Exhibit 1.1
▇▇▇▇'▇ COMPANIES, INC.
Medium-Term Notes, Series B
Due Nine Months or More From Date of Issue
DISTRIBUTION AGREEMENT
May 9, 1997
▇▇▇▇▇▇▇ ▇▇▇▇▇ & CO.
▇▇▇▇▇▇▇ Lynch, Pierce, ▇▇▇▇▇▇ & ▇▇▇▇▇
Incorporated
World Financial Center
North Tower, 10th Floor
New York, New York 10281-1310
▇▇▇▇▇▇ BROTHERS INC.
3 World Financial Center
▇▇▇ ▇▇▇▇▇ ▇▇▇▇▇▇
▇▇▇ ▇▇▇▇, ▇▇▇ ▇▇▇▇ ▇▇▇▇▇
▇▇▇▇▇▇ ▇▇▇▇▇▇▇ & CO. INCORPORATED
▇▇▇▇ ▇▇▇▇▇▇▇▇
▇▇▇ ▇▇▇▇▇
▇▇▇ ▇▇▇▇, ▇▇ ▇▇▇▇▇
Dear Sirs:
▇▇▇▇'▇ Companies, Inc., a North Carolina corporation (the
"Company"), confirms its agreement with ▇▇▇▇▇▇▇ ▇▇▇▇▇ & Co., ▇▇▇▇▇▇▇ Lynch,
Pierce, ▇▇▇▇▇▇ & ▇▇▇▇▇ Incorporated, ▇▇▇▇▇▇ Brothers Inc. and ▇▇▇▇▇▇ ▇▇▇▇▇▇▇ &
Co. Incorporated (each, an "Agent", and collectively, the "Agents") with respect
to the issue and sale by the Company of its Medium-Term Notes, Series B, Due
Nine Months or More From Date of Issue (the "Notes"). The Notes are to be issued
pursuant to the Amended and Restated Indenture, dated as of December 1, 1995, as
further amended or modified from time to time (the "Indenture"), between the
Company and The First National Bank of Chicago, as trustee (the "Trustee"). As
of the date hereof, the Company has authorized the issuance and sale of up to
U.S. $350,000,000 aggregate initial offering price of Notes to or through the
Agents pursuant to the terms of this Agreement. It is understood, however, that
the Company may from time to time authorize the issuance of additional Notes and
that such additional Notes may be sold to or through the Agents pursuant to the
terms of this Agreement, all as though the issuance of such Notes were
authorized as of the date hereof.
This Agreement provides both for the sale of Notes by the
Company to one or more Agents as principal for resale to investors and other
purchasers and for the sale of Notes by the Company directly to investors (as
may from time to time be agreed to by the Company and the applicable Agent), in
which case the applicable Agent will act as an agent of the Company in
soliciting offers for the purchase of Notes.
The Company has filed with the Securities and Exchange
Commission (the "Commission") registration statements on Form S-3 (Nos. 33-51865
and 333-14257) for the registration of unsecured debt securities, including the
Notes, under the Securities Act of 1933, as amended (the "1933 Act"), and the
offering thereof from time to time in accordance with Rule 415 of the rules and
regulations of the Commission under the 1933 Act (the "1933 Act Regulations"),
and the Company has filed such post-effective amendments thereto as may be
required prior to any acceptance by the Company of an offer for the purchase of
Notes. Such registration statements (as so amended, if applicable) have been
declared effective by the Commission and the Indenture has been duly qualified
under the Trust Indenture Act of 1939, as amended (the "1939 Act"). Such
registration statements (as so amended, if applicable) are referred to herein as
the "Registration Statement"; and the final prospectus and all applicable
amendments or supplements thereto (including the final prospectus supplement and
pricing supplement relating to the offering of Notes), in the form first
furnished to the applicable Agent(s), are collectively referred to herein as the
"Prospectus"; provided, however, that all references to the "Registration
Statement" and the "Prospectus" shall also be deemed to include all documents
incorporated therein by reference pursuant to the Securities Exchange Act of
1934, as amended (the "1934 Act"), prior to any acceptance by the Company of an
offer for the purchase of Notes; provided further that, if the Company files a
registration statement with the Commission pursuant to Rule 462(b) of the 1933
Act Regulations (the "Rule 462(b) Registration Statement"), then, after such
filing, all references to the "Registration Statement" shall also be deemed to
include the Rule 462(b) Registration Statement. A "preliminary prospectus" shall
be deemed to refer to any prospectus used before the registration statement
became effective and any prospectus furnished by the Company after the
registration statement became effective and before any acceptance by the Company
of an offer for the purchase of Notes which omitted information to be included
upon pricing in a form of prospectus filed with the Commission pursuant to Rule
424(b) of the 1933 Act Regulations. For purposes of this Agreement, all
references to the Registration Statement, Prospectus or preliminary prospectus
or to any amendment or supplement thereto shall be deemed to include any copy
filed with the Commission pursuant to its Electronic Data Gathering, Analysis
and Retrieval system ("▇▇▇▇▇").
All references in this Agreement to financial statements and
schedules and other information which is "disclosed", "contained", "included" or
"stated" (or other references of like import) in the Registration Statement,
Prospectus or preliminary prospectus shall be deemed to include all such
financial statements and schedules and other information which is incorporated
by reference in the Registration Statement, Prospectus or preliminary
prospectus, as the case may be; and all references in this Agreement to
amendments or supplements to the Registration Statement, Prospectus or
preliminary prospectus shall be deemed to include the filing of any document
under the 1934 Act which is incorporated by reference in the Registration
Statement, Prospectus or preliminary prospectus, as the case may be.
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SECTION 1. Appointment as Agent
(a) Appointment. Subject to the terms and conditions stated
herein and to subject to the reservation by the Company of the right to sell
Notes directly to purchasers on its own behalf or through other agents, as set
forth below in this subsection (a), and the provisions contained in Section
12(a) hereof, the Company hereby authorizes each of the Agents to act as its
agent to solicit offers for the purchase of all or part of the Notes from the
Company. The Company may from time to time offer Notes for sale otherwise than
through an Agent; provided, however, that so long as this Agreement shall be in
effect the Company shall not solicit offers to purchase Notes through any agent
without (x) amending this Agreement to appoint such agent an additional Agent
hereunder on the same terms and conditions as provided herein for the Agents and
(y) giving the Agents prompt notice of such appointment. If the Company sells
any Notes directly to purchasers on its own behalf and not through an agent, the
Company shall not be obligated to pay a commission. The Company may accept
offers to purchase Notes through an agent other than an Agent, provided that (i)
the Company shall not have solicited such offers, (ii) the Company and such
agent shall have executed an agreement with respect to such purchases having
terms and conditions (including, without limitation, commission rates) with
respect to such purchases substantially the same as the terms and conditions
that would apply to such purchases under this Agreement if such agent were an
Agent (which may be accomplished by incorporating by reference in such agreement
the terms and conditions of this Agreement) and (iii) the Company shall provide
the Agents with a copy of such agreement promptly following the execution
thereof.
(b) Sale of Notes. The Company shall not sell or approve the
solicitation of offers for the purchase of Notes in excess of the amount which
shall be authorized by the Company from time to time or in excess of the
aggregate initial offering price of Notes registered pursuant to the
Registration Statement. The Agents shall have no responsibility for maintaining
records with respect to the aggregate initial offering price of Notes sold, or
of otherwise monitoring the availability of Notes for sale, under the
Registration Statement.
(c) Purchases as Principal. The Agents shall not have any
obligation to purchase Notes from the Company as principal. However, absent an
agreement between an Agent and the Company that such Agent shall be acting
solely as an agent for the Company, such Agent shall be deemed to be acting as
principal in connection with any offering of Notes by the Company through such
Agent. Accordingly, the Agents, individually or in a syndicate, may agree from
time to time to purchase Notes from the Company as principal for resale to
investors and other purchasers determined by such Agents. Any purchase of Notes
from the Company by an Agent as principal shall be made in accordance with
Section 3(a) hereof.
(d) Solicitations as Agent. If agreed upon between an Agent
and the Company, such Agent, acting solely as an agent for the Company and not
as principal, will solicit offers for the purchase of Notes. Such Agent will
communicate to the Company, orally, each offer for the purchase of Notes
solicited by it on an agency basis other than those offers rejected by such
Agent. Such Agent shall have the right, in its discretion reasonably exercised,
to reject any offer for the purchase of Notes, in whole or
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in part, and any such rejection shall not be deemed a breach of its agreement
contained herein. The Company may accept or reject any offer for the purchase of
Notes, in whole or in part. Such Agent shall make reasonable best efforts to
assist the Company in obtaining performance by each purchaser whose offer for
the purchase of Notes has been solicited by it on an agency basis and accepted
by the Company. Such Agent shall not have any liability to the Company in the
event that any such purchase is not consummated for any reason. If the Company
shall default on its obligation to deliver Notes to a purchaser whose offer has
been solicited by such Agent on an agency basis and accepted by the Company, the
Company shall (i) hold such Agent harmless against any loss, claim or damage
arising from or as a result of such default by the Company and (ii) pay to such
Agent any commission to which it would otherwise be entitled absent such
default.
(e) Reliance. The Company and the Agents agree that any Notes
purchased from the Company by one or more Agents as principal shall be
purchased, and any Notes the placement of which an Agent arranges as an agent of
the Company shall be placed by such Agent, in reliance on the representations,
warranties, covenants and agreements of the Company contained herein and on the
terms and conditions and in the manner provided herein.
SECTION 2. Representations and Warranties
(a) The Company represents and warrants to each Agent as of
the date hereof, as of the date of each acceptance by the Company of an offer
for the purchase of Notes (whether to such Agent as principal or through such
Agent as agent), as of the date of each delivery of Notes (whether to such Agent
as principal or through such Agent as agent) (the date of each such delivery to
such Agent as principal is referred to herein as a "Settlement Date"), and as of
any time that the Registration Statement or the Prospectus shall be amended or
supplemented (each of the times referenced above is referred to herein as a
"Representation Date"), as follows:
(i) Due Incorporation, Good Standing and Due Qualification of
the Company. The Company has been duly organized and is validly
existing as a corporation in good standing under the laws of North
Carolina with corporate power and authority to own, lease and operate
its properties and to conduct its business as described in the
Prospectus and to enter into this Agreement and consummate the
transactions contemplated in the Prospectus; the Company is duly
qualified as a foreign corporation to transact business and is in good
standing in each jurisdiction in which such qualification is required,
whether by reason of the ownership or leasing of property or the
conduct of business, except where the failure to so qualify or be in
good standing would not result in a material adverse effect on the
condition (financial or otherwise), earnings or business affairs of the
Company and its subsidiaries, considered as one enterprise (a "Material
Adverse Effect"); all of the outstanding shares of capital stock of the
Company have been duly authorized and validly issued and are fully paid
and non-assessable; no holder thereof is or will be subject to personal
liability by reason of being such a holder; and none of the outstanding
shares of capital stock of the Company issued since December 19, 1979
was issued in violation of preemptive rights of any securityholder of
the Company.
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(ii) Due Incorporation, Good Standing and Due Qualification of
Significant Subsidiaries. Each of Lowe's Home Centers, Inc., a North
Carolina corporation, LF Corporation, a Delaware corporation, and The
Contractor Yard, Inc., a North Carolina corporation (collectively, the
"Significant Subsidiaries"; "subsidiaries" has the meaning set forth in
Rule 405 under the 1933 Act), is a corporation duly organized, validly
existing and in good standing under the laws of the jurisdiction of its
incorporation, with corporate power and authority under such laws to
own, lease and operate its properties and conduct its business as
described in the Prospectus; and each Significant Subsidiary is duly
qualified to transact business as a foreign corporation and is in good
standing in each other jurisdiction in which it owns or leases property
of a nature, or transacts business of a type, that would make such
qualification necessary, except to the extent that the failure to so
qualify or be in good standing would not have a Material Adverse
Effect. All of the outstanding shares of capital stock of each
Significant Subsidiary have been duly authorized and validly issued and
are fully paid and non-assessable and are owned by the Company,
directly or through one or more Significant Subsidiaries, free and
clear of any mortgage, pledge, lien, security interest, claim, charge,
equity or encumbrance of any kind.
(iii) Registration Statement and Prospectus. The Company meets
the requirements for use of Form S-3 under the 1933 Act; the
Registration Statement (including any Rule 462(b) Registration
Statement) has become effective under the 1933 Act and no stop order
suspending the effectiveness of the Registration Statement (including
any Rule 462(b) Registration Statement) has been issued under the 1933
Act and no proceedings for that purpose have been instituted or are
pending or, to the knowledge of the Company, are contemplated by the
Commission, and any request on the part of the Commission for
additional information has been complied with; the Indenture has been
duly qualified under the 1939 Act; at the respective times that the
Registration Statement, any Rule 462(b) Registration Statement and any
post-effective amendment thereto (including the filing of the Company's
most recent Annual Report on Form 10-K with the Commission (the "Annual
Report on Form 10-K")) became effective and at each Representation
Date, the Registration Statement (including any Rule 462(b)
Registration Statement) and any amendments thereto complied and will
comply in all material respects with the requirements of the 1933 Act
and the 1933 Act Regulations and the 1939 Act and the rules and
regulations of the Commission under the 1939 Act (the "1939 Act
Regulations") and did not and will not contain an untrue statement of a
material fact or omit to state a material fact required to be stated
therein or necessary to make the statements therein not misleading;
each preliminary prospectus and prospectus filed as part of the
Registration Statement as originally filed or as part of any amendment
thereto, or filed pursuant to Rule 424 under the 1933 Act, complied
when so filed in all material respects with the 1933 Act Regulations;
each preliminary prospectus and the Prospectus delivered to the
applicable Agent(s) for use in connection with the offering of Notes
are identical to any electronically transmitted copies thereof filed
with the Commission pursuant to ▇▇▇▇▇, except to the extent permitted
by Regulation S-T; and at the date hereof, at the date of the
Prospectus and at each Representation Date, neither the Prospectus nor
any amendment or supplement thereto included or will include an untrue
statement of a material fact or omitted or will omit to state a
material fact necessary in order to make the statements therein, in the
light of the circumstances under which they were made, not misleading;
provided, however, that the
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representations and warranties in this subsection shall not apply to
statements in or omissions from the Registration Statement or the
Prospectus made in reliance upon and in conformity with information
furnished to the Company in writing by or on behalf of the Agents,
directly or through you, expressly for use in the Registration
Statement or the Prospectus.
(iv) Incorporated Documents. The documents incorporated or
deemed to be incorporated by reference in the Prospectus, at the time
they were or hereafter are filed with the Commission, complied and will
comply in all material respects with the requirements of the 1934 Act
and the rules and regulations of the Commission under the 1934 Act (the
"1934 Act Regulations") and, when read together with the other
information in the Prospectus, at the date hereof, at the date of the
Prospectus and at each Representation Date, did not and will not
include an untrue statement of a material fact or omit to state a
material fact required to be stated therein or necessary in order to
make the statements therein, in the light of the circumstances under
which they were made, not misleading.
(v) Independent Accountants. Deloitte & Touche, LLP ("Deloitte
& Touche"), who have reported upon the audited financial statements and
schedules included or incorporated by reference in the Registration
Statement and the Prospectus, are independent public accountants as
required by the 1933 Act and the 1933 Act Regulations.
(vi) Financial Statements. The consolidated financial
statements of the Company included or incorporated by reference in the
Registration Statement and the Prospectus, together with the related
schedules and notes present fairly the consolidated financial position
of the Company and its subsidiaries at the dates indicated and the
consolidated results of operations, and the consolidated cash flows of
the Company and its subsidiaries for the periods specified; such
financial statements have been prepared in conformity with generally
accepted accounting principles ("GAAP") applied on a consistent basis
throughout the periods involved; the financial statement schedules, if
any, included in the Registration Statement and the Prospectus present
fairly the consolidated information required to be stated therein; the
selected financial data included or incorporated by reference in the
Registration Statement and the Prospectus present fairly the
information shown therein and have been compiled on a basis consistent
with that of the audited consolidated financial statements included or
incorporated by reference in the Registration Statement and the
Prospectus.
(vii) No Material Changes. Since the respective dates as of
which information is given in the Registration Statement and the
Prospectus, except as otherwise stated therein or contemplated thereby,
there has not been any (1) material adverse change in the condition
(financial or otherwise), earnings, business affairs or business
prospects of the Company and its subsidiaries, considered as one
enterprise, whether or not arising in the ordinary course of business,
(2) transaction entered into by the Company or any subsidiary, other
than in the ordinary course of business, that is material to the
Company and its subsidiaries, considered as one enterprise, or (3)
dividend (other than ordinary quarterly dividends declared, paid or
made in the ordinary course of business) or distribution of any kind
declared, paid or made by the Company on its capital stock.
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(viii) Authorization, Etc., of this Agreement, the Indenture
and the Notes. This Agreement has been duly authorized, executed and
delivered by the Company; the Indenture has been duly authorized,
executed and delivered by the Company and will be a valid and legally
binding agreement of the Company, enforceable against the Company in
accordance with its terms, except as enforcement thereof may be limited
by bankruptcy, insolvency (including, without limitation, all laws
relating to fraudulent transfers), reorganization, moratorium or
similar laws affecting enforcement of creditors' rights generally, and
except as enforcement thereof is subject to general principles of
equity (regardless of whether enforcement is considered in a proceeding
in equity or at law); the Notes have been duly authorized by the
Company for offer, sale, issuance and delivery pursuant to this
Agreement and, when executed, authenticated, issued and delivered in
the manner provided for in the Indenture and delivered against payment
of the consideration therefor, will constitute valid and binding
obligations of the Company, enforceable against the Company in
accordance with their terms, except as enforcement thereof may be
limited by bankruptcy, insolvency (including, without limitation, all
laws relating to fraudulent transfers), reorganization, moratorium or
similar laws affecting enforcement of creditors' rights generally, and
except as enforcement thereof is subject to general principles of
equity (regardless of whether enforcement is considered in a proceeding
in equity or at law); the Notes will be substantially in a form
previously certified to the Agents and contemplated by the Indenture;
and each holder of Notes will be entitled to the benefits of the
Indenture.
(ix) Descriptions of the Indenture and the Notes. The
Indenture and the Notes conform and will conform in all material
respects to the statements relating thereto contained in the Prospectus
and are substantially in the form filed or incorporated by reference,
as the case may be, as exhibits to the Registration Statement.
(x) Accuracy of Exhibits. There are no contracts or documents
which are required to be described in the Registration Statement, the
Prospectus or the documents incorporated by reference therein or to be
filed as exhibits thereto which have not been so described and filed as
required.
(xi) Absence of Defaults and Conflicts. Neither the Company
nor any Significant Subsidiary is in violation of the provisions of its
charter or by-laws or in default in the performance or observance of
any obligation, agreement, covenant or condition contained in any
contract, indenture, mortgage, loan agreement, note, lease or other
agreement or instrument to which it is a party or by which it may be
bound or to which any of its properties may be subject (collectively,
"Agreements and Instruments"), except for such defaults that would not
result in a Material Adverse Effect; and the execution, delivery and
performance of this Agreement, the Indenture, the Notes and any other
agreement or instrument entered into or issued or to be entered into or
issued by the Company in connection with the transactions contemplated
by the Prospectus, the consummation of the transactions contemplated in
the Prospectus (including the issuance and sale of the Notes and the
use of proceeds therefrom as described in the Prospectus) and the
compliance by the Company with its obligations hereunder and under the
Indenture, the Notes and such other agreements or instruments have been
duly authorized by all necessary corporate action and do not and will
not,
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whether with or without the giving of notice or the passage of time or
both, conflict with or constitute a breach of, or default or event or
condition which gives the holder of any note, debenture or other
evidence of indebtedness (or any person acting on such holder's behalf)
the right to require the repurchase, redemption or repayment of all or
a portion of such indebtedness by the Company or any of its
subsidiaries (a "Repayment Event") under, or result in the creation or
imposition of any lien, charge or encumbrance upon any property or
assets of the Company or any Significant Subsidiary pursuant to, any
Agreements and Instruments (except for such conflicts, breaches or
defaults or liens, charges or encumbrances that would not have a
Material Adverse Effect, nor will such action result in any violation
of the provisions of the charter or by-laws of the Company or any of
its subsidiaries or any applicable law, statute, rule, regulation,
judgment, order, writ or decree of any government, government
instrumentality or court, domestic or foreign, having jurisdiction over
the Company or any Significant Subsidiary or any of its respective
properties.
(xii) Absence of Labor Disputes. To the best knowledge of the
Company, no labor problem exists with its employees or with employees
of the Significant Subsidiaries or is imminent that could have a
Material Adverse Effect, and the Company is not actually aware of any
existing or imminent labor disturbance by the employees of any of its
or the Significant Subsidiaries' principal suppliers, contractors or
customers that could be expected to have a Material Adverse Effect.
(xiii) Absence of Proceedings. There is no action, suit or
proceeding, before or by any court or governmental agency or body,
domestic or foreign, now pending or, to the knowledge of the Company,
threatened against the Company or any Significant Subsidiary that is
required to be disclosed in the Registration Statement and the
Prospectus (other than as stated therein), or that could result in a
Material Adverse Effect, or that could materially and adversely affect
the properties or assets of the Company and its subsidiaries,
considered as one enterprise, the performance by the Company of its
obligations under this Agreement, the Indenture and the Notes or the
consummation of the transactions contemplated in the Prospectus; and
the aggregate of all pending legal or governmental proceedings that are
not described in the Registration Statement and the Prospectus to which
the Company or any Significant Subsidiary is a party or which affect
any of its respective properties, including ordinary routine litigation
incidental to the business of the Company or any Significant
Subsidiary, would not have a Material Adverse Effect.
(xiv) Possession of Intellectual Property. The Company and the
Significant Subsidiaries each owns or possesses, or can acquire on
reasonable terms, adequate patents, patent rights, licenses,
trademarks, service marks or trade names (collectively, "Intellectual
Property") necessary to carry on its business as presently conducted,
and neither the Company nor any of its Significant Subsidiaries has
received any notice or is otherwise aware of any infringement of or
conflict with asserted rights of others with respect to any
Intellectual Property that in the aggregate, if the subject of an
unfavorable decision, ruling or finding, could have a Material Adverse
Effect.
(xv) Possession of Licenses and Permits. The Company and the
Significant Subsidiaries each owns, possesses or has obtained all
material governmental licenses, permits, certificates,
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consents, orders, approvals and other authorizations (collectively,
"Governmental Licenses") issued by the appropriate federal, state,
local or foreign regulatory agencies or bodies necessary to own or
lease, as the case may be, and to operate its properties and to carry
on its business as presently conducted (other than such Governmental
Licenses, that, if neither owned, possessed nor obtained, would not
have a material adverse effect on the business of the Company and its
subsidiaries, considered as one enterprise), and neither the Company
nor any Significant Subsidiary has received any notice of proceedings
relating to revocation or modification of any such Governmental
Licenses.
(xvi) Environmental Laws. Except as otherwise stated in the
Registration Statement and the Prospectus and except as would not,
individually or in the aggregate, have a Material Adverse Effect, (A)
neither the Company nor any of its subsidiaries is in violation of any
federal, state, local or foreign statute, law, rule, regulation,
ordinance, code, policy or rule of common law or any judicial or
administrative interpretation thereof including any judicial or
administrative order, consent, decree or judgment, relating to
pollution or protection of human health, the environment (including,
without limitation, ambient air, surface water, groundwater, land
surface or subsurface strata) or wildlife, including, without
limitation, laws and regulations relating to the release or threatened
release of chemicals, pollutants, contaminants, wastes, toxic
substances, hazardous substances, petroleum or petroleum products
(collectively, "Hazardous Materials") or to the manufacture,
processing, distribution, use, treatment, storage, disposal, transport
or handling of Hazardous Materials (collectively, "Environmental
Laws"), (B) the Company and the Significant Subsidiaries have all
permits, authorizations and approvals required under any applicable
Environmental Laws and are each in compliance with their requirements,
(C) there are no pending or, to the knowledge of the Company,
threatened administrative, regulatory or judicial actions, suits,
demands, demand letters, claims, liens, notices of noncompliance or
violation, investigation or proceedings relating to any Environmental
Law against the Company or any of the Significant Subsidiaries and (D)
there are no events or circumstances that may reasonably be expected to
form the basis of an order for clean-up or remediation, or an action,
suit or proceeding by any private party or governmental body or agency,
against or affecting the Company or any of its subsidiaries relating to
Hazardous Materials or any Environmental Laws.
(xvii) No Filings, Regulatory Approvals, Etc. No filing with,
or approval, authorization, consent, license, registration,
qualification, order or decree of, any court or governmental authority
or agency, domestic or foreign, is necessary or required for the
performance by the Company of its obligations under this Agreement, the
Indenture and the Notes or in connection with the transactions
contemplated in the Prospectus, except such as have been previously
obtained or rendered, as the case may be.
(xviii) Market Manipulation or Stabilization Practices. The
Company has not taken and will not take, directly or indirectly, any
action designed to, or that might be reasonably expected to, cause or
result in stabilization or manipulation of the price of the Notes.
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(xix) Commodity Exchange Act. The Notes, upon issuance, will
be excluded or exempted under, or beyond the purview of, the Commodity
Exchange Act, as amended (the "Commodity Exchange Act"), and the rules
and regulations of the Commodity Futures Trading Commission under the
Commodity Exchange Act (the "Commodity Exchange Act Regulations").
(xx) Additional Certifications. Any certificate signed by any
officer of the Company or any Significant Subsidiary and delivered to
one or more Agents or to counsel for the Agents in connection with an
offering of Notes to one or more Agents as principal or through an
Agent as agent shall be deemed a representation and warranty by the
Company to such Agent or Agents as to the matters covered thereby on
the date of such certificate and, unless subsequently amended or
supplemented, at each Representation Date subsequent thereto.
SECTION 3. Purchases as Principal; Solicitations as Agent
(a) Purchases as Principal. Notes purchased from the Company
by the Agents, individually or in a syndicate, as principal shall be made in
accordance with terms agreed upon between such Agent or Agents and the Company
(which terms, unless otherwise agreed, shall, to the extent applicable, include
those terms specified in Exhibit A hereto and shall be agreed upon orally, with
written confirmation prepared by such Agent or Agents and mailed to the
Company). An Agent's commitment to purchase Notes as principal 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. Unless the context otherwise requires, references herein to "this
Agreement" shall include the applicable agreement of one or more Agents to
purchase Notes from the Company as principal. Each purchase of Notes, unless
otherwise agreed, shall be at a discount from the principal amount of each such
Note equivalent to the applicable commission set forth in Schedule A hereto. The
Agents may engage the services of any broker or dealer in connection with the
resale of the Notes purchased by them as principal and may allow all or any
portion of the discount received from the Company in connection with such
purchases to such brokers or dealers. At the time of each purchase of Notes from
the Company by one or more Agents as principal, such Agent or Agents shall
specify the requirements for the officers' certificate, opinion of counsel and
comfort letter pursuant to Sections 7(b), 7(c) and 7(d) hereof.
If the Company and two or more Agents enter into an agreement
pursuant to which such Agents agree to purchase Notes from the Company as
principal and one or more of such Agents shall fail at the Settlement Date to
purchase the Notes which it or they are obligated to purchase (the "Defaulted
Notes"), then the nondefaulting Agents shall have the right, within 24 hours
thereafter, to make arrangements for one of them or one or more other Agents or
underwriters to purchase all, but not less than all, of the Defaulted Notes in
such amounts as may be agreed upon and upon the terms herein set forth;
provided, however, that if such arrangements shall not have been completed
within such 24-hour period, then:
(i) if the aggregate principal amount of Defaulted Notes does
not exceed 10% of the aggregate principal amount of Notes to be so
purchased by all of such Agents on the Settlement
10
Date, the nondefaulting Agents shall be obligated, severally and not
jointly, to purchase the full amount thereof in the proportions that
their respective initial underwriting obligations bear to the
underwriting obligations of all nondefaulting Agents; or
(ii) if the aggregate principal amount of Defaulted Notes
exceeds 10% of the aggregate principal amount of Notes to be so
purchased by all of such Agents on the Settlement Date, such agreement
shall terminate without liability on the part of any nondefaulting
Agent.
No action taken pursuant to this paragraph shall relieve any
defaulting Agent from liability in respect of its default. In the event of any
such default which does not result in a termination of such agreement, either
the nondefaulting Agents or the Company shall have the right to postpone the
Settlement Date for a period not exceeding seven days in order to effect any
required changes in the Registration Statement or the Prospectus or in any other
documents or arrangements.
(b) Solicitations as Agent. On the basis of the
representations and warranties herein contained, but subject to the terms and
conditions herein set forth, when agreed by the Company and an Agent, such
Agent, as an agent of the Company, will use its reasonable best efforts to
solicit offers for the purchase of Notes upon the terms set forth in the
Prospectus. The Agents are not authorized to appoint sub-agents with respect to
Notes sold through them as agent. All Notes sold through an Agent as agent will
be sold at 100% of their principal amount unless otherwise agreed upon between
the Company and such Agent.
The Company reserves the right, in its sole discretion, to
suspend solicitation of offers for the purchase of Notes through an Agent, as an
agent of the Company, commencing at any time for any period of time or
permanently. As soon as practicable after receipt of instructions from the
Company, such Agent will suspend solicitation of offers for the purchase of
Notes from the Company until such time as the Company has advised such Agent
that such solicitation may be resumed.
The Company agrees to pay each Agent a commission, in the form
of a discount, equal to the applicable percentage of the principal amount of
each Note sold by the Company as a result of a solicitation made by such Agent,
as an agent of the Company, as set forth in Schedule A hereto.
(c) Administrative Procedures. The purchase price, interest
rate or formula, maturity date and other terms of the Notes specified in Exhibit
A hereto (as applicable) shall be agreed upon between the Company and the
applicable Agent(s) and specified in a pricing supplement to the Prospectus
(each, a "Pricing Supplement") to be prepared by the Company in connection with
each sale of Notes. Except as otherwise specified in the applicable Pricing
Supplement, the Notes will be issued in denominations of U.S. $1,000 or any
larger amount that is an integral multiple of U.S. $1,000. Administrative
procedures with respect to the issuance and sale of the Notes (the "Procedures")
shall be agreed upon from time to time among the Company, the Agents and the
Trustee. The Agents and the Company agree to perform, and the Company agrees to
cause the Trustee to agree to perform, their respective duties and obligations
specifically provided to be performed by them in the Procedures.
11
SECTION 4. Covenants of the Company
The Company covenants and agrees with each Agent as follows:
(a) Notice of Certain Events. The Company will notify the
Agents immediately, and confirm such notice in writing, of (i) the effectiveness
of any post-effective amendment to the Registration Statement or the filing of
any amendment or supplement to the Prospectus (other than any amendment or
supplement thereto providing solely for the determination of the variable terms
of the Notes or relating solely to the offering of securities other than the
Notes), (ii) the receipt of any comments from the Commission, (iii) any request
by the Commission for any amendment to the Registration Statement or any
amendment or supplement to the Prospectus or for additional information, (iv)
the issuance by the Commission of any stop order suspending the effectiveness of
the Registration Statement, or of any order preventing or suspending the use of
any preliminary prospectus, or of the initiation of any proceedings for that
purpose or (v) any change in the rating assigned by any nationally recognized
statistical rating organization to the Medium-Term Note Program under which the
Notes are issued (the "Program") or any debt securities (including the Notes) of
the Company, or the public announcement by any nationally recognized statistical
rating organization that it has under surveillance or review, with possible
negative implications, its rating of the Program or any such debt securities, or
the withdrawal by any nationally recognized statistical rating organization of
its rating of the Program or any such debt securities. The Company will make
every reasonable effort to prevent the issuance of any stop order and, if any
stop order is issued, to obtain the lifting thereof at the earliest possible
moment.
(b) Filing or Use of Amendments. The Company will give the
Agents advance notice of its intention to file or prepare any additional
registration statement with respect to the registration of additional Notes, any
amendment to the Registration Statement (including any filing under Rule 462(b)
of the 1933 Act Regulations) or any amendment or supplement to the prospectus
included in the Registration Statement at the time it became effective or to the
Prospectus (other than an amendment or supplement thereto providing solely for
the determination of the variable terms of the Notes or relating solely to the
offering of securities other than the Notes), whether pursuant to the 1933 Act,
the 1934 Act or otherwise, will furnish to the Agents copies of any such
document a reasonable amount of time prior to such proposed filing or use, as
the case may be, and will not file any such document to which the Agents or
counsel for the Agents shall reasonably object.
(c) Delivery of the Registration Statement. The Company has
furnished to each Agent and to counsel for the Agents, without charge, signed
and conformed copies of the Registration Statement as originally filed and of
each amendment thereto (including exhibits filed therewith or incorporated by
reference therein and documents incorporated or deemed to be incorporated by
reference therein) and signed and conformed copies of all consents and
certificates of experts. The Registration Statement and each amendment thereto
furnished to the Agents will be identical to any electronically transmitted
copies thereof filed with the Commission pursuant to ▇▇▇▇▇, except to the extent
permitted by Regulation S-T.
12
(d) Delivery of the Prospectus. The Company will deliver to
each Agent, without charge, as many copies of each preliminary prospectus as
such Agent may reasonably request, and the Company hereby consents to the use of
such copies for purposes permitted by the 1933 Act. The Company will furnish to
each Agent, without charge, such number of copies of the Prospectus (as amended
or supplemented) as such Agent may reasonably request. The Prospectus and any
amendments or supplements thereto furnished to the Agents will be identical to
any electronically transmitted copies thereof filed with the Commission pursuant
to ▇▇▇▇▇, except to the extent permitted by Regulation S-T.
(e) Preparation of Pricing Supplements. The Company will
prepare, with respect to any Notes to be sold to or through one or more Agents
pursuant to this Agreement, a Pricing Supplement with respect to such Notes in a
form previously approved by the Agents. The Company will deliver such Pricing
Supplement no later than 11:00 a.m., New York City time, on the business day
following the date of the Company's acceptance of the offer for the purchase of
such Notes and will file such Pricing Supplement pursuant to Rule 424(b) under
the 1933 Act not later than the close of business of the Commission on the fifth
business day after the date on which such Pricing Supplement is first used.
(f) Revisions of Prospectus; Material Changes. Except as
otherwise provided in subsection (n) of this Section 4, if at any time during
the term of this Agreement any event shall occur or condition shall exist as a
result of which it is necessary, in the opinion of counsel for the Agents or
counsel for the Company, to amend the Registration Statement in order that the
Registration Statement will not contain an untrue statement of a material fact
or omit to state a material fact required to be stated therein or necessary to
make the statements therein not misleading or to amend or supplement the
Prospectus in order that the Prospectus will not include an untrue statement of
a material fact or omit to state a material fact necessary in order to make the
statements therein not misleading in the light of the circumstances existing at
the time the Prospectus is delivered to a purchaser, or if it shall be
necessary, in the opinion of either such counsel, to amend the Registration
Statement or amend or supplement the Prospectus in order to comply with the
requirements of the 1933 Act or the 1933 Act Regulations, the Company shall give
immediate notice, confirmed in writing, to the Agents to cease the solicitation
of offers for the purchase of Notes in their capacity as agents and to cease
sales of any Notes they may then own as principal, and the Company will promptly
prepare and file with the Commission, subject to Section 4(b) hereof, such
amendment or supplement as may be necessary to correct such statement or
omission or to make the Registration Statement and Prospectus comply with such
requirements, and the Company will furnish to the Agents, without charge, such
number of copies of such amendment or supplement as the Agents may reasonably
request. In addition, the Company will comply with the 1933 Act, the 1933 Act
Regulations, the 1934 Act and the 1934 Act Regulations so as to permit the
completion of the distribution of each offering of Notes.
(g) Prospectus Revisions; Periodic Financial Information.
Except as otherwise provided in subsection (n) of this Section 4, on or prior to
the date on which there shall be released to the general public interim
financial statement information related to the Company with respect to each of
the first three quarters of any fiscal year or preliminary financial statement
information with respect to any fiscal year, the Company shall furnish such
information to the Agents, confirmed in writing, and shall cause the Prospectus
13
to be amended or supplemented to include financial information with respect
thereto and corresponding information for the comparable period of the preceding
fiscal year, as well as such other information and explanations as shall be
necessary for an understanding thereof or as shall be required by the 1933 Act
or the 1933 Act Regulations.
(h) Prospectus Revisions; Audited Financial Information.
Except as otherwise provided in subsection (n) of this Section 4, on or prior to
the date on which there shall be released to the general public financial
information included in or derived from the audited consolidated financial
statements of the Company for the preceding fiscal year, the Company shall
furnish such information to the Agents, confirmed in writing, and shall cause
the Prospectus to be amended or supplemented to include such audited
consolidated financial statements and the report or reports, and consent or
consents to such inclusion, of the independent accountants with respect thereto,
as well as such other information and explanations as shall be necessary for an
understanding of such consolidated financial statements or as shall be required
by the 1933 Act or the 1933 Act Regulations.
(i) Earnings Statements. The Company will timely file such
reports pursuant to the 1934 Act as are necessary in order to make generally
available to its securityholders as soon as practicable an earnings statement
for the purposes of, and to provide the benefits contemplated by, the last
paragraph of Section 11(a) of the 1933 Act.
(j) Reporting Requirements. The Company, during the period
when the Prospectus is required to be delivered under the 1933 Act, will file
all documents required to be filed with the Commission pursuant to the 1934 Act
within the time periods prescribed by the 1934 Act and the 1934 Act Regulations.
(k) Restriction on Offers and Sales of Securities. Unless
otherwise agreed upon between one or more Agents acting as principal and the
Company, between the date of the agreement by such Agent(s) to purchase the
related Notes from the Company and the Settlement Date with respect thereto, the
Company will not, without the prior written consent of such Agent(s), issue,
sell, offer or contract to sell, grant any option for the sale of, or otherwise
dispose of, any debt securities of the Company (other than the Notes that are to
be sold pursuant to such agreement or commercial paper in the ordinary course of
business).
(l) Ratings. Prior to the offer or solicitation of any offers
for sale of any Notes, the Company shall obtain a rating from each of ▇▇▇▇▇'▇
Investors Service, Inc. and Standard & Poor's Ratings Service concerning the
Notes. The Company will thereafter notify the Agents immediately (and confirm
such notice in writing) of any change in either of such ratings pursuant to
subsection (a)(v) of this Section 4.
(m) Use of Proceeds. The Company will use the net proceeds
received by it from the issuance and sale of the Notes in the manner specified
in the Prospectus.
14
(n) Suspension of Certain Obligations. The Company shall not
be required to comply with the provisions of subsection (f), (g) or (h) of this
Section 4 during any period from the time (i) the Agents shall have suspended
solicitation of offers for the purchase of Notes in their capacity as agents
pursuant to a request from the Company and (ii) no Agent shall then hold any
Notes purchased from the Company as principal, as the case may be, until the
time the Company shall determine that solicitation of offers for the purchase of
Notes should be resumed or an Agent shall subsequently purchase Notes from the
Company as principal.
SECTION 5. Conditions of Agents' Obligations
The obligations of one or more Agents to purchase Notes from
the Company as principal and to solicit offers for the purchase of Notes as an
agent of the Company, and the obligations of any purchasers of Notes sold
through an Agent as an agent of the Company, will be subject to the accuracy of
the representations and warranties on the part of the Company herein contained
or contained in any certificate of an officer of the Company or any of its
Significant Subsidiaries delivered pursuant to the provisions hereof, to the
performance and observance by the Company of its covenants and other obligations
hereunder, and to the following additional conditions precedent:
(a) Effectiveness of Registration Statement. The Registration
Statement (including any Rule 462(b) Registration Statement) is
effective under the 1933 Act and no stop order suspending the
effectiveness of the Registration Statement shall have been issued
under the 1933 Act and no proceedings for that purpose shall have been
instituted or shall be pending or threatened by the Commission, and any
request on the part of the Commission for additional information shall
have been complied with to the reasonable satisfaction of counsel to
the Agents.
(b) Legal Opinions. On the date hereof, the Agents shall have
received the following legal opinions, dated as of the date hereof and
in form and substance satisfactory to the Agents:
(1) Opinion of Counsel for the Company. The favorable
opinion of (a) ▇▇▇▇▇▇▇ ▇. ▇▇▇▇▇▇, ▇▇., Executive Vice
President, General Counsel, Chief Administrative Officer and
Secretary of the Company, to the effect set forth in Exhibit B
hereto and to such further effect as the Agents may reasonably
request, and (b) ▇▇▇▇▇▇ & ▇▇▇▇▇▇▇▇, counsel for the Company,
to the effect set forth in Exhibit C hereto and to such
further effect as the Agents may reasonably request, both in
form and substance satisfactory to counsel for the Agents,
together with signed or reproduced copies of each such opinion
for each of the Agents.
(2) Opinion of Counsel for the Agents. The favorable
opinion of ▇▇▇▇▇▇▇▇ & ▇▇▇▇▇▇▇▇, counsel for the Agents, with
respect to the matters set forth in Sections 2, 3, 5 and 6 and
subsections (i) and (ii) of the penultimate paragraph of
Exhibit C hereto.
(c) Officer's Certificate. On the date hereof, there shall not
have been, since the respective dates as of which information is given
in the Prospectus, any material adverse change in
15
the condition, financial or otherwise, or in the earnings, business
affairs or business prospects of the Company and its subsidiaries
considered as one enterprise, whether or not arising in the ordinary
course of business, and the Agents shall have received a certificate of
the President or a Vice President of the Company and of the Treasurer,
Assistant Treasurer, or Controller of the Company, dated as of the date
hereof, to the effect that (i) there has been no such material adverse
change, (ii) the representations and warranties of the Company herein
contained are true and correct with the same force and effect as though
expressly made at and as of the date of such certificate, (iii) the
Company has complied with all agreements and satisfied all conditions
on its part to be performed or satisfied at or prior to the date of
such certificate, and (iv) no stop order suspending the effectiveness
of the Registration Statement has been issued and no proceedings for
that purpose have been instituted or are pending or, to the best of
such officer's knowledge, are threatened by the Commission.
(d) Comfort Letter of Deloitte & Touche. On the date hereof,
the Agents shall have received a letter from Deloitte & Touche, dated
as of the date hereof and in form and substance satisfactory to the
Agents, to the effect set forth in Exhibit D hereto.
(e) Additional Documents. On the date hereof, counsel to the
Agents shall have been furnished with such documents and opinions as
such counsel may require for the purpose of enabling such counsel to
pass upon the issuance and sale of Notes as herein contemplated and
related proceedings, or in order to evidence the accuracy of any of the
representations and warranties, or the fulfillment of any of the
conditions, herein contained; and all proceedings taken by the Company
in connection with the issuance and sale of Notes as herein
contemplated shall be satisfactory in form and substance to the Agents
and to counsel to the Agents.
If any condition specified in this Section 5 shall not have
been fulfilled when and as required to be fulfilled, this Agreement may be
terminated by the applicable Agent or Agents by notice to the Company at any
time and any such termination shall be without liability of any party to any
other party except as provided in Section 10 hereof and except that Sections 8,
9, 11, 14 and 15 hereof shall survive any such termination and remain in full
force and effect.
SECTION 6. Delivery of and Payment for Notes Sold through an
Agent as Agent
Delivery of Notes sold through an Agent as an agent of the
Company shall be made by the Company to such Agent for the account of any
purchaser only against payment therefor in immediately available funds. In the
event that a purchaser shall fail either to accept delivery of or to make
payment for a Note on the date fixed for settlement, such Agent shall promptly
notify the Company and deliver such Note to the Company and, if such Agent has
theretofore paid the Company for such Note, the Company will promptly return
such funds to such Agent. If such failure has occurred for any reason other than
default by such Agent in the performance of its obligations hereunder, the
Company will reimburse such Agent on an equitable basis for its loss of the use
of the funds for the period such funds were credited to the Company's account.
16
SECTION 7. Additional Covenants of the Company
The Company further covenants and agrees with each Agent as
follows:
(a) Reaffirmation of Representations and Warranties. Each
acceptance by the Company of an offer for the purchase of Notes
(whether to one or more Agents as principal or through an Agent as
agent), and each delivery of Notes (whether to one or more Agents as
principal or through an Agent as agent), shall be deemed to be an
affirmation that the representations and warranties of the Company
herein contained and contained in any certificate theretofore delivered
to the Agents pursuant hereto are true and correct at the time of such
acceptance or sale, as the case may be, and an undertaking that such
representations and warranties will be true and correct at the time of
delivery to such Agent(s) or to the purchaser or its agent, as the case
may be, of the Notes relating to such acceptance or sale, as the case
may be, as though made at and as of each such time (it being understood
that such representations and warranties shall relate to the
Registration Statement and Prospectus as amended and supplemented to
each such time).
(b) Subsequent Delivery of Certificates. Each time that (i)
the Registration Statement or the Prospectus shall be amended or
supplemented (other than by an amendment or supplement providing solely
for the determination of the variable terms of the Notes or relating
solely to the offering of securities other than the Notes), (ii) (if
required in connection with the purchase of Notes from the Company by
one or more Agents as principal) the Company sells Notes to one or more
Agents as principal or (iii) the Company sells Notes in a form not
previously certified to the Agents by the Company, the Company shall
furnish or cause to be furnished to the Agent(s), forthwith a
certificate dated the date of filing with the Commission or the date of
effectiveness of such amendment or supplement, as applicable, or the
date of such sale, as the case may be, in form satisfactory to the
Agent(s) to the effect that the statements contained in the certificate
referred to in Section 5(c) hereof which were last furnished to the
Agents are true and correct at the time of the filing or effectiveness
of such amendment or supplement, as applicable, or the time of such
sale, as the case may be, as though made at and as of such time (except
that such statements shall be deemed to relate to the Registration
Statement and the Prospectus as amended and supplemented to such time)
or, in lieu of such certificate, a certificate of the same tenor as the
certificate referred to in Section 5(c) hereof, modified as necessary
to relate to the Registration Statement and the Prospectus as amended
and supplemented to the time of delivery of such certificate (it being
understood that, in the case of clause (ii) above, any such certificate
shall also include a certification that there has been no material
adverse change in the condition, financial or otherwise, or in the
earnings, business affairs or business prospects of the Company and its
subsidiaries considered as one enterprise since the date of the
agreement by such Agent(s) to purchase Notes from the Company as
principal).
(c) Subsequent Delivery of Legal Opinions. Each time that (i)
the Registration Statement or the Prospectus shall be amended or
supplemented (other than by an amendment or supplement
17
providing solely for the determination of the variable terms of the
Notes or relating solely to the offering of securities other than the
Notes), (ii) (if required in connection with the purchase of Notes from
the Company by one or more Agents as principal) the Company sells Notes
to one or more Agents as principal or (iii) the Company sells Notes in
a form not previously certified to the Agents by the Company, the
Company shall furnish or cause to be furnished forthwith to the
Agent(s) and to counsel to the Agents the written opinions of each of
▇▇▇▇▇▇▇ ▇. ▇▇▇▇▇▇, ▇▇., Executive Vice President, General Counsel,
Chief Administrative Officer and Secretary of the Company, and ▇▇▇▇▇▇ &
▇▇▇▇▇▇▇▇, counsel to the Company, or other counsel satisfactory to the
Agent(s), dated the date of filing with the Commission or the date of
effectiveness of such amendment or supplement, as applicable, or the
date of such sale, as the case may be, in form and substance
satisfactory to the Agent(s), of the same tenor as the opinion referred
to in Section 5(b)(1) hereof, but modified, as necessary, to relate to
the Registration Statement and the Prospectus as amended and
supplemented to the time of delivery of such opinion or, in lieu of
such opinion, counsel last furnishing such opinion to the Agents shall
furnish the Agent(s) with a letter substantially to the effect that the
Agent(s) may rely on such last opinion to the same extent as though it
was dated the date of such letter authorizing reliance (except that
statements in such last opinion shall be deemed to relate to the
Registration Statement and the Prospectus as amended and supplemented
to the time of delivery of such letter authorizing reliance).
(d) Subsequent Delivery of Comfort Letters. Each time that (i)
the Registration Statement or the Prospectus shall be amended or
supplemented to include additional financial information (other than by
an amendment or supplement relating solely to the issuance and/or
offering of securities other than the Notes) or (ii) (if required in
connection with the purchase of Notes from the Company by one or more
Agents as principal) the Company sells Notes to one or more Agents as
principal, the Company shall cause Deloitte & Touche forthwith to
furnish to the Agent(s) a letter, dated the date of filing with the
Commission or the date of effectiveness of such amendment or
supplement, as applicable, or the date of such sale, as the case may
be, in form satisfactory to the Agent(s), of the same tenor as the
letter referred to in Section 5(d) hereof but modified to relate to the
Registration Statement and Prospectus as amended and supplemented to
the date of such letter.
SECTION 8. Indemnification
(a) Indemnification of the Agents. The Company agrees to
indemnify and hold harmless each Agent and each person, if any, who controls
such Agent within the meaning of Section 15 of the 1933 Act or Section 20 of the
1934 Act as follows:
(i) against any and all loss, liability, claim, damage and
expense whatsoever, as incurred, arising out of an untrue statement or
alleged untrue statement of a material fact contained in the
Registration Statement (or any amendment thereto), or the omission or
alleged omission therefrom of a material fact required to be stated
therein or necessary to make the statements therein not misleading, or
arising out of an untrue statement or alleged untrue statement of a
material fact
18
included in any preliminary prospectus or the Prospectus (or any
amendment or supplement thereto), or the omission or alleged omission
therefrom of a material fact necessary in order to make the statements
therein, in the light of the circumstances under which they were made,
not misleading;
(ii) against any and all loss, liability, claim, damage and
expense whatsoever, as incurred, to the extent of the aggregate amount
paid in settlement of any litigation, or any investigation or
proceeding by any governmental agency or body, commenced or threatened,
or any claim whatsoever based upon any such untrue statement or
omission, or any such alleged untrue statement or omission, provided
that (subject to Section 8(d) hereof) any such settlement is effected
with the written consent of the Company; and
(iii) against any and all expense whatsoever, as incurred
(including the fees and disbursements of counsel chosen by such Agent),
reasonably incurred in investigating, preparing or defending against
any litigation, or any investigation or proceeding by any governmental
agency or body, commenced or threatened, or any claim whatsoever based
upon any such untrue statement or omission, or any such alleged untrue
statement or omission, to the extent that any such expense is not paid
under subparagraph (i) or (ii) above;
provided, however, that this indemnity does not apply to any loss, liability,
claim, damage or expense to the extent arising out of an untrue statement or
omission or alleged untrue statement or omission made in reliance upon and in
conformity with written information furnished to the Company by the Agents
expressly for use in the Registration Statement (or any amendment thereto) or
any preliminary prospectus or the Prospectus (or any amendment or supplement
thereto).
(b) Indemnification of Company, Directors and Officers. Each
Agent severally agrees to indemnify and hold harmless the Company, its
directors, each of its officers who signed the Registration Statement and each
person, if any, who controls the Company within the meaning of Section 15 of the
1933 Act or Section 20 of the 1934 Act against any and all loss, liability,
claim, damage and expense described in Section 8(a) hereof, as incurred, but
only with respect to untrue statements or omissions, or alleged untrue
statements or omissions, made in the Registration Statement (or any amendment
thereto) or any preliminary prospectus or the Prospectus (or any amendment or
supplement thereto) in reliance upon and in conformity with written information
furnished to the Company by the Agents expressly for use in the Registration
Statement (or any amendment thereto) or such preliminary prospectus or the
Prospectus (or any amendment or supplement thereto).
(c) Actions Against Parties; Notification. Each indemnified
party shall give notice as promptly as reasonably practicable to each
indemnifying party of any action commenced against it in respect of which
indemnity may be sought hereunder, but failure to so notify an indemnifying
party shall not relieve such indemnifying party from any liability hereunder to
the extent it is not materially prejudiced as a result thereof and in any event
shall not relieve it from any liability which it may have otherwise than on
account of this indemnity agreement. In the case of parties indemnified pursuant
to Section 8(a) hereof, counsel to the indemnified parties shall be selected by
the applicable Agent(s) and, in the case of parties
19
indemnified pursuant to Section 8(b) hereof, counsel to the indemnified shall be
selected by the Company. An indemnifying party may participate at its own
expense in the defense of any such action; provided, however, that counsel to
the indemnifying party shall not (except with the consent of the indemnified
party) also be counsel to the indemnified party. In no event shall the
indemnifying parties be liable for fees and expenses of more than one counsel
(in addition to any local counsel) separate from their own counsel for all
indemnified parties in connection with any one action or separate but similar or
related actions in the same jurisdiction arising out of the same general
allegations or circumstances.
No indemnifying party shall, without the prior written consent
of the indemnified parties, settle or compromise or consent to the entry of any
judgment with respect to any litigation, or any investigation or proceeding by
any governmental agency or body, commenced or threatened, or any claim
whatsoever in respect of which indemnification or contribution could be sought
under this Section 8 or 9 hereof (whether or not the indemnified parties are
actual or potential parties thereto), unless such settlement, compromise or
consent (i) includes an unconditional release of each indemnified party from all
liability arising out of such litigation, investigation, proceeding or claim and
(ii) does not include a statement as to or an admission of fault, culpability or
a failure to act by or on behalf of any indemnified party.
(d) Settlement Without Consent if Failure to Reimburse. If at
any time an indemnified party shall have requested an indemnifying party to
reimburse the indemnified party for fees and expenses of counsel, such
indemnifying party agrees that it shall be liable for any settlement of the
nature contemplated by Section 8(a)(ii) hereof effected without its written
consent if (i) such settlement is entered into more than 45 days after receipt
by such indemnifying party of the aforesaid request, (ii) such indemnifying
party shall have received notice of the terms of such settlement at least 30
days prior to such settlement being entered into and (iii) such indemnifying
party shall not have reimbursed such indemnified party in accordance with such
request prior to the date of such settlement. The indemnified party shall
promptly reimburse the indemnifying party for all amounts advanced to it
pursuant to this Section 8(d) (unless it is entitled to such amounts under
Section 9 hereof) if it shall be finally judicially determined that such
indemnified party was not entitled to indemnification hereunder and such loss,
liability, claim, damage or expense arose out of (i) an untrue statement or
omission or alleged untrue statement or omission made in reliance upon and in
conformity with written information furnished to the Company by the indemnified
party expressly for use in the Registration Statement (or any amendment thereto)
or any preliminary prospectus or the Prospectus (or any amendment or supplement
thereto) or (ii) a fraudulent misrepresentation (within the meaning of Section
11 of the 1933 Act) by the indemnified party.
SECTION 9. Contribution
If the indemnification provided for in Section 8 hereof is for
any reason unavailable to or insufficient to hold harmless an indemnified party
in respect of any losses, liabilities, claims, damages or expenses referred to
therein, then each indemnifying party shall contribute to the aggregate amount
of such losses, liabilities, claims, damages and expenses incurred by such
indemnified party, as incurred, (i) in such proportion as is appropriate to
reflect the relative benefits received by the Company, on the one hand,
20
and the applicable Agent(s), on the other hand, from the offering of the Notes
that were the subject of the claim for indemnification or (ii) if the allocation
provided by clause (i) 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 the
applicable Agent(s), on the other hand, in connection with the statements or
omissions which resulted in such losses, liabilities, claims, damages or
expenses, as well as any other relevant equitable considerations.
The relative benefits received by the Company, on the one
hand, and the applicable Agent(s), on the other hand, in connection with the
offering of the Notes that were the subject of the claim for indemnification
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 discount or commission received by each applicable
Agent, as the case may be, bears to the aggregate initial offering price of such
Notes.
The relative fault of the Company, on the one hand, and the
applicable Agent(s), on the other hand, shall be determined by reference to,
among other things, whether any untrue or alleged untrue statement of a material
fact or omission or alleged omission to state a material fact relates to
information supplied by the Company or by the applicable Agent(s) 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 9 were determined by pro rata
allocation (even if the applicable Agent(s) were treated as one entity for such
purpose) or by any other method of allocation which does not take account of the
equitable considerations referred to above in this Section 9. The aggregate
amount of losses, liabilities, claims, damages and expenses incurred by an
indemnified party and referred to above in this Section 9 shall be deemed to
include any legal or other expenses reasonably incurred by such indemnified
party in investigating, preparing or defending against any litigation, or any
investigation or proceeding by any governmental agency or body, commenced or
threatened, or any claim whatsoever based upon any applicable untrue or alleged
untrue statement or omission or alleged omission.
Notwithstanding the provisions of this Section 9, (i) no Agent
shall be required to contribute any amount in excess of the amount by which the
total discount or commission received by such Agent in connection with the
offering of the Notes that were the subject of the claim for indemnification
exceeds the amount of any damages which such Agent has otherwise been required
to pay by reason of any applicable untrue or alleged untrue statement or
omission or alleged omission and (ii) no person guilty of fraudulent
misrepresentation (within the meaning of Section 11(f) of the 1933 Act) shall be
entitled to contribution from any person who was not guilty of such fraudulent
misrepresentation. In addition, in connection with an offering of Notes
purchased from the Company by two or more Agents as principal, the respective
obligations of such Agents to contribute pursuant to this Section 9 are several,
and not joint, in proportion to the aggregate principal amount of Notes that
each such Agent has agreed to purchase from the Company.
21
For purposes of this Section 9, each person, if any, who
controls an Agent within the meaning of Section 15 of the 1933 Act or Section 20
of the 1934 Act shall have the same rights to contribution as such Agent, and
each director of the Company, each officer of the Company and each person, if
any, who controls the Company within the meaning of Section 15 of the 1933 Act
or Section 20 of the 1934 Act shall have the same rights to contribution as the
Company.
SECTION 10. Payment of Expenses
The Company will pay all expenses incident to the performance
of its obligations under this Agreement, including:
(a) the preparation, filing, printing and delivery of the
Registration Statement as originally filed and all amendments thereto
and any preliminary prospectus, the Prospectus and any amendments or
supplements thereto;
(b) the preparation, printing and delivery of this Agreement
and the Indenture;
(c) the preparation, issuance and delivery of the Notes,
including any fees and expenses relating to the eligibility and
issuance of Notes in book-entry form and the cost of obtaining CUSIP or
other identification numbers for the Notes;
(d) the fees and disbursements of the Company's accountants,
counsel and other advisors or agents (including any calculation agent
or exchange rate agent) and of the Trustee and its counsel;
(e) the reasonable fees and disbursements of counsel to the
Agents incurred in connection with the establishment of the Program and
incurred from time to time in connection with the transactions
contemplated hereby;
(f) the fees charged by nationally recognized statistical
rating organizations for the rating of the Program and the Notes;
(g) the fees and expenses incurred in connection with any
listing of Notes on a securities exchange;
(h) the filing fees incident to, and the reasonable fees and
disbursements of counsel to the Agents in connection with, the review,
if any, by the National Association of Securities Dealers, Inc. (the
"NASD"); and
(i) any advertising and other out-of-pocket expenses of the
Agents incurred with the approval of the Company.
22
SECTION 11. Representations, Warranties and Agreements to
Survive Delivery
All representations, warranties and agreements contained in
this Agreement or in certificates of officers of the Company or any of its
subsidiaries submitted pursuant hereto or thereto shall remain operative and in
full force and effect, regardless of any investigation made by or on behalf of
the Agents or any controlling person of an Agent, or by or on behalf of the
Company, and shall survive each delivery of and payment for the Notes.
SECTION 12. Termination
(a) Termination of this Agreement. This Agreement (excluding
any agreement by one or more Agents to purchase Notes from the Company as
principal) may be terminated for any reason, at any time by either the Company
or an Agent, as to itself, upon the giving of 30 days' prior written notice of
such termination to the other party hereto; provided, however, that if the Agent
to which the Company provides notice does not at the time of the giving of
notice hold any Notes as principal or is not then a party to an agreement with
the Company to purchase Notes from the Company as principal, then this Agreement
may be terminated by the Company upon the giving of five days' prior written
notice.
(b) Termination of Agreement to Purchase Notes as Principal.
The applicable Agent(s) may terminate any agreement by such Agent(s) to purchase
Notes from the Company as principal, immediately upon notice to the Company, at
any time prior to the Settlement Date relating thereto, if (i) there has been,
since the date of such agreement or since the respective dates as of which
information is given in the Prospectus, any material adverse change in the
condition, financial or otherwise, or in the earnings, business affairs or
business prospects of the Company and its subsidiaries considered as one
enterprise, whether or not arising in the ordinary course of business, or (ii)
there has occurred any material adverse change in the financial markets in the
United States or in the international financial markets, or any outbreak of
hostilities or escalation thereof or other calamity or crisis or any change or
development or event involving a prospective change in national or international
political, financial or economic conditions, in each case the effect of which is
such as to make it, in the judgment of such Agent(s), impracticable to market
such Notes or enforce contracts for the sale of such Notes, or (iii) trading in
any securities of the Company has been suspended or limited by the Commission,
or if trading generally on the New York Stock Exchange or the American Stock
Exchange or in the Nasdaq National Market has been suspended or limited, or
minimum or maximum prices for trading have been fixed, or maximum ranges for
prices have been required, by either of said exchanges or by such system or by
order of the Commission, the NASD or any other governmental authority, or (iv) a
banking moratorium has been declared by either Federal, New York or North
Carolina authorities, or (v) the rating assigned by any nationally recognized
statistical rating organization to the Program or any debt securities (including
the Notes) of the Company as of the date of such agreement shall have been
lowered or withdrawn since that date or if any such rating organization shall
have publicly announced that it has under surveillance or review its rating of
the Program or any such debt securities, or (vi) there shall have come to the
attention of such Agent(s) any facts that would cause such Agent(s) to believe
that the Prospectus, at the time it was required to be delivered to a purchaser
of
23
such Notes, included an untrue statement of a material fact or omitted to state
a material fact necessary in order to make the statements therein, in the light
of the circumstances existing at the time of such delivery, not misleading.
(c) General. In the event of any such termination, neither
party will have any liability to the other party hereto, except that (i) the
Agents shall be entitled to any commissions earned in accordance with the third
paragraph of Section 3(b) hereof, (ii) if at the time of termination (a) any
Agent shall own any Notes purchased by it from the Company as principal or (b)
an offer to purchase any of the Notes has been accepted by the Company but the
time of delivery to the purchaser or his agent of such Notes relating thereto
has not occurred, the covenants set forth in Sections 4 and 7 hereof shall
remain in effect until such Notes are so resold or delivered, as the case may
be, and (iii) the covenant set forth in Section 4(i) hereof, the provisions of
Section 10 hereof, the indemnity and contribution agreements set forth in
Sections 8 and 9 hereof, and the provisions of Sections 11, 14 and 15 hereof
shall remain in effect.
SECTION 13. Notices
Unless otherwise provided herein, all notices required under
the terms and provisions hereof shall be in writing, either delivered by hand,
by mail or by telex, telecopier or telegram, and any such notice shall be
effective when received at the address specified below.
If to the Company:
▇▇▇▇'▇ Companies, Inc.
P.O. Box 1111
North Wilkesboro, North Carolina 28656
Attention: ▇▇▇▇▇▇▇ ▇. ▇▇▇▇▇▇, ▇▇., Executive Vice President,
General Counsel, Chief Administrative Officer
and Secretary
Telecopy No.: (▇▇▇) ▇▇▇-▇▇▇▇
If to the Agents:
▇▇▇▇▇▇▇ ▇▇▇▇▇ & Co.
▇▇▇▇▇▇▇ ▇▇▇▇▇, ▇▇▇▇▇▇, ▇▇▇▇▇▇ & ▇▇▇▇▇
Incorporated
World Financial Center
North Tower - 10th Floor
New York, New York 10281-1310
Attention: MTN Product Management
Telecopy No.: (▇▇▇) ▇▇▇-▇▇▇▇
24
▇▇▇▇▇▇ Brothers
3 World Financial Center
▇▇▇ ▇▇▇▇▇ ▇▇▇▇▇▇
▇▇▇ ▇▇▇▇, ▇▇▇ ▇▇▇▇
Attention: MTN Product Management
Telecopy No.: (▇▇▇) ▇▇▇-▇▇▇▇
▇▇▇▇▇▇ ▇▇▇▇▇▇▇ & Co. Incorporated
▇▇▇▇ ▇▇▇▇▇▇▇▇
▇▇▇ ▇▇▇▇▇
▇▇▇ ▇▇▇▇, ▇▇ ▇▇▇▇▇
Attention: Manager - Continuously Offered Products
Telephone: (▇▇▇) ▇▇▇-▇▇▇▇
Telecopier: (▇▇▇) ▇▇▇-▇▇▇▇
with a copy to:
▇▇▇▇▇▇ ▇▇▇▇▇▇▇ & Co. Incorporated
▇▇▇▇ ▇▇▇▇▇▇▇▇
▇▇▇▇ ▇▇▇▇▇
▇▇▇ ▇▇▇▇, ▇▇ ▇▇▇▇▇
Attention: ▇▇▇▇▇ ▇▇▇▇▇▇, Investment Banking Information Center
Telephone: (▇▇▇) ▇▇▇-▇▇▇▇
Telecopier: (▇▇▇) ▇▇▇-▇▇▇▇
or at such other address as such party may designate from time to time by notice
duly given in accordance with the terms of this Section 13.
SECTION 14. Parties
This Agreement shall inure to the benefit of and be binding
upon the Agents and the Company and their respective successors. Nothing
expressed or mentioned in this Agreement is intended or shall be construed to
give any person, firm or corporation, other than the parties hereto and their
respective successors and the controlling persons, officers and directors
referred to in Sections 8 and 9 hereof and their heirs and legal
representatives, any legal or equitable right, remedy or claim under or in
respect of this Agreement or any provision herein contained. This Agreement and
all conditions and provisions hereof are intended to be for the sole and
exclusive benefit of the parties hereto and their respective successors, and
said controlling persons, officers and directors and their heirs and legal
representatives, and for the benefit of no other person, firm or corporation. No
purchaser of Notes shall be deemed to be a successor by reason merely of such
purchase.
25
SECTION 15. GOVERNING LAW; FORUM
THIS AGREEMENT AND ALL THE RIGHTS AND OBLIGATIONS OF THE
PARTIES SHALL BE GOVERNED BY AND CONSTRUED IN ACCORDANCE WITH THE LAWS OF THE
STATE OF NEW YORK. ANY SUIT, ACTION OR PROCEEDING BROUGHT BY THE COMPANY AGAINST
ANY AGENT IN CONNECTION WITH OR ARISING UNDER THIS AGREEMENT SHALL BE BROUGHT
SOLELY IN THE STATE OR FEDERAL COURT OF APPROPRIATE JURISDICTION LOCATED IN THE
BOROUGH OF MANHATTAN, THE CITY OF NEW YORK.
SECTION 16. Effect of Headings
The Article and Section headings herein are for convenience
only and shall not affect the construction hereof.
SECTION 17. Counterparts
This Agreement may be executed in one or more counterparts
and, if executed in more than one counterpart, the executed counterparts hereof
shall constitute a single instrument.
26
If the foregoing is in accordance with the Agents'
understanding of our agreement, please sign and return to the Company a
counterpart hereof, whereupon this Distribution Agreement, along with all
counterparts, will become a binding agreement among the Agents and the Company
in accordance with its terms.
Very truly yours,
LOWE'S COMPANIES, INC.
By:
Name:
Title:
CONFIRMED AND ACCEPTED, as of the date first above written:
▇▇▇▇▇▇▇ LYNCH, ▇▇▇▇▇▇, ▇▇▇▇▇▇ & ▇▇▇▇▇
INCORPORATED
By:
Authorized Signatory
▇▇▇▇▇▇ BROTHERS INC.
By:
▇▇▇▇▇▇ ▇▇▇▇▇▇▇ & CO. INCORPORATED
By:
27
SCHEDULE A
As compensation for the services of the Agents hereunder, the
Company shall pay the applicable Agent, on a discount basis, a commission for
the sale of each Note equal to the principal amount of such Note multiplied by
the appropriate percentage set forth below:
PERCENT OF
MATURITY RANGES PRINCIPAL AMOUNT
--------------- ----------------
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 years................................... .600
From 10 years to less than 15 years.................................. .625
From 15 years to less than 20 years.................................. .700
From 20 years to 30 years............................................ .750
Greater than 30 years................................................ *
--------
* As agreed to by the Company and the applicable Agent at the time of sale.
1