EXHIBIT 10.4
COMMERCIAL PAPER
DEALER AGREEMENT
between
NIKE, Inc., as Issuer
and
▇▇▇▇▇▇▇ ▇▇▇▇▇ Money Markets Inc. and
▇▇▇▇▇▇▇ Lynch, Pierce, ▇▇▇▇▇▇ & ▇▇▇▇▇ Incorporated, as Dealer
Concerning Notes to be issued pursuant to an Issuing and Paying Agent
Agreement dated as of March 17, 2004, between the Issuer and Deutsche
Bank Trust Company Americas, as Issuing and Paying Agent, as amended
Dated as of
January 24, 2007
COMMERCIAL PAPER DEALER AGREEMENT
This agreement (the "Agreement") sets forth the understanding
between the Issuer and the Dealer, each named on the cover page of this
Agreement, in connection with the issuance and sale by the Issuer of
its short-term promissory notes (the "Notes") through the Dealer.
Certain terms used in this Agreement are defined in Section 6 of
this Agreement.
The Addendum and Exhibits to this Agreement are hereby
incorporated into this Agreement and made fully a part hereof.
Section 1. Offers, Sales and Resales of Notes.
1.1 While (i) the Issuer has and shall have no obligation to
sell the Notes to the Dealer or to permit the Dealer to arrange any
sale of the Notes for the account of the Issuer, and (ii) the Dealer
has and shall have no obligation to purchase the Notes from the Issuer
or to arrange any sale of the Notes for the account of the Issuer, the
parties hereto agree that in any case where the Dealer purchases Notes
from the Issuer, or arranges for the sale of Notes by the Issuer, such
Notes will be purchased or sold by the Dealer in reliance on the
representations, warranties, covenants and agreements of the Issuer
contained herein or made pursuant hereto and on the terms and
conditions and in the manner provided herein.
1.2 So long as this Agreement shall remain in effect, and in
addition to the limitations contained in Section 1.7 hereof, the Issuer
shall not, without the consent of the Dealer, offer, solicit or accept
offers to purchase, or sell, any Notes except (a) in transactions with
one or more dealers which may from time to time after the date hereof
become dealers with respect to the Notes by executing with the Issuer
one or more agreements which contain provisions substantially identical
to those contained in Section 1 of this Agreement, of which the Issuer
hereby undertakes to provide the Dealer prompt notice or (b) in
transactions with the other dealers listed on the Addendum hereto,
which are executing agreements with the Issuer which contain provisions
substantially identical to Section 1 of this Agreement
contemporaneously herewith. In no event shall the Issuer offer,
solicit or accept offers to purchase, or sell, any Notes directly on
its own behalf in transactions with persons other than broker-dealers
as specifically permitted in this Section 1.2.
1.3 The Notes shall be in a minimum denomination of $250,000
or integral multiples of $1,000 in excess thereof, will bear such
interest rates, if interest bearing, or will be sold at such discount
from their face amounts, as shall be agreed upon by the Dealer and the
Issuer, shall have a maturity not exceeding 364 days from the date of
issuance and may have such terms as are specified in Exhibit C hereto
or the Private Placement Memorandum. The Notes shall not contain any
provision for extension, renewal or automatic "rollover."
1.4 The authentication and issuance of, and payment for, the
Notes shall be effected in accordance with the Issuing and Paying Agent
Agreement, and the Notes shall be either individual physical
certificates or book-entry notes evidenced by one or more master notes
(each, a "Master Note") registered in the name of The Depository Trust
Company ("DTC") or its nominee, in the form or forms annexed to the
Issuing and Paying Agent Agreement.
1.5 If the Issuer and the Dealer shall agree on the terms of
the purchase of any Note by the Dealer or the sale of any Note arranged
by the Dealer (including, but not limited to, agreement with respect to
the date of issue, purchase price, principal amount, maturity and
interest rate or interest rate index and margin (in the case of
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interest-bearing Notes) or discount thereof (in the case of Notes
issued on a discount basis), and appropriate compensation for the
Dealer's services hereunder) pursuant to this Agreement, the Issuer
shall cause such Note to be issued and delivered in accordance with the
terms of the Issuing and Paying Agent Agreement and payment for such
Note shall be made by the purchaser thereof, either directly or through
the Dealer, to the Issuing and Paying Agent, for the account of the
Issuer. Except as otherwise agreed, in the event that the Dealer is
expressly acting as an agent for the Issuer and a purchaser shall
either fail to accept delivery of or make payment for a Note on the
date fixed for settlement, the Dealer shall promptly notify the Issuer,
and if the Dealer has theretofore paid the Issuer for the Note, the
Issuer will promptly return such funds to the Dealer against its return
of the Note to the Issuer, in the case of a certificated Note, and upon
notice of such failure in the case of a book-entry Note. If such
failure occurred for any reason other than default by the Dealer, the
Issuer shall reimburse the Dealer on an equitable basis for the
Dealer's loss of the use of such funds for the period such funds were
credited to the Issuer's account, but only for the period after the
Note is returned to the Issuer or the Issuer is so notified.
1.6 The Dealer and the Issuer hereby establish and agree to
observe the following procedures in connection with offers, sales and
subsequent resales or other transfers of the Notes:
(a) Offers and sales of the Notes by or through the Dealer shall
be made only to: (i) investors reasonably believed by the Dealer to be
Qualified Institutional Buyers, Institutional Accredited Investors or
Sophisticated Individual Accredited Investors and (ii) non-bank
fiduciaries or agents that will be purchasing Notes for one or more
accounts, each of which is reasonably believed by the Dealer to be an
Institutional Accredited Investor or Sophisticated Individual
Accredited Investor.
(b) Resales and other transfers of the Notes by the holders
thereof shall be made only in accordance with the restrictions in the
legend described in clause (e) below.
(c) No general solicitation or general advertising shall be used
in connection with the offering of the Notes. Without limiting the
generality of the foregoing, without the prior written approval of the
Dealer, the Issuer shall not issue any press release or place or
publish any "tombstone" or other advertisement relating to the Notes.
(d) No sale of Notes to any one purchaser shall be for less than
$250,000 principal or face amount, and no Note shall be issued in a
smaller principal or face amount. If the purchaser is a non-bank
fiduciary acting on behalf of others, each person for whom such
purchaser is acting must purchase at least $250,000 principal or face
amount of Notes.
(e) Offers and sales of the Notes by the Issuer through the
Dealer acting as agent for the Issuer shall be made in accordance with
Rule 506 under the Securities Act, and shall be subject to the
restrictions described in the legend appearing on Exhibit A hereto. A
legend substantially to the effect of such Exhibit A shall appear as
part of the Private Placement Memorandum used in connection with offers
and sales of Notes hereunder, as well as on each individual certificate
representing a Note and each Master Note representing book-entry Notes
offered and sold pursuant to this Agreement.
(f) The Dealer shall furnish or shall have furnished to each
purchaser of Notes for which it has acted as the Dealer a copy of the
then-current Private Placement Memorandum unless such purchaser has
previously received a copy of the Private Placement Memorandum as then
in effect. The Private Placement Memorandum shall expressly state that
any person to whom Notes are offered shall have an opportunity to ask
questions of, and receive information from, the Issuer and the Dealer
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and shall provide the names, addresses and telephone numbers of the
persons from whom information regarding the Issuer may be obtained.
(g) The Issuer agrees, for the benefit of the Dealer and each of
the holders and prospective purchasers from time to time of the Notes
that, if at any time the Issuer shall not be subject to Section 13 or
15(d) of the Exchange Act, the Issuer will furnish, upon request and at
its expense, to the Dealer and to holders and prospective purchasers of
Notes information required by Rule 144A(d)(4)(i) in compliance with
Rule 144A(d).
(h) In the event that any Note offered or to be offered by the
Dealer would be ineligible for resale under Rule 144A, the Issuer shall
immediately notify the Dealer (by telephone, confirmed in writing) of
such fact and shall promptly prepare and deliver to the Dealer an
amendment or supplement to the Private Placement Memorandum describing
the Notes that are ineligible, the reason for such ineligibility and
any other relevant information relating thereto.
(i) The Issuer represents that it is not currently issuing
commercial paper in the United States market in reliance upon the
exemption provided by Section 3(a)(3) of the Securities Act. The Issuer
agrees that, if it shall issue commercial paper after the date hereof
in reliance upon such exemption (a) the proceeds from the sale of the
Notes will be segregated from the proceeds of the sale of any such
commercial paper by being placed in a separate account; (b) the Issuer
will institute appropriate corporate procedures to ensure that the
offers and sales of notes issued by the Issuer pursuant to the Section
3(a)(3) exemption are not integrated with offerings and sales of Notes
hereunder; and (c) the Issuer will comply with each of the requirements
of Section 3(a)(3) of the Securities Act in selling commercial paper or
other short-term debt securities other than the Notes in the United
States.
(j) The Issuer hereby agrees that, not later than 15 days after
the first sale of Notes as contemplated by this Agreement, it will file
with the SEC a notice on Form D in accordance with Rule 503 under the
Securities Act and that it will thereafter file such amendments to such
notice as Rule 503 may require.
1.7 The Issuer hereby represents and warrants to the Dealer,
in connection with offers, sales and resales of Notes, as follows:
(a) The Issuer hereby confirms to the Dealer that (except as
permitted by Section 1.6(i)) within the preceding six months neither
the Issuer nor any person other than the Dealer or the other dealers
referred to in Section 1.2 hereof acting on behalf of the Issuer has
offered or sold any Notes, or any substantially similar security of the
Issuer (including, without limitation, medium-term notes issued by the
Issuer), to, or solicited offers to buy any such security from, any
person other than the Dealer or the other dealers referred to in
Section 1.2 hereof. The Issuer also agrees that (except as permitted
by Section 1.6(i)), as long as the Notes are being offered for sale by
the Dealer and the other dealers referred to in Section 1.2 hereof as
contemplated hereby and until at least six months after the offer of
Notes hereunder has been terminated, neither the Issuer nor any person
other than the Dealer or the other dealers referred to in Section 1.2
hereof (except as contemplated by Section 1.2 hereof) will offer the
Notes or any substantially similar security of the Issuer for sale to,
or solicit offers to buy any such security from, any person other than
the Dealer or the other dealers referred to in Section 1.2 hereof, it
being understood that such agreement is made with a view to bringing
the offer and sale of the Notes within the exemption provided by
Section 4(2) of the Securities Act and Rule 506 thereunder and shall
survive any termination of this Agreement. The Issuer hereby
represents and warrants that it has not taken or omitted to take, and
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will not take or omit to take, any action that would cause the offering
and sale of Notes hereunder to be integrated with any other offering of
securities, whether such offering is made by the Issuer or some other
party or parties.
(b) The Issuer represents and agrees that the proceeds of the
sale of the Notes are not currently contemplated to be used for the
purpose of buying, carrying or trading securities within the meaning of
Regulation T and the interpretations thereunder by the Board of
Governors of the Federal Reserve System. In the event that the Issuer
determines to use such proceeds for the purpose of buying, carrying or
trading securities, whether in connection with an acquisition of
another company or otherwise, the Issuer shall give the Dealer at least
five business days' prior written notice to that effect. The Issuer
shall also give the Dealer prompt notice of the actual date that it
commences to purchase securities with the proceeds of the Notes.
Thereafter, in the event that the Dealer purchases Notes as principal
and does not resell such Notes on the day of such purchase, to the
extent necessary to comply with Regulation T and the interpretations
thereunder, the Dealer will sell such Notes either (i) only to offerees
it reasonably believes to be Qualified Institutional Buyers or to
Qualified Institutional Buyers it reasonably believes are acting for
other Qualified Institutional Buyers, in each case in accordance with
Rule 144A or (ii) in a manner which would not cause a violation of
Regulation T and the interpretations thereunder.
Section 2. Representations and Warranties of Issuer.
The Issuer represents and warrants that:
2.1 The Issuer is a corporation duly organized and validly
existing under the laws of the jurisdiction of its incorporation and
has all the requisite power and authority to execute, deliver and
perform its obligations under the Notes, this Agreement and the Issuing
and Paying Agent Agreement.
2.2 This Agreement and the Issuing and Paying Agent Agreement
have been duly authorized, executed and delivered by the Issuer and
constitute legal, valid and binding obligations of the Issuer
enforceable against the Issuer in accordance with their terms, subject
to applicable bankruptcy, insolvency and similar laws affecting
creditors' rights generally, and subject, as to enforceability, to
general principles of equity (regardless of whether enforcement is
sought in a proceeding in equity or at law).
2.3 The Notes have been duly authorized, and when issued as
provided in the Issuing and Paying Agent Agreement, and when the
consideration therefor is received by the Issuer, will be duly and
validly issued and will constitute legal, valid and binding obligations
of the Issuer enforceable against the Issuer in accordance with their
terms, subject to applicable bankruptcy, insolvency and similar laws
affecting creditors' rights generally, and subject, as to
enforceability, to general principles of equity (regardless of whether
enforcement is sought in a proceeding in equity or at law).
2.4 The offer and sale of the Notes in the manner contemplated
hereby do not require registration of the Notes under the Securities
Act, pursuant to the exemption from registration contained in Section
4(2) thereof and Regulation D thereunder, and no indenture in respect
of the Notes is required to be qualified under the Trust Indenture Act
of 1939, as amended.
2.5 The Notes will rank at least pari passu with all other
unsecured and unsubordinated indebtedness of the Issuer.
2.6 Except as provided in Section 1.6(j) hereof, no consent
or action of, or filing or registration with, any governmental or
public regulatory body or authority, including the SEC, is required to
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authorize, or is otherwise required in connection with the execution,
delivery or performance of, this Agreement, the Notes or the Issuing
and Paying Agent Agreement, except 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.
2.7 Neither the execution and delivery of this Agreement and
the Issuing and Paying Agent Agreement, nor the issuance of the Notes
in accordance with the Issuing and Paying Agent Agreement, nor the
fulfillment of or compliance with the terms and provisions hereof or
thereof by the Issuer, will (i) result in the creation or imposition of
any mortgage, lien, charge or encumbrance of any nature whatsoever upon
any of the properties or assets of the Issuer, or (ii) violate or
result in a breach or a default under any of the terms of the Issuer's
charter documents or by-laws, any contract or instrument to which the
Issuer is a party or by which it or its property is bound, or any law
or regulation, or any order, writ, injunction or decree of any court or
government instrumentality, to which the Issuer is subject or by which
it or its property is bound, which breach or default would have a
material adverse effect on the condition (financial or otherwise),
operations or business prospects of the Issuer or the ability of the
Issuer to perform its obligations under this Agreement, the Notes or
the Issuing and Paying Agent Agreement.
2.8 There is no litigation or governmental proceeding pending,
or to the knowledge of the Issuer threatened, against or affecting the
Issuer or any of its subsidiaries which would result in a material
adverse change in the condition (financial or otherwise), operations or
business prospects of the Issuer or the ability of the Issuer to
perform its obligations under this Agreement, the Notes or the Issuing
and Paying Agent Agreement.
2.9 The Issuer is not an "investment company" within the
meaning of the Investment Company Act of 1940, as amended.
2.10 Neither the Private Placement Memorandum nor the Company
Information contains any untrue statement of a material fact or omits
to state a material fact required to be stated therein or necessary to
make the statements therein, in light of the circumstances under which
they were made, not misleading.
2.11 Each (a) issuance of Notes by the Issuer hereunder and (b)
amendment or supplement of the Private Placement Memorandum shall be
deemed a representation and warranty by the Issuer to the Dealer, as of
the date thereof, that, both before and after giving effect to such
issuance and after giving effect to such amendment or supplement, (i)
the representations and warranties given by the Issuer set forth in
this Section 2 remain true and correct on and as of such date as if
made on and as of such date, (ii) in the case of an issuance of Notes,
the Notes being issued on such date have been duly and validly issued
and constitute legal, valid and binding obligations of the Issuer,
enforceable against the Issuer in accordance with their terms, subject
to applicable bankruptcy, insolvency and similar laws affecting
creditors' rights generally and subject, as to enforceability, to
general principles of equity (regardless of whether enforcement is
sought in a proceeding in equity or at law) and (iii) in the case of an
issuance of Notes, since the date of the most recent Private Placement
Memorandum, there has been no material adverse change in the condition
(financial or otherwise), operations or business prospects of the
Issuer which has not been disclosed to the Dealer in writing.
Section 3. Covenants and Agreements of Issuer.
The Issuer covenants and agrees that:
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3.1. The Issuer will give the Dealer prompt notice (but in any
event prior to any subsequent issuance of Notes hereunder) of any
amendment to, modification of or waiver with respect to, the Notes or
the Issuing and Paying Agent Agreement, including a complete copy of
any such amendment, modification or waiver.
3.2. The Issuer shall, whenever there shall occur any material
change in the Issuer's condition (financial or otherwise), operations
or business prospects or any development or occurrence in relation to
the Issuer that would be material to holders of the Notes or potential
holders of the Notes (including any downgrading or receipt of any
notice of intended or potential downgrading or any review for potential
change in the rating accorded any of the Issuer's securities by any
nationally recognized statistical rating organization which has
published a rating of the Notes), promptly, and in any event prior to
any subsequent issuance of Notes hereunder, notify the Dealer (by
telephone, confirmed in writing) of such change, development or
occurrence.
3.3. The Issuer shall from time to time furnish to the Dealer
such information as the Dealer may reasonably request, including,
without limitation, any press releases or material provided by the
Issuer to any national securities exchange or rating agency, regarding
(i) the Issuer's operations and financial condition, (ii) the due
authorization and execution of the Notes and (iii) the Issuer's ability
to pay the Notes as they mature.
3.4. The Issuer will take all such action as the Dealer may
reasonably request to ensure that each offer and each sale of the Notes
will comply with any applicable state Blue Sky laws; provided, however,
that the Issuer shall not be obligated to file any general consent to
service of process or to qualify as a foreign corporation in any
jurisdiction in which it is not so qualified or subject itself to
taxation in respect of doing business in any jurisdiction in which it
is not otherwise so subject.
3.5. The Issuer will not be in default of any of its material
obligations hereunder, under the Notes or under the Issuing and Paying
Agent Agreement, at any time that any of the Notes are outstanding.
3.6. The Issuer shall not issue Notes hereunder until the
Dealer shall have received (a) an opinion of counsel to the Issuer,
addressed to the Dealer, satisfactory in form and substance to the
Dealer, (b) a copy of the executed Issuing and Paying Agent Agreement
as then in effect, (c) a copy of resolutions adopted by the Board of
Directors of the Issuer, satisfactory in form and substance to the
Dealer and certified by the Secretary or similar officer of the Issuer,
authorizing execution and delivery by the Issuer of this Agreement, the
Issuing and Paying Agent Agreement and the Notes and consummation by
the Issuer of the transactions contemplated hereby and thereby, (d) if
required by the Dealer, prior to the issuance of any book-entry Notes
represented by a master note registered in the name of DTC or its
nominee, a copy of the executed Letter of Representations among the
Issuer, the Issuing and Paying Agent and DTC and of the executed master
note, (e) prior to the issuance of any Notes in physical form, a copy
of such form (unless attached to this Agreement or the Issuing and
Paying Agent Agreement) and (f) such other certificates, letters and
documents as the Dealer shall have reasonably requested.
Section 4. Disclosure.
4.1. The Private Placement Memorandum and its contents (other
than the Dealer Information) shall be the sole responsibility of the
Issuer, provided that prior to any distribution by the Dealer, the
Dealer submits the Private Placement Memorandum to the Issuer for
review, and the Issuer approves of the Private Placement Memorandum in
writing. The Private Placement Memorandum shall contain a statement
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expressly offering an opportunity for each prospective purchaser to ask
questions of, and receive answers from, the Issuer concerning the
offering of Notes and to obtain relevant additional information which
the Issuer possesses or can acquire without unreasonable effort or
expense.
4.2. The Issuer agrees to promptly furnish the Dealer the
Company Information as it becomes available. The Issuer shall be deemed
to have furnished Company Information when such information has been
posted on the Internet website of the Securities and Exchange
Commission (▇▇▇▇://▇▇▇.▇▇▇.▇▇▇) or on its own Internet website as
previously identified to the Dealer or if the Dealer or its affiliate
shall have been furnished such information pursuant to other
contractual arrangements with the Issuer.
4.3. (a) The Issuer further agrees to notify the Dealer
promptly upon the occurrence of any event relating to or affecting the
Issuer that would cause the Company Information then in existence to
include an untrue statement of a material fact or to omit to state a
material fact necessary in order to make the statements contained
therein, in light of the circumstances under which they are made, not
misleading.
(b) In the event that the Issuer gives the Dealer notice
pursuant to Section 4.3(a) and the Dealer notifies the Issuer that it
then has Notes it is holding in inventory, the Issuer agrees promptly
to supplement or amend the Private Placement Memorandum so that the
Private Placement Memorandum, as amended or supplemented, shall not
contain an untrue statement of a material fact or omit to state a
material fact necessary in order to make the statements therein, in
light of the circumstances under which they were made, not misleading,
and the Issuer shall make such supplement or amendment available to the
Dealer.
(c) In the event that (i) the Issuer gives the Dealer notice
pursuant to Section 4.3(a), (ii) the Dealer does not notify the Issuer
that it is then holding Notes in inventory and (iii) the Issuer chooses
not to promptly amend or supplement the Private Placement Memorandum in
the manner described in clause (b) above, then all solicitations and
sales of Notes shall be suspended until such time as the Issuer has so
amended or supplemented the Private Placement Memorandum, and made such
amendment or supplement available to the Dealer.
(d) Without limiting the generality of Section 4.3(a), the
Issuer shall review, amend and supplement the Private Placement
Memorandum on a periodic basis, but no less than at least once annually,
to incorporate current financial information of the Issuer to the
extent necessary to ensure that the information provided in the Private
Placement Memorandum is accurate and complete.
Section 5. Indemnification and Contribution.
5.1 The Issuer will indemnify and hold harmless the Dealer,
each individual, corporation, partnership, trust, association or other
entity controlling the Dealer, any affiliate of the Dealer or any such
controlling entity and their respective directors, officers, employees,
partners, incorporators, shareholders, servants, trustees and agents
(hereinafter the "Indemnitees") against any and all liabilities,
penalties, suits, causes of action, losses, damages, claims, costs and
expenses (including, without limitation, fees and disbursements of
counsel) or judgments of whatever kind or nature (each a "Claim"),
imposed upon, incurred by or asserted against the Indemnitees arising
out of or based upon (i) any allegation that the Private Placement
Memorandum (provided that prior to any distribution by the Dealer, the
Dealer shall have submitted the Private Placement Memorandum to the
Issuer for review, and the Issuer shall have approved of the Private
Placement Memorandum in writing), the Company Information or any
information provided by the Issuer to the Dealer included (as of any
relevant time) or includes an untrue statement of a material fact or
omitted (as of any relevant time) or omits to state any material fact
necessary to make the statements therein, in light of the circumstances
under which they were made, not misleading or (ii) arising out of or
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based upon the breach by the Issuer of any agreement, covenant or
representation made in or pursuant to this Agreement. This
indemnification shall not apply to the extent that the Claim arises out
of or is based upon Dealer Information or the gross negligence or
willful misconduct of the Dealer in the performance of, or the failure
to perform, its obligations under this Agreement.
5.2 Provisions relating to claims made for indemnification
under this Section 5 are set forth on Exhibit B to this Agreement.
5.3 In order to provide for just and equitable contribution in
circumstances in which the indemnification provided for in this Section
5 is held to be unavailable or insufficient to hold harmless the
Indemnitees, although applicable in accordance with the terms of this
Section 5, the Issuer shall contribute to the aggregate costs incurred
by the Dealer in connection with any Claim in the proportion of the
respective economic interests of the Issuer and the Dealer; provided,
however, that such contribution by the Issuer shall be in an amount
such that the aggregate costs incurred by the Dealer do not exceed the
aggregate of the commissions and fees earned by the Dealer hereunder
with respect to the issue or issues of Notes to which such Claim
relates. The respective economic interests shall be calculated by
reference to the aggregate proceeds to the Issuer of the Notes issued
hereunder and the aggregate commissions and fees earned by the Dealer
hereunder.
Section 6. Definitions.
6.1 "Business Day" shall mean each Monday, Tuesday, Wednesday,
____________
Thursday and Friday which is not a day on which banking institutions in
New York are generally authorized or obligated by law or executive
order to close.
6.2 "Claim" shall have the meaning set forth in Section 5.1.
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6.3 "Company Information" at any given time shall mean the
___________________
Private Placement Memorandum together with, to the extent applicable,
(i) the Issuer's most recent report on Form 10-K filed with the SEC and
each report on Form 10-Q or 8-K filed by the Issuer with the SEC since
the most recent Form 10-K, (ii) the Issuer's most recent annual audited
financial statements and each interim financial statement or report
prepared subsequent thereto, if not included in item (i) above, (iii)
the Issuer's other publicly available recent reports, including, but
not limited to, any publicly available filings or reports provided to
its shareholders, (iv) any other information or disclosure prepared
pursuant to Section 4.3 hereof and (v) any information prepared or
approved by the Issuer for dissemination to investors or potential
investors in the Notes.
6.4 "Dealer Information" shall mean material concerning the
__________________
Dealer provided by the Dealer in writing expressly for inclusion in the
Private Placement Memorandum.
6.5 "Exchange Act" shall mean the U.S. Securities Exchange Act
____________
of 1934, as amended.
6.6 "Indemnitee" shall have the meaning set forth in Section
__________
5.1.
6.7 "Institutional Accredited Investor" shall mean an
_________________________________
institutional investor that is an accredited investor within the
meaning of Rule 501 under the Securities Act and that has such
knowledge and experience in financial and business matters that it is
capable of evaluating and bearing the economic risk of an investment in
the Notes, including, but not limited to, a bank, as defined in Section
3(a)(2) of the Securities Act, or a savings and loan association or
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other institution, as defined in Section 3(a)(5)(A) of the Securities
Act, whether acting in its individual or fiduciary capacity.
6.8 "Issuing and Paying Agent Agreement" shall mean the issuing
__________________________________
and paying agent agreement described on the cover page of this
Agreement, as amended by the letter agreement dated January 24, 2007
between the Issuer and the Issuing and Paying Agent, and as such
agreement may be further amended or supplemented from time to time.
6.9 "Issuing and Paying Agent" shall mean the party designated
________________________
as such on the cover page of this Agreement, as issuing and paying
agent under the Issuing and Paying Agent Agreement, or any successor
thereto in accordance with the Issuing and Paying Agent Agreement.
6.10 "Non-bank fiduciary or agent" shall mean a fiduciary or
___________________________
agent other than (a) a bank, as defined in Section 3(a)(2) of the
Securities Act, or (b) a savings and loan association, as defined in
Section 3(a)(5)(A) of the Securities Act.
6.11 "Private Placement Memorandum" shall mean offering
____________________________
materials prepared in accordance with Section 4 (including materials
referred to therein or incorporated by reference therein, if any)
provided to purchasers and prospective purchasers of the Notes, and
shall include amendments and supplements thereto which may be prepared
from time to time in accordance with this Agreement (other than any
amendment or supplement that has been completely superseded by a later
amendment or supplement).
6.12 "Qualified Institutional Buyer" shall have the meaning
_____________________________
assigned to that term in Rule 144A under the Securities Act.
6.13 "Regulation D" shall mean Regulation D (Rules 502 et seq.)
____________
under the Securities Act.
6.14 "Rule 144A" shall mean Rule 144A under the Securities Act.
_________
6.15 "SEC" shall mean the U.S. Securities and Exchange
___
Commission.
6.16 "Securities Act" shall mean the U.S. Securities Act of
______________
1933, as amended.
6.17 "Sophisticated Individual Accredited Investor" shall mean
____________________________________________
an individual who (a) is an accredited investor within the meaning of
Regulation D under the Securities Act and (b) based on his or her pre-
existing relationship with the Dealer, is reasonably believed by the
Dealer to be a sophisticated investor (i) possessing such knowledge and
experience (or represented by a fiduciary or agent possessing such
knowledge and experience) in financial and business matters that he or
she is capable of evaluating and bearing the economic risk of an
investment in the Notes and (ii) having not less than $5 million in
investments (as defined, for purposes of this section, in Rule 2a51-1
under the Investment Company Act of 1940, as amended).
Section 7. General
7.1 Unless otherwise expressly provided herein, all notices
under this Agreement to parties hereto shall be in writing and shall be
effective when received at the address of the respective party set
forth in the Addendum to this Agreement.
7.2 This Agreement shall be governed by and construed in
accordance with the laws of the State of New York, without regard to
its conflict of laws provisions.
9
7.3 EACH OF THE DEALER AND THE ISSUER WAIVES ITS RIGHT TO TRIAL
BY JURY IN ANY SUIT, ACTION OR PROCEEDING WITH RESPECT TO THIS
AGREEMENT OR THE TRANSACTIONS CONTEMPLATED HEREBY.
7.4 This Agreement may be terminated, at any time, by the
Issuer, upon one business day's prior notice to such effect to the
Dealer, or by the Dealer upon one business day's prior notice to such
effect to the Issuer. Any such termination, however, shall not affect
the obligations of the Issuer under Sections 5 and 7.3 hereof or the
respective representations, warranties, agreements, covenants, rights
or responsibilities of the parties made or arising prior to the
termination of this Agreement.
7.5 This Agreement is not assignable by either party hereto
without the written consent of the other party; provided, however, that
the Dealer may assign its rights and obligations under this Agreement
to any affiliate of the Dealer.
7.6 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.
7.7 This Agreement is for the exclusive benefit of the parties
hereto, and their respective permitted successors and assigns hereunder,
and shall not be deemed to give any legal or equitable right, remedy or
claim to any other person whatsoever.
7.8 The Issuer acknowledges and agrees that (i) the purchase
and sale of the Notes pursuant to this Agreement is an arm's-length
commercial transaction between the Issuer, on the one hand, and the
Dealer, on the other, (ii) in connection therewith and with the process
leading to such transaction the Dealer is acting solely as a principal
and not the agent or fiduciary of the Issuer, (iii) the Dealer has not
assumed an advisory or fiduciary responsibility in favor of the Issuer
with respect to the offering contemplated hereby or the process leading
thereto (irrespective of whether the Dealer has advised or is currently
advising the Issuer on other matters) or any other obligation to the
Issuer except the obligations expressly set forth in this Agreement and
(iv) the Issuer has consulted its own legal and financial advisors to
the extent it deemed appropriate. The Issuer agrees that it will not
claim that the Dealer has rendered advisory services of any nature or
respect, or owes a fiduciary or similar duty to the Issuer, in
connection with such transaction or the process leading thereto.
7.9 In the case of any agreement by a Dealer to purchase a Note
hereunder (other than as agent) which provides for a settlement date
that is three Business Days or more after the date of such agreement,
the obligation of the Dealer to purchase the Note under such agreement
shall be subject to the following conditions:
(a) the representations and warranties given by the Issuer set
forth above in Section 2 shall be true and correct on and as of the
settlement date as if made on and as of such date, and the Issuer
shall have performed all of its obligations hereunder to be performed
as of such date,
(b) since the date of the most recent Private Placement
Memorandum, there shall have been no material adverse change in the
condition (financial or otherwise), operations or business prospects of
the Issuer (whether occurring before or after such agreement was
entered into) which was not disclosed to the Dealer in writing prior to
the time such agreement was entered into,
(c) the Issuer shall not be in default of any of its obligations
hereunder, under the Notes or under the Issuing and Paying Agent
Agreement.
10
(d) on or after the date of such agreement there shall not have
occurred any of the following: (i) a suspension or material limitation
in trading in securities generally on the New York Stock Exchange (the
"NYSE"); (ii) a suspension or material limitation in trading in the
Issuer's securities on the NYSE; (iii) a general moratorium on
commercial banking activities declared by either Federal or New York
State authorities or a material disruption in commercial banking or
securities settlement or clearance services in the United States; (iv)
the outbreak or escalation of hostilities involving the United States
or the declaration by the United States of a national emergency or war
or (v) the occurrence of any other calamity or crisis or any change in
financial, political or economic conditions in the United States or
elsewhere, if the effect of any such event specified in clause (iv) or
(v) in the judgment of the Dealer makes it impracticable or inadvisable
to proceed with the offering or the delivery of the Note on the terms
and in the manner contemplated in the Private Placement Memorandum,
(e) on or after the date of such agreement, (i) no downgrading
shall have occurred in the rating accorded the Issuer's debt securities
by any nationally recognized statistical rating organization and (ii)
no such organization shall have publicly announced that it has under
surveillance or review, with possible negative implications, its rating
of any of the Issuer's debt securities.
[Signature Page Follows]
11
IN WITNESS WHEREOF, the parties hereto have caused this Agreement
to be executed as of the date and year first written above.
NIKE, Inc.,
as Issuer
_______________________
▇▇▇▇▇▇ ▇. ▇▇▇▇▇▇▇▇
Vice President and
Treasurer
_______________________
▇▇▇▇▇▇▇ ▇▇▇▇▇
Director of Capital
Markets
▇▇▇▇▇▇▇ ▇▇▇▇▇ Money
Markets Inc. and
▇▇▇▇▇▇▇ Lynch, Pierce,
▇▇▇▇▇▇ & ▇▇▇▇▇
Incorporated,
as Dealer
By:____________________
Name:
Title:
Addendum
The following additional clauses shall apply to the Agreement and
be deemed a part thereof.
1. The other dealers referred to in clause (b) of Section 1.2 of the
Agreement are ▇▇▇▇▇▇▇, Sachs & Co., and ▇▇▇▇▇ Fargo Brokerage Services,
LLC.
2. The addresses of the respective parties for purposes of notices
under Section 7.1 are as follows:
For the Issuer:
Address: Treasury Department
▇▇▇ ▇▇▇▇▇▇▇▇ ▇▇▇▇▇
▇▇▇▇▇▇▇▇▇, ▇▇ ▇▇▇▇▇-▇▇▇▇
Attention: Treasurer
Telephone number: ▇▇▇-▇▇▇-▇▇▇▇
Fax number: ▇▇▇-▇▇▇-▇▇▇▇
For the Dealer:
Address: 4 World Financial Center
▇▇▇ ▇▇▇▇▇ ▇▇▇▇▇▇ - ▇▇▇▇ ▇▇▇▇▇
▇▇▇ ▇▇▇▇, ▇▇▇ ▇▇▇▇ ▇▇▇▇▇-▇▇▇▇
Attention: Transaction Management - CP
Telephone number: (▇▇▇) ▇▇▇-▇▇▇▇
Fax number: (▇▇▇) ▇▇▇-▇▇▇▇
Exhibit A
Form of Legend for Private Placement Memorandum and Notes
THE NOTES HAVE NOT BEEN REGISTERED UNDER THE SECURITIES ACT OF 1933, AS
AMENDED (THE "ACT"), OR ANY OTHER APPLICABLE SECURITIES LAW, AND OFFERS
AND SALES THEREOF MAY BE MADE ONLY IN COMPLIANCE WITH AN APPLICABLE
EXEMPTION FROM THE REGISTRATION REQUIREMENTS OF THE ACT AND ANY
APPLICABLE STATE SECURITIES LAWS. BY ITS ACCEPTANCE OF A NOTE, THE
PURCHASER WILL BE DEEMED TO REPRESENT THAT (I) IT HAS BEEN AFFORDED AN
OPPORTUNITY TO INVESTIGATE MATTERS RELATING TO THE ISSUER AND THE NOTES,
(II) IT IS NOT ACQUIRING SUCH NOTE WITH A VIEW TO ANY DISTRIBUTION
THEREOF AND (III) IT IS EITHER (A)(1) AN INSTITUTIONAL INVESTOR OR
SOPHISTICATED INDIVIDUAL INVESTOR THAT IS AN ACCREDITED INVESTOR WITHIN
THE MEANING OF RULE 501(a) UNDER THE ACT AND WHICH, IN THE CASE OF AN
INDIVIDUAL, (i) POSSESSES SUCH KNOWLEDGE AND EXPERIENCE IN FINANCIAL
AND BUSINESS MATTERS THAT HE OR SHE IS CAPABLE OF EVALUATING AND
BEARING THE ECONOMIC RISK OF AN INVESTMENT IN THE NOTES AND (ii) HAS
NOT LESS THAN $5 MILLION IN INVESTMENTS (AN "INSTITUTIONAL ACCREDITED
INVESTOR" OR "SOPHISTICATED INDIVIDUAL ACCREDITED INVESTOR",
RESPECTIVELY) AND (2)(i) PURCHASING NOTES FOR ITS OWN ACCOUNT, (ii) A
BANK (AS DEFINED IN SECTION 3(a)(2) OF THE ACT) OR A SAVINGS AND LOAN
ASSOCIATION OR OTHER INSTITUTION (AS DEFINED IN SECTION 3(a)(5)(A) OF
THE ACT) ACTING IN ITS INDIVIDUAL OR FIDUCIARY CAPACITY OR (iii) A
FIDUCIARY OR AGENT (OTHER THAN A U.S. BANK OR SAVINGS AND LOAN
ASSOCIATION) PURCHASING NOTES FOR ONE OR MORE ACCOUNTS EACH OF WHICH
ACCOUNTS IS SUCH AN INSTITUTIONAL ACCREDITED INVESTOR OR SOPHISTICATED
INDIVIDUAL ACCREDITED INVESTOR; OR (B) A QUALIFIED INSTITUTIONAL BUYER
("QIB") WITHIN THE MEANING OF RULE 144A UNDER THE ACT THAT IS ACQUIRING
NOTES FOR ITS OWN ACCOUNT OR FOR ONE OR MORE ACCOUNTS, EACH OF WHICH
ACCOUNTS IS A QIB; AND THE PURCHASER ACKNOWLEDGES THAT IT IS AWARE THAT
THE SELLER MAY RELY UPON THE EXEMPTION FROM THE REGISTRATION PROVISIONS
OF SECTION 5 OF THE ACT PROVIDED BY RULE 144A. BY ITS ACCEPTANCE OF A
NOTE, THE PURCHASER THEREOF SHALL ALSO BE DEEMED TO AGREE THAT ANY
RESALE OR OTHER TRANSFER THEREOF WILL BE MADE ONLY (A) IN A TRANSACTION
EXEMPT FROM REGISTRATION UNDER THE ACT, EITHER (1) TO THE ISSUER OR TO
A PLACEMENT AGENT DESIGNATED BY THE ISSUER AS A PLACEMENT AGENT FOR THE
NOTES (COLLECTIVELY, THE "PLACEMENT AGENTS"), NONE OF WHICH SHALL HAVE
ANY OBLIGATION TO ACQUIRE SUCH NOTE, (2) THROUGH A PLACEMENT AGENT TO
AN INSTITUTIONAL ACCREDITED INVESTOR, SOPHISTICATED INDIVIDUAL
ACCREDITED INVESTOR OR A QIB, OR (3) TO A QIB IN A TRANSACTION THAT
MEETS THE REQUIREMENTS OF RULE 144A AND (B) IN MINIMUM AMOUNTS OF
$250,000.
Exhibit B
Further Provisions Relating to Indemnification
(a) The Issuer agrees to reimburse each Indemnitee for all expenses
(including reasonable fees and disbursements of internal and
external counsel) as they are incurred by it in connection with
investigating or defending any loss, claim, damage, liability or
action in respect of which indemnification may be sought under
Section 5 of the Agreement (whether or not it is a party to any
such proceedings) provided, however, that if it is found in any
such action, proceeding or investigation that any loss, claim,
damage or liability of an Indemnitee has resulted from the Dealer
Information or the gross negligence or willful misconduct of the
Indemnitee in performing the services that are the subject of this
Agreement, the Indemnitee shall repay such portion of the
reimbursed amounts that is attributable to expenses incurred in
relation to the act or omission of the Indemnitee which is the
subject of such finding.
(b) Promptly after receipt by an Indemnitee of notice of the existence
of a Claim, such Indemnitee will, if a claim in respect thereof is
to be made against the Issuer, notify the Issuer in writing of the
existence thereof; provided that (i) the omission so to notify the
Issuer will not relieve the Issuer from any liability which it may
have hereunder unless and except to the extent it did not
otherwise learn of such Claim and such failure results in the
forfeiture by the Issuer of substantial rights and defenses, and
(ii) the omission so to notify the Issuer will not relieve it from
liability which it may have to an Indemnitee otherwise than on
account of this indemnity agreement. In case any such Claim is
made against any Indemnitee and it notifies the Issuer of the
existence thereof, the Issuer will be entitled to participate
therein, and to the extent that it may elect by written notice
delivered to the Indemnitee, to assume the control and defense
thereof, with counsel reasonably satisfactory to such Indemnitee;
provided that if the defendants in any such Claim include both the
Indemnitee and the Issuer, and the Indemnitee shall have concluded
that there may be legal defenses available to it which are
materially different from or additional to those available to the
Issuer, the Issuer shall not have the right to direct the defense
of such Claim on behalf of such Indemnitee, and the Indemnitee
shall have the right to select separate counsel to assert such
legal defenses on behalf of such Indemnitee. Upon receipt of
notice from the Issuer to such Indemnitee of the Issuer's election
so to assume the defense of such Claim and approval by the
Indemnitee of counsel, the Issuer will not be liable to such
Indemnitee for expenses incurred thereafter by the Indemnitee in
connection with the defense thereof (other than reasonable costs
of investigation) unless (i) the Indemnitee shall have employed
separate counsel in connection with the assertion of legal
defenses in accordance with the proviso to the next preceding
sentence (it being understood, however, that the Issuer shall not
be liable for the expenses of more than one separate counsel (in
addition to any local counsel in the jurisdiction in which any
Claim is brought), approved by the Dealer, representing the
Indemnitee who is party to such Claim), (ii) the Issuer shall not
have employed counsel reasonably satisfactory to the Indemnitee to
represent the Indemnitee within a reasonable time after notice of
existence of the Claim or (iii) the Issuer has authorized in
writing the employment of counsel for the Indemnitee. The
indemnity, reimbursement and contribution obligations of the
Issuer hereunder shall be in addition to any other liability the
Issuer may otherwise have to an Indemnitee and shall be binding
upon and inure to the benefit of any successors, assigns, heirs
and personal representatives of the Issuer and any Indemnitee.
The Issuer agrees that without the Dealer's prior written consent
(which shall not be unreasonably withheld), it will not settle,
compromise or consent to the entry of any judgment in any Claim in
respect of which indemnification may be sought under the
indemnification provision of the Agreement (whether or not the
Dealer or any other Indemnitee is an actual or potential party to
such Claim), unless such settlement, compromise or consent (i)
includes an unconditional release of each Indemnitee from all
liability arising out of such Claim and (ii) does not include a
statement as to or an admission of fault, culpability or failure
to act, by or on behalf of any Indemnitee.
Exhibit C
Statement of Terms for Interest - Bearing Commercial Paper Notes of
NIKE, Inc.
THE PROVISIONS SET FORTH BELOW ARE QUALIFIED TO THE EXTENT APPLICABLE
BY THE TRANSACTION SPECIFIC [PRICING] [PRIVATE PLACEMENT MEMORANDUM]
SUPPLEMENT (THE "SUPPLEMENT") (IF ANY) SENT TO EACH PURCHASER AT THE
TIME OF THE TRANSACTION.
1. General. (a) The obligations of the Issuer to which these terms
apply (each a "Note") are represented by one or more Master Notes (each,
a "Master Note") issued in the name of (or of a nominee for) The
Depository Trust Company ("DTC"), which Master Note includes the terms
and provisions for the Issuer's Interest-Bearing Commercial Paper Notes
that are set forth in this Statement of Terms, since this Statement of
Terms constitutes an integral part of the Underlying Records as defined
and referred to in the Master Note.
(b) "Business Day" means any day other than a Saturday or Sunday that
is neither a legal holiday nor a day on which banking institutions are
authorized or required by law, executive order or regulation to be
closed in New York City and, with respect to LIBOR Notes (as defined
below) is also a London Business Day. "London Business Day" means, a
day, other than a Saturday or Sunday, on which dealings in deposits in
U.S. dollars are transacted in the London interbank market.
2. Interest. (a) Each Note will bear interest at a fixed rate (a
"Fixed Rate Note") or at a floating rate (a "Floating Rate Note").
(b) The Supplement sent to each holder of such Note will describe the
following terms: (i) whether such Note is a Fixed Rate Note or a
Floating Rate Note and whether such Note is an Original Issue Discount
Note (as defined below); (ii) the date on which such Note will be
issued (the "Issue Date"); (iii) the Stated Maturity Date (as defined
below); (iv) if such Note is a Fixed Rate Note, the rate per annum at
which such Note will bear interest, if any, and the Interest Payment
Dates; (v) if such Note is a Floating Rate Note, the Base Rate, the
Index Maturity, the Interest Reset Dates, the Interest Payment Dates
and the Spread and/or Spread Multiplier, if any (all as defined below),
and any other terms relating to the particular method of calculating
the interest rate for such Note; and (vi) any other terms applicable
specifically to such Note. "Original Issue Discount Note" means a Note
which has a stated redemption price at the Stated Maturity Date that
exceeds its Issue Price by more than a specified de minimis amount and
which the Supplement indicates will be an "Original Issue Discount
Note".
(c) Each Fixed Rate Note will bear interest from its Issue Date at the
rate per annum specified in the Supplement until the principal amount
thereof is paid or made available for payment. Interest on each Fixed
Rate Note will be payable on the dates specified in the Supplement
(each an "Interest Payment Date" for a Fixed Rate Note) and on the
Maturity Date (as defined below). Interest on Fixed Rate Notes will be
computed on the basis of a 360-day year of twelve 30-day months.
If any Interest Payment Date or the Maturity Date of a Fixed Rate Note
falls on a day that is not a Business Day, the required payment of
principal, premium, if any, and/or interest will be payable on the next
succeeding Business Day, and no additional interest will accrue in
respect of the payment made on that next succeeding Business Day.
(d) The interest rate on each Floating Rate Note for each Interest
Reset Period (as defined below) will be determined by reference to an
interest rate basis (a "Base Rate") plus or minus a number of basis
points (one basis point equals one-hundredth of a percentage point)
(the "Spread"), if any, and/or multiplied by a certain percentage (the
"Spread Multiplier"), if any, until the principal thereof is paid or
made available for payment. The Supplement will designate which of the
following Base Rates is applicable to the related Floating Rate Note:
(a) the CD Rate (a "CD Rate Note"), (b) the Commercial Paper Rate (a
"Commercial Paper Rate Note"), (c) the Federal Funds Rate (a "Federal
Funds Rate Note"), (d) LIBOR (a "LIBOR Note"), (e) the Prime Rate (a
"Prime Rate Note"), (f) the Treasury Rate (a "Treasury Rate Note") or
(g) such other Base Rate as may be specified in such Supplement.
The rate of interest on each Floating Rate Note will be reset daily,
weekly, monthly, quarterly or semi-annually (the "Interest Reset
Period"). The date or dates on which interest will be reset (each an
"Interest Reset Date") will be, unless otherwise specified in the
Supplement, in the case of Floating Rate Notes which reset daily, each
Business Day, in the case of Floating Rate Notes (other than Treasury
Rate Notes) that reset weekly, the Wednesday of each week; in the case
of Treasury Rate Notes that reset weekly, the Tuesday of each week; in
the case of Floating Rate Notes that reset monthly, the third Wednesday
of each month; in the case of Floating Rate Notes that reset quarterly,
the third Wednesday of March, June, September and December; and in the
case of Floating Rate Notes that reset semiannually, the third
Wednesday of the two months specified in the Supplement. If any
Interest Reset Date for any Floating Rate Note is not a Business Day,
such Interest Reset Date will be postponed to the next day that is a
Business Day, except that in the case of a LIBOR Note, if such Business
Day is in the next succeeding calendar month, such Interest Reset Date
shall be the immediately preceding Business Day. Interest on each
Floating Rate Note will be payable monthly, quarterly or semiannually
(the "Interest Payment Period") and on the Maturity Date. Unless
otherwise specified in the Supplement, and except as provided below,
the date or dates on which interest will be payable (each an "Interest
Payment Date" for a Floating Rate Note) will be, in the case of
Floating Rate Notes with a monthly Interest Payment Period, on the
third Wednesday of each month; in the case of Floating Rate Notes with
a quarterly Interest Payment Period, on the third Wednesday of March,
June, September and December; and in the case of Floating Rate Notes
with a semiannual Interest Payment Period, on the third Wednesday of
the two months specified in the Supplement. In addition, the Maturity
Date will also be an Interest Payment Date.
If any Interest Payment Date for any Floating Rate Note (other than an
Interest Payment Date occurring on the Maturity Date) would otherwise
be a day that is not a Business Day, such Interest Payment Date shall
be postponed to the next day that is a Business Day, except that in the
case of a LIBOR Note, if such Business Day is in the next succeeding
calendar month, such Interest Payment Date shall be the immediately
preceding Business Day. If the Maturity Date of a Floating Rate Note
falls on a day that is not a Business Day, the payment of principal and
interest will be made on the next succeeding Business Day, and no
interest on such payment shall accrue for the period from and after
such maturity.
Interest payments on each Interest Payment Date for Floating Rate Notes
will include accrued interest from and including the Issue Date or from
and including the last date in respect of which interest has been paid,
as the case may be, to, but excluding, such Interest Payment Date. On
the Maturity Date, the interest payable on a Floating Rate Note will
include interest accrued to, but excluding, the Maturity Date. Accrued
interest will be calculated by multiplying the principal amount of a
Floating Rate Note by an accrued interest factor. This accrued
interest factor will be computed by adding the interest factors
calculated for each day in the period for which accrued interest is
being calculated. The interest factor (expressed as a decimal) for
each such day will be computed by dividing the interest rate applicable
to such day by 360, in the cases where the Base Rate is the CD Rate,
Commercial Paper Rate, Federal Funds Rate, LIBOR or Prime Rate, or by
the actual number of days in the year, in the case where the Base Rate
is the Treasury Rate. The interest rate in effect on each day will be
(i) if such day is an Interest Reset Date, the interest rate with
respect to the Interest Determination Date (as defined below)
pertaining to such Interest Reset Date, or (ii) if such day is not an
Interest Reset Date, the interest rate with respect to the Interest
Determination Date pertaining to the next preceding Interest Reset Date,
subject in either case to any adjustment by a Spread and/or a Spread
Multiplier.
The "Interest Determination Date" where the Base Rate is the CD Rate or
the Commercial Paper Rate will be the second Business Day next
preceding an Interest Reset Date. The Interest Determination Date
where the Base Rate is the Federal Funds Rate or the Prime Rate will be
the Business Day next preceding an Interest Reset Date. The Interest
Determination Date where the Base Rate is LIBOR will be the second
London Business Day next preceding an Interest Reset Date. The
Interest Determination Date where the Base Rate is the Treasury Rate
will be the day of the week in which such Interest Reset Date falls
when Treasury Bills are normally auctioned. Treasury Bills are
normally sold at auction on Monday of each week, unless that day is a
legal holiday, in which case the auction is held on the following
Tuesday or the preceding Friday. If an auction is so held on the
preceding Friday, such Friday will be the Interest Determination Date
pertaining to the Interest Reset Date occurring in the next succeeding
week.
The "Index Maturity" is the period to maturity of the instrument or
obligation from which the applicable Base Rate is calculated.
The "Calculation Date," where applicable, shall be the earlier of (i)
the tenth calendar day following the applicable Interest Determination
Date or (ii) the Business Day preceding the applicable Interest Payment
Date or Maturity Date.
All times referred to herein reflect New York City time, unless
otherwise specified.
The Issuer shall specify in writing to the Issuing and Paying Agent
which party will be the calculation agent (the "Calculation Agent")
with respect to the Floating Rate Notes. The Calculation Agent will
provide the interest rate then in effect and, if determined, the
interest rate which will become effective on the next Interest Reset
Date with respect to such Floating Rate Note to the Issuing and Paying
Agent as soon as the interest rate with respect to such Floating Rate
Note has been determined and as soon as practicable after any change in
such interest rate.
All percentages resulting from any calculation on Floating Rate Notes
will be rounded to the nearest one hundred-thousandth of a percentage
point, with five-one millionths of a percentage point rounded upwards.
For example, 9.876545% (or .09876545) would be rounded to 9.87655%
(or .0987655). All dollar amounts used in or resulting from any
calculation on Floating Rate Notes will be rounded, in the case of U.S.
dollars, to the nearest cent or, in the case of a foreign currency, to
the nearest unit (with one-half cent or unit being rounded upwards).
CD Rate Notes
"CD Rate" means the rate on any Interest Determination Date for
negotiable certificates of deposit having the Index Maturity as
published by the Board of Governors of the Federal Reserve System (the
"FRB") in "Statistical Release H.15(519), Selected Interest Rates" or
any successor publication of the FRB ("H.15(519)") under the heading
"CDs (Secondary Market)".
If the above rate is not published in H.15(519) by 3:00 p.m. on the
Calculation Date, the CD Rate will be the rate on such Interest
Determination Date set forth in the daily update of H.15(519),
available through the world wide website of the FRB at
▇▇▇▇://▇▇▇.▇▇▇▇▇▇▇▇▇▇▇▇▇▇.▇▇▇/▇▇▇▇▇▇▇▇/▇▇▇/▇▇▇▇▇▇, or any successor
site or publication or other recognized electronic source used for the
purpose of displaying the applicable rate ("H.15 Daily Update") under
the caption "CDs (Secondary Market)".
If such rate is not published in either H.15(519) or H.15 Daily Update
by 3:00 p.m. on the Calculation Date, the Calculation Agent will
determine the CD Rate to be the arithmetic mean of the secondary market
offered rates as of 10:00 a.m. on such Interest Determination Date of
three leading nonbank dealers1 in negotiable U.S. dollar certificates
of deposit in New York City selected by the Calculation Agent for
negotiable U.S. dollar certificates of deposit of major United States
money center banks of the highest credit standing in the market for
negotiable certificates of deposit with a remaining maturity closest to
the Index Maturity in the denomination of $5,000,000.
If the dealers selected by the Calculation Agent are not quoting as set
forth above, the CD Rate will remain the CD Rate then in effect on such
Interest Determination Date.
Commercial Paper Rate Notes
"Commercial Paper Rate" means the Money Market Yield (calculated as
described below) of the rate on any Interest Determination Date for
commercial paper having the Index Maturity, as published in H.15(519)
under the heading "Commercial Paper-Nonfinancial".
If the above rate is not published in H.15(519) by 3:00 p.m. on the
Calculation Date, then the Commercial Paper Rate will be the Money
Market Yield of the rate on such Interest Determination Date for
commercial paper of the Index Maturity as published in H.15 Daily
Update under the heading "Commercial Paper-Nonfinancial".
If by 3:00 p.m. on such Calculation Date such rate is not published in
either H.15(519) or H.15 Daily Update, then the Calculation Agent will
determine the Commercial Paper Rate to be the Money Market Yield of the
arithmetic mean of the offered rates as of 11:00 a.m. on such Interest
Determination Date of three leading dealers of U.S. dollar commercial
paper in New York City selected by the Calculation Agent for commercial
paper of the Index Maturity placed for an industrial issuer whose bond
rating is "AA," or the equivalent, from a nationally recognized
statistical rating organization.
If the dealers selected by the Calculation Agent are not quoting as
mentioned above, the Commercial Paper Rate with respect to such
Interest Determination Date will remain the Commercial Paper Rate then
in effect on such Interest Determination Date.
"Money Market Yield" will be a yield calculated in accordance with the
following formula:
D x 360
Money Market Yield = _______________ x 100
360 - (D x M)
1 Such nonblank dealers referred to in this Statement of Terms may include
affiliates of the Dealer.
where "D" refers to the applicable per annum rate for commercial paper
quoted on a bank discount basis and expressed as a decimal and "M"
refers to the actual number of days in the interest period for which
interest is being calculated.
Federal Funds Rate Notes
"Federal Funds Rate" means the rate on any Interest Determination Date
for federal funds as published in H.15(519) under the heading "Federal
Funds (Effective)" and displayed on Moneyline Telerate (or any
successor service) on page 120 (or any other page as may replace the
specified page on that service) ("Telerate Page 120").
If the above rate does not appear on Telerate Page 120 or is not so
published by 3:00 p.m. on the Calculation Date, the Federal Funds Rate
will be the rate on such Interest Determination Date as published in
H.15 Daily Update under the heading "Federal Funds/(Effective)".
If such rate is not published as described above by 3:00 p.m. on the
Calculation Date, the Calculation Agent will determine the Federal
Funds Rate to be the arithmetic mean of the rates for the last
transaction in overnight U.S. dollar federal funds arranged by each of
three leading brokers of Federal Funds transactions in New York City
selected by the Calculation Agent prior to 9:00 a.m. on such Interest
Determination Date.
If the brokers selected by the Calculation Agent are not quoting as
mentioned above, the Federal Funds Rate will remain the Federal Funds
Rate then in effect on such Interest Determination Date.
LIBOR Notes
The London Interbank offered rate ("LIBOR") means, with respect to any
Interest Determination Date, the rate for deposits in U.S. dollars
having the Index Maturity that appears on the Designated LIBOR Page as
of 11:00 a.m., London time, on such Interest Determination Date.
If no rate appears, LIBOR will be determined on the basis of the rates
at approximately 11:00 a.m., London time, on such Interest
Determination Date at which deposits in U.S. dollars are offered to
prime banks in the London interbank market by four major banks in such
market selected by the Calculation Agent for a term equal to the Index
Maturity and in principal amount equal to an amount that in the
Calculation Agent's judgment is representative for a single transaction
in U.S. dollars in such market at such time (a "Representative Amount").
The Calculation Agent will request the principal London office of each
of such banks to provide a quotation of its rate. If at least two such
quotations are provided, LIBOR will be the arithmetic mean of such
quotations. If fewer than two quotations are provided, LIBOR for such
interest period will be the arithmetic mean of the rates quoted at
approximately 11:00 a.m., in New York City, on such Interest
Determination Date by three major banks in New York City, selected by
the Calculation Agent, for loans in U.S. dollars to leading European
banks, for a term equal to the Index Maturity and in a Representative
Amount; provided, however, that if fewer than three banks so selected
by the Calculation Agent are providing such quotations, the then
existing LIBOR rate will remain in effect for such Interest Payment
Period.
"Designated LIBOR Page" means the display designated as page "3750" on
Moneyline Telerate (or such other page as may replace the 3750 page on
that service or such other service or services as may be nominated by
the British Bankers' Association for the purposes of displaying London
interbank offered rates for U.S. dollar deposits).
Prime Rate Notes
"Prime Rate" means the rate on any Interest Determination Date as
published in H.15(519) under the heading "Bank Prime Loan".
If the above rate is not published in H.15(519) prior to 3:00 p.m. on
the Calculation Date, then the Prime Rate will be the rate on such
Interest Determination Date as published in H.15 Daily Update opposite
the caption "Bank Prime Loan".
If the rate is not published prior to 3:00 p.m. on the Calculation Date
in either H.15(519) or H.15 Daily Update, then the Calculation Agent
will determine the Prime Rate to be the arithmetic mean of the rates of
interest publicly announced by each bank that appears on the Reuters
Screen US PRIME1 Page (as defined below) as such bank's prime rate or
base lending rate as of 11:00 a.m., on that Interest Determination Date.
If fewer than four such rates referred to above are so published by
3:00 p.m. on the Calculation Date, the Calculation Agent will determine
the Prime Rate to be the arithmetic mean of the prime rates or base
lending rates quoted on the basis of the actual number of days in the
year divided by 360 as of the close of business on such Interest
Determination Date by three major banks in New York City selected by
the Calculation Agent.
If the banks selected are not quoting as mentioned above, the Prime
Rate will remain the Prime Rate in effect on such Interest
Determination Date.
"Reuters Screen US PRIME1 Page" means the display designated as page
"US PRIME1" on the Reuters Monitor Money Rates Service (or such other
page as may replace the US PRIME1 page on that service for the purpose
of displaying prime rates or base lending rates of major United States
banks).
Treasury Rate Notes
"Treasury Rate" means:
(1) the rate from the auction held on the Interest Determination Date
(the "Auction") of direct obligations of the United States ("Treasury
Bills") having the Index Maturity specified in the Supplement under the
caption "INVESTMENT RATE" on the display on Moneyline Telerate (or any
successor service) on page 56 (or any other page as may replace that
page on that service) ("Telerate Page 56") or page 57 (or any other
page as may replace that page on that service) ("Telerate Page 57"), or
(2) if the rate referred to in clause (1) is not so published by 3:00
p.m. on the related Calculation Date, the Bond Equivalent Yield (as
defined below) of the rate for the applicable Treasury Bills as
published in H.15 Daily Update, under the caption "U.S. Government
Securities/Treasury Bills/Auction High", or
(3) if the rate referred to in clause (2) is not so published by 3:00
p.m. on the related Calculation Date, the Bond Equivalent Yield of the
auction rate of the applicable Treasury Bills as announced by the
United States Department of the Treasury, or
(4) if the rate referred to in clause (3) is not so announced by the
United States Department of the Treasury, or if the Auction is not
held, the Bond Equivalent Yield of the rate on the particular Interest
Determination Date of the applicable Treasury Bills as published in
H.15(519) under the caption "U.S. Government Securities/Treasury
Bills/Secondary Market", or
(5) if the rate referred to in clause (4) not so published by 3:00 p.m.
on the related Calculation Date, the rate on the particular Interest
Determination Date of the applicable Treasury Bills as published in
H.15 Daily Update, under the caption "U.S. Government
Securities/Treasury Bills/Secondary Market", or
(6) if the rate referred to in clause (5) is not so published by 3:00
p.m. on the related Calculation Date, the rate on the particular
Interest Determination Date calculated by the Calculation Agent as the
Bond Equivalent Yield of the arithmetic mean of the secondary market
bid rates, as of approximately 3:30 p.m. on that Interest Determination
Date, of three primary United States government securities dealers
selected by the Calculation Agent, for the issue of Treasury Bills with
a remaining maturity closest to the Index Maturity specified in the
Supplement, or
(7) if the dealers so selected by the Calculation Agent are not quoting
as mentioned in clause (6), the Treasury Rate in effect on the
particular Interest Determination Date.
"Bond Equivalent Yield" means a yield (expressed as a percentage)
calculated in accordance with the following formula:
D x N
Bond Equivalent Yield = _____________ x 100
360 - (D x M)
where "D" refers to the applicable per annum rate for Treasury Bills
quoted on a bank discount basis and expressed as a decimal, "N" refers
to 365 or 366, as the case may be, and "M" refers to the actual number
of days in the applicable Interest Reset Period.
3. Final Maturity. The Stated Maturity Date for any Note will be the
date so specified in the Supplement, which shall be no later than 364
days from the date of issuance. On its Stated Maturity Date, or any
date prior to the Stated Maturity Date on which the particular Note
becomes due and payable by the declaration of acceleration, each such
date being referred to as a Maturity Date, the principal amount of each
Note, together with accrued and unpaid interest thereon, will be
immediately due and payable.
4. Events of Default. The occurrence of any of the following shall
constitute an "Event of Default" with respect to a Note: (i) default
in any payment of principal of or interest on such Note (including on a
redemption thereof); (ii) the Issuer makes any compromise arrangement
with its creditors generally including the entering into any form of
moratorium with its creditors generally; (iii) a court having
jurisdiction shall enter a decree or order for relief in respect of the
Issuer in an involuntary case under any applicable bankruptcy,
insolvency or other similar law now or hereafter in effect, or there
shall be appointed a receiver, administrator, liquidator, custodian,
trustee or sequestrator (or similar officer) with respect to the whole
or substantially the whole of the assets of the Issuer and any such
decree, order or appointment is not removed, discharged or withdrawn
within 60 days thereafter; or (iv) the Issuer shall commence a
voluntary case under any applicable bankruptcy, insolvency or other
similar law now or hereafter in effect, or consent to the entry of an
order for relief in an involuntary case under any such law, or consent
to the appointment of or taking possession by a receiver, administrator,
liquidator, assignee, custodian, trustee or sequestrator (or similar
official), with respect to the whole or substantially the whole of the
assets of the Issuer or make any general assignment for the benefit of
creditors. Upon the occurrence of an Event of Default, the principal
of each obligation evidenced by such Note (together with interest
accrued and unpaid thereon) shall become, without any notice or demand,
immediately due and payable.2
5. Obligation Absolute. No provision of the Issuing and Paying
Agent Agreement under which the Notes are issued shall alter or impair
the obligation of the Issuer, which is absolute and unconditional, to
pay the principal of and interest on each Note at the times, place and
rate, and in the coin or currency, herein prescribed.
6. Supplement. Any term contained in the Supplement shall supercede
any conflicting term contained herein.
2 Unlike single payment notes, where a default arises only at the stated
maturity, interest-bearing notes with multiple payment dates should
contain a default provision permitting acceleration of the maturity
if the Issuer defaults on an interest payment.