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EXHIBIT (4)-2a
Aeroquip-▇▇▇▇▇▇▇, Inc.
$150,000,000
Medium-Term Notes
Due Nine Months or More from Data of Issue
U.S. DISTRIBUTION AGREEMENT
April 18, 1997
▇▇▇▇▇▇ ▇▇▇▇▇▇▇ & Co. Incorporated
▇▇▇▇ ▇▇▇▇▇▇▇▇
▇▇▇ ▇▇▇▇, ▇▇▇ ▇▇▇▇ ▇▇▇▇▇
▇.▇. ▇▇▇▇▇▇ Securities Inc.
▇▇ ▇▇▇▇ ▇▇▇▇▇▇, ▇▇▇ ▇▇▇▇▇
▇▇▇ ▇▇▇▇, ▇▇▇ ▇▇▇▇ ▇▇▇▇▇
Dear Sirs:
Aeroquip-▇▇▇▇▇▇▇, Inc., 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 $150,000,000 (or the equivalent thereof in
one or more foreign currencies or composite currencies) aggregate initial public
offering price of its medium-term notes due nine months or more from date of
issue (the "Notes"). The Notes will be issued under an Indenture dated as of May
1, 1996 and a First Supplemental Indenture dated as of April 17, 1997 (together,
the "Indenture") between the Company and The First National Bank of Chicago (as
successor-in-interest to NBD 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.
The Company hereby appoints ▇▇▇▇▇▇ ▇▇▇▇▇▇▇ & Co. Incorporated
("▇▇▇▇▇▇ ▇▇▇▇▇▇▇") and ▇.▇. ▇▇▇▇▇▇ Securities Inc. ("▇.▇. ▇▇▇▇▇▇")
(individually, an "Agent" and collectively, the "Agents") as its agents, subject
to Section 10 hereof, 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 also may purchase Notes as principal pursuant to
the terms
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of a written terms agreement relating to such sale substantially in the form of
Exhibit A hereto (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") a registration statement, including a prospectus,
relating to its debt securities, including the Notes. Such registration
statement, including the exhibits thereto, as amended at the Commencement Date
(as hereinafter defined), is hereinafter referred to as the "Registration
Statement." The Company proposes to file with the Commission from time to time,
pursuant to Rule 424 under the Securities Act of 1933, as amended (the
"Securities Act"), supplements to the prospectus included in the Registration
Statement that will describe certain terms of the Notes. The prospectus in the
form in which it appears in the Registration Statement 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 an Agent solicits offers to purchase Notes, as of each date on
which the Company accepts an offer to purchase Notes (including any purchase by
an Agent pursuant to a Terms Agreement, if any), 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 been declared effective by
the Commission under the Securities Act; no stop order suspending the
effectiveness of the Registration Statement has been issued and no
proceeding for that purpose has been instituted or, to the knowledge of
the Company, threatened by the Commission; and the Registration
Statement (as amended if the Company shall have filed any amendments
thereto) complies, or will comply, in all material respects with the
Securities Act and the Trust Indenture Act of 1939, as amended, and the
rules and regulations of the Commission thereunder (collectively, the
"Trust Indenture Act"), and does not and will not, as of the applicable
effective date,
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contain any untrue statement or omit to state any material fact
required to be stated therein or necessary to make the statements
therein not misleading, and the Prospectus, 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 the foregoing representations and
warranties shall not apply to (i) that part of the Registration
Statement which constitutes the Statement of Eligibility and
Qualification (Form T-1) under the Trust Indenture Act of the Trustee,
and (ii) statements or omissions in the Registration Statement or the
Prospectus made in reliance upon and in conformity with information
relating to any Agent furnished to the Company in writing by such Agent
expressly for use therein;
(b) the documents incorporated by reference in the Prospectus,
when they were filed with the Commission, conformed in all material
respects to the requirements of the Exchange Act, and none of such
documents contained an untrue statement of a material fact or omitted
to state a material fact necessary to make the statements therein, in
the light of the circumstances under which they were made, not
misleading; and any further documents so filed and incorporated by
reference in the Prospectus, when such documents are filed with the
Commission, will conform in all material respects to the requirements
of the Exchange Act, as applicable, and will not contain an 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;
(c) the financial statements, and the related notes thereto
included or incorporated by reference in the Registration Statement and
the Prospectus present fairly the consolidated financial position of
the Company and its consolidated subsidiaries as of the dates indicated
and the results of their operations and the changes in their
consolidated cash flows for the periods specified; said financial
statements have been prepared in conformity with generally accepted
accounting principles applied on a consistent basis, and the supporting
schedules included or incorporated by reference in the Registration
Statement present fairly the information required to be stated therein;
(d) since the respective dates as of which information is
given in the Registration Statement and the Prospectus, there has not
been any change, or any development involving a prospective change,
which could reasonably be expected to have a material adverse effect on
the general affairs, business, prospects, management, financial
position, stockholders' equity or results of operations of the Company
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and its subsidiaries taken as a whole, otherwise than as set forth or
contemplated in the Prospectus; and except as set forth or contemplated
in the Prospectus neither the Company nor any of its subsidiaries has,
since January 1, 1997, entered into any transaction or agreement
(whether or not in the ordinary course of business) material to the
Company and its subsidiaries taken as a whole;
(e) the Company has been duly incorporated and is validly
existing as a corporation in good standing under the laws of its
jurisdiction of incorporation, with full corporate power and authority
to own its properties and conduct its business as described in the
Registration Statement and the Prospectus, and has been duly qualified
as a foreign corporation for the transaction of business and is in good
standing under the laws of each other jurisdiction in which it owns or
leases properties, or conducts any business so as to require such
qualification, other than where the failure to be so qualified or in
good standing would not have material adverse effect on the Company and
its subsidiaries taken as a whole;
(f) each of Aeroquip Corporation and ▇▇▇▇▇▇▇, Incorporated
(collectively, the "Subsidiaries") has been duly incorporated and is
validly existing as a corporation 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 has
been duly qualified as a foreign corporation for the transaction of
business and is in good standing under the laws of each jurisdiction in
which it owns or leases properties or conducts any business so as to
require such qualification, other than where the failure to be so
qualified or in good standing would not have a material adverse effect
on the Company and its subsidiaries taken as a whole; and all of the
outstanding shares of capital stock of each Subsidiary have been duly
authorized and validly issued, are fully-paid and non-assessable, and
are owned by the Company, directly or indirectly, free and clear of all
liens, encumbrances, security interests and claims;
(g) this Agreement and any applicable Terms Agreement has been
duly authorized, executed and delivered by the Company and constitutes
the valid and binding agreement of the Company, except as rights to
indemnity and contribution may be limited by applicable law;
(h) the Notes have been duly authorized by the Company, and,
when issued, delivered and authenticated pursuant to this Agreement and
the Indenture, will have been duly executed, issued an delivered and
will constitute valid and binding obligations of the Company entitled
to the benefits provided by the Indenture; the Indenture has been duly
authorized, executed and delivered by the Company,
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qualified under the Trust Indenture Act and constitutes a valid and
binding instrument of the Company; and the Notes and the Indenture
conform to the descriptions thereof in the Prospectus;
(i) neither the Company nor either Subsidiary is, or with the
giving of notice or the lapse of time or both would be, in violation of
or in default under its Articles of Incorporation or its Code of
Regulations (or other organizational documents, as the case may be) or
any indenture, mortgage, deed of trust, loan agreement or other
agreement or instrument to which the Company or either of the
Subsidiaries is a party or by which it or any of them or any of their
respective properties is bound, except for violations and defaults
which individually and in the aggregate are not material to the Company
and the Subsidiaries taken as a whole; the issue and sale of the Notes
and the performance by the Company of all of its obligations under the
Notes, the Indenture, this Agreement and any applicable Terms Agreement
and the consummation of the transactions herein and therein
contemplated will not conflict with or result in a breach of any of the
terms or provisions of, or constitute a default under, any indenture,
mortgage, deed of trust, loan agreement or other material agreement or
instrument to which the Company or either of the Subsidiaries is a
party or by which the Company or either of the Subsidiaries is bound or
to which any of the property or assets of the Company or either of the
Subsidiaries is subject, nor will any such action result in any
violation of the provisions of the Articles of Incorporation or the
Code of Regulations (or other organizational documents, as the case may
be) of the Company or either of the Subsidiaries or any applicable law
or statute or any order, rule or regulation of any court or
governmental agency or body having jurisdiction over the Company, the
Subsidiaries or any of their respective properties; and no consent,
approval, authorization, order, registration or qualification of or
with any such court or governmental agency or body is required for the
issue and sale of the Notes or the consummation by the Company of the
transactions contemplated by this Agreement, any applicable Terms
Agreement or the Indenture, except such consents, approvals,
authorizations, registrations or qualifications as have been obtained
under the Securities Act and the Trust Indenture Act; and
(j) other than as set forth or contemplated in the Prospectus
as amended or supplemented, if applicable, there are no legal or
governmental proceedings pending or, to the knowledge of the Company,
threatened to which the Company or either of the Subsidiaries is or may
be a party or to which any property of the Company or either of the
Subsidiaries is or may be subject which could individually or in the
aggregate reasonably be expected to have a material adverse
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effect on the general affairs, business, prospects, management,
financial position, stockholders' equity or results of operations of
the Company and the Subsidiaries taken as a whole and, to the best of
the Company's knowledge, no such proceedings are threatened or
contemplated by governmental authorities or threatened by others; and
there are no contracts or other documents of a character required to be
filed as an exhibit to the Registration Statement or required to be
described in the Registration Statement or the Prospectus which are not
filed or described as required.
Notwithstanding the foregoing, the representations and
warranties set forth in Section 1(a) and (h) (except as to due authorization of
the Notes) and (i), when made as of the Commencement Date, or as of any date on
which an Agent solicits offers to purchase Notes, with respect to any Notes the
payments of principal or interest on which will be determined by reference to
one or more currency exchange rates, commodity prices, equity indices or other
factors, shall be deemed not to address the application of the Commodity
Exchange Act, as amended, or the rules, regulations or interpretations of the
Commodity Futures Trading Commission.
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
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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:
TERM COMMISSION RATE
---- ---------------
From 9 months to less than 1 year .125%
From 1 year 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 10 year .600%
From 10 years to less than 15 year .625%
From 15 years to less than 20 year .700%
From 20 years to less than 30 year .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 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 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
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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 Brown & Wood LLP, counsel for the Agents, not later
than 12 Noon, 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."
(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
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their review and will not file any such proposed supplement or amendment to
which the Agents reasonably object; PROVIDED, HOWEVER, that (i) the foregoing
requirement 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 and approved 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 Securities
Act. The Company will promptly advise the Agents (i) of the filing of any
amendment or supplement to the Basic Prospectus (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 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 Securities 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,
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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,
satisfactory in all respects to the Agents, 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, 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 Securities 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
Securities 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
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any supplements and amendments thereto as such Agent may reasonably request.
(e) 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.
(f) 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 Securities Act.
(g) 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 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, (v) any fees charged by rating agencies for the rating of the Notes,
(vi) any expenses incurred by the Company in connection with a "road show"
presentation to potential investors and (vii) 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.
(h) 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 and (iii) commercial paper issued in the ordinary course of
business), 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
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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 (in the case of an Agent's
obligation to solicit offers to purchase Notes, at the time of such
solicitation, and, in the case of an Agent's or any other purchaser's obligation
to purchase Notes, at the time the Company accepts the offer to purchase such
Notes and at the time of issuance and delivery) and (in each case) to the
following additional conditions precedent when and as specified:
(a) Prior to such solicitation or purchase, as the
case may be:
(i) since the respective dates as of which information is
given in the Prospectus there shall not have been any change or any
development involving a change, which could reasonably be expected to
have a material adverse effect on the general affairs, business,
prospects, management,financial position, stockholders' equity or
results of operations of the Company and the Subsidiaries, taken as a
whole, otherwise than as set forth or contemplated in the Prospectus as
amended or supplemented at the time of such solicitation or at the time
such offer to purchase was made, the effect of which in the judgment of
the relevant Agent makes it impracticable to market the Notes on the
terms and in the manner contemplated in the Prospectus;
(ii) trading generally shall not have been suspended or
materially limited on or by, as the case may be, any of the New York
Stock Exchange, the American Stock Exchange, or the National
Association of Securities Dealers, Inc., (ii) trading of any securities
of or guaranteed by the Company shall not have been suspended on any
exchange or in any over-the counter market, (iii) a general moratorium
on commercial banking activities in New York shall not have been
declared by either Federal or New York State authorities, or (iv) there
shall not have occurred any outbreak or escalation of hostilities or
any change in financial markets or any calamity or crisis that, in the
judgment of the relevant Agent, is material and adverse and which, in
the judgment of such Agent, makes it impracticable to market the Notes
on the terms and in the manner contemplated in the Prospectus.
(iii) there shall not have occurred any downgrading, nor shall
any notice have been given of (i) any intended or potential downgrading
or (ii) any review for possible change
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that does not indicate an improvement, in the rating accorded any
securities of or guaranteed by the Company by any "nationally
recognized statistical rating organization", as such term is defined
for purposes of Rule 436(g) (2) under the Securities Act;
(A) except, in each case described in paragraph (i), (ii) or
(iii) 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 (ii) 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.
(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 ▇▇▇▇▇
▇. ▇▇▇▇▇, general counsel of the Company, to the effect that:
(A) the Company has been duly incorporated and is
validly existing as a corporation in good standing under the
laws of its jurisdiction of incorporation, with corporate
power and authority to own its properties and conduct its
business as described in the Prospectus;
(B) the Company has been duly qualified as a foreign
corporation for the transaction of business and is in good
standing under the laws of each other jurisdiction in which it
owns or leases properties, or conducts any business, so as to
require such qualification, other than where the failure to be
so qualified or in good standing would not have a material
adverse effect on the Company and its Subsidiaries taken as a
whole;
(C) each Subsidiary has been duly incorporated and is
validly existing as a corporation under the law of its
jurisdiction of incorporation with corporate power and
authority to own its properties and conduct its business as
described in the Prospectus, as then amended or supplemented,
and has been duly qualified as a foreign corporation for the
transaction of business and is in good standing under the laws
of each other jurisdiction in which it owns or leases
properties, or conducts any business, so as to require such
qualification, other than where the failure to be so qualified
and in good standing would not have a material adverse effect
on the Company and the
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Subsidiaries taken as a whole; and all of the issued shares of
capital stock of each Subsidiary have been duly and validly
authorized and issued, are fully paid and non-assessable, and
are owned directly or indirectly by the Company, free and
clear of all liens, encumbrances, equities or claims;
(D) other than as set forth or contemplated in the
Prospectus, there are no legal or governmental proceedings
pending or, to the best of such counsel's knowledge,
threatened to which the Company or either of the Subsidiaries
is or may be a party or to which any property of the Company
or the Subsidiaries is or may be the subject which could
individually or in the aggregate reasonably be expected to
have a material adverse effect on the general affairs,
business, prospects, management, financial position,
stockholders' equity or results of operations of the Company
and the Subsidiaries taken as a whole; to the best of such
counsel's knowledge, no such proceedings are threatened or
contemplated by governmental authorities or threatened by
others; and such counsel does not know of any contracts or
other documents of a character required to be filed as an
exhibit to the Registration Statement or required to be
described in the Registration Statement or the Prospectus
which are not filed or described as required;
(E) neither the Company nor either of the
Subsidiaries is, or with the giving of notice or the lapse of
time or both would be, in violation of its Articles of
Incorporation or its Code of Regulations (or other
organizational documents, as the case may be), except for
violations which individually or in the aggregate could not
reasonably be expected to have a material adverse effect on
the general affairs, business, prospects, management,
financial position, stockholders' equity or results of
operations of the Company and the Subsidiaries taken as a
whole, and the issue and sale of the Notes and the performance
by the Company of its obligations under the Notes, the
Indenture and this Agreement and the consummation of the
transactions herein and therein contemplated will not conflict
with or result in a breach of any of the terms or provisions
of, or constitute a default under, any indenture, mortgage,
deed of trust, loan agreement or other material agreement or
instrument known to such counsel to which the Company or
either of the Subsidiaries is a party or by which the Company
or either of the Subsidiaries is bound or to which any of the
property or assets of the Company or either of the
Subsidiaries is subject, nor will any such action result in
any violation of the provisions of the Articles of
Incorporation or the Code of Regulations
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(or other organizational documents, as the case may be) of the
Company or either of the Subsidiaries or any applicable law or
statute (except as rights to indemnity and contribution
hereunder may be limited by applicable law) or any order, rule
or regulation of any court or governmental agency or body
having jurisdiction over the Company, the Subsidiaries or any
of their respective properties;
(F) the statements incorporated by reference in the
Prospectus from Item 3 of Part 1 of the Company's Annual
Report on Form 10-K for the fiscal year ended December 31,
1996 and in the Registration Statement in Item 15, in so far
as such statements constitute a summary of the legal matters,
documents or proceedings referred to therein, fairly present
the information called for with respect to such legal matters,
documents or proceedings; and
(G) such counsel (1) is of the opinion that each
document, if any, filed pursuant to the Exchange Act and
incorporated by reference in the Prospectus, as then amended
or supplemented (except for financial statements and schedules
included therein as to which such counsel need not express any
opinion) complied when so filed as to form in all material
respects with the Exchange Act and the applicable rules and
regulations of the Commission thereunder, (2) is of the
opinion that the Registration Statement and Prospectus, as
then amended or supplemented, if applicable (except for
financial statements and schedules included therein as to
which such counsel need not express any opinion) comply as to
form in all material respects with the Securities Act and the
Trust Indenture Act and the applicable rules and regulations
of the Commission thereunder, (3) has no reason to believe
that (except for financial statements and schedules as to
which such counsel need not express any belief and except for
that part of the Registration Statement that constitutes the
Form T-1 heretofore referred to) each part of the Registration
Statement, as then amended, if applicable, when such part
became effective, contained and as of the date such opinion is
delivered, contains any untrue statement of a material fact or
omitted or omits to state a material fact required to be
stated therein or necessary to make the statements therein not
misleading and (4) has no reason to believe that (except for
financial statements and schedules as to which such counsel
need not express any belief) the Prospectus, as then amended
or supplemented, if applicable, as of the date such opinion is
delivered contains any 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
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they were made, not misleading; PROVIDED that in the case of
an opinion delivered on the Commencement Date or pursuant to
Section 5(b), the opinion and belief set forth in clauses (3)
and (4) above 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.
(ii) The opinion, dated as of such date, of ▇▇▇▇▇, Day, ▇▇▇▇▇▇ & ▇▇▇▇▇,
outside counsel for the Company (or such other counsel as is acceptable
to the Agents), to the effect that:
(A) each of this Agreement and any applicable Terms
Agreement has been duly authorized, executed and delivered
by the Company;
(B) 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 and
would be entitled to the benefits of the Indenture;
(C) the Indenture has been duly authorized, executed and
delivered by the Company and duly qualified under the Trust Indenture
Act and constitutes a valid and binding instrument of the Company;
(D) no consent, approval or authorization or order of any
governmental agency or body is required for the issue and sale of the
Notes, except such as have been obtained under the Securities Act and
the Trust Indenture Act;
(E) the statements in the Prospectus, under the captions
"Description of Notes" and "Description of Securities", in each case
insofar as such statements purport to summarize the provisions of the
documents referred to therein, present fair summaries of such
provisions;
(F) such counsel is of the opinion ascribed to it in
the Prospectus, as then amended or supplemented, under the
caption "United States Taxation"; and
(G) (1) such counsel is of the opinion that the Registration
Statement and the Prospectus and any amendments and supplements thereto
(except for the financial statements and supporting schedules included
therein and that part of the Registration Statement which constitutes
the Statement of Eligibility and Qualification (Form T-1) under the
Trust Indenture Act of the Trustee as to which such counsel need
express no opinion) comply as to form in all material respects with the
requirements of the Securities Act and the Trust Indenture Act, (2) no
facts have come to the attention
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of such counsel to cause them to believe that the Registration
Statement (except for the financial statements and supporting schedules
included therein and that part of the Registration Statement which
constitutes the Statement of Eligibility and Qualification (Form T-1)
under the Trust Indenture Act of the Trustee as to which such counsel
need express no belief), on the date of this Agreement, contains an
untrue statement of a material fact or omits to state a material fact
required to be stated therein or necessary to make the statements
therein not misleading, and (3) no facts have come to the attention of
such counsel to cause them to believe that the Prospectus (except for
the financial statements and supporting schedules included therein as
to which counsel need express no belief) as amended or supplemented, if
applicable, to the Closing Date 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.
In rendering such opinions, such counsel may rely (A) as to matters
involving the application of laws other than the laws of the United
States and the States of Ohio and New York, to the extent such counsel
deems proper and to the extent specified in such opinion, if at all,
upon an opinion or opinions (in form and substance reasonably
satisfactory to Agents' counsel) of other counsel reasonably acceptable
to Agents' counsel, familiar with the applicable laws; and (B) as to
matters of fact, to the extent such counsel deems proper, on
certificates of responsible officers of the Company and certificates or
other written statements of officials of jurisdictions having custody
of documents respecting the corporate existence or good standing of the
Company. The opinions of such counsel for the Company shall state that
the opinion of any such other counsel is in form satisfactory to such
counsel and, in such counsel's opinion, he or they, as the case may be,
and the Agents are justified in relying thereon. With respect to the
matters to be covered in subparagraphs (b)(i)(G) and (b)(ii)(G),
respectively, above, ▇▇▇▇▇ ▇. ▇▇▇▇▇ and ▇▇▇▇▇, Day, ▇▇▇▇▇▇ & ▇▇▇▇▇ (or
such other counsel as is acceptable to the Agents) may state that their
opinions and beliefs are based upon their participation in the
preparation of the Prospectus and any amendment or supplement thereto
and review and discussion of the contents of the Registration Statement
and the Prospectus and that, except as specified, they have not
independently verified and are not passing upon, and do not assume any
responsibility for, the accuracy, completeness or fairness of the
information contained in the Registration Statement and the Prospectus;
(iii) The opinion, dated as of such date, of Brown & Wood LLP,
counsel for the Agents, covering the matters in subparagraphs (A), (B),
(C), (E) and (G) in paragraph (b)
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(ii) above. With respect to subparagraph (G) of paragraph (b) (ii)
above, Brown & Wood LLP may state that their opinion and belief are
based upon their participation in the preparation of the Registration
Statement and Prospectus and any amendments or supplements thereto (but
not including documents incorporated therein by reference) and review
and discussion of the contents thereof (including documents
incorporated therein by reference), but are without independent check
or verification, except as specified.
(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 an executive officer of the Company, to the
effect set forth in subparagraph (a) (iii) above and to the effect that 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 of the conditions on its part to be performed
or satisfied on or before such date.
The officer signing and delivering such certificate may rely
upon the best of his knowledge as to proceedings threatened.
(d) On the Commencement Date and, if called for by any Terms
Agreement, on the corresponding Settlement Date, Ernst & Young LLP, independent
public accountants, shall have furnished to the relevant Agents a letter or
letters, dated the Commencement Date or such Settlement Date, as the case may
be, in form and substance satisfactory to such Agents containing statements and
information of the type ordinarily included in accountants' "comfort letters" to
underwriters with respect to the financial statements and certain financial
information contained in or incorporated by reference into the Prospectus, as
then amended or supplemented.
(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 that
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 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 signed by an executive officer of the Company, 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
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referred to in Section 4(c) relating to the Registration Statement or the
Prospectus as amended or supplemented to the time of delivery of such
certificate.
(b) Each time that the Company furnishes a certificate
pursuant to Section 5(a), the Company will furnish or cause to be furnished
forthwith to each Agent the written opinions of ▇▇▇▇▇ ▇. ▇▇▇▇▇, Esq. and ▇▇▇▇▇,
Day, ▇▇▇▇▇▇ & ▇▇▇▇▇ (or such other counsel as is acceptable to the Agents). Any
such opinions 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 respective opinions referred to in Sections 4(b)(i) and (ii),
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 opinions, each such counsel last furnishing such 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 that 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. 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 Securities Act or Section 20 of
the Exchange Act, from and against any and all losses, claims, damages and
liabilities (including without limitation the legal fees and other expenses
incurred in connection with any suit, action or proceeding or any claim
asserted) caused by any untrue statement or alleged untrue statement of a
material fact contained in the Registration Statement 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 untrue statement or omission or alleged
untrue statement or omission made in reliance upon and in conformity with
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information relating to any Agent furnished to the Company in writing by such
Agent expressly for use therein;
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 who controls the Company within the meaning of Section
15 of the Securities Act and Section 20 of the Exchange Act, to the same extent
as the foregoing indemnity from the Company to each 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 amendment or supplement thereto.
If any suit, action, proceeding (including any governmental or
regulatory investigation), claim or demand shall be brought or asserted against
any person in respect of which indemnity may be sought pursuant to either of the
two preceding paragraphs, such person (the "Indemnified Person") shall promptly
notify the person against whom such indemnity may be sought (the "Indemnifying
Person") in writing, and the Indemnifying Person, upon request of the
Indemnified Person, shall retain counsel reasonably satisfactory to the
Indemnified Person to represent the Indemnified Person and any others the
Indemnifying Person may designate in such proceeding and shall pay the fees and
expenses of such counsel related to such proceeding. In any such proceeding, any
Indemnified Person 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 Person
unless (i) the Indemnifying Person and the Indemnified Person shall have
mutually agreed to the contrary, (ii) the Indemnifying Person has failed within
a reasonable time to retain counsel reasonably satisfactory to the Indemnified
Person or (iii) the named parties in any such proceeding (including any
impleaded parties) include both the Indemnifying Person and the Indemnified
Person 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 Person shall not, in connection with any
proceedings 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 Indemnified Persons, and that all such fees and expenses shall
be reimbursed as they are incurred. Any such separate firm for any Agent and
such control persons of an Agent shall be designated in writing by ▇▇▇▇▇▇
▇▇▇▇▇▇▇ or, if ▇▇▇▇▇▇ ▇▇▇▇▇▇▇ is not an Indemnified Person, by the Agents that
are Indemnified Persons and any such separate firm for the Company, its
directors, its officers who sign the Registration Statement and such control
persons of the Company or authorized representatives shall be designated in
writing by the Company. The Indemnifying Person shall not be liable for any
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 Person agrees to indemnify any
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Indemnified Person from and against any loss or liability by reason of such
settlement or judgment. No Indemnifying Person shall, without the prior written
consent of the Indemnified Person, effect any settlement of any pending or
threatened proceeding in respect of which any Indemnified Person is or could
have been a party and indemnity could have been sought hereunder by such
Indemnified Person, unless such settlement includes an unconditional release of
such Indemnified Person from all liability on claims that are the subject matter
of such proceeding.
If the indemnification provided for in the first and second
paragraphs of this Section 6 is unavailable to an Indemnified Person in respect
of any losses, claims, damages or liabilities referred to therein, then each
Indemnifying Person under such paragraph, in lieu of indemnifying such
Indemnified Person thereunder, shall contribute to the amount paid or payable by
such Indemnified Person 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 the 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 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 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 and the total discounts and
commissions received by each Agent bear to the aggregate public offering price
of the Notes. The relative fault of the Company on the one hand and each Agent
on the other shall be determined by reference to, among other things, whether
the untrue or alleged untrue statement of a material fact or the omission or
alleged omission to state a material fact relates to information supplied by the
Company or by each Agent and the parties' relative intent, knowledge, access to
information and opportunity to correct or prevent such statement or omission.
The Company and the Agents agree that it would not be just and
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 the immediately preceding paragraph. The amount
paid or payable by an Indemnified Person as a result of the losses, claims,
damages and liabilities referred to in the immediately preceding paragraph shall
be deemed to include, subject to the limitation set forth above, any legal or
other expenses incurred by such Indemnified Person in
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connection with investigating or defending any such action or claim.
Notwithstanding the provisions of this Section 6, in no event shall an Agent be
required to contribute any amount in excess of the amount by which the total
price at which the Notes referred to in the immediately preceding paragraph 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 Securities Act) shall be entitled to contribution from any person who was
not guilty of such fraudulent misrepresentation.
The indemnity and contribution agreements contained in this
Section 6 are in addition to any liability which the Indemnifying Persons may
otherwise have to the Indemnified Persons referred to above.
The indemnity and contribution agreements contained in this
Section 6 and the representations and warranties of the Company set forth in
this Agreement shall remain operative and in full force and effect regardless of
(i) any termination of this 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 other 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
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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(g), 6, 7, 9, 11 and 14 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(h), 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 (i) if sent to ▇▇▇▇▇▇ ▇▇▇▇▇▇▇, will be
mailed, delivered or telefaxed and confirmed to ▇▇▇▇▇▇ ▇▇▇▇▇▇▇ at ▇▇▇▇ ▇▇▇▇▇▇▇▇,
▇▇▇ ▇▇▇▇, ▇▇▇ ▇▇▇▇ ▇▇▇▇▇, Attention: Manager, Credit Department (telefax number:
212-761- 0687), with a copy to ▇▇▇▇ ▇▇▇▇▇▇▇▇, ▇▇▇ ▇▇▇▇, ▇▇▇ ▇▇▇▇ ▇▇▇▇▇,
Attention: Managing Director, Debt Syndicate (telefax number: 212-761-0785);
(ii) if sent to ▇.▇. ▇▇▇▇▇▇, will be mailed, delivered or telefaxed and
confirmed to ▇.▇. ▇▇▇▇▇▇ Securities Inc., ▇▇ ▇▇▇▇ ▇▇▇▇▇▇, ▇▇▇ ▇▇▇▇▇, ▇▇▇ ▇▇▇▇,
▇▇▇ ▇▇▇▇ ▇▇▇▇▇, Attention: Manager, Credit Department (telefax number: 212-761-
0687); or (iii) if sent to the Company, will be mailed, delivered or telefaxed
and confirmed to the Company at Aeroquip-▇▇▇▇▇▇▇, Inc., ▇▇▇▇ ▇▇▇▇▇▇▇, ▇▇▇▇▇▇,
▇▇▇▇ ▇▇▇▇▇-0050, Attention: ▇▇▇▇▇ ▇. ▇▇▇▇▇, Vice President and General Counsel
(telefax number: (▇▇▇) ▇▇▇-▇▇▇▇).
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, upon
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.
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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.
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,
AEROQUIP-▇▇▇▇▇▇▇, INC.
By: ________________________
Title:
The foregoing Agreement
is hereby confirmed
and accepted as of the
date first above written.
▇▇▇▇▇▇ ▇▇▇▇▇▇▇ & CO. INCORPORATED
By: ________________________
Title:
▇.▇. ▇▇▇▇▇▇ SECURITIES INC.
By: __________________________
Title:
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EXHIBIT A
Aeroquip-▇▇▇▇▇▇▇, Inc.
MEDIUM-TERM NOTES
TERMS AGREEMENT
___________________ 19__
Aeroquip-▇▇▇▇▇▇▇, Inc.
▇▇▇▇ ▇▇▇▇▇▇▇
▇▇▇▇▇▇, ▇▇▇▇ ▇▇▇▇▇-0050
Attention: ▇▇▇▇▇ ▇. ▇▇▇▇▇, Vice President
and General Counsel
Re: Distribution Agreement dated April 18, 1997
(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
---- --------
▇▇▇▇▇▇ ▇▇▇▇▇▇▇ & Co.
Incorporated
[Insert syndicate list]1
Total . . . . .$
==========
The Notes shall have the following terms:
--------
1 Delete if the transaction will not be syndicated.
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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 OlD: dates:
Total amount Interest reset
of OlD: 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
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The provisions of Sections 1, 2(b) and 2(c) and 3 through 6,
9, 10, 11 and 14 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 ▇▇▇▇▇▇ ▇▇▇▇▇▇▇ & Co. Incorporated 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 ▇▇▇▇▇▇ ▇▇▇▇▇▇▇ & Co. Incorporated 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 ▇▇▇▇▇▇ ▇▇▇▇▇▇▇ & Co. Incorporated
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 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(g), 6, 9, 11 and 14 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:
A. The officers' certificate referred to in Section 4(c).
--------
2 Delete if the transaction will not be syndicated.
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B. The opinion or opinions of the general counsel of the
Company referred to in Section 4(b)(i).
C. The opinion or opinions of outside counsel for the
Company referred to in Section 4(b) (ii).
D. The opinion of Agents' counsel referred to in Section
4(b) (iii).
E. The accountants' letter referred to in Section 4(d).
▇▇▇▇▇▇ ▇▇▇▇▇▇▇ & CO. INCORPORATED
By: _____________________________
Title:
Accepted:
Aeroquip-▇▇▇▇▇▇▇, Inc.
By: _____________________
Title:
A-4
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EXHIBIT B
AEROQUIP-▇▇▇▇▇▇▇, INC.
$150,000,000
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 Aeroquip-▇▇▇▇▇▇▇, Inc. (the "Company"; pursuant to the Distribution
Agreement, dated as of April 18, 1997 (the "Distribution Agreement") among the
Company and ▇▇▇▇▇▇ ▇▇▇▇▇▇▇ & Co. Incorporated ("▇▇▇▇▇▇ ▇▇▇▇▇▇▇") and ▇.▇. ▇▇▇▇▇▇
Securities Inc. ("▇.▇. ▇▇▇▇▇▇") (the "Agents"). The Notes will be issued under
an Indenture dated as of May 1, 1996 and a First Supplemental Indenture dated as
of April 17, 1997 (together, the "Indenture") between the Company and The First
National Bank of Chicago (as successor-in-interest to NBD 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 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.
B-1
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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 April 18,
1997, and a Medium-Term Note Certificate Agreement between the Trustee and DTC,
dated as of May 26, 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,~00,000
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 (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
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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. $100,000 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
Supplement: Company, the Company will prepare a pricing
supplement (a "Pricing Supplement")
reflecting the terms of such Note. The
Company (i) will arrange to file 10 copies
of such Pricing Supplement with the
Commission in accordance with the applicable
paragraph of Rule 424(b) under the
Securities 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
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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 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:
1. Principal amount.
2. Maturity Date.
3. In the case of a Fixed Rate
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.
B-4
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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
"OlD Note"), and if it is an OlD
Note, the total amount of OlD,
the yield to maturity, the
initial accrual period OlD and
the applicability of modified
Payment upon Acceleration (and,
if so, the Issue Price).
10. Whether the Note is a PERLS
Note, and if it is a PERLS 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 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
B-5
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relevant 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.
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.
B-6
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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 "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 The First National
Bank of Chicago, Aeroquip-▇▇▇▇▇▇▇-Account
#59- 29024,Chicago, Illinois, in immediately
available funds the amount transferred to
the Trustee in accordance with Settlement
Procedure
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
B-7
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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
Procedures Notes to or through an Agent (unless
Timetable: otherwise specified pursuant 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 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 one 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.
B-8
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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
to Settle deliver order with 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
Trustee's participant account contains a principal amount of
the Global Security representing such Note that is at least
equal to the principal amount to be debited. If a withdrawal
message is processed with respect to all the Book-Entry Notes
represented by a Global Security, the Trustee will mark such
Global Security "cancelled," make appropriate entries in the
Trustee's records and send such cancel led 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 cancel led 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
B-9
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related actions described in the preceding paragraph.
Notwithstanding the foregoing, upon any failure to settle with
respect to a Book-Entry Note, DTC may take any actions in
accordance with its SDFS operating procedures then in effect.
In the event of a failure to settle with respect to one or
more, but not all, of the Book-Entry Notes to have been
represented by a Global 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.
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
of Pricing Note is accepted by or on behalf of the
Supplement: Company, the Company will prepare a Pricing
Supplement reflecting the terms of such Note. The
Company (i) will arrange to file 10 copies of such
Pricing Supplement with the Commission in accordance
with the applicable paragraph of Rule 424(b) under
the Securities 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
B-10
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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 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
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
Procedures: Certificated 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 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.
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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 OlD Note, and if it is an
OlD Note, the total amount of OlD, the yield to
maturity, the initial accrual period OlD and the
applicability of Modified Payment upon Acceleration
(and if so, the Issue Price).
15. Whether the Note is a PERLS Note, and if it is a
PERLS 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.
B-12
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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:
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 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
The First National Bank of Chicago,
Aeroquip-▇▇▇▇▇▇▇-Account #59-29024, Chicago,
Illinois, 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
B-13
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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 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
an Agent (unless otherwise specified pursuant to a Terms
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: If a purchaser fails to accept delivery of and
to Settle 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 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
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43
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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