principal is payable. The Trustee
will provide monthly to the Issuer lists of
principal and interest to be paid on
Certificated Notes maturing in the next month.
The Trustee will be responsible for withholding
taxes on interest paid on Certificated Notes as
required by applicable law. On the first
Business Day of each month, the Trustee will
deliver to the Issuer by facsimile transmission
a written statement, indicating the total
principal amount of Outstanding Certificated
Notes for which it serves as trustee as of the
immediately preceding Business Day.
If any Interest Payment Date for a Fixed Rate
Certificated Note is scheduled to occur on a day
that is not a Business Day with respect to such
Fixed Rate Certificated Note, the payment due on
such Interest Payment Date will be made on the
following day that is a Business Day with
respect to such Fixed Rate Certificated Note,
and no interest shall accrue on the amount
payable on such Interest Payment Date for the
period from and after such Interest Payment Date
to such following day that is a Business Day.
If any Interest Payment Date for a Floating Rate
Certificated Note is scheduled to occur on a day
that is not a Business Day with respect to such
Floating Rate Certificated Note, such Interest
Payment Date will be the following day that is a
Business Day with respect to such Floating Rate
Certificated Note; PROVIDED, HOWEVER, that in
the case of a Floating Rate Certificated Note
that is a LIBOR Note or a EURIBOR Note (or a
Floating Rate Certificated Note for which LIBOR
or EURIBOR is the applicable Base Rate), if such
Business Day is in the next succeeding calendar
month, such Interest
C-19
Payment Date will be the immediately preceding
day that is a Business Day.
If the date of Maturity of a Certificated Note is
scheduled to occur on a day that is not a Business
Day with respect to such Certificated Note, the
payment due at Maturity will be made on the
following day that is a Business Day with respect
to such Certificated Note, and no interest shall
accrue on the amount payable at Maturity for the
period from and after the date of Maturity.
ACCEPTANCE AND REJECTION OF The Issuer has the sole right to accept offers
OFFERS: to purchase Certificated Notes and may reject
any offer in whole or in part. Each Agent may,
in its discretion reasonably exercised, reject
any offer to purchase Certificated Notes
received by it in whole or part. Each Agent will
advise the Issuer promptly by telephone or
facsimile transmission of all offers to purchase
Certificated Notes received by such Agent, other
than those rejected by it.
SETTLEMENT: The receipt by the Issuer of immediately
available funds in exchange for an authenticated
Certificated Note delivered to the selling Agent
and such Agent's delivery of such Note against
receipt of immediately available funds shall
constitute "settlement" with respect to such
Note. Each offer accepted by the Issuer will be
settled on the third Business Day (or, if
acceptance by the Issuer occurs after 4:30 p.m.,
New York time, on the fourth Business Day)
following acceptance of such offer pursuant to
the timetable for settlement set forth below,
unless the Issuer and the purchaser agree to
settlement on another day; PROVIDED, HOWEVER,
that the Issuer will notify the Trustee at least
twenty-four hours prior to the time of
settlement.
SETTLEMENT PROCEDURES: In the event of a purchase of Certificated Notes
by one or more of the Agents, as principal,
appropriate settlement details, if different
from those set forth below, will be set forth in
an applicable Terms Agreement to be entered into
between such Agent or Agents and the Issuer
pursuant to the Distribution Agreement.
Settlement Procedures with regard to each
Certificated Note sold by the Issuer through an
Agent, as agent, shall be as follows:
A. Such Agent will advise the Issuer by
facsimile transmission or orally (if
confirmed within 24 hours by
C-20
written telecommunication) of the following
settlement information:
1. Name in which such Note is to be
registered (the "Registered Owner").
2. Address of the Registered Owner and
address for payment of principal and
interest.
3. Taxpayer identification or Social
Security number of the Registered
Owner (if available).
4. Principal amount.
5. Stated Maturity.
6. If such Note is Fixed Rate Note, the
interest rate. If such Note is a
Floating Rate Note, the following:
a. Base Rate or Base Rates;
b. Initial Interest Rate;
c. Spread or Spread Multiplier,
if any;
d. Interest Reset Dates;
e. Interest Reset Period;
f. Interest Payment Dates;
g. Index Maturity;
h. Interest Payment Period;
i. Calculation Agent (if other than
▇▇▇▇▇ Fargo Bank, N.A.;
j. Maximum Interest Rate, if any;
k. Minimum Interest Rate, if any;
l. Interest Determination Dates;
and
m. Index Currency, if applicable.
7. Earliest Redemption Date, Redemption
Price
C-21
and other redemption provisions, if
any.
8. Settlement date.
9. Original Issue Price.
10. Original issue discount, if any.
11. Agent's commission, determined as
provided in Section 2 of the
Distribution Agreement between the
Issuer and such Agent.
12. Additional terms or provisions of such
Note, if any.
13. Net Proceeds to the Issuer.
14. Commission.
15. Discount.
16. Initial Maturity Date (for Renewable
Notes).
17. Final Maturity Date (for Renewable
Notes).
B. The Issuer will advise the Trustee by
telephone (confirmed in writing signed by an
authorized person at any time on the same
date) or facsimile transmission signed by an
authorized person of the information set
forth in Settlement Procedure "A" above and
the name of such Agent.
C. The Issuer will deliver (if not
previously delivered) to the Trustee a
preprinted four-ply packet for such Note,
which packet will contain the following
documents in forms that have been
approved by the Issuer, the Agents and
the Trustee:
1. Note with customer confirmation.
2. Stub One - for the Trustee.
3. Stub Two - for the Agent.
4. Stub Three - for the Issuer.
D. The Trustee will complete and
authenticate such Note and deliver it
(with the confirmation) and Stubs One and
Two to such Agent, and such Agent will
C-22
acknowledge receipt of the Note by
stamping or otherwise marking Stub One
and returning it to the Trustee. Such
delivery will be made only against such
acknowledgment of receipt and evidence
that instructions have been given by such
Agent for payment to the account of the
Issuer at the Trustee, in funds available
for immediate use, of an amount equal to
the price of such note less Agent's
commission. In the event that the
instructions given by such Agent for
payment to the account of the Issuer are
revoked, the Issuer will, as promptly as
possible, wire transfer to the account of
such Agent an amount of immediately
available funds equal to the amount of
such payment and such Agent will return
such Note to the Trustee.
E. Such Agent will deliver such Note (with
confirmation) to the customer against
payment in immediately available funds.
Such Agent will obtain the acknowledgment
of receipt of such Note by retaining Stub
Two.
F. The Trustee will retain Stub One and will
send Stub Three to the Issuer by
first-class mail. Monthly, the Trustee
will send to the Issuer a written
statement, setting forth (i) the
principal amount of the Notes Outstanding
under the Indenture as of the date of
such report, (ii) a brief description of
any sales of which the Issuer has advised
the Trustee but which have not yet been
settled and (iii) a description of
issuances and retirements of, payments on
and other activity relating to the Notes
during the related month.
SETTLEMENT PROCEDURES For offers of Certificated Notes solicited by an
TIMETABLE: Agent, as agent, and accepted by the Issuer,
Settlement Procedures "A" through "F" set forth
above shall be completed on or before the
respective times (New York City time) set forth
below:
SETTLEMENT PROCEDURE TIME
-------------------- ----
A............... 3:00 p.m. on day before
settlement date
B............... 4:00 p.m. on day before
settlement date
C-D.............. 2:15 p.m. on settlement date
E............... 3:00 p.m. on settlement date
F............... 5:00 p.m. on settlement date
C-23
FAILURE TO SETTLE: If a purchaser fails to accept delivery of and
make payment for any Certificated Note, the
selling Agent will notify the Issuer and the
Trustee by telephone and return such Note to the
Trustee. Upon receipt of such Note, the Issuer
will immediately wire transfer to the account of
the Agent an amount equal to the amount
previously credited thereto in respect of such
Note. Such wire transfer will be made on the
settlement date, if possible, and in any event
not later than the day following the settlement
date. If the failure shall have occurred for any
reason other than a default by the applicable
Agent in the performance of its obligations
hereunder and under the Distribution Agreement,
the Issuer will pay to such Agent an amount
equal to the interest earned by the Issuer with
respect to such funds during the period when
they were credited to the account of the Issuer.
Immediately upon receipt of the Certificated
Note in respect of which such failure occurred,
the Trustee will ▇▇▇▇ such Note "cancelled,"
make appropriate entries in the Trustee's
records and send such cancelled Note to the
Issuer.
PROCEDURE FOR POSTINGS: The Issuer will periodically contact one or more
Agents for recommended postings with respect to
Certificated Notes being offered. When the
Issuer has determined or changed its postings
with respect to Certificated Notes being
offered, it will promptly advise the Agents. At
such times as the Issuer is not posting, the
Agents will not solicit firm offers but may
record "indications of interest" only.
PRICING SUPPLEMENTS: Within five Business Days after any sale of
Certificated Notes, the Issuer will file or
transmit for filing with the Commission in
compliance with Rule 424(b)(3) of the rules and
regulations of the Commission promulgated under
the Securities Act of 1933, as amended, a copy
of a Pricing Supplement to the Prospectus
relating to such Notes that reflects the
applicable interest rates and other terms and
will deliver a copy of such Pricing Supplement
to each of the Agents and the Trustee.
SUSPENSION OF SOLICITATION, The Issuer may instruct the Agents to suspend
AMENDMENT OR SUPPLEMENT: solicitation of offers to purchase Certificated
Notes at any time. Upon receipt of such
instructions, each Agent will as soon as
possible suspend such solicitations until such
time as it has been advised by the Issuer that
such solicitations may be resumed. The Issuer
will, consistent with its obligations under the
Distribution Agreement, promptly advise each
Agent and the Trustee whether orders outstanding
at the time such Agent suspends solicitation may
be settled and whether copies of the Prospectus,
as in effect at the time of the suspension,
together
C-24
with the appropriate Pricing Supplement, may be
delivered in connection with the settlement of
such orders. The Issuer will have the sole
responsibility for such decision and for any
arrangements that may be made in the event that
the Issuer determines that such orders may not
be settled or that copies of such Prospectus and
Pricing Supplement may not be so delivered.
DELIVERY OF PROSPECTUS: A copy of the most recent Prospectus and of the
applicable Pricing Supplement, if any, must be
provided to a purchaser by the applicable Agent
prior to or at the time of the earlier of (a)
the written confirmation of a sale sent to a
purchaser of Certificated Notes or his agent and
(b) the delivery of any such Certificated Notes
to a purchaser or his agent (see Settlement
Procedures).
ADVERTISING COSTS: The Issuer will determine with the Agents the
amount and nature of advertising that may be
appropriate in offering the Certificated Notes.
Advertising expenses approved in writing by the
Issuer in connection with the solicitation of
purchases of Certificated Notes from the Issuer
will be paid by the Issuer.
C-25
Appendix I
FORM OF OFFICER'S CERTIFICATE
THE ▇▇▇▇ DISNEY COMPANY
I, [Name], [Title] of The ▇▇▇▇ Disney Company, a Delaware corporation
(the "Company"), pursuant to Section 5(d) of the Distribution Agreement,
dated September 24, 2001 (the "Distribution Agreement"), among the Company
and Banc of America Securities LLC, Banc One Capital Markets, Inc., Bear,
▇▇▇▇▇▇▇ & Co. Inc., Credit Suisse First Boston Corporation, ▇▇▇▇▇▇▇, Sachs &
Co., HSBC Securities (USA) Inc., ▇.▇. ▇▇▇▇▇▇ Securities Inc., ▇▇▇▇▇▇ Brothers
Inc., ▇▇▇▇▇▇▇ Lynch, Pierce, ▇▇▇▇▇▇ & ▇▇▇▇▇ Incorporated, ▇▇▇▇▇▇ ▇▇▇▇▇▇▇ &
Co. Incorporated, ▇▇▇▇▇▇▇ ▇▇▇▇▇ Barney Inc. and The ▇▇▇▇▇▇▇▇ Capital Group,
L.P. (collectively, the "Agents"), relating to the offering from time to time
by the Company directly or through the Agents of up to $6,500,000,000
aggregate principal amount of Medium-Term Notes, Series B of the Company,
hereby certify on behalf of the Company that:
1. Except as contemplated in the Prospectus or reflected therein by
the filing of any amendment or supplement thereto or any Incorporated
Document, since the date of the most recent consolidated financial statements
included or incorporated by reference in the Prospectus, there has not been
any material adverse change in the consolidated financial condition or
earnings of the Company and its subsidiaries, considered as one enterprise.
2. The representations and warranties of the Company contained in
Section 1(a) of the Distribution Agreement (other than Section 1(a)(vii)
thereof) are true and correct in all material respects with the same force
and effect as though expressly made at and as of the date hereof.
3. The Company has complied with all agreements and satisfied all
conditions required by the Distribution Agreement or the Indenture on its
part to be performed or satisfied at or prior to the date hereof.
4. No stop order suspending the effectiveness of the Registration
Statement has been issued and no proceedings for that purpose have been
initiated or, to the best of my knowledge, threatened by the Securities and
Exchange Commission.
Capitalized terms used but not defined herein have the meanings given in
the Distribution Agreement.
Appendix I-1
IN WITNESS WHEREOF, I have hereunto signed my name this _____ day of
__________.
By:
-----------------------------------
Name:
Title:
Appendix I-2
Appendix II
FORM OF RELIANCE LETTER OF COUNSEL
[Date]
Banc of America Securities LLC
Banc One Capital Markets, Inc.
Bear, ▇▇▇▇▇▇▇ & Co. Inc.
Credit Suisse First Boston Corporation
▇▇▇▇▇▇▇, ▇▇▇▇▇ & Co.
HSBC Securities (USA) Inc.
▇.▇. ▇▇▇▇▇▇ Securities Inc.
▇▇▇▇▇▇ Brothers Inc.
▇▇▇▇▇▇▇ Lynch, Pierce, ▇▇▇▇▇▇ & ▇▇▇▇▇ Incorporated
▇▇▇▇▇▇ ▇▇▇▇▇▇▇ & Co. Incorporated
▇▇▇▇▇▇▇ ▇▇▇▇▇ Barney Inc.
The ▇▇▇▇▇▇▇▇ Capital Group, L.P.
Re: THE ▇▇▇▇ DISNEY COMPANY MEDIUM-TERM NOTES, SERIES B
Dear Sirs:
[We] [I] have delivered an opinion to you dated __________ as counsel to
The ▇▇▇▇ Disney Company (the "Company"), pursuant to Section [5(a)][5(b)] of
the Distribution Agreement, dated as of September 24, 2001 (the "Distribution
Agreement"), among the Company and Banc of America Securities LLC, Banc One
Capital Markets, Inc., Bear, ▇▇▇▇▇▇▇ & Co. Inc., Credit Suisse First Boston
Corporation, ▇▇▇▇▇▇▇, ▇▇▇▇▇ & Co., HSBC Securities (USA) Inc., ▇.▇. ▇▇▇▇▇▇
Securities Inc., ▇▇▇▇▇▇ Brothers Inc., ▇▇▇▇▇▇▇ Lynch, Pierce, ▇▇▇▇▇▇ & ▇▇▇▇▇
Incorporated, ▇▇▇▇▇▇ ▇▇▇▇▇▇▇ & Co. Incorporated, ▇▇▇▇▇▇▇ ▇▇▇▇▇ Barney Inc.
and The ▇▇▇▇▇▇▇▇ Capital Group, L.P. You may continue to rely upon such
opinion [(other than, in the case of the opinion delivered pursuant to Section
5(b) of the Distribution Agreement, the matters covered by Section 5(b)(i) and
5(b)(iv)(x) thereof, as to which no opinion is expressed)] as if it were dated
as of this date, except that all statements and opinions contained therein shall
be deemed to relate to the Registration Statement and Prospectus (as such terms
are defined in the Distribution Agreement) as amended and supplemented to this
date.
This letter is delivered to you pursuant to Section 6(b) of the
Distribution Agreement.
Very truly yours,
Appendix II-1