EXHIBIT 1.1
COMDISCO, INC.
Medium-Term Notes, Series H
DISTRIBUTION AGREEMENT
January 19, 1999
▇▇▇▇▇▇▇ ▇▇▇▇▇ & CO.
▇▇▇▇▇▇▇ LYNCH, PIERCE, ▇▇▇▇▇▇ & ▇▇▇▇▇ INCORPORATED
World Financial Center
North Tower
▇▇▇ ▇▇▇▇▇ ▇▇▇▇▇▇
▇▇▇ ▇▇▇▇, ▇▇▇ ▇▇▇▇ ▇▇▇▇▇-▇▇▇▇
NATIONSBANC ▇▇▇▇▇▇▇▇▇▇ SECURITIES LLC
▇▇▇▇ ▇▇▇▇▇ ▇▇▇▇▇
▇▇▇▇▇▇▇, ▇▇▇▇▇▇▇▇ ▇▇▇▇▇
▇▇▇▇▇▇▇ ▇▇▇▇▇ BARNEY INC.
▇▇▇▇ ▇▇▇▇▇ ▇▇▇▇▇
▇▇▇▇▇▇▇, ▇▇▇▇▇▇▇▇ ▇▇▇▇▇
WARBURG DILLON READ LLC
▇▇▇ ▇▇▇▇▇▇▇▇▇▇ ▇▇▇▇▇▇▇▇▇
▇▇▇▇▇▇▇▇, ▇▇▇▇▇▇▇▇▇▇▇ ▇▇▇▇▇
Ladies and Gentlemen:
Comdisco, Inc., a Delaware corporation (the "Company") confirms its
agreement with each of you (each an "Agent"; collectively, the "Agents") with
respect to the issue and sale by the Company of its Medium-Term Notes, Series H
(the "Notes"). The Notes are to be issued pursuant to an indenture (the
"Indenture") dated as of December 15, 1998, between the Company and The Fuji
Bank and Trust Company, as trustee (the "Trustee"). As of the date hereof, the
Company has authorized the issuance of up to $600,000,000 aggregate principal
amount of Notes, which may be distributed through the Agents pursuant to the
terms of this Agreement. It is understood, however, that the Company may from
time to time authorize the issuance of additional notes and that such notes may
be distributed through the Agents pursuant to the terms of this Agreement, or
through one or more other agents pursuant to the terms of a separate agreement,
all as though the issuance of such notes was authorized as of the date hereof.
The Notes will be represented by either a global security registered in the
name of a nominee of The Depository Trust Company (the "Depositary"), as
Depositary (a "Book-Entry Note"), or a certificate issued in definitive form (a
"Certificated Note"), as selected by the purchaser and agreed to by the Company
and specified in the applicable pricing supplement. Beneficial interests in
Book-Entry Notes will be shown on, and transfers thereof will be effected only
through, records maintained by the Depositary and its participants. Book-Entry
Notes will not be issuable in definitive form, except under the circumstances
described in the applicable prospectus supplement. The Notes shall be issued in
the currency or currency unit (the "Specified Currency") and shall have the
maturity ranges, annual interest rate (whether fixed or floating), redemption
provisions, repayment provisions and other terms set forth in the Prospectus
referred to below as it may be supplemented from time to time, including any
pricing supplement (the "Pricing Supplement").
Subject to the terms and conditions stated herein and subject to the
reservation by the Company of the right to sell Notes directly to investors on
its own behalf or through other agents, dealers or underwriters substantially on
the same terms and conditions provided herein (including, but not limited to the
commission schedule set forth as Exhibit B
hereto), the Company hereby (i) agrees that whenever the Company determines to
sell Notes directly to any of the Agents as principal for resale to others, it
will enter into a Terms Agreement (as hereinafter defined) relating to such sale
in accordance with the provisions of Section 2(a) hereof, and (ii) appoints the
Agents as its agents to solicit orders for, and to sell, all or part of the
Notes during a period beginning on the date hereof and ending when the Notes
have been sold, or such other time as the Company may specify to you in writing.
Each Agent will use all reasonable efforts to assist the Company in obtaining
performance by each purchaser whose offer to purchase Notes from the Company has
been solicited by such Agent as agent and accepted by the Company, but such
Agent shall not have any liability to the Company in the event any such purchase
is not consummated for any reason.
The Company has filed with the Securities and Exchange Commission (the
"Commission") a registration statement on Form S-3 (File No. 333-65535) relating
to the Notes and the offering thereof from time to time in accordance with Rule
415 under the Securities Act of 1933 (the "1933 Act"). Such registration
statement has been declared effective by the Commission, and the Indenture has
been qualified under the Trust Indenture Act of 1939 (the "1939 Act"). Such
registration statement (and any further registration statements which may be
filed by the Company for the purpose of registering additional notes and in
connection with which this Agreement is included or incorporated by reference as
an exhibit) and the prospectus filed pursuant to Rule 424 under the 1933 Act,
including all documents incorporated therein by reference, as from time to time
amended or supplemented by the filing of documents pursuant to the Securities
Exchange Act of 1934 (the "1934 Act"), the 1933 Act or otherwise, are referred
to herein as the "Registration Statement" and the "Prospectus", respectively,
except that if any revised prospectus shall be provided to the Agents by the
Company for use in connection with the offering of the Notes which differs from
the Prospectus on file at the Commission at the time the Registration Statement
became effective (whether or not such revised prospectus is required to be filed
by the Company pursuant to Rule 424(b) of the rules and regulations under the
1933 Act (the "1933 Act Regulations")), the term "Prospectus" shall refer to
such revised prospectus from and after the time it is first provided to the
Agents for such use. For purposes of this Agreement, all references to the
Registration Statement, Prospectus or any amendment or supplement to any of the
foregoing shall be deemed to include any copy filed with the Commission pursuant
to the Electronic Data Gathering, Analysis and Retrieval System ("▇▇▇▇▇").
SECTION 1. REPRESENTATIONS AND WARRANTIES.
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(a) The Company represents and warrants to each of the Agents as of the
date hereof (the "Closing Date"), as of the date of each acceptance by the
Company of an offer for the purchase of Notes whether through an Agent as agent
or to an Agent as principal, as of the date of each sale of Notes whether
through an Agent as agent or to an Agent as principal (each such sale to an
Agent as principal being referred to herein as a "Settlement Date"), and as of
the times referred to in Sections 6(a) and 6(b) hereof (each of the times
referenced above being referred to herein as a "Representation Date"), as
follows:
(i) Due Incorporation and Qualification. The Company has been duly
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incorporated and is validly existing as a corporation in good standing
under the laws of the State of Delaware with corporate power and authority
to own, lease and operate its properties and conduct its business as
described in the Prospectus; and the Company is duly qualified as a foreign
corporation to transact business and is in good standing in each
jurisdiction in which its ownership or lease of substantial properties or
the conduct of its business requires such qualification and in which the
failure to so qualify and be in good standing would materially adversely
affect the business or financial condition of the Company and its
subsidiaries considered as one enterprise.
(ii) Subsidiaries. No subsidiary of the Company is a "significant
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subsidiary" as defined in Rule 405 of Regulation C of the 1933 Act
Regulations.
(iii) Registration Statement and Prospectus. At the time the
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Registration Statement became effective, it complied, and as of the
applicable Representation Date will comply, in all material respects with
the requirements of the 1933 Act, the 1933 Act Regulations and the 1939
Act. The Registration Statement, at the time it became effective did not,
and as of the applicable Representation Date will not, contain an untrue
statement of a material fact or omit to state any material fact required to
be stated therein or necessary to make the statements therein not
misleading. The Prospectus, at the time the Registration Statement became
effective (unless the term "Prospectus" refers to a prospectus which has
been provided to the Agents by the Company for
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use in connection with the offering of the Notes which differs from the
Prospectus on file at the Commission at the time the Registration Statement
became effective, in which case at the time it is first provided to the
Agents for such use), did not, and as of the applicable Representation Date
will not, contain an untrue statement of a material fact or omit to state a
material fact necessary in order to make the statements therein, in the
light of the circumstances under which they were made, not misleading;
provided, however, that the representations and warranties in this
subsection shall not apply to statements in or omissions from the
Registration Statement or Prospectus made in reliance upon and in
conformity with information furnished to the Company in writing by the
Agents expressly for use in the Registration Statement or Prospectus or
that part of the Registration Statement which shall constitute the
Statement of Eligibility under the 1939 Act and the rules and regulations
of the Commission promulgated thereunder.
(iv) Incorporated Documents. The documents incorporated by reference
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in the Prospectus, at the time they were or hereafter are filed with the
Commission, complied and will comply in all material respects with the
requirements of the 1934 Act and the rules and regulations thereunder (the
"1934 Act Regulations"), and, when read together and with the other
information in the Prospectus, did not and will not contain an untrue
statement of a material fact or omit to state a material fact required to
be stated therein or necessary to make the statements therein, in the light
of the circumstances under which they were or are made, not misleading;
provided, however, that the representations and warranties in this
subsection shall not apply to statements and/or omissions from the
Prospectus made in reliance upon and in conformity with the information
furnished to the Company in writing by you expressly for use in the
Prospectus, as amended or supplemented.
(v) Accountants. To the best of the Company's knowledge, the
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accountants who certified the financial statements included or incorporated
by reference in the Prospectus are independent public accountants as
required by the 1933 Act and the 1933 Act Regulations.
(vi) Financial Statements. The consolidated financial statements of
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the Company and its subsidiaries included or incorporated by reference in
the Prospectus present fairly the financial position of the Company and its
subsidiaries as at the dates indicated and the results of their operations
for the periods specified; except as stated therein, said financial
statements have been prepared in conformity with generally accepted
accounting principles applied on a consistent basis throughout the period
or periods involved.
(vii) Material Changes or Material Transactions. Since the
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respective dates as of which information is given in the Registration
Statement and the Prospectus, except as otherwise stated therein or
contemplated thereby, (a) there has been no material adverse change in, or
any material development known to management which is likely to result in a
material adverse change in, the condition, financial or otherwise, of the
Company and its subsidiaries considered as one enterprise, or in the
earnings, business affairs or business prospects of the Company and its
subsidiaries considered as one enterprise, whether or not arising in the
ordinary course of business, and (b) there have been no transactions
considered material to the Company and its subsidiaries considered as one
enterprise entered into by the Company or any of its subsidiaries other
than those in the ordinary course of business.
(viii) No Defaults, Breaches, Liens; Regulatory Approvals. The
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Company is not in violation of its charter or in default in the performance
or observance of any material obligation, agreement, covenant or condition
contained in any contract, indenture, mortgage, loan agreement, note, lease
or other instrument to which it is a party or by which it or any of its
properties may be bound; and the execution and delivery of this Agreement,
the Indenture and each applicable Terms Agreement, if any, and the
consummation of the transactions contemplated herein and therein have been
duly authorized by all necessary corporate action and will not conflict
with or constitute a breach of, or default under, or result in the creation
or imposition of any lien, charge or encumbrance upon any property or
assets of the Company pursuant to any contract, indenture, mortgage, loan
agreement, note, lease or other instrument to which the Company is a party
or by which it may be bound or to which any of the property or assets of
the Company is subject, nor will such action result in any violation of the
provisions of the charter or by-laws of the Company or, to the best of its
knowledge, any law, administrative regulation or administrative or court
order or decree; and no consent, approval, authorization, order or decree
of any court or governmental agency or body is required for the
consummation by the Company
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of the transactions contemplated by this Agreement, except such as may be
required under the 1933 Act, the 1939 Act, the 1933 Act Regulations or
state securities or Blue Sky laws.
(ix) Legal Proceedings; Contracts. Except as may be set forth in the
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Prospectus, there is no action, suit or proceeding before or by any court
or governmental agency or body, domestic or foreign, now pending, with
respect to which the Company has been served, or, to the knowledge of the
Company, threatened against or affecting, the Company or any of its
subsidiaries, which might, in the opinion of the Company, result in any
material adverse change in the condition, financial or otherwise, of the
Company and its subsidiaries considered as one enterprise, or in the
earnings, business affairs or business prospects of the Company and its
subsidiaries considered as one enterprise, or might materially and
adversely affect the properties or assets thereof or might materially and
adversely affect the consummation of this Agreement or any Terms Agreement;
and there are no material contracts or documents of the Company or any of
its subsidiaries which are required to be filed as exhibits to the
Registration Statement by the 1933 Act or by the 1933 Act Regulations which
have not been so filed.
(x) Material Licenses and Other Authorizations. The Company owns or
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possesses or has obtained all governmental licenses, permits, consents,
orders, approvals and other authorizations necessary to lease or own, as
the case may be, and to operate its properties and to carry on its business
as presently conducted, except where the failure to possess any such
license, permits, consents, orders, approvals or authorizations would not
have a material adverse effect on the financial condition, or the earnings
or business of the Company.
(xi) Trademarks, Service Marks and Trade Names. The Company owns or
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possesses, or can acquire on reasonable terms, adequate trademarks, service
marks and trade names necessary to conduct the business now operated by it,
and the Company has not received any notice of infringement of or conflict
with asserted rights of others with respect to any trademarks, service
marks or trade names which, singly or in the aggregate, if the subject of
an unfavorable decision, ruling or finding, would materially adversely
affect the conduct of the business, operations, financial condition or
income of the Company and its subsidiaries considered as one enterprise.
(xii) Authorization and Validity of the Notes. The Notes have been
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duly authorized for issuance and sale pursuant to this Agreement and, when
issued, authenticated and delivered pursuant to the provisions of this
Agreement and of the Indenture against payment of the consideration
therefor specified herein or in any Terms Agreement, the Notes will
constitute valid and legally binding obligations of the Company enforceable
in accordance with their terms, except as enforcement thereof may be
limited by bankruptcy, insolvency, or other laws relating to or affecting
creditors' rights generally or by general equity principles, and will be
entitled to the benefits provided by the Indenture, which will be
substantially in the form heretofore delivered to the Agents; and the Notes
and the Indenture conform in all material respects to all statements
relating thereto contained in the Prospectus.
(xiii) Indenture. The Indenture has been duly authorized, executed
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and delivered by the Company and (assuming the Indenture has been duly
authorized, executed and delivered by the Trustee) constitutes a valid and
binding agreement of the Company, enforceable in accordance with its terms,
except as enforcement thereof may be limited by bankruptcy, insolvency, or
other laws relating to or affecting creditors' rights generally, or by
general equity principles.
(b) Additional Certifications. Any certificate signed by any officer of
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the Company and delivered to the Agents or to counsel for the Agents in
connection with an offering of Notes shall be deemed a representation and
warranty by the Company to the Agents as to the matters covered thereby.
SECTION 2. PURCHASES AS PRINCIPAL; SOLICITATIONS AS AGENT.
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(a) Purchases as Principal. Unless otherwise agreed by the Company and the
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applicable Agent, Notes shall be purchased by such Agent as principal. Such
purchase shall be made in accordance with the terms of this Agreement and a
separate agreement which will provide for the sale of such Notes to, and the
purchase and reoffering thereof by such
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Agent. Each such separate agreement (which may be an oral agreement and
confirmed in writing as described below between the Agent and the Company) is
herein referred to as a "Terms Agreement". Each such Terms Agreement, whether
oral (and confirmed in writing, which may be by facsimile transmission) or in
writing, shall be with respect to such information (as applicable) as is
specified in Exhibit A hereto. Unless otherwise agreed to between the Company
and the Agent in a Terms Agreement, any Note sold to an Agent (i) shall be
purchased by such Agent at a price equal to 100% of the principal amount thereof
less a percentage equal to the commission applicable to an agency sale of a Note
of identical maturity and (ii) may be resold by such Agent at varying prices
from time to time. In connection with any resale of Notes purchased, an Agent
may use a selling or dealer group and may reallow any portion of the discount or
commission payable pursuant hereto to dealers or other purchasers.
(b) Solicitations as Agent. On the basis of the representations and
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warranties herein contained, but subject to the terms and conditions herein set
forth, when agreed to by the Company and the applicable Agent, such Agent as an
agent of the Company, will use its reasonable efforts to solicit offers to
purchase the Notes upon the terms and conditions set forth in the Prospectus.
The Company reserves the right, in its sole discretion, to instruct the
Agents to suspend solicitation of purchases of the Notes commencing at any time
for any period of time or permanently. As soon as practicable, but in any event
not later than one business day after receipt of instructions from the Company,
the Agents will suspend solicitation of offers to purchase Notes from the
Company until such time as the Company has advised the Agents that such
solicitation may be resumed.
The Company agrees to pay each Agent, as consideration for soliciting the
sale of any Notes, a commission in the form of a discount equal to the
applicable percentage of the principal amount of each Note sold by the Company
as a result of a solicitation made by each respective Agent as set forth in
Exhibit B hereto. Except as provided in Section 2(a), without the prior
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approval of the Company, the Agent may not re-allow any portion of the
commission payable pursuant hereto to dealers or purchasers in connection with
the offer and sale of any Notes.
As agent, each Agent is authorized to solicit orders for the Notes at a
purchase price which shall be agreed upon by the Company and the Agents and set
forth in a supplement to the Prospectus and (except as may be otherwise provided
in an applicable supplement to the Prospectus) only in denominations of $1,000
or any integral multiple thereof. Each Agent shall communicate to the Company,
orally or in writing, each reasonable offer to purchase Notes received by it.
The Company shall have the sole right to accept offers to purchase the Notes and
may reject any such offer in whole or in part. Each Agent shall have the right
to reject, in its discretion reasonably exercised, any offer to purchase the
Notes in whole or in part, and any such rejection shall not be deemed a breach
of the Agent's agreements contained herein.
(c) Administrative Procedures. Administrative procedures respecting the
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sale of Notes shall be agreed upon from time to time in writing by the Agents
and the Company (the "Procedures"). The Agents and the Company agree to perform
the respective duties and obligations specifically provided to be performed by
the Agents herein and in the Procedures.
(d) Delivery of Documents. The documents required to be delivered by
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Section 5 hereof shall be delivered at the office of ▇▇▇▇▇ & Wood LLP, ▇▇▇ ▇▇▇▇▇
▇▇▇▇▇ ▇▇▇▇▇▇, ▇▇▇ ▇▇▇▇, ▇▇▇ ▇▇▇▇ ▇▇▇▇▇ on the date hereof or such other time as
the Agents and the Company may agree in writing.
Any Notes which are purchased by an Agent as principal shall be purchased,
and any Notes the placement of which an Agent arranges, shall be placed by such
Agent, in reliance on the representations and warranties of the Company herein
contained and on to the terms and conditions and in the manner provided herein.
SECTION 3. COVENANTS OF THE COMPANY.
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The Company covenants with each of the Agents as follows:
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(a) Notice of Certain Events. The Company will notify each of the Agents
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immediately (i) of the effectiveness of any amendment to the Registration
Statement (including any post-effective amendment), (ii) of the mailing or the
delivery to the Commission for filing of any supplement to the Prospectus or any
document to be filed pursuant to the 1934 Act which will be incorporated by
reference in the Prospectus, (iii) of the receipt of any comments from the
Commission with respect to the Registration Statement or the Prospectus, (iv) of
any request by the Commission for any amendment to the Registration Statement or
any amendment or supplement to the Prospectus or for additional information, (v)
of the issuance by the Commission of any stop order suspending the effectiveness
of the Registration Statement or the initiation of any proceedings for that
purpose and (vi) if the rating assigned by any nationally recognized securities
rating agency to any debt securities or other obligations of the Company has
been lowered since the date of the applicable Terms Agreement or if any such
rating agency shall have publicly announced that it has placed any debt
securities or other obligations of the Company on what is commonly termed a
"watch list" for possible downgrading. The Company will make every reasonable
effort to prevent the issuance of any stop order and, if any stop order is
issued, to obtain the lifting thereof at the earliest possible moment; provided,
however, that the Company shall have no such obligation during any period from
the time (i) the Agents shall have suspended solicitation of offers to purchase
Notes in their capacity as agents pursuant to a request from the Company and
(ii) the Agents shall not then hold any Notes as principal purchased pursuant to
a Terms Agreement (or, if the Agents hold Notes as principal purchased pursuant
to a Terms Agreement, the Agents have held such Notes for more than 90 days), to
the time the Company shall determine that solicitation of purchases of the Notes
should be resumed or shall subsequently enter into a new Terms Agreement with
the Agents.
(b) Notice of Certain Proposed Filings. The Company will give the Agents
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notice of its intention to file any additional registration statement with
respect to the registration of additional notes, any amendment to the
Registration Statement (including any post-effective amendment) or any amendment
or supplement to the Prospectus (including any revised prospectus which the
Company proposes for use by the Agents in connection with the offering of the
Notes which differs from the prospectus on file at the Commission at the time
the Registration Statement became effective, whether or not such revised
prospectus is required to be filed pursuant to Rule 424(b) of the 1933 Act
Regulations), whether by the filing of documents pursuant to the 1934 Act, the
1933 Act or otherwise, and will furnish the Agents with copies of any such
amendment or supplement or other documents proposed to be filed or used a
reasonable time in advance of such filing or use, and will not file any such
amendment or supplement or other documents in a form to which you or your
counsel shall reasonably object.
(c) Copies of Registration Statement, Prospectus. The Company will deliver
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to the Agents as many signed and conformed copies of the Registration Statement
(as originally filed) and of each amendment thereto (including exhibits filed
therewith or incorporated by reference therein and documents incorporated by
reference in the Prospectus) as the Agents may reasonably request. The Company
will furnish to the Agents as many copies of the Prospectus (as amended or
supplemented) as the Agents shall reasonably request so long as the Agents are
required to deliver a Prospectus in connection with sales or solicitations of
offers to purchase the Notes. Copies of the Registration Statement, each
amendment hereto, the Prospectus and any amendments or supplements thereto
furnished to the Agents will be identical to any electronically transmitted
copies thereof filed with the Commission pursuant to ▇▇▇▇▇, except to the extent
permitted by Regulation S-T of the 1933 Act Regulations.
(d) Revisions of Prospectus -- Material Changes. If at any time when the
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Prospectus is required by the 1933 Act to be delivered in connection with sales
of the Notes or an Agent holds any Notes as principal purchased pursuant to a
Terms Agreement any event shall occur or condition exist as a result of which it
is necessary, in the reasonable opinion of the Agents' counsel or counsel for
the Company, to further amend or supplement the Prospectus in order that the
Prospectus will not include an untrue statement of a material fact or omit to
state any material fact necessary in order to make the statements therein not
misleading in the light of the circumstances existing at the time it is
delivered to a purchaser, or if it shall be necessary, in the reasonable opinion
of either such counsel, at any such time to amend or supplement the Registration
Statement or the Prospectus in order to comply with the requirements of the 1933
Act or the 1933 Act Regulations, immediate notice shall be given, and confirmed
in writing, to the Agents to cease the solicitation of offers to purchase the
Notes in the Agents' capacity as agents and to cease sales of any Notes an Agent
may then own as principal, and the Company will promptly prepare and file with
the Commission such amendment or supplement, whether by filing documents
pursuant to the 1934 Act, the 1933 Act or otherwise, as may be necessary to
correct such untrue statement or omission or to make the Registration Statement
comply with such requirements.
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(e) Prospectus Revisions -- Periodic Financial Information. On or prior to
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the date on which there shall be released to the general public interim
financial statement information related to the Company with respect to each of
the first three quarters of any fiscal year or preliminary financial statement
information with respect to any fiscal year, the Company shall furnish such
information to the Agents, confirmed in writing, and shall cause the Prospectus
to be amended or supplemented to include or incorporate by reference capsule
financial information with respect thereto and corresponding information for the
comparable period of the preceding fiscal year, as well as such other
information and explanations as shall be necessary for an understanding thereof
or as shall be required by the 1933 Act or the 1933 Act Regulations; provided,
however, that if on the date of such release the Agents shall have suspended
solicitation of offers to purchase Notes in each Agent's capacity as agent
pursuant to a request from the Company, and shall not then hold any Notes as
principal purchased pursuant to a Terms Agreement, the Company shall not be
obligated so to amend or supplement the Prospectus until such time as the
Company shall determine that solicitation of offers to purchase Notes should be
resumed or shall subsequently enter into a Terms Agreement with an Agent.
(f) Prospectus Revisions -- Audited Financial Information. On or prior to
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the date on which there shall be released to the general public financial
information included in or derived from the audited financial statements of the
Company for the preceding fiscal year, the Company shall cause the Registration
Statement and the Prospectus to be amended, whether by the filing of documents
pursuant to the 1934 Act, the 1933 Act or otherwise, to include or incorporate
by reference such audited financial statements and the report or reports, and
consent or consents to such inclusion or incorporation by reference, of the
independent accountants with respect thereto, as well as such other information
and explanations as shall be necessary for an understanding of such financial
statements or as shall be required by the 1933 Act or the 1933 Act Regulations;
provided, however, that if on the date of such release the Agents shall have
suspended solicitation of offers to purchase Notes in each Agent's capacity as
agent pursuant to a request from the Company, and shall not then hold any Notes
as principal purchased pursuant to a Terms Agreement, the Company shall not be
obligated so to amend or supplement the Prospectus until such time as the
Company shall determine that solicitation of offers to purchase Notes should be
resumed or shall subsequently enter into a Terms Agreement with an Agent.
(g) Section 11(a) Earnings Statements. The Company will make generally
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available to its security holders as soon as practicable, but not later than 90
days after the close of the period covered thereby, earnings statements (in form
complying with the provisions of Rule 158 under the ▇▇▇▇ ▇▇▇) 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 such
Rule 158) of the Registration Statement with respect to each sale of Notes.
(h) Copies of Financial Reports. The Company will furnish to the Agents,
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at the earliest time the Company makes the same available to others, copies of
its annual reports and other financial reports furnished or made available to
the public generally.
(i) Blue Sky Qualifications. The Company will endeavor, in cooperation
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with the Agents, to qualify the Notes for offering and sale under the applicable
securities laws of such states and other jurisdictions of the United States as
the Agents may reasonably designate, and will maintain such qualifications in
effect for as long as may be required for the distribution of the Notes; the
Company will file such statements and reports as may be required by the laws of
each jurisdiction in which the Notes have been qualified as above provided;
provided, however, that the Company shall not be obligated to file any general
consent to service of process or to qualify as a foreign corporation in any
jurisdiction in which it is not so qualified or as a dealer in securities in any
jurisdiction in which it is not so qualified or to subject itself to taxation in
respect of doing business in any jurisdiction in which it is not otherwise so
subject or expend amounts in excess of $1,000 for filing fees in any one
jurisdiction.
(j) 1934 Act Filings. The Company, during the period when the Prospectus
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is required to be delivered under the 1933 Act, will file promptly all documents
required to be filed with the Commission pursuant to Sections 13(a), 13(c), 14
or 15(d) of the 1934 Act.
(k) Stand-Off Agreement. Between the date of any Terms Agreement and the
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Settlement Date with respect to such Terms Agreement, the Company will not,
without the prior consent of each Agent that is a party to said
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Terms Agreement, offer or sell or enter into any agreement to sell, any debt
securities of the Company (other than the Notes which are to be sold pursuant to
such Terms Agreement and commercial paper, tax-exempt securities or other
securities (which contain terms which are not substantially similar to the Notes
which are to be sold pursuant to such Terms Agreement) offered and sold by the
Company in the ordinary course of its business, including, but not limited to,
securities issued by the Company in connection with the non-recourse financing
of lease receivables), except as may otherwise be provided in any such Terms
Agreement.
SECTION 4. PAYMENT OF EXPENSES.
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The Company will pay all expenses incident to the performance of its
obligations under this Agreement, including:
(i) The preparation and filing of the Registration Statement and all
amendments thereto and the Prospectus and any amendments or supplements
thereto;
(ii) The preparation, issuance and delivery of the Notes;
(iii) The fees and disbursements of the Company's accountants and of the
Trustee and its counsel;
(iv) The reasonable fee and disbursements of the Agents' counsel;
(v) The qualification of the Notes under securities laws in accordance
with the provisions of Section 3(i), including filing fees and the
reasonable fees and disbursements of the Agents' counsel in connection
therewith and in connection with the preparation of any Blue Sky Survey and
any Legal Investment Survey;
(vi) The printing and delivery to the Agents in quantities as
hereinabove stated of copies of the Registration Statement and any
amendments thereto, and of the Prospectus and any amendments or supplements
thereto, and the delivery by the Agents of the Prospectus and any
amendments or supplements thereto in connection with solicitations or
confirmations of sales of the Notes;
(vii) The printing and delivery to the Agents of copies of the Indenture
and any Blue Sky Survey and any Legal Investment Survey;
(viii) Any fees charged by rating agencies for the rating of the Notes;
(ix) The fees and expenses, if any, incurred with respect to any filing
with the National Association of Securities Dealers, Inc.; and
(x) Any advertising and other out-of-pocket expenses incurred with the
approval of the Company.
SECTION 5. CONDITIONS OF OBLIGATIONS.
-------------------------
Each Agent's obligations to purchase the Notes as principal and to solicit
offers to purchase the Notes as agent of the Company and the obligation of any
purchaser of Notes sold through an Agent as agent, will be subject at all times
to the accuracy of the representations and warranties on the part of the Company
herein and to the accuracy of the statements of the Company's officers made in
any certificate furnished pursuant to the provisions hereof, to the performance
and observance by the Company of all covenants and agreements herein contained
on its part to be performed and observed and to the following additional
conditions precedent:
(a) Legal Opinions. At the Closing Date and at each Settlement Date with
--------------
respect to any applicable Terms Agreement, if called for by such Terms
Agreement, each Agent shall have received the following documents:
8
(1) Opinion of Company Counsel. The opinion of ▇▇▇▇▇▇ ▇. ▇▇▇▇▇,
--------------------------
Esq., Senior Vice President/Legal of the Company, or ▇▇▇▇▇▇▇▇ ▇.
▇▇▇▇▇▇▇▇▇▇, Esq., Vice President and General Counsel of the Company dated
as of such Closing Date or Settlement Date, in form and substance
satisfactory to the Agents and the Agents' counsel, to the effect that:
(i) The Company has been duly incorporated and is validly
existing as a corporation in good standing under the laws of the State
of Delaware.
(ii) The Company has corporate power and authority to own, lease
and operate its properties and conduct its business as described in
the Prospectus.
(iii) To the best of such counsel's knowledge, the Company is duly
qualified as a foreign corporation to transact business and is in good
standing in each jurisdiction in which its ownership or lease of
substantial properties or the conduct of its business requires such
qualification and in which failure of the Company to be so qualified
and in good standing would have a material adverse effect upon the
Company and its subsidiaries considered as a single enterprise.
(iv) This Agreement (and, if the opinion is being given pursuant
to Section 6(c) hereof as a result of the Company having entered into
a Terms Agreement requiring such opinion, the applicable Terms
Agreement) has been duly authorized, executed and delivered by the
Company.
(v) The Indenture has been duly authorized, executed and
delivered by the Company and (assuming the Indenture has been duly
authorized, executed and delivered by the Trustee) constitutes a valid
and binding agreement of the Company, enforceable in accordance with
its terms, except as enforcement thereof may be limited by bankruptcy,
insolvency, or other laws relating to or affecting creditors' rights
generally, or by general equity principles.
(vi) The Notes are in the form contemplated by the Indenture, have
been duly authorized by all necessary corporate action and, when
executed and authenticated as specified in the Indenture and delivered
against payment of the consideration therefor in accordance with this
Agreement, as supplemented by the applicable Terms Agreement, if any,
will be valid and binding obligations of the Company, enforceable in
accordance with their terms, except as enforcement thereof may be
limited by bankruptcy, insolvency, or other laws relating to or
affecting creditors' rights generally, or by general equity
principles, and each holder of Notes will be entitled to the benefits
of the Indenture.
(vii) The statements in the Prospectus under the caption
"Description of Debt Securities" and in the Prospectus Supplement
under the caption "Description of Notes", insofar as they purport to
summarize certain provisions of documents specifically referred to
therein, are accurate summaries of such provisions.
(viii) The Indenture is qualified under the 1939 Act.
(ix) The Registration Statement is effective under the 1933 Act
and, to the best of such counsel's knowledge, no stop order suspending
the effectiveness of the Registration Statement has been issued under
the 1933 Act or proceedings therefor initiated or threatened by the
Commission.
(x) At the time the Registration Statement became effective, the
Registration Statement (other than the financial statements included
or incorporated by reference therein, as to which no opinion need be
rendered) appeared on its face to comply as to form in all material
respects with the requirements of the 1933 Act, the 1939 Act and the
regulations under each of those Acts.
(xi) To the best of such counsel's knowledge, there are no legal
or governmental proceedings pending or threatened which are required
to be disclosed in the Registration Statement, other than those
disclosed therein, and all pending legal or governmental proceedings
to which the Company or
9
any subsidiary is a party or of which any of their property is the
subject which are not described in the Prospectus, including ordinary
routine litigation incidental to the business, are, considered in the
aggregate, not material.
(xii) To the best of such counsel's knowledge and information,
there are no contracts, indentures, mortgages, loan agreements, notes,
leases or other instruments required to be described or referred to in
the Registration Statement or to be filed as exhibits thereto other
than those described or referred to therein or filed or incorporated
by reference as exhibits thereto, the descriptions thereof or
references thereto are correct, and, except for certain minor matters
which, either individually or in the aggregate, will not or do not
have a material adverse effect on the Company or its business, no
default exists in the due performance or observance of any material
obligation, agreement, covenant or condition contained in any
contract, indenture, loan agreement, note, lease or other instrument
so described, referred to, filed or incorporated by reference.
(xiii) No consent, approval, authorization, or order of any court or
governmental authority or agency is required in connection with the
sale of the Notes, except such as may be required under the 1933 Act,
the 1939 Act, the 1933 Act Regulations, or state securities laws; and,
to the best of such counsel's knowledge, the execution and delivery of
this Agreement (and, if the opinion is being given pursuant to Section
6(c) hereof on account of the Company having entered into a Terms
Agreement, the applicable Terms Agreement) and the Indenture and the
consummation of the transactions contemplated herein and therein will
not conflict with or constitute a breach of, or default under, or
result in the creation or imposition of any lien, charge or
encumbrance upon any property or assets of the Company pursuant to,
any contract, indenture, mortgage, loan agreement, note, lease or
other instrument known to such counsel and to which the Company is a
party or by which it may be bound or to which any of the property or
assets of the Company is subject, or any law, administrative
regulation or administrative or court decree, known to such counsel to
be applicable to the Company, of any court or governmental agency,
authority or body or any arbitrator having jurisdiction over the
Company, except that such counsel need express no opinion as to any
state securities or Blue Sky laws, or any rules or regulations
thereunder; nor will such action result in any violation of the
provisions of the charter or bylaws of the Company.
(xiv) Each document filed pursuant to the 1934 Act and incorporated
by reference in the Prospectus (except for the financial statements
included therein or omitted therefrom, as to which counsel need not
comment), appeared on its face to comply when filed as to form in all
material respects with the 1934 Act and the rules and regulations
promulgated thereunder.
In rendering such opinion, such counsel may rely (A) as to matters
involving the application of laws of the State of New York, to the extent
deemed proper and specified in such opinion, upon the opinion of ▇▇▇▇▇ &
Wood LLP, counsel for the Agents, delivered pursuant to subsection (a)(2)
hereof and (B) as to matters of fact, to the extent deemed proper, on
certificates of responsible officers of the Company and public officials.
(2) Opinion of Counsel to the Agents. The opinion of ▇▇▇▇▇ & ▇▇▇▇
--------------------------------
LLP, counsel to the Agents, dated as of such Closing Date or Settlement
Date, covering the matters referred to in subparagraph (1) under the
subheadings (i) and (iv) to (x), inclusive.
(3) In giving their opinions required by subsection (a)(1) and (a)(2)
of this Section, ▇▇. ▇▇▇▇▇ or ▇▇. ▇▇▇▇▇▇▇▇▇▇ and ▇▇▇▇▇ & ▇▇▇▇ LLP shall
each additionally state that nothing has come to their attention that would
lead them to believe that the Registration Statement (except for the
financial statements and other financial or statistical data included
therein or omitted therefrom, as to which counsel need not comment), at the
time it became effective, or if an amendment to the Registration Statement
or an Annual Report on Form 10-K has been filed by the Company with the
Commission subsequent to the effectiveness of the Registration Statement,
then at the time of the most recent such amendment or filing, contained an
untrue statement of a material fact or omitted to state a material fact
required to be stated therein or necessary to make the statements therein
not misleading or that the Prospectus, as amended or supplemented at the
Closing Date, the Settlement
10
Date or the date of such opinion, as the case may be, contains an untrue
statement of a material fact or omits to state a material fact necessary in
order to make the statements therein, in the light of the circumstances
under which they were made, not misleading.
(b) Officer's Certificate. At the Closing Date and at each Settlement Date
---------------------
with respect to any Terms Agreement, there shall not have been, since the
respective dates as of which information is given in the Registration Statement
and the Prospectus or since the date of such Terms Agreement, any material
adverse change in, or any material development known to management which is
likely to result in a material adverse change in, the condition, financial or
otherwise, of the Company and its subsidiaries considered as one enterprise, or
the earnings, business affairs or business prospects of the Company and its
subsidiaries considered as one enterprise, whether or not arising in the
ordinary course of business; and the Agents shall have received a certificate of
the Chief Executive Officer or the President and the Chief Financial Officer of
the Company at the Closing Date and, if called for by the applicable Terms
Agreement, at each Settlement Date, dated as of the Closing Date or such
Settlement Date, to the effect that (i) there has been no such material adverse
change or material development known to management which is likely to result in
a material adverse change, (ii) the other representations and warranties of the
Company contained in Section 1 are true and correct with the same force and
effect as though expressly made at and as of the date of such certificate, (iii)
the Company has complied with all agreements and satisfied all conditions on its
part to be performed or satisfied at or prior to the date of such certificate,
and (iv) no stop order suspending the effectiveness of the Registration
Statement has been issued and no proceedings for that purpose have been
initiated or threatened by the Commission.
(c) Comfort Letter.The Agents shall have received on the date hereof, a
--------------
letter from KPMG Peat Marwick LLP, dated as of the date hereof, in form and
substance satisfactory to the Agents, to the effect that:
(i) They are independent public accountants with respect to the Company
and its subsidiaries within the meaning of the 1933 Act and the 1933 Act
Regulations.
(ii) In their opinion, the consolidated financial statements and
supporting schedule(s) audited by them and incorporated by reference in the
Registration Statement comply as to form in all material respects with the
applicable accounting requirements of the 1933 Act and the 1933 Act
Regulations with respect to registration statements on Form S-3 and the
1934 Act and the 1934 Act Regulations.
(iii) Based upon limited procedures set forth in detail in such letter
(which shall include, without limitation, the procedures specified by the
American Institute of Certified Public Accountants for a review of interim
financial information as described in SAS No. 71, Interim Financial
Information, with respect to the unaudited consolidated financial
statements of the Company and its subsidiaries included in the Registration
Statement), nothing has come to their attention which causes them to
believe that:
(A) any material modifications should be made to the unaudited
consolidated financial statements included in the Registration
Statement for them to be in conformity with generally accepted
accounting principles; or
(B) the unaudited consolidated financial statements included in
the Registration Statement do not comply as to form in all material
respects with the applicable accounting requirements of the 1933 Act,
the 1933 Act Regulations, the 1934 Act and the 1934 Act Regulations;
or
(C) at a specified date not more than five days prior to the
date of such letter, there was any change in the capital stock or any
increase in the long-term debt of the Company and its subsidiaries
consolidated or any decrease in consolidated net assets, in each case
as compared with amounts shown in the most recent consolidated balance
sheet incorporated by reference in the Registration Statement, except
in each case for changes, increases or decreases which the
Registration Statement and the Prospectus disclose have occurred or
may occur; or
11
(D) for the period from the date of the most recent financial
statements incorporated by reference in the Registration Statement to
a specified date not more than five days prior to the date of such
letter, there were any decreases, as compared with the corresponding
period in the preceding year, in consolidated revenues or net
earnings, except in each case for increases or decreases which the
Registration Statement and the Prospectus disclose have occurred or
may occur.
(iv) In addition to the examination referred to in their report
incorporated by reference in the Registration Statement and the Prospectus,
they have carried out certain other specified procedures, not constituting
an audit, with respect to certain amounts, percentages and financial
information which are included in the Registration Statement and the
Prospectus and which are specified by the Agents, and have found such
amounts, percentages and financial information to be in agreement with the
relevant accounting, financial and other records of the Company and its
subsidiaries identified in such letter.
(d) Other Documents. At the date hereof, at the Closing Date and at each
---------------
Settlement Date with respect to any applicable Terms Agreement, counsel to the
Agents shall have been furnished with such documents and opinions as such
counsel may reasonably require for the purpose of enabling such counsel to pass
upon the issuance and sale of Notes as herein contemplated and related
proceedings, or in order to evidence the accuracy and completeness of any of the
representations and warranties, or the fulfillment of any of the conditions,
herein contained; and all proceedings taken by the Company in connection with
the issuance and sale of Notes as herein contemplated shall be satisfactory in
form and substance to the Agents and to the Agents' counsel.
(e) Further Conditions. The obligations of each of the Agents to purchase
------------------
Notes pursuant to any Terms Agreement will be subject to the following further
conditions: (i) the rating assigned by any nationally recognized securities
rating agency to any debt securities or other obligations of the Company as of
the date of the applicable Terms Agreement shall not have been lowered since
that date nor shall any such rating agency have publicly announced that it has
placed any obligations of the Company on what is commonly termed a "watch list"
for possible downgrading, and (ii) there shall not have come to such Agent's
attention any facts that would cause such Agent to believe that the Prospectus,
at the time it was required to be delivered to a purchaser of Notes, contained
an untrue statement of a material fact or omitted to state a material fact
necessary in order to make the statements therein, in the light of the
circumstances existing at such time, not misleading.
If any condition specified in this Section shall not have been fulfilled,
this Agreement and any Terms Agreement may be terminated by the Agents by notice
to the Company at any time at or prior to the Closing Date or the applicable
Settlement Date, and such termination shall be without liability of any party to
any other party, except that the covenants set forth in Section 3(g) hereof, the
provisions of Section 4 hereof, the indemnity and contribution agreements set
forth in Sections 7 and 8 hereof, and the provisions of Sections 9 and 13 hereof
shall remain in effect.
SECTION 6. ADDITIONAL COVENANTS OF THE COMPANY.
-----------------------------------
The Company covenants and agrees that:
(a) Reaffirmation of Representations and Warranties. Each acceptance by it
-----------------------------------------------
of an offer for the purchase of Notes, and each sale of Notes to the Agents
pursuant to a Terms Agreement, shall be deemed to be an affirmation that the
representations and warranties of the Company contained in this Agreement and in
any certificate theretofore delivered to the Agents pursuant hereto are true and
correct at the time of such acceptance or sale, as the case may be, and an
undertaking that such representations and warranties will be true and correct at
the time of delivery to the purchaser or his agent, or to the Agents, of the
Notes or Notes relating to such acceptance or sale, as the case may be, as
though made at and as of each such time (and it is understood that such
representations and warranties shall relate to the Registration Statement and
the Prospectus as amended and supplemented to each such time);
(b) Subsequent Delivery of Certificates. Each time that the Registration
-----------------------------------
Statement or the Prospectus shall be amended or supplemented (other than by an
amendment or supplement providing solely for a change in the interest rates of
Notes or a change in the principal amount of Notes remaining to be sold or
similar changes) or there is filed with the Commission any document incorporated
by reference into the Prospectus or, if so indicated in the applicable Terms
12
Agreement, the Company sells Notes to the Agents pursuant to a Terms Agreement,
the Company shall furnish or cause to be furnished to the Agents forthwith a
certificate in form satisfactory to the Agents to the effect that the statements
contained in the certificates referred to in Section 5(b) hereof which were last
furnished to the Agents are true and correct at the time of such amendment or
supplement or filing or sale, as the case may be, as though made at and as of
such time (except that such statements shall be deemed to relate to the
Registration Statement and the Prospectus as amended and supplemented to such
time) or, in lieu of such certificate, certificates of the same tenor as the
certificates referred to in said Section 5(b), modified as necessary to relate
to the Registration Statement and the Prospectus as amended and supplemented to
the time of delivery of such certificates;
(c) Subsequent Delivery of Legal Opinions. Each time that the Registration
-------------------------------------
Statement or the Prospectus shall be amended or supplemented (other than by an
amendment or supplement providing solely for a change in the interest rates of
the Notes or a change in the principal amount of Notes remaining to be sold or
similar changes) or there is filed with the Commission any document incorporated
by reference into the Prospectus (other than any Current Report on Form 8-K) or,
if so indicated in the applicable Terms Agreement, the Company sells Notes to
the Agents pursuant to a Terms Agreement, the Company shall furnish or cause to
be furnished forthwith to the Agents and to the Agents' counsel a written
opinion of ▇▇▇▇▇▇ ▇. ▇▇▇▇▇, Esq., Senior Vice President/Legal of the Company or
▇▇▇▇▇▇▇▇ ▇. ▇▇▇▇▇▇▇▇▇▇, Esq., Vice President and General Counsel of the Company,
or other counsel satisfactory to the Agents, dated the date of delivery of such
opinion, in form satisfactory to the Agents, of the same tenor as the opinion
referred to in Section 5(a) hereof but modified, as necessary, to relate to the
Registration Statement and the Prospectus as amended and supplemented to the
time of delivery of such opinion or, in lieu of such opinion, counsel last
furnishing such opinion to the Agents shall furnish the Agents with a letter to
the effect that the Agents may rely on such last opinion to the same extent as
though it was dated the date of such letter authorizing reliance (except that
statements in such last opinion shall be deemed to relate to the Registration
Statement and the Prospectus as amended and supplemented to the time of delivery
of such letter authorizing reliance); and
(d) Subsequent Delivery of Comfort Letters. Prior to the initial sale of
--------------------------------------
any of the Notes within any fiscal quarter, the Company shall cause KPMG Peat
Marwick LLP to furnish the Agents a letter, dated the date of such initial sale,
or the date of the filing of an amendment, supplement or document including or
incorporating by reference additional financial information in the Registration
Statement or the Prospectus; such letter shall be in form satisfactory to the
Agents, of the same tenor as the portions of the letter referred to in clauses
(i) and (ii) of Section 5(c) hereof but modified to relate to the Registration
Statement and Prospectus, as amended and supplemented to the date of such
letter, and of the same general tenor as the portions of the letter referred to
in clauses (iii) and (iv) of said Section 5(c) with such changes as may be
necessary to reflect changes in the financial statements and other information
derived from the accounting records of the Company; provided, however, that if
the Registration Statement or the Prospectus is amended or supplemented solely
to include financial information as of and for a fiscal quarter, KPMG Peat
Marwick LLP may limit the scope of such letter to the unaudited financial
statements included in such amendment or supplement unless any other information
included therein of an accounting, financial, or statistical nature is of such a
nature that, in the Agents' reasonable judgment, such letter should cover such
other information.
SECTION 7. INDEMNIFICATION.
---------------
(a) Indemnification of the Agents. The Company agrees to indemnify and
-----------------------------
hold harmless each of the Agents and each person, if any, who controls any Agent
within the meaning of Section 15 of the 1933 Act or Section 20 of the 1934 Act
as follows:
(i) against any and all loss, liability, claim, damage and expense
whatsoever, as incurred, arising out of any untrue statement or alleged
untrue statement of a material fact contained in the Registration
Statement, as originally filed (or any amendment thereto), or the omission
or alleged omission therefrom of a material fact required to be stated
therein or necessary to make the statements therein not misleading or
arising out of any untrue statement or alleged untrue statement of a
material fact contained in the Prospectus (if used within the period set
forth in Section 3(e) hereof and as amended or supplemented if the Company
shall have furnished any amendments or supplements thereto), or the
omission or alleged omission therefrom of a material fact necessary in
order to make the statements therein, in the light of the circumstances
under which they were made, not misleading; provided, however, that the
Company will not be liable in any such case to the extent that any such
13
loss, claim, damage, liability or expense arises out of or is based upon
any untrue statement or omission or such alleged untrue statement or
omission (A) which has been made therein or omitted therefrom in reliance
upon and in conformity with written information furnished to the Company by
any Agent expressly for use in the registration statement as originally
filed (or any amendment thereto) or the prospectus as originally filed (or
any amendment or supplement thereto) or (B) which has been made or omitted
from the Statement of Eligibility of the Trustee on Form T-1, other than
any such untrue statement or omission or alleged untrue statement or
omission made therein or omitted therefrom in reliance upon information
furnished in writing to the Trustee by the Company for use therein; the
foregoing indemnification with respect to any preliminary prospectus shall
not inure to the benefit of any Agent from whom the person asserting any
such losses, claims, damages or liabilities purchased Notes, or any person
controlling such Agent, if a copy of the Prospectus (as then amended or
supplemented if the Company shall have furnished any amendments or
supplements thereto) was not sent or given by or on behalf of such Agent to
such person, if such delivery is required by law, at or prior to the
written confirmation of the sale of such Notes to such person and if the
Prospectus (as so amended or supplemented) would have cured the defect
giving rise to such loss, claim, damage or liability;
(ii) against any and all loss, liability, claim, damage and expense
whatsoever, as incurred, to the extent of the aggregate amount paid in
settlement of any litigation, or investigation or proceeding by any
governmental agency or body, commenced or threatened, or of any claim
whatsoever based upon any such untrue statement or omission, or any such
alleged untrue statement or omission if such settlement is effected with
the written consent of the Company; and
(iii) against any and all expense whatsoever, as incurred (including the
fees and disbursements of counsel chosen by the Agents), reasonably
incurred in investigating, preparing or defending against any litigation,
or investigation or proceeding by any governmental agency or body,
commenced or threatened, or any claim whatsoever based upon any such untrue
statement or omission, or any such alleged untrue statement or omission
(except as made in reliance upon and in conformity with information
furnished by the Agents as aforesaid), to the extent that any such expense
is not paid under (i) or (ii) above.
Insofar as this indemnity may permit indemnification for liabilities under
the 1933 Act of any person who is a partner of an Agent or who controls an Agent
within the meaning of Section 15 of the 1933 Act or Section 20 of the 1934 Act
and who, at the date of this Agreement, is a director, officer or controlling
person of the Company, such indemnity agreement is subject to the undertaking of
the Company in the Registration Statement.
(b) Indemnification of Company. Each Agent severally agrees to indemnify
--------------------------
and hold the Company, its directors, each of its officers who signed the
Registration Statement as originally filed (or any amendment thereto), and each
person, if any, who controls the Company within the meaning of Section 15 of the
1933 Act or Section 20 of the 1934 Act, harmless from and against any and all
loss, liability, claim, damage and expense to the same extent described in the
indemnity contained in subsection (a) of this Section, as incurred, but only
with respect to untrue statements or omissions, or alleged untrue statements or
omissions, made in or omitted from the Registration Statement (or any amendment
thereto) or the Prospectus (or any amendment or supplement thereto) in reliance
upon and in conformity with written information furnished to the Company by the
Agents expressly for use in the Registration Statement (or any amendment
thereto) or the Prospectus (or any amendment or supplement thereto).
(c) Tax Indemnity. The Company agrees to indemnify and hold harmless each
-------------
Agent against any documentary stamp or similar issue tax and any related
interest or penalties on the issue or sale of the Notes to the Agents which are
due in the United States of America, the United Kingdom or any other
jurisdiction.
(d) General. Promptly after receipt by an indemnified party under
-------
subsection (a) or (b) above of written notice of the commencement of any action
such indemnified party shall, if a claim in respect thereof is to be made
against the indemnifying party under such subsection, notify the indemnifying
party in writing of the commencement thereof, and in the event that such
indemnified party shall not so notify the indemnifying party within 30 days
following receipt of any such notice by such indemnified party, the indemnifying
party shall have no further liability under such subdivision to such indemnified
party unless such indemnifying party shall have received other notice addressed
and delivered in the manner provided in Section 11 hereof of the commencement of
such action; but the omission so to notify the indemnifying
14
party shall not relieve it from any liability which it may have to any
indemnified party otherwise than under such subsection. Any indemnified party or
any such controlling person shall have the right to employ separate counsel in
any such action and participate in the defense thereof, but the fees and
expenses of such counsel shall be at the expense of such indemnified party
unless (i) the employment of such counsel has been specifically authorized in
writing by the indemnifying party, (ii) the indemnifying party has failed to
assume the defense and employ counsel or (iii) the named parties to any such
action (including any impleaded parties) include both such indemnified party and
the indemnifying party and such indemnified party has been advised by such
counsel that there may be one or more legal defenses available to it which are
different from or additional to those available to the indemnifying party (in
which case the indemnifying party shall not have the right to assume the defense
of such action on behalf of such indemnified party, it being understood,
however, that the indemnifying party shall not, in connection with any one such
action or separate but substantially similar or related action in the same
jurisdiction arising out of the same general allegations or circumstances, be
liable for the reasonable fees and expenses of more than one separate firm of
attorneys (in addition to local counsel) for all such indemnified parties, which
firm shall be designated in writing by you).
SECTION 8. CONTRIBUTION.
------------
If the indemnification provided for in Section 7 is unavailable to or
insufficient to hold harmless an indemnified party in respect of any losses,
claims, damages or liabilities (or actions in respect thereof) referred to
therein, then each indemnifying party shall contribute to the amount paid or
payable by such indemnified party as a result of such losses, claims, damages or
liabilities (or actions in respect thereof) in such proportion as is appropriate
to reflect the relative benefits received by the Company on the one hand and the
contributing Agent on the other from the offering of the Notes to which such
loss, claim, damage or liability (or action in respect thereof) relates. If,
however, the indemnification provided for in Section 7 is unavailable to or
insufficient to hold harmless an indemnified party in respect of any losses,
claims, damages or liabilities (or actions in respect thereof) referred to
therein, if the allocation provided by the immediately preceding sentence is not
permitted by applicable law or if the indemnified party failed to give the
notice required under Section 7(d) above, then each indemnifying party shall
contribute to such amount paid or payable by such indemnified party in such
proportion as is appropriate to reflect not only such relative benefits but also
the relative fault of the Company on the one hand and the contributing Agent on
the other in connection with the statements or omissions which resulted in such
losses, claims, damages or liabilities (or actions in respect thereof), as well
as any other relevant equitable considerations. The relative benefits received
by the Company on the one hand and the contributing Agent on the other shall be
deemed to be in the same proportion as the total net proceeds from the sale of
Notes (before deducting expenses) received by the Company bear to the total
commissions or discounts received by the contributing Agent in respect thereof
(or, in the case of Notes sold pursuant to a Terms Agreement, the aggregate
commissions that would have been received by such Agent if such commissions had
been payable). The relative fault shall be determined by reference to, among
other things, whether the untrue or alleged untrue statement of a material fact
or the omission or alleged omission to state a material fact required to be
stated therein or necessary in order to make the statements therein not
misleading relates to information supplied by the Company on the one hand or by
the contributing Agent on the other and the parties' relative intent, knowledge,
access to information and opportunity to correct or prevent such statement or
omission. The Company and the contributing Agent agree that it would not be
just and equitable if contribution pursuant to this Section 8 were determined by
pro rata allocation or by any other method of allocation which does not take
account of the equitable considerations referred to above in this Section 8.
The amount paid or payable by an indemnified party as a result of the losses,
claims, damages or liabilities (or actions in respect thereof) referred to above
in this Section 8 shall be deemed to include 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 8, no Agent shall be required to contribute any amount in excess of the
amount by which the total price at which the Notes purchased by or through such
Agent were sold exceeds the amount of any damages which such Agent has otherwise
been required to pay by reason of such untrue or alleged untrue statement or
omission or alleged omission. No person guilty of fraudulent misrepresentation
(within the meaning of Section 11(f) of the ▇▇▇▇ ▇▇▇) shall be entitled to
contribution from any person who is not guilty of such fraudulent
misrepresentation. For purposes of this Section, each person, if any, who
controls an Agent within the meaning of Section 15 of the 1933 Act or Section 20
of the 1934 Act shall have the same rights to contribution as such Agent, and
each director of the Company, each officer of the Company who signed the
Registration Statement, and each person, if any, who controls the Company within
the meaning of Section 15 of the 1933 Act or Section 20 of the 1934 Act shall
have the same rights to contribution as the Company. Any amounts to be paid a
party pursuant to this Section 8 for losses, claims, damages or liabilities (or
actions in respect thereof) referred to above in this
15
Section 8 shall be paid as incurred; provided, however, that amounts so paid
shall be returned to the paying party in the event that it is ultimately
determined that the party that received payment was not entitled to such
payment.
SECTION 9. INDEMNIFICATIONS, CONTRIBUTIONS, REPRESENTATIONS, WARRANTIES AND
----------------------------------------------------------------
AGREEMENTS TO SURVIVE DELIVERY.
------------------------------
The indemnification and contribution agreements contained in Sections 7 and
8 and the representations, warranties and agreements contained in this Agreement
or any Terms Agreement, or contained in certificates of officers of the Company
submitted pursuant hereto, shall remain operative and in full force and effect,
regardless of any investigation made by or on behalf of the Agents or any
controlling person, or by or on behalf of the Company, and shall survive each
delivery of and payment of any of the Notes.
SECTION 10. TERMINATION.
-----------
(a) Termination of this Agreement. This Agreement (excluding any Terms
-----------------------------
Agreement) may be terminated for any reason, at any time by either the Company
as to any Agent or one of the Agents (with respect to such Agent), upon the
giving of 3 days written notice of such termination to the other parties hereto.
(b) Termination of a Terms Agreement. Each Agent named in a Terms
--------------------------------
Agreement may terminate such Terms Agreement, immediately upon notice to the
Company, at any time at or prior to the Settlement Date relating thereto (i) if
there has been, since the date of such Terms Agreement or since the respective
dates as of which information is given in the Registration Statement, any
material adverse change in, or any material development known to management
which is likely to result in a material adverse change in, the condition,
financial or otherwise, of the Company and its subsidiaries considered as one
enterprise, or in the earnings, business affairs or business prospects of the
Company and its subsidiaries considered as one enterprise, whether or not
arising in the ordinary course of business, or (ii) if there has occurred any
outbreak or material escalation of hostilities or other calamity or crisis the
effect of which on the financial markets of the United States is such as to make
it, in such Agent's reasonable judgment, impracticable to market the Notes or
enforce contracts for the sale of the Notes, or (iii) if trading in the Common
Stock of the Company has been suspended by the Commission or a national
securities exchange, or if trading generally on either the American Stock
Exchange or the New York Stock Exchange has been suspended, or minimum or
maximum prices for trading have been fixed, or maximum ranges for prices for
securities have been required, by either of said exchanges or by order of the
Commission or any other governmental authority, or if a banking moratorium in
the United States generally or in the City or the State of New York has been
declared by either Federal or New York authorities or if a banking moratorium
has been declared by the relevant authorities in the country or countries of
origin of any foreign currency or currencies underlying the Notes, or (iv) if
the rating assigned by any nationally recognized securities rating agency to any
debt securities or other obligations of the Company has been lowered since the
date of the applicable Terms Agreement or if any such rating agency shall have
publicly announced that it has placed any debt securities or other obligations
of the Company on what is commonly termed a "watch list" for possible
downgrading, or (v) if there shall have come to such Agent's attention any facts
that would cause the Agent to believe that the Prospectus, at the time it was
required to be delivered to a purchaser of Notes, contained an untrue statement
of a material fact or omitted to state a material fact necessary in order to
make the statements therein, in light of the circumstances existing at the time
of such delivery, not misleading.
(c) General. In the event of any such termination, no party will have any
-------
liability to any other party hereto, except that (i) each Agent shall be
entitled to any commissions earned in accordance with the third paragraph of
Section 2(a) hereof, (ii) if at the time of termination (a) either an Agent
shall own any Notes purchased pursuant to a Terms Agreement with the intention
of reselling them or (b) an offer to purchase any of the Notes has been accepted
by the Company but the time of delivery to the purchaser or his agent of the
Note or Notes relating thereto has not occurred, the covenants set forth in
Sections 3 and 6 hereof shall remain in effect until such Notes are so resold or
delivered, as the case may be, and (iii) the covenant set forth in Section 3(g)
hereof, the provisions of Section 4 hereof, the indemnity and contribution
agreements set forth in Sections 7 and 8 hereof, and the provisions of Sections
9 and 13 hereof shall remain in effect.
16
In the event of termination with respect to any Agent this Agreement shall
remain in full force and effect with respect to any Agent as to which such
termination has not occurred.
SECTION 11. NOTICES.
-------
All notices and other communications hereunder shall be in writing and
shall be deemed to have been duly given if mailed or transmitted by any standard
form of telecommunication. Notices to the Agents shall be directed to ▇▇▇▇▇▇▇
▇▇▇▇▇ & Co., ▇▇▇▇▇▇▇ Lynch, Pierce, ▇▇▇▇▇▇ & ▇▇▇▇▇ Incorporated, North Tower,
10th Floor, ▇▇▇ ▇▇▇▇▇ ▇▇▇▇▇▇, ▇▇▇ ▇▇▇▇, ▇▇▇ ▇▇▇▇ ▇▇▇▇▇-▇▇▇▇, attention of MTN
Product Management, telecopy: (▇▇▇)▇▇▇-▇▇▇▇; NationsBanc ▇▇▇▇▇▇▇▇▇▇ Securities
LLC, ▇▇▇▇ ▇▇▇▇▇ ▇▇▇▇▇, ▇▇▇▇▇▇▇, ▇▇▇▇▇▇▇▇ ▇▇▇▇▇, attention: ▇▇▇▇▇ ▇▇▇▇▇▇;
▇▇▇▇▇▇▇ ▇▇▇▇▇ ▇▇▇▇▇▇ Inc., ▇▇▇▇ ▇▇▇▇▇ ▇▇▇▇▇, ▇▇▇▇▇▇▇, ▇▇▇▇▇▇▇▇ ▇▇▇▇▇, attention
of ▇▇▇▇ ▇▇▇▇▇▇; and Warburg Dillon Read LLC, ▇▇▇ ▇▇▇▇▇▇▇▇▇▇ ▇▇▇▇▇▇▇▇▇, ▇▇▇▇▇▇▇▇,
▇▇ ▇▇▇▇▇, attention of ▇▇▇▇▇ ▇▇▇▇▇; notices to the Company shall be directed to
it at Comdisco, Inc., ▇▇▇▇ ▇▇▇▇▇ ▇▇▇▇▇ ▇▇▇▇, ▇▇▇▇▇▇▇▇, ▇▇▇▇▇▇▇▇ ▇▇▇▇▇, attention
of ▇▇▇▇▇▇ ▇. ▇▇▇▇▇▇▇▇, Vice President and Treasurer, with a copy to the General
Counsel at the same address.
SECTION 12. PARTIES.
-------
This Agreement and any Terms Agreement shall inure to the benefit of and be
binding upon each of the Agents and the Company and their respective successors.
Nothing expressed or mentioned in this Agreement or any Terms Agreement is
intended or shall be construed to give any person, firm or corporation, other
than the parties hereto and their respective successors and the controlling
persons and officers and directors referred to in Section 7 and their heirs and
legal representatives, any legal or equitable right, remedy or claim under or in
respect of this Agreement or any Terms Agreement or any provision herein or
therein contained. This Agreement and any Terms Agreement and all conditions
and provisions hereof and thereof are intended to be for the sole and exclusive
benefit of the parties hereto and their respective successors and said
controlling persons and officers and directors and their heirs and legal
representatives, and for the benefit of no other person, firm or corporation.
No purchaser of Notes shall be deemed to be a successor by reason merely of such
purchase.
SECTION 13. GOVERNING LAW.
-------------
This Agreement and any Terms Agreement and the rights and obligations of
the parties created hereby shall be governed by the laws of the State of New
York applicable to agreements made and to be performed in such state. Any suit,
action or proceeding brought by the Company against the Agents in connection
with, or arising under, this Agreement shall be brought in the state or federal
court of appropriate jurisdiction located in either the Borough of Manhattan,
the City of New York, New York or the City of Chicago, Illinois.
SECTION 14. COUNTERPARTS.
------------
This Agreement may be executed in one or more counterparts, and when a
counterpart has been executed by each party hereto all such counterparts taken
together shall constitute one and the same Agreement.
17
[SIGNATURE PAGE FOR JANUARY 19, 1999 DISTRIBUTION AGREEMENT]
If the foregoing is in accordance with your understanding of our agreement,
please sign and return to the Company a counterpart hereof, whereupon this
instrument along with all counterparts will become a binding agreement between
the Agents and the Company in accordance with its terms.
Very truly yours,
COMDISCO, INC.
By: /s/ ▇▇▇▇▇▇ ▇. ▇▇▇▇▇▇▇▇
--------------------------
Its: Authorized Signatory
CONFIRMED AND ACCEPTED, as of the date
first above written:
▇▇▇▇▇▇▇ LYNCH, PIERCE, ▇▇▇▇▇▇
& ▇▇▇▇▇ INCORPORATED ▇▇▇▇▇▇▇ ▇▇▇▇▇ BARNEY INC.
By: /s/ ▇▇▇▇▇▇ ▇. ▇▇▇▇ By: /s/ ▇▇▇▇ ▇▇▇▇▇▇ ▇▇▇▇▇
-------------------------- --------------------------
Its: Authorized Signatory Its: Authorized Signatory
NATIONSBANC ▇▇▇▇▇▇▇▇▇▇ SECURITIES LLC WARBURG DILLON READ LLC
By: /s/ ▇▇▇▇▇ ▇▇▇▇▇▇▇▇▇ By: /s/ ▇▇▇▇▇ ▇. ▇▇▇▇▇
-------------------------- --------------------------
Its: Authorized Signatory Its: Authorized Signatory
18
EXHIBIT A
$___,000,000
COMDISCO, INC.
Medium-Term Notes
TERMS AGREEMENT
_______, 19__
[▇▇▇▇▇▇▇ ▇▇▇▇▇ & CO.
▇▇▇▇▇▇▇ Lynch, Pierce, ▇▇▇▇▇▇ & ▇▇▇▇▇
Incorporated
▇▇▇▇▇▇▇ ▇▇▇▇▇ World Headquarters
North Tower
World Financial Center
New York, New York 10281-1310]
[NATIONSBANC ▇▇▇▇▇▇▇▇▇▇ SECURITIES LLC
▇▇▇▇ ▇▇▇▇▇ ▇▇▇▇▇
▇▇▇▇▇▇▇, ▇▇▇▇▇▇▇▇ ▇▇▇▇▇]
[▇▇▇▇▇▇▇ ▇▇▇▇▇ ▇▇▇▇▇▇ INC.
▇▇▇▇ ▇▇▇▇▇ ▇▇▇▇▇
▇▇▇▇▇▇▇, ▇▇▇▇▇▇▇▇ ▇▇▇▇▇]
[WARBURG DILLON READ LLC
▇▇▇ ▇▇▇▇▇▇▇▇▇▇ ▇▇▇▇▇▇▇▇▇
▇▇▇▇▇▇▇▇, ▇▇ ▇▇▇▇▇]
Attention:_____________________
Re: Distribution Agreement dated January 19, 1999
The undersigned agrees to purchase the following principal amount of
Medium-Term Notes, Series H:
$______
Specified Currency:
Principal:
Interest:
Aggregate principal amount U. S. $ other
Price to Public:
Provisions relating to redemption, if any:
Provisions relating to repayment, if any:
IF FIXED RATE NOTES:
Interest Rate:
Maturity:
19
Amortization Schedule:
IF FLOATING RATE NOTES:
Base Rate:
Initial Interest Date:
Interest Determination Date:
Interest Reset Date:
Interest Reset Period:
Record Date:
Interest Payment Dates:
Index Maturity:
Maturity:
Maximum Interest Rate:
Minimum Interest Rate:
Spread:
Spread Multiplier:
Indexed Currency or Currencies (if any):
Settlement Date and Time:
Place of Delivery:
Calculation Agent:
Form of Note (Book Entry or Certificated)
Method of and Specified Funds for Payment of
Purchase Price: By certified or official
bank check or checks, payable to the order of
the Company, in immediately available funds
By wire transfer to a bank account specified
by the Company in next day immediately
available funds
Provisions relating to underwriter default,
if any:
Other termination provisions, if any:
Exceptions, if any, to Section 3(k) of the Distribution Agreement:
20
[The certificate referred to in Section 6(b) of the Distribution Agreement,
the opinions referred to in Section 6(c) of the Distribution Agreement and the
accountants' letter referred to in Section 6(d) of the Distribution Agreement
will be required.]
[▇▇▇▇▇▇▇ ▇▇▇▇▇ & CO.
▇▇▇▇▇▇▇ Lynch, Pierce, ▇▇▇▇▇▇ & ▇▇▇▇▇
Incorporated]
[NATIONSBANC ▇▇▇▇▇▇▇▇▇▇ SECURITIES LLC]
[▇▇▇▇▇▇▇ ▇▇▇▇▇ ▇▇▇▇▇▇ INC.]
[WARBURG DILLON READ LLC]
By:___________________________________
Title:
Accepted:
COMDISCO, INC.
By:_____________________________
Title:
21
EXHIBIT B
Commission Schedule for Agency Transactions
-------------------------------------------
Term Commission Rate*
---- ---------------
From 9 months but less than 1 year .125%
From 1 year but less than 18 months .150%
From 18 months but less than 2 years .200%
From 2 years but less than 3 years .250%
From 3 years but less than 4 years .350%
From 4 years but less than 5 years .450%
From 5 years but less than 6 years .500%
From 6 years but less than 7 years .550%
From 7 years but less than 8 years .600%
From 8 years but less than 9 years .600%
From 9 years but less than 10 years .600%
From 10 years to 15 years .625%
*Commission rates for Notes denominated in a foreign currency vary from the
commission rate schedule set forth above, with respect to Notes with the
following maturities:
From 8 years but less than 9 years .650%
From 9 years but less than 10 years .700%
From 10 years to 15 years .750%
Notes sold to an Agent as principal will be sold at a discount negotiated
at the time of sale.
22