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Exhibit 1.1
▇▇▇▇▇▇-▇▇▇▇▇▇▇▇ CORPORATION
$755,000,000
Medium-Term Notes
Due 9 Months or more from Date of Issue
U.S. DISTRIBUTION AGREEMENT
April 6, 1998
▇▇▇▇▇▇ ▇▇▇▇▇▇▇ & Co. Incorporated
▇▇▇▇ ▇▇▇▇▇▇▇▇
▇▇▇ ▇▇▇▇, ▇▇▇ ▇▇▇▇ ▇▇▇▇▇
Citicorp Securities, Inc.
▇▇▇ ▇▇▇▇ ▇▇▇▇▇▇
▇▇▇ ▇▇▇▇, ▇▇▇ ▇▇▇▇ ▇▇▇▇▇
Salomon Brothers Inc
▇ ▇▇▇▇▇ ▇▇▇▇▇ ▇▇▇▇▇▇
▇▇▇ ▇▇▇▇, ▇▇▇ ▇▇▇▇ ▇▇▇▇▇
Dear Sirs:
▇▇▇▇▇▇-▇▇▇▇▇▇▇▇ CORPORATION, an Ohio corporation (the
"Company"), confirms its agreement with each of you with respect to the issue
and sale from time to time by the Company of up to $755,000,000 (or the
equivalent thereof in one or more foreign currencies or composite currencies)
aggregate initial public offering price of its medium-term notes due 9 months or
more from date of issue (the "Notes"). The Notes will be issued under an
Indenture dated as of May 3, 1996 (the "Indenture") between the Company and
National City Bank, as Trustee (the "Trustee"), and will have the maturities,
interest rates, redemption provisions, if any, and other terms as set forth in
supplements to the Basic Prospectus referred to below.
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The Company hereby appoints ▇▇▇▇▇▇ ▇▇▇▇▇▇▇ & Co. Incorporated
("▇▇▇▇▇▇ ▇▇▇▇▇▇▇"), Citicorp Securities, Inc. and Salomon Brothers Inc
(individually, an "Agent" and collectively, the "Agents") as its exclusive
agents, subject to Section 11, for the purpose of soliciting and receiving
offers to purchase Notes from the Company by others and, on the basis of the
representations and warranties herein contained, but subject to the terms and
conditions herein set forth, each Agent agrees to use reasonable efforts to
solicit and receive offers to purchase Notes upon terms acceptable to the
Company at such times and in such amounts as the Company shall from time to time
specify. In addition, any Agent may also purchase Notes as principal pursuant to
the terms of a terms agreement relating to such sale (a "Terms Agreement") in
accordance with the provisions of Section 2(b) hereof.
The Company has filed with the Securities and Exchange
Commission (the "Commission") registration statements (Nos. 333-02761 and
333-47955), the most recent of which contains a prospectus, for the registration
under the Securities Act of 1933, as amended (the "Act") of the Notes. Such
registration statements, including the exhibits thereto, as amended at the
Commencement Date (as hereinafter defined), are hereinafter collectively
referred to as the "Registration Statement." The Company proposes to file with
the Commission from time to time, pursuant to Rule 424 under the Act,
supplements to the prospectus included in Registration Statement No. 333-47955
that will describe certain terms of the Notes. The prospectus in the form in
which it appears in Registration Statement No. 333-47955 which, pursuant to Rule
429 of the Act, is a combined prospectus relating also to Registration Statement
No. 333- 02761 is hereinafter referred to as the "Basic Prospectus." The term
"Prospectus" means the Basic Prospectus together with the prospectus supplement
or supplements (each a "Prospectus Supplement") specifically relating to Notes,
as filed with, or transmitted for filing to, the Commission pursuant to Rule
424. As used herein, the terms "Basic Prospectus" and "Prospectus" shall include
in each case the documents, if any, incorporated by reference therein. The terms
"supplement," "amendment" and "amend" as used herein shall include all documents
deemed to be incorporated by reference in the Prospectus that are filed
subsequent to the date of the Basic Prospectus by the Company with the
Commission pursuant to the Securities Exchange Act of 1934, as amended (the
"Exchange Act").
1. REPRESENTATIONS AND WARRANTIES. The Company represents and
warrants to and agrees with each Agent as of the Commencement Date, as of each
date on which the Company
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accepts an offer to purchase Notes (including any purchase by an Agent pursuant
to a Terms Agreement), as of each date the Company issues and delivers Notes and
as of each date the Registration Statement or the Basic Prospectus is amended or
supplemented, as follows (it being understood that such representations,
warranties and agreements shall be deemed to relate to the Registration
Statement, the Basic Prospectus and the Prospectus, each as amended or
supplemented to each such date):
(a) The Registration Statement has become effective; no stop
order suspending the effectiveness of the Registration Statement is in effect,
and no proceedings for such purpose are pending before or threatened by the
Commission.
(b) Each part of the Registration Statement and the Prospectus
conform and, as amended or supplemented, if applicable, will conform in all
material respects with the requirements of the Act, the Trust Indenture Act of
1939, as amended (the "Trust Indenture Act") and the rules and regulations of
the Commission thereunder; each part of the Registration Statement, when such
part became effective, did not contain and each such part, as amended or
supplemented, if applicable, will not contain any untrue statement of a material
fact or omit to state a material fact required to be stated therein or necessary
to make the statements therein not misleading; and the Prospectus does not
contain and, as amended or supplemented, if applicable, will not contain any
untrue statement of a material fact or omit to state a material fact necessary
to make the statements therein, in the light of the circumstances under which
they were made, not misleading, except that (i) the foregoing shall not apply to
statements in or omissions from any such document in reliance upon, and in
conformity with written information relating to an Agent furnished to the
Company by such Agent expressly for use in the preparation thereof, and (ii) the
representations and warranties set forth above, when made as of the Commencement
Date or as of any date on which the Company accepts an offer to purchase Notes,
shall be deemed not to cover information concerning an offering of particular
Notes to the extent such information will be set forth in a supplement to the
Basic Prospectus.
(c) The documents from which information is incorporated by
reference in the Prospectus, when they became effective or were filed with the
Commission, as the case may be, conformed in all material respects to the
requirements of the Act or the Exchange Act, as applicable, and the rules and
regulations of the Commission thereunder, and any documents so filed and
incorporated by reference subsequent to the effective date of the Registration
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Statement will, when they are filed with the Commission, conform in all material
respects to the requirements of the Act and the Exchange Act, as applicable, and
the rules and regulations of the Commission thereunder.
(d) The financial statements of the Company and its
subsidiaries set forth in the Registration Statement and Prospectus, as amended
or supplemented, if applicable, fairly present, the financial condition of the
Company and its subsidiaries as of the dates indicated and the results of
operations and changes in financial position for the periods therein specified
in conformity with generally accepted accounting principles consistently applied
throughout the periods involved (except as otherwise stated therein).
(e) The Company and each of its subsidiaries has been duly
incorporated and is an existing corporation in good standing under the laws of
its jurisdiction of incorporation, has full power and authority (corporate and
other) to conduct its business as described in the Registration Statement and
Prospectus and is duly qualified to do business in each jurisdiction in which it
owns or leases real property or in which the conduct of its business requires
such qualification except where the failure to be so qualified, considering all
such cases in the aggregate, does not involve a material risk to the business,
properties, financial position or results of operations of the Company and its
subsidiaries (taken as a whole); and all of the outstanding shares of capital
stock of each such subsidiary have been duly authorized and validly issued, are
fully paid and non-assessable and (except as otherwise stated in the Prospectus)
are owned beneficially by the Company subject to no security interest, other
encumbrance or adverse claim.
(f) Each of this Agreement and any applicable Written Terms
Agreement (as hereinafter defined) has been duly authorized, executed and
delivered by the Company.
(g) The Indenture and the Notes have been duly authorized, the
Indenture has been duly qualified under the Trust Indenture Act, executed and
delivered and constitutes, and the Notes, when duly executed, authenticated,
issued and delivered as contemplated hereby and by the Indenture, will
constitute valid and legally binding obligations of the Company enforceable in
accordance with their terms subject, as to enforcement, to bankruptcy,
insolvency, reorganization and other laws of general applicability relating to
or affecting creditors' rights and to general equity principles.
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(h) Except as contemplated in the Prospectus, as amended or
supplemented, if applicable, subsequent to the respective dates as of which
information is given in the Registration Statement and the Prospectus, neither
the Company nor any of its subsidiaries has incurred any liabilities or
obligations, direct or contingent, or entered into any transactions, not in the
ordinary course of business, that are material to the Company and its
subsidiaries (taken as a whole), and there has not been any material change, on
a consolidated basis, in the capital stock, short-term debt or long-term debt of
the Company and its subsidiaries, or any material adverse change, or any
development involving a prospective material adverse change, in the condition
(financial or other), business, prospects, net worth or results of operations of
the Company and its subsidiaries (taken as a whole).
(i) Except as set forth in the Prospectus, as amended or
supplemented, if applicable, there is not pending or, to the knowledge of the
Company, threatened, any action, suit or proceeding to which the Company or any
of its subsidiaries is a party before or by any court or governmental agency or
body, which might result in any material adverse change in the condition
(financial or other), business, prospects, net worth or results of operations of
the Company and its subsidiaries, or might materially and adversely affect the
properties or assets thereof.
(j) There are no contracts or documents of the Company or any
of its subsidiaries that are required to be filed as exhibits to the
Registration Statement by the Act or by the Rules and Regulations that have not
been so filed.
(k) The performance of this Agreement and the consummation of
the transactions herein contemplated will not result in a breach or violation of
any of the terms and provisions of, or constitute a default under, any statute,
any agreement or instrument to which the Company is a party or by which it is
bound or to which any of the property of the Company is subject, the Company's
Amended Articles of Incorporation or Regulations, or any order, rule or
regulation of any court or governmental agency or body having jurisdiction over
the Company or any of its properties; no consent, approval, authorization or
order of, or filing with, any court or governmental agency or body is required
for the consummation of the transactions contemplated by this Agreement in
connection with the issuance or sale of the Notes by the Company, except such as
may be required under the Act, the Trust Indenture Act or state securities laws;
and the Company has full power and
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authority to authorize, issue and sell the Notes as contemplated by this
Agreement.
(l) The Company has complied with all provisions of Section
517.075, Florida Statutes relating to doing business with the Government of Cuba
or with any person or affiliate located in Cuba.
2. SOLICITATIONS AS AGENT; PURCHASES AS PRINCIPAL.
(a) SOLICITATIONS AS AGENT. In connection with an Agent's
actions as agent hereunder, such Agent agrees to use reasonable efforts to
solicit offers to purchase Notes upon the terms and conditions set forth in the
Prospectus as then amended or supplemented.
The Company reserves the right, in its sole discretion, to
instruct the Agents to suspend at any time, for any period of time or
permanently, the solicitation of offers to purchase Notes. Upon receipt of at
least one business day's prior notice from the Company, the Agents will
forthwith suspend solicitations of offers to purchase Notes from the Company
until such time as the Company has advised the Agents that such solicitation may
be resumed. While such solicitation is suspended, the Company shall not be
required to deliver any certificates, opinions or letters in accordance with
Sections 5(a), 5(b) and 5(c); PROVIDED, HOWEVER, that if the Registration
Statement or Prospectus is amended or supplemented during the period of
suspension (other than by an amendment or supplement providing solely for a
change in the interest rates, redemption provisions, amortization schedules or
maturities offered on the Notes or for a change the Agents deem to be
immaterial), no Agent shall be required to resume soliciting offers to purchase
Notes until the Company has delivered such certificates, opinions and letters as
such Agent may request.
The Company agrees to pay to each Agent, as consideration for
the sale of each Note resulting from a solicitation made or an offer to purchase
received by such Agent, a commission in the form of a discount from the purchase
price of such Note equal to the percentage set forth below of the purchase price
of such Note:
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Term Commission Rate
---- ---------------
From 9 months to less than 12 months .125%
From 12 months to less than 18 months .150%
From 18 months to less than 2 years .200%
From 2 years to less than 3 years .250%
From 3 years to less than 4 years .350%
From 4 years to less than 5 years .450%
From 5 years to less than 6 years .500%
From 6 years to less than 7 years .550%
From 7 years to less than 8 years .600%
From 8 years to less than 9 years .600%
From 9 years to less than 10 years .600%
From 10 years to less than 15 years .625%
From 15 years to less than 20 years .700%
From 20 years to less than 30 years .750%
From 30 years and beyond to be negotiated
Each Agent shall communicate to the Company, orally or in
writing, each offer to purchase Notes received by such Agent as agent that in
its judgment should be considered by the Company. The Company shall have the
sole right to accept offers to purchase Notes and may reject any offer in whole
or in part. Each Agent shall have the right to reject any offer to purchase
Notes that it considers to be unacceptable, and any such rejection shall not be
deemed a breach of its agreements contained herein. The procedural details
relating to the issue and delivery of Notes sold by the Agents as agents and the
payment therefor shall be as set forth in the Administrative Procedures (as
hereinafter defined).
(b) PURCHASES AS PRINCIPAL. Each sale of Notes to an Agent as
principal shall be made in accordance with the terms of this Agreement. In
connection with each such sale, the Company will enter into a Terms Agreement
that will provide for the sale of such Notes to and the purchase thereof by such
Agent. Each Terms Agreement will take the form of either (i) a written agreement
between such Agent and the Company, which may be substantially in the form of
Exhibit A hereto (a "Written Terms Agreement"), or (ii) an oral agreement
between such Agent and the Company confirmed in writing by such Agent to the
Company.
An Agent's commitment to purchase Notes pursuant to a 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. Each Terms Agreement shall specify the
principal amount of Notes to be purchased by such Agent pursuant thereto, the
maturity date of such
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Notes, the price to be paid to the Company for such Notes, the interest rate and
interest rate formula, if any, applicable to such Notes and any other terms of
such Notes. Each such Terms Agreement may also specify any requirements for
officers' certificates, opinions of counsel and letters from the independent
public accountants of the Company pursuant to Section 4 hereof. A Terms
Agreement may also specify certain provisions relating to the reoffering of such
Notes by such Agent.
Each Terms Agreement shall specify the time and place of
delivery of and payment for such Notes. Unless otherwise specified in a Terms
Agreement, the procedural details relating to the issue and delivery of Notes
purchased by an Agent as principal and the payment therefor shall be as set
forth in the Administrative Procedures. Each date of delivery of and payment for
Notes to be purchased by an Agent pursuant to a Terms Agreement is referred to
herein as a "Settlement Date."
Unless otherwise specified in a Terms Agreement, if you are
purchasing Notes as principal you may resell such Notes to other dealers. Any
such sales may be at a discount, which shall not exceed the amount set forth in
the Prospectus Supplement relating to such Notes.
(c) ADMINISTRATIVE PROCEDURES. The Agents and the Company
agree to perform the respective duties and obligations specifically provided to
be performed in the Medium-Term Notes Administrative Procedures (attached hereto
as Exhibit B) (the "Administrative Procedures"), as amended from time to time.
The Administrative Procedures may be amended only by written agreement of the
Company and the Agents.
(d) DELIVERY. The documents required to be delivered by
Section 4 of this Agreement as a condition precedent to each Agent's obligation
to begin soliciting offers to purchase Notes as an agent of the Company shall be
delivered at the office of ▇▇▇▇▇▇▇▇ & ▇▇▇▇▇▇▇▇, counsel for the Agents, not
later than 4:00 p.m., New York time, on the date hereof, or at such other time
and/or place as the Agents and the Company may agree upon in writing, but in no
event later than the day prior to the earlier of (i) the date on which the
Agents begin soliciting offers to purchase Notes and (ii) the first date on
which the Company accepts any offer by an Agent to purchase Notes pursuant to a
Terms Agreement. The date of delivery of such documents is referred to herein as
the "Commencement Date."
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(e) OBLIGATIONS SEVERAL. The Company acknowledges that the
obligations of the Agents under this Agreement are several and not joint.
3. AGREEMENTS. The Company agrees with each Agent that:
(a) Prior to the termination of the offering of the Notes
pursuant to this Agreement or any Terms Agreement, the Company will not file any
Prospectus Supplement relating to the Notes or any amendment to the Registration
Statement unless the Company has previously furnished to the Agents copies
thereof for their review and given each of you a reasonable opportunity to
comment on any such proposed amendment or supplement; PROVIDED, HOWEVER, that,
in the event that an Agent may own any Notes as principal, until the
distribution of such Notes has been completed, the Company will not file any
such proposed supplement or amendment to which such Agent reasonably objects;
PROVIDED, FURTHER, that (i) the foregoing requirements shall not apply to any of
the Company's periodic filings with the Commission required to be filed pursuant
to Section 13(a), 13(c), 14 or 15(d) of the Exchange Act, copies of which
filings the Company will cause to be delivered to the Agents promptly after
being transmitted for filing with the Commission and (ii) any Prospectus
Supplement that merely sets forth the terms or a description of particular Notes
shall only be reviewed by the Agent or Agents offering such Notes. Subject to
the foregoing sentence, the Company will promptly cause each Prospectus
Supplement to be filed with or transmitted for filing to the Commission in
accordance with Rule 424(b) under the Act. The Company will promptly advise the
Agents (i) of the filing of any amendment or supplement to the Basic Prospectus
(other than filings referred to in clause (i) above) (except that notice of the
filing of an amendment or supplement to the Basic Prospectus that merely sets
forth the terms or a description of particular Notes shall only be given to the
Agent or Agents offering such Notes), (ii) of the filing and effectiveness of
any amendment to the Registration Statement, (iii) of any request by the
Commission for any amendment to the Registration Statement or any amendment or
supplement to the Basic Prospectus or for any additional information, (iv) of
the issuance by the Commission of any stop order suspending the effectiveness of
the Registration Statement or the institution or threatening of any proceeding
for that purpose and (v) of the receipt by the Company of any notification with
respect to the suspension of the qualification of the Notes for sale in any
jurisdiction or the initiation or threatening of any proceeding for such
purpose. The Company will use its best efforts to prevent the issuance of any
such stop order or notice of suspension
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of qualification and, if issued, to obtain as soon as possible the withdrawal
thereof. If the Basic Prospectus is amended or supplemented as a result of the
filing under the Exchange Act of any document incorporated by reference in the
Prospectus, no Agent shall be obligated to solicit offers to purchase Notes so
long as it is not reasonably satisfied with such document.
(b) If, at any time when a prospectus relating to the Notes is
required to be delivered under the Act, any event occurs or condition exists as
a result of which the Prospectus, as then amended or supplemented, would include
an untrue statement of a material fact, or omit to state any material fact
necessary to make the statements therein, in the light of the circumstances when
the Prospectus, as then amended or supplemented, is delivered to a purchaser,
not misleading, or if, in the opinion of the Agents or in the opinion of the
Company, it is necessary at any time to amend or supplement the Prospectus, as
then amended or supplemented, to comply with applicable law, the Company will
immediately notify the Agents by telephone (with confirmation in writing) to
suspend solicitation of offers to purchase Notes and, if so notified by the
Company, the Agents shall forthwith suspend such solicitation and cease using
the Prospectus, as then amended or supplemented. If the Company shall decide to
amend or supplement the Registration Statement or Prospectus, as then amended or
supplemented, it shall so advise the Agents promptly by telephone (with
confirmation in writing) and, at its expense, shall prepare and cause to be
filed promptly with the Commission an amendment or supplement to the
Registration Statement or Prospectus, as then amended or supplemented, which
will be provided to the Agents for review, that will correct such statement or
omission or effect such compliance and will supply such amended or supplemented
Prospectus to the Agents in such quantities as they may reasonably request. If
any documents, certificates, opinions and letters furnished to the Agents
pursuant to paragraph (f) below and Sections 5(a), 5(b) and 5(c) in connection
with the preparation and filing of such amendment or supplement are satisfactory
in all respects to the Agents, upon the filing with the Commission of such
amendment or supplement to the Prospectus or upon the effectiveness of an
amendment to the Registration Statement, the Agents will resume the solicitation
of offers to purchase Notes hereunder. Notwithstanding any other provision of
this Section 3(b), until the distribution of any Notes an Agent may own as
principal has been completed, if any event described above in this paragraph (b)
occurs, the Company will, at its own expense, forthwith prepare and cause to be
filed promptly with the Commission an amendment or supplement to the
Registration Statement or Prospectus,
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as then amended or supplemented, satisfactory in all respects to such Agent,
will supply such amended or supplemented Prospectus to such Agent in such
quantities as it may reasonably request and shall furnish to such Agent pursuant
to paragraph (f) below and Sections 5(a), 5(b) and 5(c) such documents,
certificates, opinions and letters as it may request in connection with the
preparation and filing of such amendment or supplement.
(c) The Company will make generally available to its security
holders and to the Agents as soon as practicable earning statements that satisfy
the provisions of Section 11(a) of the Act and the rules and regulations of the
Commission thereunder covering twelve month periods beginning, in each case, not
later than the first day of the Company's fiscal quarter next following the
"effective date" (as defined in Rule 158 under the Act) of the Registration
Statement with respect to each sale of Notes. If such fiscal quarter is the last
fiscal quarter of the Company's fiscal year, such earning statement shall be
made available not later than 90 days after the close of the period covered
thereby and in all other cases shall be made available not later than 45 days
after the close of the period covered thereby.
(d) The Company will furnish to each Agent, without charge, a
signed copy of the Registration Statement, including exhibits and all amendments
thereto, and as many copies of the Prospectus, any documents incorporated by
reference therein and any supplements and amendments thereto as such Agent may
reasonably request.
(e) The Company will use its best efforts to qualify the Notes
for offer and sale under the securities or Blue Sky laws of such jurisdictions
as the Agents shall reasonably request and to maintain such qualifications for
as long as the Agents shall reasonably request, provided that the Company shall
not be required in connection therewith to qualify as a foreign corporation or
to execute a general consent to service of process in any state.
(f) The Company shall furnish to the Agents such relevant
documents and certificates of officers of the Company relating to the business,
operations and affairs of the Company, the Registration Statement, the Basic
Prospectus, any amendments or supplements thereto, the Indenture, the Notes,
this Agreement, the Administrative Procedures, any Terms Agreement and the
performance by the Company of its obligations hereunder or thereunder as the
Agents may from time to time reasonably request.
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(g) The Company shall notify the Agents promptly in writing of
any downgrading, or of its receipt of any notice of any intended or potential
downgrading or of any review for possible change that does not indicate the
direction of the possible change, in the rating accorded any of the Company's
securities by any "nationally recognized statistical rating organization," as
such term is defined for purposes of Rule 436(g)(2) under the Act.
(h) The Company will, whether or not any sale of Notes is
consummated, pay all expenses incident to the performance of its obligations
under this Agreement and any Terms Agreement, including: (i) the preparation and
filing of the Registration Statement and the Prospectus and all amendments and
supplements thereto, (ii) the preparation, issuance and delivery of the Notes,
(iii) the fees and disbursements of the Company's counsel and accountants and of
the Trustee and its counsel, (iv) the qualification of the Notes under
securities or Blue Sky laws in accordance with the provisions of Section 3(e),
including filing fees and the fees and disbursements of counsel for the Agents
in connection therewith and in connection with the preparation of any Blue Sky
or Legal Investment Memoranda, (v) the printing and delivery to the Agents in
quantities as hereinabove stated of copies of the Registration Statement and all
amendments thereto and of the Prospectus and any amendments or supplements
thereto, (vi) the printing and delivery to the Agents of copies of any Blue Sky
or Legal Investment Memoranda, (vii) any fees charged by rating agencies for the
rating of the Notes, (viii) any expenses incurred by the Company in connection
with a "road show" presentation to potential investors and (ix) the fees and
disbursements of counsel for the Agents incurred in connection with the offering
and sale of the Notes, including any opinions to be rendered by such counsel
hereunder, and (x) any out-of-pocket expenses incurred by the Agents; PROVIDED
that any advertising expenses incurred by the Agents shall have been approved by
the Company.
(i) During the period beginning the date of any Terms
Agreement and continuing to and including the Settlement Date with respect to
such Terms Agreement, the Company will not, without such Agent's prior written
consent, offer, sell, contract to sell or otherwise dispose of any debt
securities of the Company or warrants to purchase debt securities of the Company
substantially similar to such Notes (other than (i) the Notes that are to be
sold pursuant to such Terms Agreement, (ii) Notes previously agreed to be sold
by the Company, (iii) commercial paper issued in the ordinary course of business
and (iv) debt securities issued by the Company pursuant to transactions exempt
from registration under
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Section 4(2) of the Act or Rule 506 promulgated thereunder, except as may
otherwise be provided in such Terms Agreement.
4. CONDITIONS OF THE OBLIGATIONS OF THE AGENTS. Each Agent's
obligation to solicit offers to purchase Notes as agent of the Company, each
Agent's obligation to purchase Notes pursuant to any Terms Agreement and the
obligation of any other purchaser to purchase Notes will be subject to the
accuracy of the representations and warranties on the part of the Company
herein, to the accuracy of the statements of the Company's officers made in each
certificate furnished pursuant to the provisions hereof and to the performance
and observance by the Company of all covenants and agreements herein contained
on its part to be performed and observed at the time the Company accepts the
offer to purchase such Notes and at the time of issuance and delivery thereof
and to the following additional conditions precedent when and as specified:
(a) Prior to such solicitation or purchase, as
the case may be:
(i) no stop order suspending the effectiveness of the
Registration Statement shall have been issued and no proceeding for
that purpose shall have been instituted or, to the knowledge of the
Company or any Agent, threatened by the Commission, and any request of
the Commission for additional information (to be included in the
Registration Statement or the Prospectus or otherwise) shall have been
complied with to the satisfaction of the Agents;
(ii) no Agent shall have advised the Company that the
Registration Statement or Prospectus, or any amendment or supplement
thereto, contains an untrue statement of fact which in the opinion of
the Agents is material, or omits to state a fact which in the opinion
of the Agents is material and is required to be stated therein or is
necessary to make the statements therein (in the case of the
Prospectus, in the light of the circumstances under which they were
made) not misleading;
(iii) except as contemplated in the Prospectus, as amended or
supplemented at the time of such solicitation or at the time such offer
to purchase was made, subsequent to the respective dates as of which
information is given on the Registration Statement and the Prospectus,
as amended or supplemented, if applicable, there shall not have been
any change, on a consolidated basis, in the capital stock, short-term
debt or
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long-term debt of the Company and its subsidiaries, or any adverse
change in the condition (financial or other), business, prospects, net
worth or results of operations of the Company and its subsidiaries
that, in the judgment of the relevant Agent, makes it impracticable to
market the Notes on the terms and in the manner contemplated by the
Prospectus, as so amended or supplemented; and
(iv) none of the following shall have occurred: (a) trading on
the New York Stock Exchange or the American Stock Exchange shall have
been wholly suspended, (b) minimum or maximum prices for trading shall
have been fixed, or maximum ranges for prices for securities shall have
been required, on the New York Stock Exchange or the American Stock
Exchange, by such Exchange or by order of the Commission or any other
governmental authority having jurisdiction, (c) a banking moratorium
shall have been declared by Federal or New York authorities, (d) any
downgrading shall have occurred in the rating accorded the Company's
debt securities by any "nationally recognized statistical rating
organization," as that term is defined by the Commission for purposes
of Rule 436(g)(2) under the Act or any such organization shall have
publicly announced that it has under surveillance or review, with
possible negative implications, its rating of any of the Company's debt
securities, or (e) an outbreak or material escalation of major
hostilities in which the United States is involved, a declaration of
war by Congress, any other substantial national or international
calamity or any other event or occurrence of a similar character shall
have occurred that, in the judgment of the relevant Agent, makes it
impracticable or inadvisable to market the Notes on the terms and in
the manner contemplated by the Prospectus, as amended or supplemented
at the time of such solicitation or at the time such offer to purchase
was made;
(A) except, in each case described in paragraph (iii) or (iv)
above, as disclosed to the relevant Agent in writing by the Company prior to
such solicitation or, in the case of a purchase of Notes, as disclosed to the
relevant Agent before the offer to purchase such Notes was made or (B) unless in
each case described in (iv) above, the relevant event shall have occurred and
been known to the relevant Agent before such solicitation or, in the case of a
purchase of Notes, before the offer to purchase such Notes was made.
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(b) On the Commencement Date and, if called for by any Terms
Agreement, on the corresponding Settlement Date, the relevant Agents shall have
received:
(i) The opinion, dated as of such date, of ▇▇▇▇▇, Day, ▇▇▇▇▇▇
& ▇▇▇▇▇, outside counsel for the Company, in substantially the form
attached as Annex I hereto.
(ii) The opinion of ▇▇▇▇▇▇ ▇. ▇▇▇▇▇▇▇▇, Esq., Vice President,
General Counsel and Secretary of the Company, or other Company counsel
acceptable to the Agents, dated as of such date, to the effect that:
(a) The Company is duly incorporated, validly existing and in
good standing under the laws of its jurisdiction of incorporation, with
corporate power and authority to own its properties and to conduct its
business as described in the Prospectus and is qualified to do business
in each state in which it owns or leases real property, except where
the failure to be so qualified, considering all such cases in the
aggregate, does not involve a material risk to the business,
properties, financial position or results of operations of the Company
and its subsidiaries (taken as a whole).
(b) each of Parker Services Inc., Travel 17325 Inc., Parker
Properties Inc., ▇▇▇▇▇▇-▇▇▇▇▇▇▇▇ International Corp., ▇▇▇▇▇▇
Intangibles Inc., Parker de Puerto Rico, Inc., ▇▇▇▇▇▇ Finance Corp.,
▇▇▇▇▇▇-▇▇▇▇▇▇▇▇ Asia Pacific Co., Ltd., Power Distribution Group
Inc., and ▇▇▇▇▇▇ AIP Corp. (collectively referred to as the "Domestic
Subsidiaries") is duly incorporated, validly existing and in good
standing under the laws of its respective jurisdiction of
incorporation; each of the Domestic Subsidiaries has corporate power
and authority to own its properties and to conduct its business as
described in the Prospectus and is qualified to do business in each
state in which it owns or leases real property, except where the
failure to be so qualified, considering all such cases in the
aggregate, does not involve a material risk to the business,
properties, financial position or results of the operations of the
Company and its Domestic Subsidiaries (taken as a whole); all of the
outstanding shares of capital stock of each of the Domestic
Subsidiaries have been duly authorized and validly issued, are fully
paid and nonassessable and (except as otherwise stated in the
Prospectus) are owned beneficially by the Company;
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(c) each of Parker Hannifin GmbH, ▇▇▇▇▇▇ ▇▇▇▇▇▇▇▇ ▇▇▇, Parker
Hannifin S.p.A., Parker Hannifin (Canada) Inc. and Parker Hannifin,
S.A.(collectively referred to as the "Significant Foreign
Subsidiaries") has been duly organized and is in good standing under
the laws of its respective jurisdiction of incorporation; each of the
Significant Foreign Subsidiaries has full power and authority
(corporate and other) to conduct its business as described in the
Registration Statement; each of the Significant Foreign Subsidiaries is
not, and is not required to be, registered or qualified to do business
as a foreign corporation under the laws of any jurisdiction other than
its jurisdiction of incorporation, and all of the outstanding shares of
capital stock of each of the Significant Foreign Subsidiaries have been
duly authorized and validly issued, are fully paid and non-assessable
and (except for shareholders' or directors' qualifying shares) are
owned, directly or indirectly, by the Company subject to no security
interest, other encumbrance, or adverse claim (such counsel being
entitled to rely upon opinions of local counsel, provided that such
counsel shall furnish to you signed copies thereof and state that he
believes that both you and he are justified in relying upon such
opinion).
(iii) The opinion, dated as of such date, of ▇▇▇▇▇▇▇▇ &
▇▇▇▇▇▇▇▇, counsel for the Agents, covering the matters in Annex I in
the paragraphs numbered (2), (3) and (4), and certain matters covered
in the first and last unnumbered paragraphs of ▇▇▇▇▇ ▇.
The opinion of ▇▇▇▇▇, Day, ▇▇▇▇▇▇ & ▇▇▇▇▇ described in
paragraph (b)(i) above shall be rendered to the Agents at the request
of the Company and shall so state therein.
(c) On the Commencement Date and, if called for by any Terms
Agreement, on the corresponding Settlement Date, the relevant Agents shall have
received a certificate, dated the Commencement Date or such Settlement Date, as
the case may be, and signed by the Chairman of the Board, the President or a
Vice President and by the principal financial or accounting officer to the
effect that, to the best of their knowledge based upon reasonable investigation:
(i) the representations and warranties of the Company
contained in this Agreement are true and correct as of such date and
that the Company has complied with all of the agreements and satisfied
all
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of the conditions on its part to be performed or satisfied on or before
such date;
(ii) no stop order suspending the effectiveness of the
Registration Statement has been issued, and no proceeding for that
purpose has been instituted or is threatened by the Commission; and
(iii) since the effective date of the Registration Statement,
there has occurred no event required to be set forth in an amendment or
supplement to the Registration Statement or Prospectus that has not
been so set forth, and there has been no document required to be filed
under the Exchange Act and the rules and regulations thereunder that
upon such filing would be deemed to be incorporated by reference in the
Prospectus that has not been so filed.
The officers signing and delivering such certificate may rely
upon the best of their knowledge as to proceedings threatened.
(d) On the Commencement Date and, if called for by any Terms
Agreement, on the corresponding Settlement Date, Coopers & ▇▇▇▇▇▇▇, independent
public accountants, shall have furnished to the relevant Agents a letter or
letters, dated the Commencement Date or such Settlement Date to the effect set
forth in Annex II hereto.
(e) On the Commencement Date and on each Settlement Date, the
Company shall have furnished to the relevant Agents such appropriate further
information, certificates and documents as they may reasonably request.
5. ADDITIONAL AGREEMENTS OF THE COMPANY. (a) Each time the
Registration Statement or Prospectus is amended or supplemented (other than by
an amendment or supplement (i) solely setting forth the terms of any securities
registered thereunder other than the Notes or (ii) providing solely for a change
in the interest rates, redemption provisions, amortization schedules or
maturities offered on the Notes or for a change the Agents deem to be
immaterial), the Company will deliver or cause to be delivered forthwith to each
Agent a certificate, dated the date of such amendment or supplement, as the case
may be, in form reasonably satisfactory to the Agents, of the same tenor as the
certificate referred to in Section 4(c), and signed by officers as required in
such Section, relating to the Registration Statement or the Prospectus as
amended or supplemented to the time of delivery of such certificate.
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(b) Each time the Company furnishes a certificate pursuant to
Section 5(a), the Company will furnish or cause to be furnished forthwith to
each Agent a written opinion of independent counsel for the Company. Any such
opinion shall be dated the date of such amendment or supplement, as the case may
be, shall be in a form satisfactory to the Agents and shall be of the same tenor
as the opinion referred to in Section 4(b)(i), but modified to relate to the
Registration Statement and the Prospectus as amended and supplemented to the
time of delivery of such opinion. In lieu of such opinion, counsel last
furnishing such an opinion to an Agent may furnish to each Agent a letter to the
effect that such Agent may rely on such last opinion to the same extent as
though it were dated the date of such letter (except that statements in such
last opinion will be deemed to relate to the Registration Statement and the
Prospectus as amended or supplemented to the time of delivery of such letter).
(c) Each time the Registration Statement or the Prospectus is
amended or supplemented to set forth amended or supplemental financial
information or such amended or supplemental information is incorporated by
reference in the Prospectus, the Company shall cause its independent public
accountants forthwith to furnish each Agent with a letter, dated the date of
such amendment or supplement, as the case may be, in form satisfactory to the
Agents, of the same tenor as the letter referred to in Section 4(d), with regard
to the amended or supplemental financial information included or incorporated by
reference in the Registration Statement or the Prospectus as amended or
supplemented to the date of such letter.
6. INDEMNITY AND CONTRIBUTION. (a) The Company agrees to
indemnify and hold harmless each Agent and each person, if any, who controls any
Agent within the meaning of either Section 15 of the Act or Section 20 of the
Exchange Act from and against any and all losses, claims, damages and
liabilities (including, without limitation, any legal or other expenses
reasonably incurred by any Agent or any such controlling person in connection
with defending or investigating any such action or claim) caused by any untrue
statement or alleged untrue statement of a material fact contained in the
Registration Statement or any amendment thereof or the Prospectus (as amended or
supplemented if the Company shall have furnished any amendments or supplements
thereto), or caused by any omission or alleged omission to state therein a
material fact required to be stated therein or necessary to make the statements
therein not misleading, except insofar as such losses, claims, damages or
liabilities are caused by any such untrue statement or omission or alleged
untrue statement or omission based upon
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information relating to such Agent furnished to the Company in writing by such
Agent expressly for use therein.
(b) Each Agent agrees, severally and not jointly, to indemnify
and hold harmless the Company, its directors, its officers who sign the
Registration Statement and each person, if any, who controls the Company within
the meaning of either Section 15 of the Act or Section 20 of the Exchange Act to
the same extent as the foregoing indemnity from the Company to such Agent, but
only with reference to information relating to such Agent furnished to the
Company in writing by such Agent expressly for use in the Registration Statement
or the Prospectus or any amendments or supplements thereto.
(c) In case any proceeding (including any governmental
investigation) shall be instituted involving any person in respect of which
indemnity may be sought pursuant to either paragraph (a) or (b) above, such
person (the "indemnified party") shall promptly notify the person against whom
such indemnity may be sought (the "indemnifying party") in writing and the
indemnifying party, upon request of the indemnified party, shall retain counsel
reasonably satisfactory to the indemnified party to represent the indemnified
party and any others the indemnifying party may designate in such proceeding and
shall pay the fees and disbursements of such counsel related to such proceeding.
In any such proceeding, any indemnified party shall have the right to retain its
own counsel, but the fees and expenses of such counsel shall be at the expense
of such indemnified party unless (i) the indemnifying party and the indemnified
party shall have mutually agreed to the retention of such counsel or (ii) the
named parties to any such proceeding (including any impleaded parties) include
both the indemnifying party and the indemnified party and representation of both
parties by the same counsel would be inappropriate due to actual or potential
differing interests between them. It is understood that the indemnifying party
shall not, in respect of the legal expenses of any indemnified party in
connection with any proceeding or related proceedings in the same jurisdiction,
be liable for the fees and expenses of more than one separate firm (in addition
to any local counsel) for all such indemnified parties and that all such fees
and expenses shall be reimbursed as they are incurred. Such firm shall be
designated in writing by ▇▇▇▇▇▇ ▇▇▇▇▇▇▇ or, if ▇▇▇▇▇▇ ▇▇▇▇▇▇▇ is not an
indemnified party and is not reasonably likely to become an indemnified party,
by the Agents that are indemnified parties, in the case of parties indemnified
pursuant to paragraph (a) above, and by the Company, in the case of parties
indemnified pursuant to paragraph (b) above. The indemnifying party shall not be
liable for any
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settlement of any proceeding effected without its written consent, but if
settled with such consent or if there be a final judgment for the plaintiff, the
indemnifying party agrees to indemnify the indemnified party from and against
any loss or liability by reason of such settlement or judgment. Notwithstanding
the foregoing sentence, if at any time an indemnified party shall have requested
an indemnifying party to reimburse the indemnified party for fees and expenses
of counsel as contemplated by the second and third sentences of this paragraph,
the indemnifying party agrees that it shall be liable for any settlement of any
proceeding effected without its written consent if (i) such settlement is
entered into more than 30 days after receipt by such indemnifying party of the
aforesaid request and (ii) such indemnifying party shall not have reimbursed the
indemnified party in accordance with such request prior to the date of such
settlement. No indemnifying party shall, without the prior written consent of
the indemnified party, effect any settlement of any pending or threatened
proceeding in respect of which any indemnified party is or could have been a
party and indemnity could have been sought hereunder by such indemnified party,
unless such settlement includes an unconditional release of such indemnified
party from all liability on claims that are the subject matter of such
proceeding.
(d) To the extent the indemnification provided for in
paragraph (a) or (b) of this Section 6 is unavailable to an indemnified party or
insufficient in respect of any losses, claims, damages or liabilities referred
to therein in connection with any offering of Notes, then each indemnifying
party under such paragraph, in lieu of indemnifying such indemnified party
thereunder, shall contribute to the amount paid or payable by such indemnified
party as a result of such losses, claims, damages or liabilities (i) in such
proportion as is appropriate to reflect the relative benefits received by the
Company on the one hand and each Agent on the other hand from the offering of
such Notes or (ii) if the allocation provided by clause (i) above is not
permitted by applicable law, in such proportion as is appropriate to reflect not
only the relative benefits referred to in clause (i) above but also the relative
fault of the Company on the one hand and each Agent on the other hand in
connection with the statements or omissions that resulted in such losses,
claims, damages or liabilities, as well as any other relevant equitable
considerations. The relative benefits received by the Company on the one hand
and each Agent on the other hand in connection with the offering of such Notes
shall be deemed to be in the same respective proportions as the total net
proceeds from the offering of such Notes (before deducting expenses) received by
the Company bear to the total
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discounts and commissions received by each Agent in respect thereof. The
relative fault of the Company on the one hand and each Agent on the other hand
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 by
such Agent and the parties' relative intent, knowledge, access to information
and opportunity to correct or prevent such statement or omission. Each Agent's
obligation to contribute pursuant to this Section 6 shall be several in the
proportion that the principal amount of the Notes the sale of which by or
through such Agent gave rise to such losses, claims, damages or liabilities
bears to the aggregate principal amount of the Notes the sale of which by or
through any Agent gave rise to such losses, claims, damages or liabilities, and
not joint.
(e) The Company and the Agents agree that it would not be just
or equitable if contribution pursuant to this Section 6 were determined by PRO
RATA allocation (even if the Agents were treated as one entity for such purpose)
or by any other method of allocation that does not take account of the equitable
considerations referred to in paragraph (d) of this Section 6. The amount paid
or payable by an indemnified party as a result of the losses, claims, damages
and liabilities referred to in paragraph (d) of this Section 6 shall be deemed
to include, subject to the limitations set forth above, any legal or other
expenses reasonably incurred by such indemnified party in connection with
investigating or defending any such action or claim. Notwithstanding the
provisions of this Section 6, no Agent shall be required to contribute any
amount in excess of the amount by which the total price at which the Notes
referred to in paragraph (d) of this Section 6 that were offered and sold to the
public through such Agent exceeds the amount of any damages that 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 Act) shall be
entitled to contribution from any person who was not guilty of such fraudulent
misrepresentation. The remedies provided for in this Section 6 are not exclusive
and shall not limit any rights or remedies which may otherwise be available to
any indemnified party at law or in equity.
(f) The indemnity and contribution provisions contained in
this Section 6, representations, warranties and other statements of the Company,
its officers and the Agents set forth in or made pursuant to this Agreement or
any Terms Agreement will remain in full force and effect regardless of
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(i) any termination of this Agreement or any such Terms Agreement, (ii) any
investigation made by or on behalf of any Agent or any person controlling any
Agent or by or on behalf of the Company, its officers or directors or any person
controlling the Company and (iii) acceptance of and payment for any of the
Notes.
7. POSITION OF THE AGENTS. In acting under this Agreement and
in connection with the sale of any Notes by the Company (other than Notes sold
to an Agent pursuant to a Terms Agreement), each Agent is acting solely as agent
of the Company and does not assume any obligation towards or relationship of
agency or trust with any purchaser of Notes. An Agent shall make reasonable
efforts to assist the Company in obtaining performance by each purchaser whose
offer to purchase Notes has been solicited by such Agent and accepted by the
Company, but such Agent shall not have any liability to the Company in the event
any such purchase is not consummated for any reason. If the Company shall
default in its obligations to deliver Notes to a purchaser whose offer it has
accepted, the Company shall hold the relevant Agent harmless against any loss,
claim, damage or liability arising from or as a result of such default and
shall, in particular, pay to such Agent the commission it would have received
had such sale been consummated.
8. TERMINATION. This Agreement may be terminated at any time
by the Company or, as to any Agent, by the Company or such Agent upon the giving
of written notice of such termination to the other parties hereto, but without
prejudice to any rights, obligations or liabilities of any party hereto accrued
or incurred prior to such termination. The termination of this Agreement shall
not require termination of any Terms Agreement, and the termination of any such
Terms Agreement shall not require termination of this Agreement. If this
Agreement is terminated, the provisions of the third paragraph of Section 2(a),
Section 2(e), the last sentence of Section 3(b) and Sections 3(c), 3(h), 6, 7,
9, 11 and 13 shall survive; PROVIDED that if at the time of termination an offer
to purchase Notes has been accepted by the Company but the time of delivery to
the purchaser or its agent of such Notes has not occurred, the provisions of
Sections 2(b), 2(c), 3(a), 3(e), 3(f), 3(g), 3(i), 4 and 5 shall also survive
until such delivery has been made.
9. NOTICES. All communications hereunder will be in writing
and effective only on receipt, and, if sent to ▇▇▇▇▇▇ ▇▇▇▇▇▇▇, will be mailed,
delivered or telefaxed and confirmed to ▇▇▇▇▇▇ ▇▇▇▇▇▇▇ at ▇▇▇▇ ▇▇▇▇▇▇▇▇, ▇▇▇
▇▇▇▇▇, ▇▇▇ ▇▇▇▇, ▇▇▇ ▇▇▇▇ ▇▇▇▇▇, Attention: Manager -- Continuously Offered
Products (telefax number: 212-761-0780), with a
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copy to ▇▇▇▇ ▇▇▇▇▇▇▇▇, ▇▇▇ ▇▇▇▇, ▇▇▇ ▇▇▇▇ 10036, 36th floor, Attention:
Investment Banking Information Center(telefax number: 212-761-0260), Citicorp
Securities, Inc., ▇▇▇ ▇▇▇▇ ▇▇▇▇▇▇, ▇▇▇ ▇▇▇▇, ▇▇ ▇▇▇▇▇, Attention: Managing
Director, Syndicate (telefax number: 212-291-3190) and Salomon Brothers Inc, 7
World Trade Center, New York, New York 10048 (telefax number: 212-783-4120),
with a copy to 7 World Trade Center, New York, New York 10048, Attention:
Transaction Structuring Group (telefax number 212-783-2274), or, if sent to the
Company, will be mailed, delivered or telefaxed and confirmed to the Company at
▇▇▇▇▇ ▇▇▇▇▇▇ ▇▇▇▇▇▇, ▇▇▇▇▇▇▇▇▇, ▇▇▇▇ ▇▇▇▇▇, Attention: Treasurer (telefax number
(216) 481- 4057).
10. SUCCESSORS. This Agreement and any Terms Agreement will
inure to the benefit of and be binding upon the parties hereto and their
respective successors and the officers, directors and controlling persons
referred to in Section 6 and the purchasers of Notes (to the extent expressly
provided in Section 4), and no other person will have any right or obligation
hereunder.
11. AMENDMENTS. This Agreement may be amended or supplemented
if, but only if, such amendment or supplement is in writing and is signed by the
Company and each Agent; PROVIDED that the Company may from time to time, on
seven days prior written notice to the Agents but without the consent of any
Agent, amend this Agreement to add as a party hereto one or more additional
firms registered under the Exchange Act, whereupon each such firm shall become
an Agent hereunder on the same terms and conditions as the other Agents that are
parties hereto. The Agents shall sign any amendment or supplement giving effect
to the addition of any such firm as an Agent under this Agreement.
12. COUNTERPARTS. This Agreement may be signed in two or more
counterparts, each of which shall be an original, with the same effect as if the
signatures thereto and hereto were upon the same instrument.
13. APPLICABLE LAW. This Agreement shall be governed by and
construed in accordance with the internal laws of the State of New York.
14. HEADINGS. The headings of the sections of this Agreement
have been inserted for convenience of reference only and shall not be deemed a
part of this Agreement.
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If the foregoing is in accordance with your understanding of
our agreement, please sign and return to us the enclosed duplicate hereof,
whereupon this letter and your acceptance shall represent a binding agreement
between the Company and you.
Very truly yours,
▇▇▇▇▇▇-▇▇▇▇▇▇▇▇ CORPORATION
By /s/ ▇▇▇▇▇▇ ▇. ▇▇▇▇▇▇▇▇
--------------------------------
Name: ▇▇▇▇▇▇ ▇. ▇▇▇▇▇▇▇▇
Title: Vice President, General
Counsel and Secretary
The foregoing Agreement is hereby confirmed and accepted as of the date first
above written.
▇▇▇▇▇▇ ▇▇▇▇▇▇▇ & CO. INCORPORATED
By /s/ ▇▇▇▇▇▇ ▇. ▇▇▇▇▇▇▇▇▇▇▇ ▇▇▇
--------------------------------------
Name: ▇▇▇▇▇▇ ▇. ▇▇▇▇▇▇▇▇▇▇▇ III
Title: Vice President
CITICORP SECURITIES, INC.
By /s/ ▇▇▇▇▇▇ ▇. ▇▇▇▇▇▇▇, ▇▇.
--------------------------------------
Name: ▇▇▇▇▇▇ ▇. ▇▇▇▇▇▇▇, ▇▇.
Title: Vice President
SALOMON BROTHERS INC
By /s/ ▇▇▇ ▇▇▇▇▇▇
--------------------------------------
Name: ▇▇▇ ▇▇▇▇▇▇
Title: Vice President
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25
ANNEX I
(1) The Indenture has been duly authorized, executed and
delivered by the Company and duly qualified under the Trust Indenture
Act of 1939 and is a valid and binding instrument of the Company,
enforceable against the Company in accordance with its terms, subject
to the effect of (i) general principles of equity, regardless of
whether such enforceability is considered in a proceeding in equity or
at law, and (ii) any applicable bankruptcy, insolvency, reorganization,
moratorium or similar laws affecting creditors' rights generally.
(2) The Notes have been duly authorized and, if executed and
authenticated in accordance with the provisions of the Indenture and
delivered to and paid for by the purchasers thereof on the date of such
opinion, would be valid and binding obligations of the Company,
enforceable against the Company in accordance with their terms, subject
to the effect of (i) general principles of equity, regardless of
whether such enforceability is considered in a proceeding in equity or
at law, and (ii) any applicable bankruptcy, insolvency, reorganization,
moratorium or similar laws affecting creditors' rights generally.
(3) Each of the Distribution Agreement and, if applicable, any
Written Terms Agreement has been duly authorized, executed and
delivered by the Company.
(4) Neither the execution and delivery of the Distribution
Agreement nor the performance of the transactions therein contemplated
will result in the violation of any statute or regulation or any order
or decree of any court or governmental authority known to us which is
binding upon the Company or its property, or conflict with or result in
a default under any of the terms and provisions of the Company's
Amended Articles of Incorporation or Code of Regulations or any
indenture, loan agreement or any agreement listed on EXHIBIT A attached
hereto.
(5) No consent, approval, authorization or order or any
governmental agency or body is required for the issuance or sale by the
Company of the Notes, except such as have been obtained
26
under the Act and the Trust Indenture Act and such as may be required
under state securities or Blue Sky laws in connection with the purchase
and distribution of the Notes by the Agents.
We have participated in the preparation of the Registration
Statement and Prospectus (certain of the documents incorporated into the
Prospectus by reference having previously been prepared and filed by the Company
without our participation). From time to time we have had discussions with
officers and employees of the Company, accountants and auditors, the independent
accountants who examined certain of the financial statements of the Company and
its consolidated subsidiaries included in the Registration Statement and
Prospectus, and your representatives concerning the information contained in the
Registration Statement and Prospectus and the proposed responses to various
items in Form S-3. Based thereupon we are of the opinion that the Registration
Statement and the Prospectus (except for financial statements, financial
schedules, and other financial data included therein, as to which we express no
opinion) at the time the Registration Statement became effective under the Act
complied as to form in all material respects with the Act and the Trust
Indenture Act and the respective rules and regulations thereunder, and that the
documents incorporated or deemed to be incorporated by reference into the
Prospectus that were filed prior to the date of this opinion (except for
financial statements, financial schedules, and other financial data included
therein, as to which we express no opinion) at the time they were filed complied
as to form in all material respects with the requirements of the Exchange Act
and the rules and regulations thereunder.
27
We do not know of any litigation or governmental proceedings
required to be described in the Prospectus that are not described as required,
or of any contracts or other documents of a character required to be described
in the Registration Statement or Prospectus or to be filed as exhibits to the
Registration Statement which are not described and filed as required. The
descriptions in the Registration Statement and Prospectus of statutes, legal and
governmental proceedings, contracts and other documents present fair summaries
of such statutes, legal and governmental proceedings, contracts or other
documents. We further are of the opinion that the statements contained in the
Prospectus under the caption "Description of Senior Debt Securities" and "United
States Taxation," insofar as they purport to summarize the provisions of
documents or the Unites States Federal tax laws described therein, present fair
summaries of such provisions or such United States Federal tax laws.
The Registration Statement has become effective under the Act,
and to the best of our knowledge, no stop order suspending the effectiveness of
the Registration Statement has been issued and no proceeding for that purpose or
challenging the accuracy of any document incorporated by reference into the
Prospectus are pending or, to the best of our knowledge, threatened by the
Commission.
We have not independently verified and are not passing upon,
and do not assume any responsibility for, the accuracy, completeness or fairness
(except as set forth in the second preceding paragraph above) of the information
contained in the Registration Statement and Prospectus, including any document
incorporated or deemed to be incorporated therein by reference. Based upon the
participation and discussions described above, however, no facts have come to
our attention that cause us to believe that the Registration Statement (except
for financial statements, financial schedules, and other financial date included
therein), at the time it became effective contained any untrue statement of a
material fact or omitted to state a material fact required to be stated therein
or necessary in order to make the statements therein not misleading, or that the
Prospectus (with the foregoing exceptions), on the date of the Prospectus and
the Commencement Date, contained or contains any untrue statement of a material
fact or omitted or omits to state a material fact required to be stated therein
or necessary in order to make the statements therein, in the light of the
circumstances under which they were made, not misleading.
28
ANNEX II
(1) They are independent certified public accountants with
respect to the Company and its subsidiaries within the meaning of the
Act and the published rules and regulations thereunder.
(2) In their opinion, the consolidated financial statements
and schedules audited by them and included or incorporated by reference
in the Registration Statement and Prospectus comply as to form in all
material respects with the applicable accounting requirements of the
Act or the Exchange Act, as applicable, and the published rules and
regulations thereunder.
(3) On the basis of procedures referred to in such letter,
including a reading of the latest available interim financial
statements of the Company and inquiries of officials of the Company
responsible for financial and accounting matters, nothing caused them
to believe that:
(A) any unaudited financial statements included or
incorporated in the Prospectus do not comply as to form in all
material respects with the applicable accounting requirements
of the Exchange Act and the published rules and regulations
thereunder or are not stated on a basis substantially
consistent with that of the audited financial statements
included in the Company's most recent Annual Report on Form
10-K; or
(B) at a specified date not more than five days prior
to the date of such letter, there was any change in the
capital stock, short-term debt or long-term debt of the
Company and its subsidiaries or any decrease in consolidated
net current assets or net assets as compared with amounts
shown in the most recent unaudited balance sheet included or
incorporated by reference in the Prospectus, except in all
cases for changes or decreases which the Prospectus discloses
have occurred or may occur or as may be set forth in such
letter; or
(C) for the period from the date of the most recent
unaudited balance sheet included or incorporated by reference
in the Prospectus to a subsequent specified date not more than
five days prior to the date of such letter, there was any
decrease, as compared with the corresponding period of the
previous year and with the period of corresponding length
ended the date of such
29
unaudited balance sheet, in consolidated net sales,
consolidated net income before taxes, or net income, except in
all cases for changes or decreases which the Prospectus
discloses have occurred or may occur or as may be set forth in
such letter.
(4) In addition to their examination referred to in their
report included or incorporated by reference in the Registration
Statement and Prospectus and the procedures referred to in (3) above,
they have carried out certain other specified procedures, not
constituting an audit, with respect to certain of the dollar amounts,
percentages and other financial information to bc agreed upon by the
Company and the Underwriters (in each case to the extent that such
dollar amounts, percentages and other financial information, are
derived directly or by analysis or computation, from the general
accounting records of the Company and its subsidiaries) that are
included or incorporated by reference in the Prospectus and appear or
are incorporated by reference in the Company's Annual Report on Form
10-K under the captions "Item 1. -- Business", "Item 6. -- Selected
Financial Data", and "Item 7. -- Management's Discussion and Analysis
of Financial Condition and Results of Operations", and have found such
dollar amounts, percentages and financial information to be in
agreement with the general accounting records of the Company and its
subsidiaries.
30
EXHIBIT A
▇▇▇▇▇▇-▇▇▇▇▇▇▇▇ CORPORATION
MEDIUM-TERM NOTES
TERMS AGREEMENT
_______ __, 199_
▇▇▇▇▇▇-▇▇▇▇▇▇▇▇ CORPORATION
▇▇▇▇▇ ▇▇▇▇▇▇ ▇▇▇▇▇▇
▇▇▇▇▇▇▇▇▇, ▇▇ ▇▇▇▇▇
Attention:
Re: Distribution Agreement dated
April 6, 1998 (the "Distribution Agreement")
--------------------------------------------
We agree to purchase your Medium-Term Notes having the
following terms:
[We agree to purchase, severally and not jointly, the
principal amount of Notes set forth below opposite our names:
Principal Amount
Name of Notes
[Name of relevant Agent(s)]
[Insert syndicate list]1
Total . . . . . . $
===========
-----------------
Delete if the transaction will not be syndicated.
A-1
31
The Notes shall have the following terms:
All Notes: Fixed Rate Notes: Floating Rate
---------- ----------------- -------------
Notes:
------
Principal amount: Interest Rate: Base rate:
Purchase price: Applicability Index maturity:
of modified
Price to public: payment upon Spread:
acceleration:
Settlement date Spread
multiplier:
and time: If yes, state
issue price: Alternate rate
Place of event spread:
delivery: Amortization
schedule: Initial interest
Specified rate:
currency:
Initial interest
Maturity date: reset date:
Initial accrual Interest reset
period OID: dates:
Total amount Interest reset
of OID: period:
Original yield Maximum interest
to maturity: rate:
Optional repayment Minimum interest
date(s): rate:
Optional redemption Interest payment
date(s): period:
Initial redemption Interest payment
date: dates:
Initial redemption Calculation agent:
percentage:
Annual redemption
percentage
decrease:
Other terms:
A-2
32
The provisions of Sections 1, 2(b) and 2(c) and 3 through 6,
9, 10, 11 and 13 of the Distribution Agreement and the related definitions are
incorporated by reference herein and shall be deemed to have the same force and
effect as if set forth in full herein.
[If on the Settlement Date any one or more of the Agents shall
fail or refuse to purchase Notes that it has or they have agreed to purchase on
such date, and the aggregate amount of Notes which such defaulting Agent or
Agents agreed but failed or refused to purchase is not more than one-tenth of
the aggregate amount of the Notes to be purchased on such date, the other Agents
shall be obligated severally in the proportions that the amount of Notes set
forth opposite their respective names above bears to the aggregate amount of
Notes set forth opposite the names of all such non-defaulting Agents, or in such
other proportions as _____________ may specify, to purchase the Notes which such
defaulting Agent or Agents agreed but failed or refused to purchase on such
date; PROVIDED that in no event shall the amount of Notes that any Agent has
agreed to purchase pursuant to this Agreement be increased pursuant to this
paragraph by an amount in excess of one-ninth of such amount of Notes without
the written consent of such Agent. If on the Settlement Date any Agent or Agents
shall fail or refuse to purchase Notes and the aggregate amount of Notes with
respect to which such default occurs is more than one-tenth of the aggregate
amount of Notes to be purchased on such date, and arrangements satisfactory to
___________ and the Company for the purchase of such Notes are not made within
36 hours after such default, this Agreement shall terminate without liability on
the part of any non-defaulting Agent or the Company. In any such case either
___________ or the Company shall have the right to postpone the Settlement Date
but in no event for longer than seven days, in order that the required changes,
if any, in the Registration Statement and in the Prospectus or in any other
documents or arrangements may be effected. Any action taken under this paragraph
shall not relieve any defaulting Agent from
A-3
33
liability in respect of any default of such Agent under this
Agreement.]2
This Agreement is subject to termination on the terms
incorporated by reference herein. If this Agreement is so terminated, the
provisions of Sections 3(h), 6, 9, 11 and 13 of the Distribution Agreement shall
survive for the purposes of this Agreement.
The following information, opinions, certificates, letters
and documents referred to in Section 4 of the Distribution Agreement will be
required: ________________
[NAME OF RELEVANT AGENT(S)]
By
------------------------------
Name
Title:
Accepted:
▇▇▇▇▇▇-▇▇▇▇▇▇▇▇ CORPORATION
By
----------------------------
Name:
Title:
-------------------
Delete if the transaction will not be syndicated.
A-4
34
EXHIBIT B
▇▇▇▇▇▇-▇▇▇▇▇▇▇▇ CORPORATION
MEDIUM-TERM NOTES
ADMINISTRATIVE PROCEDURES
---------------------------------
Explained below are the administrative procedures and specific terms
of the offering of Medium-Term Notes (the "Notes"), on a continuous basis by
▇▇▇▇▇▇-▇▇▇▇▇▇▇▇ CORPORATION (the "Company") pursuant to the Distribution
Agreement, dated as of April 6, 1998(the "Distribution Agreement") among the
Company and ▇▇▇▇▇▇ ▇▇▇▇▇▇▇ & Co. Incorporated, Citicorp Securities, Inc. and
Salomon Brothers Inc (the "Agents"). The Notes will be issued under an Indenture
dated as of May 3, 1996 (the "Indenture") between the Company and National City
Bank, as trustee (the "Trustee"). In the Distribution Agreement, the Agents have
agreed to use reasonable efforts to solicit purchases of the Notes, and the
administrative procedures explained below will govern the issuance and
settlement of any Notes sold through an Agent, as agent of the Company. An
Agent, as principal, may also purchase Notes for its own account, and if
requested by such Agent, the Company and such Agent will enter into a terms
agreement (a "Terms Agreement"), as contemplated by the Distribution Agreement.
The administrative procedures explained below will govern the issuance and
settlement of any Notes purchased by an Agent, as principal, unless otherwise
specified in the applicable Terms Agreement.
The Trustee will be the Registrar, Calculation Agent, Authenticating
Agent and Paying Agent for the Notes and will perform the duties specified
herein. Each Note will be represented by either a Global Security (as defined
below) 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
B-1
35
such holder (a "Certificated Note"). Except as set forth in the Indenture, an
owner of a Book-Entry Note will not be entitled to receive a Certificated Note.
Book-Entry Notes, which may be payable only in U.S. dollars, will be
issued in accordance with the administrative procedures set forth in Part I
hereof as they may subsequently be amended as the result of changes in DTC'S
operating procedures. Certificated Notes will be issued in accordance with the
administrative procedures set forth in Part II hereof. Unless otherwise defined
herein, terms defined in the Indenture, the Notes or any prospectus supplement
relating to the Notes shall be used herein as therein defined.
The Company will advise the Agents in writing of the employees of the
Company with whom the Agents are to communicate regarding offers to purchase
Notes and the related settlement details.
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 Representation from
the Company and the Trustee to DTC, dated as of June 3, 1996, and a Medium-Term
Note Certificate Agreement between the Trustee and DTC, dated as of March 22,
1989 (the "MTN Certificate Agreement"), and its obligations as a participant in
DTC, including DTC's Same-Day Funds Settlement System ("SDFS").
Issuance: On any date of settlement (as defined
under "Settlement" below) for one or
more Book-Entry Notes, the Company will
issue a single global security in fully
registered form without coupons (a
"Global Security") representing up to
U.S. $200,000,000 principal amount of
all such Notes that have the same
Original Issue Date, Maturity Date and
other terms. Each Global Security will
be dated and issued as of the date of
its authentication by the Trustee. Each
Global Security will bear an "Interest
Accrual Date," which will be (i) with
respect to an original Global Security
B-2
36
(or any portion thereof), its original
issuance date and (ii) with respect to any
Global Security (or any portion thereof)
issued subsequently upon exchange of a
Global Security, or in lieu of a destroyed,
lost or stolen Global Security, the most
recent Interest Payment Date to which
interest has been paid or duly provided for
on the predecessor Global Security (or if no
such payment or provision has been made, the
original issuance date of the predecessor
Global Security), regardless of the date of
authentication of such subsequently issued
Global Security. Book-Entry Notes may be
payable only in U.S. dollars. No Global
Security will represent any Certificated
Note.
Denominations: Book-Entry Notes will be issued in principal
amounts of U.S. $1,000 or any amount in
excess thereof that is an integral multiple
of U.S. $1,000. Global Securities will be
denominated in principal amounts not in
excess of U.S. $200,000,000. If one or more
Book-Entry Notes having an aggregate
principal amount in excess of $200,000,000
would, but for the preceding sentence, be
represented by a single Global Security,
then one Global Security will be issued to
represent each U.S. $200,000,000 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.
Preparation If any offer to purchase a Book-Entry Note
of Pricing is accepted by or on behalf of the Company,
Supplement: the Company will prepare a pricing
supplement (a "Pricing Supplement")
reflecting the terms of such Note. The
Company (i) will arrange to file such
Pricing Supplement with the Commission in
accordance with the applicable paragraph
B-3
37
of Rule 424(b) under the Act and (ii) will,
as soon as possible and in any event not
later than the date on which such Pricing
Supplement is filed with the Commission,
deliver the number of copies of such Pricing
Supplement to the relevant Agent as such
Agent shall request.
In each instance that a Pricing Supplement
is prepared, the relevant Agent will affix
the Pricing Supplement to Prospectuses prior
to their use. Outdated Pricing Supplements,
and the Prospectuses to which they are
attached (other than those retained for
files), will be destroyed.
Settlement: The receipt by the Company of immediately
available funds in payment for a Book-Entry
Note and the authentication and issuance of
the Global Security representing such Note
shall constitute "settlement" with respect
to such Note. All offers accepted by the
Company will be settled on the third
Business Day next succeeding the date of
acceptance, unless the Company accepts an
offer to purchase Notes after 4:30 p.m. on
such date in which case settlement will
occur on the fourth Business Day next
succeeding such date of acceptance, pursuant
to the timetable for settlement set forth
below, unless the Company and the purchaser
agree to settlement on another day, which
shall be no earlier than the next Business
Day.
Settlement Settlement Procedures with regard to each
Procedures: Book-Entry Note sold by the Company to or
through an Agent (unless otherwise specified
pursuant to a Terms Agreement) shall be as
follows:
A. The relevant Agent will advise
the Company by telephone that such
Note is a Book-Entry Note and of the
following settlement information:
B-4
38
1. Principal amount.
2. Maturity Date.
3. In the case of a Fixed
Book-Entry Note, the Interest
Rate, whether such Note will pay
interest annually or semiannually
and whether such Note is an
Amortizing Note, and, if so, the
amortization schedule, or, in the
case of a Floating Rate
Book-Entry Note, the Initial
Interest Rate (if known at such
time), Interest Payment Date(s),
Interest Payment Period,
Calculation Agent, Base Rate,
Index Maturity, Interest Reset
Period, Initial Interest Reset
Date, Interest Reset Dates,
Spread or Spread Multiplier (if
any), Minimum Interest Rate (if
any), Maximum Interest Rate (if
any) and the Alternate Rate Event
Spread (if any).
4. Redemption or repayment
provisions (if any).
5. Settlement date and time
(Original Issue Date).
6. Interest Accrual Date.
7. Price.
8. Agent's commission (if any)
determined as provided in the
Distribution Agreement.
9. Whether the Note is an
Original Issue Discount Note (an
"OID Note"), and if it is an OID
Note, the total amount of OID,
the yield to maturity, the
initial accrual period OID and
the applicability of Modified
Payment upon
B-5
39
Acceleration (and, if so, the
Issue Price).
10. Whether the Note is an
Indexed Note, and if it is an
Indexed Note, the Denominated
Currency, the Indexed Currency or
Currencies, the Payment Currency,
the Exchange Rate Agent, the
Reference Dealers, the Face
Amount, the Fixed Amount of each
Indexed Currency, the Aggregate
Fixed Amount of each Indexed
Currency and the Authorized
Denominations (if other than U.S.
dollars).
11. Whether the Note is a
Renewable Note, and if it is a
Renewable Note, the Initial
Maturity Date and the Final
Maturity Date.
12. Whether the Company has the
to extend the Original Maturity
Date of the Note, and, if so, the
Final Maturity Date of such Note.
13. Whether the Company has the
option to reset the Interest
Rate, the Spread or the Spread
Multiplier of the Note.
14. Any other applicable terms.
B. The Company will advise the
Trustee by telephone or electronic
transmission (confirmed in writing
at any time on the same date) of the
information set forth in Settlement
Procedure "A" above. The Trustee
will then assign a CUSIP number to
the Global Security representing
such Note and will notify the
Company and the relevant
B-6
40
Agent of such CUSIP number by
telephone as soon as practicable.
C. The Trustee will enter a pending
deposit message through DTC's
Participant Terminal System,
providing the following settlement
information to DTC, the relevant
Agent and Standard & Poor's
Corporation:
1. The information set forth in
Settlement Procedure "A".
2. The Initial Interest Payment
Date for such Note, the number of
days by which such date succeeds
the related DTC Record Date
(which in the case of Floating
Rate Notes which reset daily or
weekly, shall be the date five
calendar days immediately
preceding the applicable Interest
Payment Date and, in the case of
all other Notes, shall be the
Record Date as defined in the
Note) and, if known, the amount
of interest payable on such
Initial Interest Payment Date.
3. The CUSIP number of the Global
Security representing such Note.
4. Whether such Global Security
will represent any other
Book-Entry Note (to the extent
known at such time).
5. Whether such Note is an
Amortizing Note (by an
appropriate notation in the
comments field of DTC's
Participant Terminal System).
6. The number of participant
accounts to be maintained by DTC
on behalf of the relevant Agent
and the Trustee.
B-7
41
D. The Trustee will complete and
authenticate the Global Security
representing such Note.
E. DTC will credit such Note to the
Trustee's participant account at
DTC.
F. The Trustee will enter an SDFS
deliver order through DTC's
Participant Terminal System
instructing DTC to (i) debit such
Note to the Trustee's participant
account and credit such Note to the
relevant 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
(if any). The entry of such a
deliver order shall constitute a
representation and warranty by the
Trustee to DTC that (a) the Global
Security representing such
Book-Entry Note has been issued and
authenticated and (b) the Trustee is
holding such Global Security
pursuant to the MTN Certificate
Agreement.
G. Unless the relevant Agent is the
end purchaser of such Note, 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
an amount equal to the price of such
Note.
H. Transfers of funds in accordance
with SDFS deliver orders described
in Settlement Procedures
B-8
42
"F" and "G" will be settled in
accordance with SDFS operating
procedures in effect on the
settlement date.
I. The Trustee will credit to the
account of the Company maintained at
Key Bank National Association
Cleveland, Ohio, in immediately
available funds the amount
transferred to the Trustee in
accordance with Settlement Procedure
"F".
J. Unless the relevant Agent is the
end purchaser of such Note, such
Agent will confirm the purchase of
such Note to the purchaser either by
transmitting to the Participants
with respect to such Note a
confirmation order or orders through
DTC's institutional delivery system
or by mailing a written confirmation
to such purchaser.
K. Monthly, the Trustee will send to
the Company a statement setting
forth the principal amount of Notes
outstanding as of that date under
the Indenture and setting forth a
brief description of any sales of
which the Company has advised the
Trustee that have not yet been
settled.
Settlement For sales by the Company of Book-Entry Notes to or
Procedures through an Agent (unless otherwise specified pursuant
Timetable: to a Terms Agreement) for settlement on the first
Business Day after the sale date, Settlement
Procedures "A" through "J" set forth above shall be
completed as soon as possible but not later than the
respective times in New York City set forth below:
Settlement
Procedure Time
--------- ----
A 11:00 A.M. on sale date
B-9
43
B 12:00 Noon on sale date
C 2:00 P.M. on sale date
D 9:00 A.M. on settlement date
E 10:00 A.M. on settlement date
F-G 2:00 P.M. on settlement date
H 4:45 P.M. on settlement date
I-J 5:00 P.M. on settlement date
If a sale is to be settled more than a Business Day after the
sale date, Settlement Procedures "A", "B" and "C" shall be
completed as soon as practicable but no later than 11:00 A.M.,
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 first Business Day before the
settlement date. Settlement Procedure "H" is subject to
extension in accordance with any extension of Fedwire closing
deadlines and in the other events specified in the SDFS
operating procedures in effect on the settlement date.
If settlement of a Book-Entry Note is rescheduled or
cancelled, the Trustee, after receiving notice from the
Company or the relevant Agent, 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 If the Trustee fails to enter an SDFS deliver order with
to Settle: respect to a Book-Entry Note pursuant to Settlement Procedure
"F", 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, provided that the
B-10
44
▇▇▇▇▇▇▇'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 mark such
Global Security "cancelled," make appropriate entries in the
Trustee's records and send such cancelled Global Security to
the Company. The CUSIP number assigned to such Global Security
shall, in accordance with the procedures of the CUSIP Service
Bureau of Standard & Poor's Corporation, 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 such Global Security for two Global Securities, one
of which shall represent such Book-Entry Note or Notes and
shall be cancelled immediately after issuance and the other of
which shall represent the remaining Book-Entry Notes
previously represented by the surrendered Global Security and
shall bear the CUSIP number of the surrendered Global
Security.
If the purchase price for any Book-Entry Note is not timely
paid to the Participants with respect to such Note by the
beneficial purchaser thereof (or a person, including an
indirect participant in DTC, acting on behalf of such
purchaser), such Participants and, in turn, the relevant Agent
may enter SDFS deliver orders through DTC's Participant
Terminal System reversing the orders entered pursuant to
Settlement Procedures "F" and "G", respectively. Thereafter,
the Trustee will deliver the withdrawal message and take the
related actions described in the preceding paragraph.
Notwithstanding the foregoing, upon any failure to settle with
respect to a
B-11
45
Book-Entry Note, DTC may take any actions in accordance with
its SDFS operating procedures then in effect.
In the event of a failure to settle with respect to one or
more, but not all, of the Book-Entry Notes to have been
represented by a Global Security, the Trustee will provide, in
accordance with Settlement Procedures "D" and "F", for the
authentication and issuance of a Global Security representing
the Book-Entry Notes to be represented by such Global Security
and will make appropriate entries in its records.
B-12
46
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 an Original Issue Date, which will be (i) with
respect to an original Certificated Note (or any portion
thereof), its original issuance date (which will be the
settlement date) and (ii) with respect to any Certificated
Note (or portion thereof) issued subsequently upon transfer or
exchange of a Certificated Note or in lieu of a destroyed,
lost or stolen Certificated Note, the original issuance date
of the predecessor Certificated Note, regardless of the date
of authentication of such subsequently issued Certificated
Note.
Preparation If any offer to purchase a Certificated Note is accepted by or
of Pricing on behalf of the Company, the Company will prepare a Pricing
Supplement: Supplement reflecting the terms of such Note. The Company (i)
will arrange to file such Pricing Supplement with the
Commission in accordance with the applicable paragraph of Rule
424(b) under the Act and (ii) will, as soon as possible and in
any event not later than the date on which such Pricing
Supplement is filed with the Commission, deliver the number of
copies of such Pricing Supplement to the relevant Agent as
such Agent shall request.
In each instance that a Pricing Supplement is prepared, the
relevant Agent will affix the Pricing Supplement to
Prospectuses prior to their use. Outdated Pricing Supplements,
and the Prospectuses to which they are attached (other than
those retained for files), will be destroyed.
B-13
47
Settlement: The receipt by the Company of immediately available funds in
exchange for an authenticated Certificated Note delivered to
the relevant Agent and such Agent's delivery of such Note
against receipt of immediately available funds shall
constitute "settlement" with respect to such Note. All offers
accepted by the Company will be settled on the third Business
Day next succeeding the date of acceptance, unless the Company
accepts an offer to purchase Notes after 4:30 p.m. on such
date in which case settlement will occur on the fourth
Business Day next succeeding such date of acceptance, pursuant
to the timetable for settlement set forth below, unless the
Company and the purchaser agree to settlement on another date,
which date shall be no earlier than the next Business Day.
Settlement Settlement Procedures with regard to each Certificated Note
Procedures: sold by the Company to or through an Agent (unless otherwise
specified pursuant to a Terms Agreement) shall be as follows:
A. The relevant Agent will advise the Company by
telephone that such Note is a Certificated Note and
of the following settlement information:
1. Name in which such Note is to be
registered ("Registered Owner").
2. Address of the Registered Owner and
address for payment of principal and
interest.
3. Taxpayer identification number of the
Registered Owner (if available).
4. Principal amount.
5. Maturity Date.
B-14
48
6. In the case of a Fixed Rate Certificated
Note, the Interest Rate, whether such Note
will pay interest annually or semiannually
and whether such Note is an Amortizing Note
and, if so, the amortization schedule, or,
in the case of a Floating Rate Certificated
Note, the Initial Interest Rate (if known at
such time), Interest Payment Date(s),
Interest Payment Period, Calculation Agent,
Base Rate, Index Maturity, Interest Reset
Period, Initial Interest Reset Date,
Interest Reset Dates, Spread or Spread
Multiplier (if any), Minimum Interest Rate
(if any), Maximum Interest Rate (if any) and
the Alternate Rate Event Spread (if any).
7. Redemption or repayment provisions (if
any).
8. Settlement date and time (Original Issue
Date).
9. Interest Accrual Date.
10. Price.
11. Agent's commission (if any) determined
as provided in the Distribution Agreement.
12. Denominations.
13. Specified Currency.
14. Whether the Note is an OID Note, and if
it is an OID Note, the total amount of OID,
the yield to maturity, the initial accrual
period OID and the applicability of Modified
Payment upon Acceleration (and if so, the
Issue Price).
B-15
49
15. Whether the Note is an Indexed Note, and
if it is an Indexed Note, the Denominated
Currency, the Indexed Currency or
Currencies, the Payment Currency, the
Exchange Rate Agent, the Reference Dealers,
the Face Amount, the Fixed Amount of each
Indexed Currency, the Aggregate Fixed Amount
of each Indexed Currency and the Authorized
Denominations (if other than U.S. dollars).
16. Whether the Note is a Renewable Note,
and if it is a Renewable Note, the Initial
Maturity Date and the Final Maturity Date.
17. Whether the Company has the option to
extend the Original Maturity Date of the
Note, and, if so, the Final Maturity Date of
such Note.
18. Whether the Company has the option to
reset the Interest Rate, the Spread or the
Spread Multiplier of the Note.
19. Any other applicable terms.
B. The Company will advise the Trustee by telephone
or electronic transmission (confirmed in writing at
any time on the same date) of the information set
forth in Settlement Procedure "A" above.
C. The Company will have delivered to the Trustee a
pre-printed four-ply packet for such Note, which
packet will contain the following documents in forms
that have been approved by the Company, the relevant
Agent and the Trustee:
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1. Note with customer confirmation.
2. Stub One - For the Trustee.
3. Stub Two - For the relevant Agent.
4. Stub Three - For the Company.
D. The Trustee will complete such Note and
authenticate such Note and deliver it (with the
confirmation) and Stubs One and Two to the relevant
Agent, and such Agent will acknowledge receipt of the
Note by stamping or otherwise marking Stub One and
returning it to the Trustee. Such delivery will be
made only against such acknowledgment of receipt and
evidence that instructions have been given by such
Agent for payment to the account of the Company at
Key Bank National Association, Cleveland, Ohio, or to
such other account as the Company shall have
specified to such Agent and the Trustee, in
immediately available funds, of an amount equal to
the price of such Note less such Agent's commission
(if any). In the event that the instructions given by
such Agent for payment to the account of the Company
are revoked, the Company 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 made.
E. Unless the relevant Agent is the end purchaser of
such Note, such Agent will deliver such Note (with
confirmation) to the customer against payment in
immediately available funds. Such Agent will obtain
the acknowledgment of
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receipt of such Note by retaining Stub Two.
F. The Trustee will send Stub Three to the Company by
first-class mail. Monthly, the Trustee will also send
to the Company a statement setting forth the
principal amount of the Notes outstanding as of that
date under the Indenture and setting forth a brief
description of any sales of which the Company has
advised the Trustee that have not yet been settled.
Settlement For sales by the Company of Certificated Notes to or through
Procedures an Agent (unless otherwise specified pursuant to a Terms
Timetable: Agreement), Settlement Procedures "A" through "F" set forth
above shall be completed on or before the respective times in
New York City set forth below:
Settlement
Procedure Time
--------- ----
A 2:00 P.M. on day before settlement
date
B 3:00 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
Failure
to Settle: If a purchaser fails to accept delivery of and make payment
for any Certificated Note, the relevant Agent will notify the
Company and the Trustee by telephone and return such Note to
the Trustee. Upon receipt of such notice, the Company will
immediately wire transfer to the account of such Agent an
amount equal to the price of such Note less such Agent's
commission in respect of such Note (if any). Such wire
transfer will be made
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52
on the settlement date, if possible, and in any event not
later than the Business Day following the settlement date. If
the failure shall have occurred for any reason other than a
default by such Agent in the performance of its obligations
hereunder and under the Distribution Agreement, then the
Company will reimburse such Agent or the Trustee, as
appropriate, on an equitable basis for its loss of the use of
the funds during the period when they were credited to the
account of the Company. Immediately upon receipt of the
Certificated Note in respect of which such failure occurred,
the Trustee will mark such Note "cancelled," make appropriate
entries in the Trustee's records and send such Note to the
Company.
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