EXHIBIT 1-f
▇▇▇▇▇▇ ▇▇▇▇▇▇▇
▇▇▇▇▇▇ ▇▇▇▇▇▇▇ DirectSecurities(SM)
DISTRIBUTION AGREEMENT
[ ], 2005
▇▇▇▇▇▇ ▇▇▇▇▇▇▇ ▇▇ Inc.
▇▇▇▇ ▇▇▇▇▇▇▇▇
▇▇▇ ▇▇▇▇, ▇▇▇ ▇▇▇▇ ▇▇▇▇▇
▇▇▇▇▇▇ ▇▇▇▇▇▇▇ & Co. Incorporated
▇▇▇▇ ▇▇▇▇▇▇▇▇
▇▇▇ ▇▇▇▇, ▇▇▇ ▇▇▇▇ ▇▇▇▇▇
Dear Sirs:
▇▇▇▇▇▇ ▇▇▇▇▇▇▇, a Delaware corporation (the "Company"), confirms its
agreement with you with respect to the issue and sale from time to time by the
Company of up to U.S.$2,000,000,000 aggregate initial public offering price of
its ▇▇▇▇▇▇ ▇▇▇▇▇▇▇ DirectSecurities(SM) due more than nine months from the date
of issue (the "Notes") or such larger aggregate initial public offering price
as the Company may determine to offer (the "Program Capacity"), subject to
reduction as a result of the sale of the Company's (i) Global Medium-Term
Notes, Series F (issued other than as part of a Unit), (ii) Global Units,
Series F, (iii) Global Medium-Term Notes, Series G and Series H (issued other
than as part of a Unit), to be sold primarily outside of the United States, and
(iv) Global Units, Series G and Series H, to be sold primarily outside of the
United States, and the sale of certain of the Company's other debt securities,
warrants, preferred stock, common stock, purchase contracts and units and of
capital securities of certain ▇▇▇▇▇▇ ▇▇▇▇▇▇▇ Capital Trusts (together with the
Notes, the "Program Securities") in excess of an aggregate initial public
offering price equal to U.S.$[ ] minus the Program Capacity.
The Notes will be issued as senior indebtedness pursuant to the provisions
of a senior indenture dated as of November 1, 2004, between the Company and
JPMorgan Chase Bank, N.A. (formerly known as JPMorgan Chase Bank), as trustee
(the "Trustee") (as may be supplemented or amended from time to time, the
"Indenture").
The Notes 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 you as its exclusive agents 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, you agree 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, you may also purchase Notes as principal
pursuant to the terms of a terms agreement relating to such sale (a "Notes 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 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 relating to the
Notes included in the Registration Statement that will describe certain terms of
the Notes. The prospectus relating to the Notes 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 the Notes, as filed with, or transmitted for filing to,
the Commission pursuant to Rule 424 under the Securities Act. 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"). If the Company
has filed an abbreviated registration statement to register additional Program
Securities pursuant to Rule 462(b) under the Securities Act (the "Rule 462
Registration Statement"), then any reference herein to the term "Registration
Statement" shall be deemed to include such Rule 462 Registration Statement.
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1. Representations and Warranties. The Company represents and warrants to
and agrees with you as of the Commencement Date, as of each date on which you
solicit offers to purchase Notes, as of each date on which the Company accepts
an offer to purchase Notes (including any purchase by you as principal pursuant
to a Notes Terms Agreement), as of each date the Company issues and delivers
Notes and as of each date the Registration Statement or the Basic Prospectus is
amended or supplemented, as follows (it being understood that such
representations, warranties and agreements shall be deemed to relate to the
Registration Statement, the Basic Prospectus and the Prospectus, each as amended
or supplemented to each such date):
(a) The Registration Statement has become effective, no stop order
suspending the effectiveness of the Registration Statement is in effect, and no
proceedings for such purpose are pending before or threatened by the Commission.
(b) (i) Each document, if any, filed or to be filed pursuant to the
Exchange Act and incorporated by reference in the Prospectus complied or will
comply when so filed in all material respects with the Exchange Act and the
applicable rules and regulations of the Commission thereunder, (ii) each part of
the Registration Statement, when such part became effective, did not contain and
each such part, as amended or supplemented, if applicable, will not contain any
untrue statement of a material fact or omit to state a material fact required to
be stated therein or necessary to make the statements therein not misleading,
(iii) the Registration Statement and the Prospectus comply and, as amended or
supplemented, if applicable, will comply in all material respects with the
Securities Act and the applicable rules and regulations of the Commission
thereunder and (iv) the Prospectus does not contain and, as amended or
supplemented, if applicable, will not contain any untrue statement of a material
fact or omit to state a material fact necessary to make the statements therein,
in the light of the circumstances under which they were made, not misleading,
except that (1) the representations and warranties set forth in this Section
1(b) do not apply (A) to statements or omissions in the Registration Statement
or the Prospectus based upon information relating to you furnished to the
Company in writing by you expressly for use therein or (B) to those parts of the
Registration Statement that constitute the Statements of Eligibility (Form T-1)
under the Trust Indenture Act of 1939, as amended (the "Trust Indenture Act"),
of the Trustees and (2) the representations and warranties set forth in clauses
(iii) and (iv) above, when made as of the Commencement Date or as of any date on
which you solicit offers to purchase Notes or on which the Company accepts an
offer to purchase Notes, shall be deemed not to cover information concerning an
offering of particular Notes to the extent such information will be set forth in
a supplement to the Basic Prospectus.
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(c) The Company has been duly incorporated, is validly existing as a
corporation in good standing under the laws of the State of Delaware, has the
corporate power and authority to own its property and to conduct its business as
described in the Prospectus and is duly qualified to transact business and is in
good standing in each jurisdiction in which the conduct of its business or its
ownership or leasing of property requires such qualification, except to the
extent that the failure to be so qualified or be in good standing would not have
a material adverse effect on the Company and its consolidated subsidiaries,
taken as a whole.
(d) Each subsidiary of the Company has been duly incorporated, is validly
existing as a corporation in good standing under the laws of the jurisdiction of
its incorporation, has the corporate power and authority to own its property and
to conduct its business as described in the Prospectus and is duly qualified to
transact business and is in good standing in each jurisdiction in which the
conduct of its business or its ownership or leasing of property requires such
qualification, except to the extent that the failure to be so qualified or be in
good standing would not have a material adverse effect on the Company and its
consolidated subsidiaries, taken as a whole.
(e) Each of this Agreement and any applicable Written Notes Terms Agreement
(as hereinafter defined) has been duly authorized, executed and delivered by the
Company.
(f) The Indenture has been duly qualified under the Trust Indenture Act and
has been duly authorized, executed and delivered by the Company and is a valid
and binding agreement of the Company, enforceable in accordance with its terms
except as the enforceability thereof (i) may be limited by bankruptcy,
insolvency, reorganization, liquidation, moratorium and other similar laws
affecting creditors' rights generally and (ii) is subject to general principles
of equity, regardless of whether such enforceability is considered at a
proceeding in equity or at law.
(g) The form of the Notes has been duly authorized and established in
conformity with the provisions of the Indenture and, when the Notes have been
executed and authenticated in accordance with the provisions of the Indenture
and delivered to and duly paid for by the purchasers thereof, the Notes will be
entitled to the benefits of such Indenture and will be valid and binding
obligations of the Company, enforceable in accordance with their respective
terms except as the enforceability thereof (i) may be limited by bankruptcy,
insolvency, reorganization, liquidation, moratorium and other similar laws
affecting creditors' rights generally and (ii) is subject to general principles
of equity, regardless of whether such enforceability is considered at a
proceeding in equity or at law.
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(h) The execution and delivery by the Company of this Agreement, the Notes,
the Indenture and any applicable Written Notes Terms Agreement and the
performance by the Company of its obligations under this Agreement, the Notes,
the Indenture and any applicable Notes Terms Agreement will not contravene any
provision of applicable law or the certificate of incorporation or by-laws of
the Company or any agreement or other instrument binding upon the Company or any
of its subsidiaries that is material to the Company and its consolidated
subsidiaries, taken as a whole, or any judgment, order or decree of any
governmental body, agency or court having jurisdiction over the Company or any
consolidated subsidiary, and no consent, approval, authorization or order of, or
qualification with, any governmental body or agency is required for the
performance by the Company of its obligations under this Agreement, the Notes,
the Indenture and any applicable Notes Terms Agreement, except such as may be
required by the securities or Blue Sky laws of the various states in connection
with the offer and sale of the Notes; provided, however, that no representation
is made or warranty given as to whether the purchase of the Notes constitutes a
"prohibited transaction" under Section 406 of the Employee Retirement Income
Security Act of 1974, as amended, or Section 4975 of the Internal Revenue Code
of 1986, as amended.
(i) There has not occurred any material adverse change, or any development
involving a prospective material adverse change, in the condition, financial or
otherwise, or in the earnings, business or operations of the Company and its
subsidiaries, taken as a whole, from that set forth in the Prospectus.
(j) There are no legal or governmental proceedings pending or threatened to
which the Company or any of its consolidated subsidiaries is a party or to which
any of the properties of the Company or any of its consolidated subsidiaries is
subject that are required to be described in the Registration Statement or the
Prospectus and are not so described or any statutes, regulations, contracts or
other documents that are required to be described in the Registration Statement
or the Prospectus or to be filed or incorporated by reference as exhibits to the
Registration Statement that are not described, filed or incorporated as
required.
(k) Each of the Company and its consolidated subsidiaries has all necessary
consents, authorizations, approvals, orders, certificates and permits of and
from, and has made all declarations and filings with, all federal, state, local
and other governmental authorities, all self-regulatory organizations and all
courts and other tribunals, to own, lease, license and use its properties and
assets and to conduct its business in the manner described in the Prospectus,
except to the extent that the failure to obtain or file would not have a
material adverse effect on the Company and its consolidated subsidiaries, taken
as a whole.
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(l) ▇▇▇▇▇▇ ▇▇▇▇▇▇▇ ▇▇ Inc. is registered as a broker-dealer and investment
adviser with the Commission, is registered with the Commodity Futures Trading
Commission as a futures commission merchant and is a member of the New York
Stock Exchange, Inc. and the National Association of Securities Dealers, Inc.
(m) ▇▇▇▇▇▇ ▇▇▇▇▇▇▇ & Co. Incorporated is registered as a broker-dealer and
investment adviser with the Commission, is registered with the Commodity Futures
Trading Commission as a futures commission merchant and is a member of the New
York Stock Exchange, Inc. and the National Association of Securities Dealers,
Inc.
(n) The Company is not, and after giving effect to the offering and sale of
the Notes and the application of the proceeds thereof as described in the
Prospectus, will not be required to register as, an "investment company" as such
term is defined in the Investment Company Act of 1940, as amended.
2. Solicitations as Agents; Purchases as Principals.
(a) Solicitations as Agents. In connection with your actions as agents
hereunder, you agree 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 you 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, you will forthwith suspend solicitations of offers to
purchase Notes from the Company until such time as the Company has advised you
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 (i) a change in the interest rates, repayment provisions, redemption
provisions or maturities offered on the Notes or (ii) for a change you deem to
be immaterial), you shall not be required to resume soliciting offers to
purchase Notes until the Company has delivered such certificates, opinions and
letters as you may request.
The Company agrees to pay to you, as consideration for the sale of each
Note resulting from a solicitation made or an offer to purchase received by you,
a commission in the form of a discount from the purchase price of such Note
equal to between 0.2% and 3.0% (depending upon such Note's maturity) of the
principal amount of such Note or such other discount as may be specified in the
Prospectus Supplement relating to such Note.
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You shall communicate to the Company, orally or in writing, each offer to
purchase Notes received by you as agent that in your 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. You shall
have the right to reject any offer to purchase Notes that you consider to be
unacceptable, and any such rejection shall not be deemed a breach of your
agreements contained herein. The procedural details relating to the issue and
delivery of Notes sold by you as agent and the payment therefor shall be as set
forth in the Administrative Procedures (as hereinafter defined).
(b) Purchases as Principals. Each sale of Notes to you as principals shall
be made in accordance with the terms of this Agreement. In connection with each
such sale, the Company will enter into a Notes Terms Agreement that will provide
for the sale of such Notes to and the purchase thereof by you. Each Notes Terms
Agreement will take the form of either (i) a written agreement between you and
the Company, which may be substantially in the form of Exhibit A hereto (a
"Written Notes Terms Agreement"), or (ii) an oral agreement between you and the
Company confirmed in writing by you to the Company.
Your commitment to purchase Notes as principal pursuant to a Notes 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 Notes Terms Agreement shall specify the
principal amount of Notes to be purchased by you 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 Notes Terms Agreement may also specify
any requirements for officers' certificates, opinions of counsel and letters
from the independent auditors of the Company pursuant to Section 4 hereof. A
Notes Terms Agreement may also specify certain provisions relating to the
reoffering of such Notes by you.
Each Notes Terms Agreement shall specify the time and place of delivery of
and payment for such Notes. Unless otherwise specified in a Notes Terms
Agreement, the procedural details relating to the issue and delivery of Notes
purchased by you 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 you as principal pursuant to a Notes Terms Agreement is referred
to herein as a "Settlement Date."
Unless otherwise specified in a Notes 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.
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(c) Administrative Procedures. You and the Company agree to perform the
respective duties and obligations specifically provided to be performed in the
DirectSecurities, 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 you.
(d) Delivery. The documents required to be delivered by Section 4 of this
Agreement as a condition precedent to your obligation to begin soliciting offers
to purchase Notes as agents of the Company shall be delivered at the office of
▇▇▇▇▇ ▇▇▇▇ & ▇▇▇▇▇▇▇▇, your counsel, not later than 4:00 p.m., New York City
time, on the date hereof, or at such other time and/or place as you 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 you begin soliciting offers to purchase
Notes and (ii) the first date on which the Company accepts any offer by you to
purchase Notes as principal. The date of delivery of such documents is referred
to herein as the "Commencement Date."
3. Agreements. The Company agrees with you that:
(a) Prior to the termination of the offering of the Notes pursuant to this
Agreement or pursuant to any Notes Terms Agreement, the Company will not file
any Prospectus Supplement relating to the Notes or any amendment to the
Registration Statement relating to the Notes unless the Company has previously
furnished to you a copy thereof for your review and will not file any such
proposed supplement or amendment to which you reasonably object; provided,
however, that 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), 13(f), 14 or 15(d) of the Exchange Act, copies of which filings
the Company will cause to be delivered to you promptly after being transmitted
for filing with the Commission. 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 you (i) of the filing of any amendment or
supplement to the Basic Prospectus, (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
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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, you shall not be obligated to solicit offers to
purchase Notes so long as you are 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 your opinion 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
you by telephone (with confirmation in writing) to suspend solicitation of
offers to purchase Notes and, if so notified by the Company, you 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 you 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 you, that will correct
such statement or omission or effect such compliance and will supply such
amended or supplemented Prospectus to you in such quantities as you may
reasonably request. If any documents, certificates, opinions and letters
furnished to you 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 you, 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, you 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 you 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 you, will supply such amended or supplemented
Prospectus to you in such quantities as you may reasonably request and shall
furnish to you pursuant to paragraph (f) below and Sections 5(a), 5(b) and 5(c)
such documents, certificates, opinions and letters as you may request in
connection with the preparation and filing of such amendment or supplement.
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(c) The Company will make generally available to its security holders and
to you 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 first 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 in New York City, without charge, (i) to each
Agent, a signed copy of the Registration Statement, including exhibits and all
amendments thereto, and as many copies of the Prospectus, any documents
incorporated by reference therein and any supplements and amendments thereto as
you may reasonably request and (ii) to each Agent that purchases Notes pursuant
to a Notes Terms Agreement or solicits an offer to purchase Notes that is
accepted by the Company, prior to 10:00 a.m. New York City time on the business
day next succeeding the date of such Notes Terms Agreement or the acceptance of
such offer, as many copies of the Prospectus, as then amended or supplemented
(including the Prospectus Supplement relating to the Notes to be purchased
pursuant to such Notes Terms Agreement or accepted offer), as such Agent may
reasonably request.
(e) The Company will endeavor to qualify the Notes for offer and sale under
the securities or Blue Sky laws of such jurisdictions as you shall reasonably
request and to maintain such qualifications for as long as you shall reasonably
request.
(f) During the term of this Agreement, the Company shall furnish to you
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 Notes Terms Agreement
and the performance by the Company of its obligations hereunder or thereunder as
you may from time to time reasonably request.
(g) The Company shall notify you 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 the Company or 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.
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(h) The Company will, whether or not any sale of Notes is consummated, pay
all expenses incident to the performance of its obligations under this Agreement
and any Notes 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
Trustees and their counsel, (iv) the qualification of the Notes under securities
or Blue Sky laws in accordance with the provisions of Section 3(e), including
filing fees and the fees and disbursements of your counsel in connection
therewith and in connection with the preparation of any Blue Sky or Legal
Investment Memoranda, (v) the printing and delivery to you in quantities as
hereinabove stated of copies of the Registration Statement and all amendments
thereto and of the Prospectus and any amendments or supplements thereto, (vi)
the printing and delivery to you of copies of the Indenture and any Blue Sky or
Legal Investment Memoranda, (vii) any fees charged by rating agencies for the
rating of the Notes, (viii) the fees and expenses, if any, incurred with respect
to any filing with the National Association of Securities Dealers, Inc., (ix)
the fees and disbursements of your counsel incurred in connection with the
offering and sale of the Notes, including any opinions to be rendered by such
counsel hereunder, and (x) any out-of-pocket expenses incurred by you; provided
that any advertising expenses incurred by you shall have been approved by the
Company.
(i) During the period beginning on the date of any Notes Terms Agreement
and continuing to and including the Settlement Date with respect to such Notes
Terms Agreement, the Company will not, without your prior consent, offer, sell,
contract to sell or otherwise dispose of any debt securities of the Company
substantially similar to the Notes set forth in such Notes Terms Agreement
(other than (A) the Notes that are to be sold pursuant to such Notes Terms
Agreement, (B) Notes previously agreed to be sold by the Company and (C)
commercial paper issued in the ordinary course of business), except as may
otherwise be provided in the applicable Notes Terms Agreement.
4. Conditions of the Obligations of the Agents. Your obligation to solicit
offers to purchase Notes as agents of the Company, your obligation to purchase
Notes as principals pursuant to any Notes 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 your obligation to solicit
offers to purchase Notes, at the time of such solicitation, and, in the case of
your 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)
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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) there shall not have occurred any change, or any development
involving a prospective change, in the condition, financial or otherwise,
or in the earnings, business or operations of the Company and its
subsidiaries, taken as a whole, from that set forth in the Prospectus, as
amended or supplemented at the time of such solicitation or at the time
such offer to purchase was made, that, in your judgment, is material and
adverse and that makes it, in your judgment, impracticable to market the
Notes on the terms and in the manner contemplated by the Prospectus, as so
amended or supplemented;
(ii) there shall not have occurred any (A) suspension or material
limitation of trading generally on or by, as the case may be, any of the
New York Stock Exchange, the American Stock Exchange, the Nasdaq National
Market, the Chicago Board of Options Exchange, the Chicago Mercantile
Exchange or the Chicago Board of Trade, (B) suspension of trading of any
securities of the Company on any exchange or in any over-the-counter
market, (C) material disruption in securities settlement, payment or
clearance services in the United States or, in the event of a global
offering, in any relevant foreign jurisdiction, (D) declaration of any
moratorium on commercial banking activities by Federal or New York State
authorities or (E) any outbreak or escalation of hostilities or any change
in financial markets or any calamity or crisis that, in your judgment, is
material and adverse and which, singly or together with any other event
specified in this clause (E), makes it, in your judgment, impracticable or
inadvisable to proceed with the offer, sale or delivery of the Notes on the
terms and in the manner contemplated by the Prospectus, as amended or
supplemented, at the time of such solicitation or at the time such offer to
purchase was made; and
(iii) there shall not have occurred any downgrading, nor shall any
notice have been given of any intended or potential downgrading or of any
review for a possible change that does not indicate the direction of the
possible change, in the rating accorded the Company or 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;
(A) except, in each case described in paragraph (i), (ii) or (iii) above, as
disclosed to you in writing by the Company prior to such solicitation or, in the
case of a purchase of Notes, before the offer to purchase such Notes was made or
(B)
12
unless in each case described in (ii) above, the relevant event shall have
occurred and been known to you prior to 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 Notes Terms
Agreement, on the corresponding Settlement Date, you shall have received:
(i) The opinion, dated as of such date, of Sidley ▇▇▇▇▇▇ ▇▇▇▇▇ & ▇▇▇▇
LLP, counsel to the Company, or of other counsel satisfactory to you and
who may be an officer of the Company, to the following effect that:
(A) the Company has been duly incorporated, is validly existing
as a corporation in good standing under the laws of the State of
Delaware, has the corporate power and authority to own its property
and to conduct its business as described in the Prospectus, as amended
or supplemented, and is duly qualified to transact business and is in
good standing in each jurisdiction in which the conduct of its
business or its ownership or leasing of property requires such
qualification, except to the extent that the failure to be so
qualified or be in good standing would not have a material adverse
effect on the Company and its consolidated subsidiaries, taken as a
whole;
(B) each of ▇▇▇▇▇▇ ▇▇▇▇▇▇▇ ▇▇ Inc., Discover Bank, ▇▇▇▇▇▇ ▇▇▇▇▇▇▇
& Co. Incorporated and ▇▇▇▇▇▇ ▇▇▇▇▇▇▇ International Holdings Inc.
(each a "Material Subsidiary") has been duly incorporated, is validly
existing as a corporation in good standing under the laws of the
jurisdiction of its incorporation, has the corporate power and
authority to own its property and to conduct its business as described
in the Prospectus, as amended or supplemented, and is duly qualified
to transact business and is in good standing in each jurisdiction in
which the conduct of its business or its ownership or leasing of
property requires such qualification, except to the extent that the
failure to be so qualified or be in good standing would not have a
material adverse effect on the Company and its consolidated
subsidiaries, taken as a whole;
(C) each of the Company and its Material Subsidiaries has all
necessary consents, authorizations, approvals, orders, certificates
and permits of and from, and has made all declarations and filings
with, all federal, state, local and other governmental authorities,
all self-regulatory organizations and all courts and other tribunals,
to own, lease,
13
license and use its properties and assets and to conduct its business
in the manner described in the Prospectus, as amended or supplemented,
except to the extent that the failure to obtain or file would not have
a material adverse effect on the Company and its consolidated
subsidiaries, taken as a whole;
(D) each of this Agreement and any applicable Written Notes Terms
Agreement has been duly authorized, executed and delivered by the
Company;
(E) the Indenture has been duly qualified under the Trust
Indenture Act and has been duly authorized, executed and delivered by
the Company and is a valid and binding agreement of the Company,
enforceable in accordance with its terms except as the enforceability
thereof (i) may be limited by bankruptcy, insolvency, reorganization,
liquidation, moratorium and other similar laws affecting creditors'
rights generally and (ii) is subject to general principles of equity,
regardless of whether such enforceability is considered at a
proceeding in equity or at law;
(F) the form of the Notes has been duly authorized and
established in conformity with the provisions of the Indenture and, if
the Notes had been executed by the Company and authenticated by the
Trustee or its duly appointed agent in accordance with the provisions
of the Indenture and delivered to and duly paid for by the purchasers
thereof on the date of such opinion, such Notes would be entitled to
the benefits of such Indenture and would be valid and binding
obligations of the Company, enforceable in accordance with their
respective terms except as the enforceability thereof (i) may be
limited by bankruptcy, insolvency, reorganization, liquidation,
moratorium and other similar laws affecting creditors' rights
generally and (ii) is subject to general principles of equity,
regardless of whether such enforceability is considered at a
proceeding in equity or at law;
(G) the execution and delivery by the Company of the Notes, the
Indenture and any applicable Written Notes Terms Agreement and the
performance by the Company of its obligations under this Agreement,
the Notes, the Indenture and any applicable Notes Terms Agreement will
not contravene any provision of applicable law or the certificate of
incorporation or by-laws of the Company or, to the best of such
counsel's knowledge, any agreement or other instrument binding upon
14
the Company or any of its subsidiaries that is material to the Company
and its consolidated subsidiaries, taken as a whole, or, to the best
of such counsel's knowledge, any judgment, order or decree of any U.S.
governmental body, agency or court having jurisdiction over the
Company or any of its consolidated subsidiaries, and no consent,
approval, authorization or order of or qualification with any U.S.
governmental body or agency is required for the performance by the
Company of its obligations under this Agreement, the Notes, the
Indenture and any applicable Notes Terms Agreement, except such as may
be required by the securities or Blue Sky laws of the various states
in connection with the offer and sale of the Notes; provided, however,
that no opinion is expressed on whether the purchase of the Notes
constitutes a "prohibited transaction" under Section 406 of the
Employee Retirement Income Security Act of 1974, as amended, or
Section 4975 of the Internal Revenue Code of 1986, as amended;
(H) the statements (1) in the Prospectus, as then amended or
supplemented, under the captions "Description of Notes" (in the
Prospectus Supplement), "Description of Debt Securities" (in the Basic
Prospectus) and "Plan of Distribution" (in the Prospectus Supplement
and in the Basic Prospectus), (2) in the Registration Statement, as
then amended or supplemented, under Item 15, (3) in "Item 3. Legal
Proceedings" of the most recent annual report on Form 10-K
incorporated by reference in the Prospectus and (4) in "Item 1. Legal
Proceedings" of Part II of the quarterly reports on Form 10-Q, if any,
filed since such annual report and incorporated by reference in the
Prospectus, in each case insofar as such statements constitute
summaries of the legal matters, documents or proceedings referred to
therein, fairly present the information called for with respect to
such legal matters, documents and proceedings and fairly summarize the
matters referred to therein;
(I) after due inquiry, such counsel does not know of any legal or
governmental proceedings pending or threatened to which the Company or
any of its consolidated subsidiaries is a party or to which any of the
properties of the Company or any of its consolidated subsidiaries is
subject that are required to be described in the Registration
Statement or the Prospectus, as then amended or supplemented, and are
not so described or of any U.S. federal or state statutes,
regulations, contracts or other documents governed by U.S. federal or
state law that are
15
required to be described in the Registration Statement or the
Prospectus, as then amended or supplemented, or to be filed or
incorporated by reference as exhibits to such Registration Statement
that are not described, filed or incorporated by reference as
required;
(J) the Company is not, and after giving effect to the offering
and sale of the Notes and the application of the proceeds thereof as
described in the Prospectus, will not be required to register as, an
"investment company" as such term is defined in the Investment Company
Act of 1940, as amended; and
(K) such counsel (1) believes that each document, if any, filed
pursuant to the Exchange Act and incorporated by reference in the
Prospectus as then amended or supplemented (except as to financial
statements and schedules and other financial and statistical data
included therein, as to which such counsel need not express any
belief) 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) has no reason to believe that the
Registration Statement (except as to financial statements and
schedules and other financial and statistical data included therein,
as to which such counsel need not express any belief, and except for
the part of the Registration Statement that constitutes the Forms T-1)
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, (3) believes that the Registration Statement
and Prospectus, as then amended or supplemented, if applicable (except
as to financial statements and schedules and other financial and
statistical data included therein, as to which such counsel need not
express any belief), complied as to form in all material respects with
the Securities Act and the applicable rules and regulations of the
Commission thereunder and (4) has no reason to believe that the
Prospectus, as then amended or supplemented, if applicable (except as
to financial statements and schedules and other financial and
statistical data included therein, as to which such counsel need not
express any belief), 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 they were made, not misleading;
provided that in the case of an opinion
16
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 ▇▇▇▇▇ ▇▇▇▇ & ▇▇▇▇▇▇▇▇,
your special counsel, covering the matters in subparagraphs (D), (E), (F)
and (H) (with respect to statements in the Prospectus, as then amended or
supplemented, under the captions "Description of Notes" (in the Prospectus
Supplement), "Description of Debt Securities" (in the Basic Prospectus),
"Plan of Distribution" (in the Prospectus Supplement and in the Basic
Prospectus) and clauses (2), (3) and (4) of subparagraph (K) in paragraph
(b)(i) above.
With respect to subparagraph (K) of paragraph (b)(i) above, if such opinion
is given by counsel who is also an officer of the Company, such counsel may
state that his or her opinion and belief are based upon his or her
participation, or the participation of someone under his or her supervision, in
the preparation of the Registration Statement and Prospectus and any amendments
or supplements thereto and documents incorporated therein by reference and
review and discussion of the contents thereof, but are without independent check
or verification, except as specified. With respect to subparagraph (K) of
paragraph (b)(i) above, ▇▇▇▇▇ ▇▇▇▇ & ▇▇▇▇▇▇▇▇ and, if Sidley ▇▇▇▇▇▇ ▇▇▇▇▇ & ▇▇▇▇
LLP is giving such opinion, Sidley ▇▇▇▇▇▇ ▇▇▇▇▇ & ▇▇▇▇ 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.
(iii) The opinion, dated as of such date, of Sidley ▇▇▇▇▇▇ ▇▇▇▇▇ &
Wood LLP, special counsel to the Company, to the effect that the statements
set forth under the caption "United States Federal Income Taxation" in the
Prospectus Supplement and under the caption "Forms of Securities --
Limitations on Issuance of Bearer Securities and Bearer Debt Warrants" in
the Basic Prospectus, insofar as such statements relate to statements of
law or legal conclusions under the laws of the United States or matters of
United States law, fairly present the information called for and fairly
summarize the matters referred to therein.
17
The opinion of Sidley ▇▇▇▇▇▇ ▇▇▇▇▇ & ▇▇▇▇ LLP described in paragraph
(b)(iii) above and in paragraph (b)(i) above, if such opinion is given by Sidley
▇▇▇▇▇▇ ▇▇▇▇▇ & ▇▇▇▇ LLP, shall be rendered to you at the request of the Company
and shall so state therein.
(c) On the Commencement Date and, if called for by any Notes Terms
Agreement, on the corresponding Settlement Date, you 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 Notes Terms
Agreement, on the corresponding Settlement Date, the Company's independent
auditors shall have furnished to you a letter or letters, dated as of the
Commencement Date or such Settlement Date, as the case may be, in form and
substance satisfactory to you 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; provided that each letter so furnished shall use a "cut-off date"
no more than three business days prior to the date of such letter.
(e) On the Commencement Date and on each Settlement Date, the Company shall
have furnished to you such appropriate further information, certificates and
documents as you may reasonably request
5. Additional Agreements of the Company. (a) Each time the Registration
Statement or Prospectus is amended or supplemented (other than by an amendment
or supplement providing solely for (i) a change in the interest rates, repayment
provisions, redemption provisions or maturities offered on the Notes or (ii) a
change you deem to be immaterial), the Company will deliver or cause to be
delivered forthwith to you 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 you, of the same tenor as the certificate
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.
18
(b) Each time the Company furnishes a certificate pursuant to Section 5(a)
(other than any amendment or supplement to the Registration Statement or
Prospectus caused by the filing of a Current Report on Form 8-K unless you shall
reasonably request based on disclosure included or omitted from such Report),
the Company will furnish or cause to be furnished forthwith to you a written
opinion of counsel for the Company. Any such opinion shall be dated the date of
such amendment or supplement, as the case may be, shall be in a form
satisfactory to you and shall be of the same tenor as the opinions referred to
in Section 4(b), but modified to relate to the Registration Statement and the
Prospectus as amended and supplemented to the time of delivery of such opinion.
In lieu of such opinion, counsel last furnishing such an opinion to you may
furnish to you a letter to the effect that you may rely on such last opinion to
the same extent as though it were dated the date of such letter (except that
statements in such last opinion will be deemed to relate to the Registration
Statement and the Prospectus as amended or supplemented to the time of delivery
of such letter.)
(c) Each time the Registration Statement or the Prospectus is amended or
supplemented to set forth amended or supplemental financial information or such
amended or supplemental information is incorporated by reference in the
Prospectus, the Company shall cause its independent auditors forthwith to
furnish you with a letter, dated the date of such amendment or supplement, as
the case may be, in form satisfactory to you, 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; provided that each letter so furnished shall use a "cut-off date" no
more than three business days prior to the date of such letter.
6. Indemnification and Contribution. (a) The Company agrees to indemnify
and hold harmless you and each person, if any, who controls you 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, any legal or other expenses reasonably incurred
in connection with defending or investigating any such action or claim) caused
by any untrue statement or alleged untrue statement of a material fact contained
in the Registration Statement or any amendment thereof or the Prospectus (as
amended or supplemented if the Company shall have furnished any amendments or
supplements thereto), or caused by any omission or alleged omission to state
therein a material fact required to be stated therein or necessary to make the
statements therein not misleading, except insofar as such losses, claims,
damages or liabilities are caused by any such untrue statement or omission or
alleged untrue statement or omission based upon information relating to you
furnished to the Company in writing by you expressly for use therein.
19
(b) You agree to indemnify and hold harmless the Company, its directors,
its officers who sign the Registration Statement and each person, if any, who
controls the Company within the meaning of either Section 15 of the Securities
Act or Section 20 of the Exchange Act to the same extent as the foregoing
indemnity from the Company to you, but only with reference to information
relating to you furnished to the Company in writing by you expressly for use in
the Registration Statement or the Prospectus or any amendments or supplements
thereto.
(c) In case any proceeding (including any governmental investigation) shall
be instituted involving any person in respect of which indemnity may be sought
pursuant to either paragraph (a) or (b) above, such person (the "indemnified
party") shall promptly notify the person against whom such indemnity may be
sought (the "indemnifying party") in writing and the indemnifying party, upon
request of the indemnified party, shall retain counsel reasonably satisfactory
to the indemnified party to represent the indemnified party and any others the
indemnifying party may designate in such proceeding and shall pay the fees and
disbursements of such counsel related to such proceeding. In any such
proceeding, any indemnified party shall have the right to retain its own
counsel, but the fees and expenses of such counsel shall be at the expense of
such indemnified party unless (i) the indemnifying party and the indemnified
party shall have mutually agreed to the retention of such counsel or (ii) the
named parties to any such proceeding (including any impleaded parties) include
both the indemnifying party and the indemnified party and representation of both
parties by the same counsel would be inappropriate due to actual or potential
differing interests between them. It is understood that the indemnifying party
shall not, in respect of the legal expenses of any indemnified party in
connection with any proceeding or related proceedings in the same jurisdiction,
be liable for the fees and expenses of more than one separate firm (in addition
to any local counsel) for all such indemnified parties and that all such fees
and expenses shall be reimbursed as they are incurred. Such firm shall be
designated in writing by you, in the case of parties indemnified pursuant to
paragraph (a) above, and by the Company, in the case of parties indemnified
pursuant to paragraph (b) above. The indemnifying party shall not be liable for
any settlement of any proceeding effected without its written consent, but if
settled with such consent or if there were to be a final judgment for the
plaintiff, the indemnifying party agrees to indemnify the indemnified party from
and against any loss or liability by reason of such settlement or judgment.
Notwithstanding the foregoing sentence, if at any time an indemnified party
shall have requested an indemnifying party to reimburse the indemnified party
for fees and expenses of counsel as contemplated by the second and third
sentences of this paragraph, the indemnifying party agrees that it shall be
liable for any settlement of any proceeding effected without its written consent
if (i) such settlement is entered into more than 30 days after receipt by such
indemnifying party of the aforesaid request and (ii) such indemnifying party
shall not have reimbursed the indemnified party in accordance
20
with such request prior to the date of such settlement. No indemnifying party
shall, without the prior written consent of the indemnified party, effect any
settlement of any pending or threatened proceeding in respect of which any
indemnified party is or could have been a party and indemnity could have been
sought hereunder by such indemnified party, unless such settlement includes an
unconditional release of such indemnified party from all liability on claims
that are the subject matter of such proceeding.
(d) To the extent the indemnification provided for in paragraph (a) or (b)
of this Section 6 is unavailable to an indemnified party or insufficient in
respect of any losses, claims, damages or liabilities referred to therein in
connection with any offering of Notes, then each indemnifying party under such
paragraph, in lieu of indemnifying such indemnified party thereunder, shall
contribute to the amount paid or payable by such indemnified party as a result
of such losses, claims, damages or liabilities (i) in such proportion as is
appropriate to reflect the relative benefits received by the Company on the one
hand and you on the other hand from the offering of such Notes 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 you on the other hand in connection with the statements or omissions
that resulted in such losses, claims, damages or liabilities, as well as any
other relevant equitable considerations. The relative benefits received by the
Company on the one hand and you on the other hand in connection with the
offering of such Notes shall be deemed to be in the same respective proportions
as the total net proceeds from the offering of such Notes (before deducting
expenses) received by the Company bear to the total discounts and commissions
received by you in respect thereof. The relative fault of the Company on the one
hand and of you on the other hand shall be determined by reference to, among
other things, whether the untrue or alleged untrue statement of a material fact
or the omission or alleged omission to state a material fact relates to
information supplied by the Company or by you and the parties' relative intent,
knowledge, access to information and opportunity to correct or prevent such
statement or omission.
(e) The Company and you agree that it would not be just or equitable if
contribution pursuant to this Section 6 were determined by pro rata allocation
or by any other method of allocation that does not take account of the equitable
considerations referred to in paragraph (d) above. The amount paid or payable by
an indemnified party as a result of the losses, claims, damages and liabilities
referred to in paragraph (d) above shall be deemed to include, subject to the
limitations set forth above, any legal or other expenses reasonably incurred by
such indemnified party in connection with investigating or defending any such
action or claim. Notwithstanding the provisions of this Section 6, you shall not
be required to contribute any amount in excess of the amount by which the total
price at which the Notes referred to in paragraph (d) above that were offered
and sold to
21
the public through you exceeds the amount of any damages that you have 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 remedies provided for in this Section 6 are not exclusive
and shall not limit any rights or remedies which may otherwise be available to
any indemnified party at law or in equity.
(f) The indemnity and contribution provisions contained in this Section 6
and the representations, warranties and other statements of the Company, its
officers and you set forth in or made pursuant to this Agreement or any Notes
Terms Agreement will remain operative and in full force and effect regardless of
(i) any termination of this Agreement or any such Notes Terms Agreement, (ii)
any investigation made by or on behalf of you or any person controlling you or
by or on behalf of the Company, its officers or directors or any person
controlling the Company and (iii) acceptance of and payment for any of the
Notes.
7. Position of the Agent. In acting under this Agreement and in connection
with the sale of any Notes by the Company (other than Notes sold to you pursuant
to a Notes Terms Agreement), you are acting solely as agent of the Company and
do not assume any obligation towards or relationship of agency or trust with any
purchaser of Notes. You shall make reasonable efforts to assist the Company in
obtaining performance by each purchaser whose offer to purchase Notes has been
solicited by you and accepted by the Company, but you 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 you harmless
against any loss, claim, damage or liability arising from or as a result of such
default and shall, in particular, pay to you the commission you would have
received had such sale been consummated.
8. Offering Restrictions. If any Notes are to be offered outside the United
States, you will not offer or sell any such Notes in any jurisdiction if such
offer or sale would not be in compliance with any applicable law or regulation
or if any consent, approval or permission is needed for such offer or sale by
you or for or on behalf of the Company unless such consent, approval or
permission has been previously obtained. Subject to the obligations of the
Company set forth in Section 3 of this Agreement, the Company shall have no
responsibility for, and you will obtain, any consent, approval or permission
required by you for the subscription, offer, sale or delivery by you of Notes,
or the distribution of any offering materials, under the laws and regulations in
force in any jurisdiction to which you are subject or in or from which you make
any subscription, offer, sale or delivery.
22
9. Termination. This Agreement may be terminated at any time either by the
Company or by you upon the giving of written notice of such termination to the
other parties hereto, but without prejudice to any rights, obligations or
liabilities of the other parties hereto accrued or incurred prior to such
termination. The termination of this Agreement shall not require termination of
any Notes Terms Agreement, and the termination of any such Notes Terms Agreement
shall not require termination of this Agreement. If this Agreement is
terminated, the provisions of the third paragraph of Section 2(a), the last
sentence of Section 3(b) and Sections 3(c), 3(h), 6, 7, 10, 11 and 13 shall
survive; provided that if at the time of termination an offer to purchase Notes
has been accepted by the Company but the time of delivery to the purchaser or
its agent of such Notes has not occurred, the provisions of Sections 1, 2(b),
2(c), 3(a), 3(d), 3(e), 3(f), 3(g), 3(i), 4 and 5 shall also survive until such
delivery has been made.
10. Notices. All communications hereunder will be in writing and effective
only on receipt, and, if sent to you, will be mailed, delivered or telefaxed and
confirmed to you at ▇▇▇▇ ▇▇▇▇▇▇▇▇, ▇▇▇ ▇▇▇▇, ▇▇▇ ▇▇▇▇ ▇▇▇▇▇, Attention: Manager,
Continuously Offered Products (telefax number: 212-761-0781) or, if sent to the
Company, will be mailed, delivered or telefaxed and confirmed to the Company at
▇▇▇▇ ▇▇▇▇▇▇ ▇▇ ▇▇▇ ▇▇▇▇▇▇▇▇, ▇▇▇ ▇▇▇▇, ▇▇▇ ▇▇▇▇ ▇▇▇▇▇, Attention: Treasurer;
Facsimile No.: ▇▇▇-▇▇▇-▇▇▇▇.
11. Successors. This Agreement and any Notes 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.
12. Counterparts. This Agreement may be signed in any number of
counterparts, each of which shall be an original, with the same effect as if the
signatures thereto and hereto were upon the same instrument.
13. Applicable Law. This Agreement will 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.
23
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,
▇▇▇▇▇▇ ▇▇▇▇▇▇▇
By:
----------------------------------
Name:
Title:
The foregoing Agreement is hereby
confirmed and accepted as of the date first
above written.
▇▇▇▇▇▇ ▇▇▇▇▇▇▇ ▇▇ INC.
By:
-------------------------------
Name:
Title:
▇▇▇▇▇▇ ▇▇▇▇▇▇▇ & CO.
INCORPORATED
By:
-------------------------------
Name:
Title:
EXHIBIT A
▇▇▇▇▇▇ ▇▇▇▇▇▇▇
DIRECTSECURITIES(SM)
NOTES TERMS AGREEMENT
_______________, 200_
▇▇▇▇▇▇ ▇▇▇▇▇▇▇
▇▇▇▇ ▇▇▇▇▇▇▇▇
▇▇▇ ▇▇▇▇, ▇▇▇ ▇▇▇▇ ▇▇▇▇▇
Attention:
Re: DirectSecurities Distribution Agreement dated [ ], 2005
(the "DirectSecurities Distribution Agreement")
-----------------------------------------------------------------
The undersigned agrees to purchase your ▇▇▇▇▇▇ ▇▇▇▇▇▇▇
DirectSecurities(SM) having the following terms:
Principal Amount: Interest Rate:
Purchase Price: Applicability of Modified Payment upon Acceleration:
Price to Public: If yes, state issue price:
Settlement Date and Time: Applicability of Survivor's Option:
Place of Delivery: Optional Repayment Date(s):
Original Issue Date: Optional Redemption Date(s):
Interest Accrual Date: Initial Redemption Date:
Interest Payment Dates: Initial Redemption Percentage:
Interest Payment Period: Annual Redemption Percentage Reduction:
Maturity Date: Face Amount (if any):
Minimum Denominations:
Other Provisions:
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The provisions of Sections 1, 2(b) and 2(c), 3 through 6, 8 and 10 through
14 of the DirectSecurities 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.
This Agreement is also subject to termination on the terms incorporated by
reference herein. If this Agreement is terminated, the provisions of Sections
3(h), 6, 10, 11, and 13 of the DirectSecurities 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 DirectSecurities Distribution Agreement will be
required: ________________.
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▇▇▇▇▇▇ ▇▇▇▇▇▇▇ ▇▇ INC.
By:
----------------------------------
Name:
Title:
▇▇▇▇▇▇ ▇▇▇▇▇▇▇ & CO. INCORPORATED
By:
----------------------------------
Name:
Title:
Accepted:
▇▇▇▇▇▇ ▇▇▇▇▇▇▇
By:
-------------------------------
Name:
Title:
A-3
EXHIBIT B
▇▇▇▇▇▇ ▇▇▇▇▇▇▇
▇▇▇▇▇▇ ▇▇▇▇▇▇▇ DIRECTSECURITIES(SM)
ADMINISTRATIVE PROCEDURES
________________________
Explained below are the administrative procedures and specific terms of the
offering of ▇▇▇▇▇▇ ▇▇▇▇▇▇▇ DirectSecurities(SM) (the "Notes") on a continuous
basis by ▇▇▇▇▇▇ ▇▇▇▇▇▇▇ (the "Company") pursuant to the ▇▇▇▇▇▇ ▇▇▇▇▇▇▇
DirectSecurities Distribution Agreement dated [ ], 2005 (as may be
amended from time to time, the "DirectSecurities Distribution Agreement") among
the Company, ▇▇▇▇▇▇ ▇▇▇▇▇▇▇ ▇▇ Inc. and ▇▇▇▇▇▇ ▇▇▇▇▇▇▇ & Co. Incorporated
(collectively or individually the "Agent" as the context requires). The Notes
will be issued as senior indebtedness of the Company pursuant to the provisions
of a senior indenture dated as of November 1, 2004 (as may be supplemented or
amended from time to time, the "Indenture"), between the Company and JPMorgan
Chase Bank, N.A. (formerly known as JPMorgan Chase Bank), ("JPMorgan Chase"), as
trustee.
In the DirectSecurities Distribution Agreement, the Agent has 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 the Agent, as agent of the Company. The Agent, as principal, may
also purchase Notes for its own account, and the Company and the Agent will
enter into a terms agreement (a "Notes Terms Agreement"), as contemplated by the
DirectSecurities Distribution Agreement. The administrative procedures explained
below will govern the issuance and settlement of any Notes purchased by the
Agent, as principal, unless otherwise specified in the applicable Notes Terms
Agreement.
JPMorgan Chase will be the Registrar, Authenticating Agent and Paying Agent
for the Notes and will perform the duties specified herein. Each Note will be
represented by a Global Note (as defined below) delivered to JPMorgan Chase, as
agent for The Depository Trust Company ("DTC"), and recorded in the book-entry
system maintained by DTC (a "Book-Entry Note"). Each Note will be issued in
global form. Except as set forth in the Indenture, an owner of a Book-Entry Note
will not be entitled to receive a certificated note.
Book-Entry Notes will be payable in U.S. dollars and will be issued in
accordance with the administrative procedures set forth in Part I hereof as they
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may subsequently be amended as the result of changes in DTC's operating
procedures.
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 Agent in writing of the employees of the
Company with whom the Agent is to communicate regarding offers to purchase Notes
and the related settlement details.
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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, JPMorgan Chase will
perform the custodial, document control and administrative functions described
below, in accordance with its respective obligations under (i) DTC's Operational
Arrangements dated February 20, 2002, as amended from time to time, including by
the Blanket Issuer Letter of Representations from the Company to DTC, dated as
of August 25, 2003 and (ii) its obligations under a Medium-Term Note Certificate
Agreement between JPMorgan Chase and DTC dated as of November 13, 2001, 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 Note in fully registered form
without coupons (a "Global Note") representing up to
U.S.$500,000,000 principal amount of all such Notes that
have the same Original Issue Date, Maturity Date and
other terms and that otherwise comprise the same
securities and have the same terms. Each Global Note will
be dated and issued as of the date of its authentication
by JPMorgan Chase. Each Global Note will bear an
"Interest Accrual Date," which will be (i) with respect
to an original Global Note (or any portion thereof), its
original issuance date and (ii) with respect to any
Global Note (or any portion thereof) issued subsequently
upon exchange of a Global Note, or in lieu of a
destroyed, lost or stolen Global Note, the most recent
Interest Payment Date to which interest has been paid or
duly provided for on the predecessor Global Note or Notes
(or if no such payment or provision has been made, the
original issuance date of the predecessor Global Note),
regardless of the date of authentication of such
subsequently issued Global Note. Book-Entry Notes will be
payable in U.S. dollars.
Denominations: Book-Entry Notes will be issued in principal amounts of
U.S.$1,000 or any amount in excess thereof that is an
integral multiple of U.S.$1,000, unless otherwise
indicated in the applicable Pricing Supplement. Global
Notes will be denominated in principal amounts not in
excess of U.S.$500,000,000. If one or more Book-Entry
Notes having an aggregate principal amount in
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excess of U.S.$500,000,000 would, but for the preceding
sentence, be represented by a single Global Note then one
Global Note will be issued to represent each
U.S.$500,000,000 principal amount of such Book-Entry Note
or Notes and an additional Global Note will be issued to
represent any remaining principal amount of such
Book-Entry Note or Notes. In such a case, each of the
Global Notes shall be assigned the same CUSIP number.
Preparation of
Pricing Supplement: If any order to purchase a Book-Entry Note is accepted by
or on behalf of the Company, the Company will prepare a
pricing supplement (a "Pricing Supplement") reflecting
the terms of such Note. The Company (i) will arrange to
file an electronic format document, in the manner
prescribed by the ▇▇▇▇▇ ▇▇▇▇▇ Manual, of such Pricing
Supplement with the Commission in accordance with the
applicable paragraph of Rule 424(b) under the Securities
Act, (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 Agent as the Agent
shall request and (iii) will, on the Agent's behalf,
promptly file five copies of such Pricing Supplement with
the National Association of Securities Dealers, Inc. (the
"NASD"), if required under the rules of the NASD. The
Agent will cause such Pricing Supplement to be delivered
to the purchaser of the Note.
In each instance that a Pricing Supplement is prepared,
the Agent will affix the Pricing Supplement to
Prospectuses prior to their use. Outdated Pricing
Supplements, and the Prospectuses to which they are
attached (other than those retained for files), will be
destroyed.
Settlement: The receipt by the Company of immediately available funds
in payment for a Book-Entry Note and the authentication
and issuance of the Global Note representing such Note
shall constitute "settlement" with respect to such Note.
All orders accepted by the Company will be settled on the
fifth Business Day
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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 Procedures: Settlement Procedures with regard to each Book-Entry Note
sold by the Company to or through the Agent (unless
otherwise specified pursuant to a Notes Terms Agreement),
shall be as follows:
A. The 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. Whether such Note will pay interest monthly,
quarterly, semiannually or annually.
4. Whether a Survivor's Option is applicable.
5. Redemption or repayment provisions, if any.
6. Settlement date and time (Original Issue Date).
7. Interest Accrual Date.
8. Price.
9. Agent's commission, if any, determined as provided
in the DirectSecurities Distribution Agreement.
10. Whether the Note is an Original Issue Discount Note
(an "OID Note"), and if it is an OID Note, the
applicability of Modified Payment upon Acceleration
(and, if so, the Issue Price).
11. Any other applicable provisions.
B. The Company will advise JPMorgan Chase by telephone or
electronic transmission (confirmed in writing at any time
on the same date) of the information set forth in
"Settlement Procedures" "A" above, such
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advice to contain a representation as to the aggregate
principal amount of Notes permitted to be issued
hereunder after such issuance. JPMorgan Chase will then
assign a CUSIP number to the Global Note representing a
Note and will notify the Company and the Agent of such
CUSIP number(s) by telephone as soon as practicable.
C. JPMorgan Chase will enter a pending deposit message
through DTC's Participant Terminal System, providing the
following settlement information to DTC, the Agent and
Standard & Poor's Corporation:
1. The information set forth in "Settlement Procedure"
"A" above.
2. The Initial Interest Payment Date for the Notes, the
number of days by which such date succeeds the
related DTC Record Date and, if known, amount of
interest payable on such Initial Interest Payment
Date.
3. The CUSIP number of the Global Note.
4. Whether the Global Note will represent any other
Book-Entry Note (to the extent known at such time).
5. The number of Participant accounts to be maintained
by DTC on behalf of the Agent and JPMorgan Chase.
D. JPMorgan Chase will authenticate, complete and deliver
the Global Note representing the Note.
E. DTC will credit such Note to JPMorgan Chase's participant
account at DTC.
F. JPMorgan Chase will enter an SDFS deliver order through
DTC's Participant Terminal System instructing DTC to (i)
debit the Note to JPMorgan Chase's participant account
and credit such Note to the Agent's participant account
and (ii) debit the Agent's settlement account and credit
JPMorgan Chase's settlement account for an amount equal
to the price of such Note less the Agent's commission, if
any. The entry of such
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a deliver order shall constitute a representation and
warranty by JPMorgan Chase to DTC that (a) the Global
Note representing a Book-Entry Note has been issued and
authenticated and (b) JPMorgan Chase is holding such
Global Note pursuant to the Medium-Term Note Certificate
Agreement between JPMorgan Chase and DTC.
G. Unless the Agent is the end purchaser of a Note, the
Agent will enter an SDFS deliver order through DTC's
Participant Terminal System instructing DTC (i) to debit
such Note to the 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 the 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. JPMorgan Chase will credit to the account of the Company
maintained at JPMorgan Chase, New York, New York, in
funds available for immediate use in the amount
transferred to JPMorgan Chase in accordance with
"Settlement Procedure" "F".
J. Unless the Agent is the end purchaser of the Note, the
Agent will confirm the purchase of such Note to the
purchaser either by transmitting to the Participants with
respect to such Note a confirmation order or orders
through DTC's institutional delivery system or by mailing
a written confirmation to such purchaser.
K. Monthly, JPMorgan Chase 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 JPMorgan Chase that have not yet
been settled.
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Settlement
Procedures
Timetable: For sales by the Company of Book-Entry Notes to or
through the Agent (unless otherwise specified pursuant to
a Notes 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 the sale date
B 12:00 Noon on the sale date
C 2:00 P.M. on the sale date
D 9:00 A.M. on the settlement date
E 10:00 A.M. on the settlement date
F-G 2:00 P.M. on the settlement date
H 4:45 P.M. on the settlement date
I-J 5:00 P.M. on the 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 Noon and 2:00 P.M.,
respectively, on the first Business Day after the sale
date. "Settlement Procedure" "H" is subject to extension
in accordance with any extension of Fedwire closing
deadlines and in the other events specified in the SDFS
operating procedures in effect on the settlement date.
If settlement of a Book-Entry Note is rescheduled or
canceled, JPMorgan Chase, after receiving notice from the
Company or the 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 to Settle: If JPMorgan Chase fails to enter an SDFS deliver order
with respect to a Book-Entry Note pursuant to "Settlement
Procedure" "F", JPMorgan Chase may deliver to DTC,
through DTC's Participant Terminal
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System, as soon as practicable a withdrawal message
instructing DTC to debit such Note to JPMorgan Chase's
participant account, provided that JPMorgan Chase's
participant account contains a principal amount of the
Global Note 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 Note, JPMorgan Chase will
▇▇▇▇ such Global Note "canceled," make appropriate
entries in JPMorgan Chase's records and send such
canceled Global Note to the Company. The CUSIP number
assigned to such Global Note shall, in accordance with
the procedures of the CUSIP Service Bureau of Standard &
Poor's Corporation, be canceled 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 Note, JPMorgan Chase will
exchange such Global Note for two Global Notes one of
which shall represent such Book-Entry Note or Notes and
shall be canceled immediately after issuance and the
other of which shall represent the remaining Book-Entry
Notes previously represented by the surrendered Global
Note and shall bear the CUSIP number of the surrendered
Global Note.
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 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, JPMorgan Chase will deliver the
withdrawal message and take the related actions described
in the preceding paragraph.
Notwithstanding the foregoing, upon any failure to settle
with respect to a 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
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represented by a Global Note, JPMorgan Chase will
provide, in accordance with Settlement Procedures "D" and
"F", for the authentication and issuance of a Global Note
representing the Book-Entry Notes to be represented by
such Global Note and will make appropriate entries in its
records.
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