EXHIBIT 1
KEYSTONE FINANCIAL MID-ATLANTIC FUNDING CORP.
SENIOR/SUBORDINATED MEDIUM-TERM NOTES
DUE FROM 9 MONTHS TO 30 YEARS FROM DATE OF ISSUE
UNCONDITIONALLY GUARANTEED AS TO PRINCIPAL,
PREMIUM, IF ANY, AND INTEREST, IF ANY, BY
KEYSTONE FINANCIAL, INC.
Distribution Agreement
----------------------
_________, 1997
▇▇▇▇▇▇▇, ▇▇▇▇▇ & Co.
▇▇ ▇▇▇▇▇ ▇▇▇▇▇▇
▇▇▇ ▇▇▇▇, ▇▇▇ ▇▇▇▇ ▇▇▇▇▇
Bear, ▇▇▇▇▇▇▇ & Co. Inc.
▇▇ ▇▇▇▇▇ ▇▇▇▇▇▇
▇▇▇ ▇▇▇▇, ▇▇▇ ▇▇▇▇ ▇▇▇▇▇
▇▇▇▇▇, ▇▇▇▇▇▇▇▇ & ▇▇▇▇▇, Inc.
▇ ▇▇▇▇▇ ▇▇▇▇▇ ▇▇▇▇▇▇
▇▇▇ ▇▇▇▇, ▇▇▇ ▇▇▇▇ ▇▇▇▇▇
Ladies and Gentlemen:
Keystone Financial Mid-Atlantic Funding Corp., a Pennsylvania
corporation (the "Company"), proposes to issue and sell from time to time its
Senior Medium-Term Notes (the "Senior Notes") and Subordinated Medium-Term Notes
(the "Subordinated Notes" and, together with the Senior Notes, the
"Securities"). The Securities will be due 9 months to 30 years from date of
issue. The Senior Notes will be unconditionally guaranteed as to payment of
principal, premium, if any, and interest, if any (the "Senior Guarantees"), by
Keystone Financial, Inc. (the "Guarantor"). The Subordinated Notes will be
unconditionally guaranteed as to payment of principal, premium, if any, and
interest, if any (the "Subordinated Guarantees" and, together with the Senior
Guarantees, the "Guarantees") by the Guarantor. Each of the Company and the
Guarantor agrees with each of ▇▇▇▇▇▇▇, ▇▇▇▇▇ & Co., Bear, ▇▇▇▇▇▇▇ & Co. Inc. and
▇▇▇▇▇, ▇▇▇▇▇▇▇▇ & ▇▇▇▇▇, Inc. (each, an "Agent" and collectively, the "Agents")
as set forth in this Agreement.
Subject to the terms and conditions stated herein and to the reservation by
the Company of the right to sell Securities and related Guarantees directly on
its own behalf, the Company hereby (i) appoints each Agent as an agent of the
Company for the purpose of soliciting and receiving offers to purchase
Securities and related Guarantees from the Company pursuant to Section 2(a)
hereof and (ii) agrees that, except as otherwise contemplated herein, whenever
it determines to sell Securities and related Guarantees directly to any Agent as
principal, it will enter into a separate agreement (each a "Terms Agreement"),
substantially in the form of Annex I hereto, relating to such sale in accordance
with Section 2(b) hereof. This Distribution Agreement shall not be construed to
create either an obligation on the part of the
Company to sell any Securities and related Guarantees or an obligation of any of
the Agents to purchase Securities and related Guarantees as principal.
The Senior Notes and the Senior Guarantees will be issued under an
indenture, dated as of __________, 1997 (the "Senior Indenture"), between the
Company, the Guarantor and Bankers Trust Company, as Senior Trustee (the "Senior
Trustee") and the Subordinated Notes and the Subordinated Guarantees will be
issued under an indenture, dated as of ___________, 1997 (the "Subordinated
Indenture"), between the Company, the Guarantor and Bankers Trust Company, as
subordinated trustee ("The Subordinated Trustee"). The Senior Indenture and the
Subordinated Indenture are collectively referred to herein as the "Indentures."
The Senior Trustee and the Subordinated Trustee are referred to herein
collectively and individually as the "Trustee."
As of the date hereof, the Company and the Guarantor have authorized
the issuance and sale of up to U.S.$400,000,000 aggregate principal amount (or
its equivalent in any other currency or composite currency as the Company shall
designate at the time of issuance) of Securities and the related Guarantees
through the Agents pursuant to the terms of this Agreement. It is understood,
however, that the Company and the Guarantor may from time to time authorize the
issuance of additional Securities and related Guarantees and that such
additional Securities and related Guarantees may be sold through or to the
Agents pursuant to the terms of this Agreement, all as though the issuance of
such Securities were authorized as of the date hereof.
1. The Company and the Guarantor jointly and severally represent and
warrant to, and agree with, each Agent that:
(a) A registration statement on Form S-3 (File No. 333- ) (the
"Initial Registration Statement") has been filed by the Company and the
Guarantor with the Securities and Exchange Commission (the "Commission") for
the registration of the Securities and the Guarantees; the Initial
Registration Statement and any post-effective amendment thereto, each in the
form heretofore delivered or to be delivered to such Agent, including all
documents incorporated by reference in the prospectus included therein, have
been declared effective by the Commission in such form; other than a
registration statement, if any, increasing the size of the offering (a "Rule
462(b) Registration Statement"), filed pursuant to Rule 462(b) under the
Securities Act of 1933, as amended (the "Act"), which became effective upon
filing, no other document with respect to the Initial Registration Statement
has heretofore been filed or transmitted for filing with the Commission
(other than the prospectuses filed pursuant to Rule 424(b) of the rules and
regulations of the Commission under the Act, each in the form heretofore
delivered to the Agents); and no stop order suspending the effectiveness of
the Initial Registration Statement, any post-effective amendment thereto or
the Rule 462(b) Registration Statement, if any, has been issued and no
proceeding for that purpose has been initiated or threatened by the
Commission (any preliminary prospectus included in the Initial Registration
Statement or filed with the Commission pursuant to Rule 424(a) of the rules
and regulations of the Commission under the Act, is hereinafter called a
"Preliminary Prospectus"; the various parts of the Initial Registration
Statement and the 462(b) Registration Statement, if any, including all
exhibits thereto and the documents incorporated by reference in the
prospectus contained in the Initial Registration Statement at the time such
part of the registration statement became effective but excluding Form T-1,
each as amended at the time such part of the registration statement became
effective or such part of the Rule 462(b) Registration Statement, if any,
became or hereafter becomes effective, is hereinafter collectively called
the "Registration Statement"; the prospectus (including, if applicable, any
prospectus supplement)
2
relating to the Securities and the Guarantees, in the form in which it has
most recently been filed, or transmitted for filing, with the Commission on
or prior to the date of this Agreement, is hereinafter called the
"Prospectus"; any reference herein to any Preliminary Prospectus or the
Prospectus shall be deemed to refer to and include the documents
incorporated by reference therein pursuant to the applicable form under the
Act, as of the date of such Preliminary Prospectus or Prospectus, as the
case may be; any reference to any amendment or supplement to any Preliminary
Prospectus or the Prospectus, including any supplement to the Prospectus
that sets forth only the terms of a particular issue of the Securities and
the related Guarantees (a "Pricing Supplement"), shall be deemed to refer to
and include any documents filed after the date of such Preliminary
Prospectus or Prospectus, as the case may be, under the Securities Exchange
Act of 1934, as amended (the "Exchange Act"), and incorporated therein by
reference; any reference to any amendment to the Registration Statement
shall be deemed to refer to and include any annual report of the Guarantor
filed pursuant to Section 13(a) or 15(d) of the Exchange Act after the
effective date of the Initial Registration Statement that is incorporated by
reference in the Registration Statement; and any reference to the Prospectus
as amended or supplemented shall be deemed to refer to and include the
Prospectus as amended or supplemented (including by the applicable Pricing
Supplement filed in accordance with Section 4(a) hereof) in relation to
Securities and Guarantees to be sold pursuant to this Agreement, in the form
filed or transmitted for filing with the Commission pursuant to Rule 424(b)
under the Act and in accordance with Section 4(a) hereof, including any
documents incorporated by reference therein as of the date of such filing);
(b) The documents incorporated by reference in the Prospectus, when
they became effective or were filed with the Commission, as the case may be,
conformed in all material respects to the requirements of the Act or the
Exchange Act, as applicable, and the rules and regulations of the Commission
thereunder, and none of such documents contained an untrue statement of a
material fact or omitted to state a material fact required to be stated
therein or necessary to make the statements therein not misleading; and any
further documents so filed and incorporated by reference in the Prospectus,
or any further amendment or supplement thereto, when such documents become
effective or are filed with the Commission, as the case may be, will conform
in all material respects to the requirements of the Act or the Exchange Act,
as applicable, and the rules and regulations of the Commission thereunder
and will not contain an untrue statement of a material fact or omit to state
a material fact required to be stated therein or necessary to make the
statements therein not misleading;
(c) The Registration Statement and the Prospectus conform, and any
further amendments or supplements to the Registration Statement or the
Prospectus will conform, in all material respects to the requirements of the
Act and the Trust Indenture Act of 1939, as amended (the "Trust Indenture
Act"), and the rules and regulations of the Commission thereunder and do not
and will not, as of the applicable effective date as to the Registration
Statement and any amendment thereto and as of the applicable filing date as
to the Prospectus and any amendment or supplement thereto, contain an untrue
statement of a material fact or omit to state a material fact required to be
stated therein or necessary to make the statements therein not misleading;
provided, however, that this representation and warranty shall not apply to
any statements or omissions made in reliance upon and in conformity with
information furnished in writing to the Company by any Agent expressly for
use in the Prospectus as amended or supplemented to relate to a particular
issuance of Securities and related Guarantees, it being understood and
agreed that the only such information is that described as such in Section
7(a) below;
3
(d) Neither the Company, the Guarantor nor any of the Guarantor's
Significant Subsidiaries (as defined in Rule 405 of Regulation C under the
Act) has sustained since the date of the latest audited financial statements
included or incorporated by reference in the Prospectus any material loss or
interference with its business from fire, explosion, flood or other
calamity, whether or not covered by insurance, or from any labor dispute or
court or governmental action, order or decree, otherwise than as set forth
or contemplated in the Prospectus; and, since the respective dates as of
which information is given in the Registration Statement and the Prospectus,
there has not been any material change in the capital stock or long-term
debt of the Company, the Guarantor (other than the share repurchase program
that has been disclosed to the Agents) or any of the Guarantor's
Significant Subsidiaries or any material adverse change, or any development
involving a prospective material adverse change, in or affecting the general
affairs, management, financial position, shareholders' equity or results of
operations of the Company, the Guarantor or any of the Guarantor's
Significant Subsidiaries, otherwise than as set forth or contemplated in the
Prospectus.
(e) Each of the Company and the Guarantor and each of the Guarantor's
Significant Subsidiaries has been duly incorporated and is validly existing
as a corporation in good standing under the laws of the jurisdiction of its
incorporation, with full power and authority to own its properties and
conduct its business as described in the Prospectus;
(f) The Guarantor is duly registered as a bank holding company under
the Bank Holding Company Act of 1956, as amended (the "BHC Act");
(g) The Guarantor has an authorized capitalization as set forth in the
Prospectus, and all of the issued shares of capital stock of the Guarantor
have been duly and validly authorized and issued and are fully paid and non-
assessable. All of the issued shares of the Company and each other
Significant Subsidiaries of the Guarantor have been duly and validly
authorized and issued and are fully paid and non-assessable (subject to the
provisions of Section 55 of Title 12 of the United States Code in the case
of Significant Subsidiaries which are national banks) and are owned by the
Guarantor, directly or through Significant Subsidiaries, free and clear of
any security interest, mortgage, pledge, lien, encumbrance, claim or equity;
(h) The Securities have been duly authorized, and, when issued and
delivered pursuant to this Agreement and any Terms Agreement, will have been
duly executed, authenticated, issued and delivered and will constitute valid
and legally binding obligations of the Company entitled to the benefits
provided by the Indentures, which will be substantially in the forms filed
as exhibits to the Registration Statement; the Guarantees have been duly
authorized and, upon due issuance and delivery of the related Securities and
due endorsement of the Guarantees, the Guarantees will have been duly
executed, authenticated, issued and delivered and will constitute valid and
legally binding obligations of the Guarantor entitled to the benefits
provided by the Indentures; the Indentures have been duly authorized and
duly qualified under the Trust Indenture Act and constitute valid and
legally binding instruments, enforceable in accordance with their terms,
subject, as to enforcement, to bankruptcy, insolvency, reorganization and
other laws of general applicability relating to or affecting creditors'
rights and to general equity principles; and the Indentures conform and the
Securities and the Guarantees of any particular issuance of Securities will
conform to the descriptions thereof contained in the Prospectus as amended
or supplemented to relate to such issuance;
4
(i) The issue and sale of the Securities and the Guarantees, the
compliance by the Company and the Guarantor with all of the provisions of
the Securities, the Guarantees, the Indentures, this Agreement and any Terms
Agreement, and the consummation of the transactions herein and therein
contemplated will not conflict with or result in a breach or violation of
any of the terms or provisions of, or constitute a default under, any
indenture, mortgage, deed of trust, loan agreement or other agreement or
instrument to which the Company, the Guarantor or any of the Guarantor's
Significant Subsidiaries is a party or by which the Company, the Guarantor
or any of the Guarantor's Significant Subsidiaries is bound or to which any
of the property or assets of the Company, the Guarantor or the Guarantor's
Significant Subsidiaries is subject, nor will such action result in any
violation of the provisions of the Articles of Incorporation (which term, as
used herein, shall be deemed to include other chartering documents, as
applicable), as amended, or the By-laws of the Company, the Guarantor or any
of the Guarantor's Significant Subsidiaries or any statute or any order,
rule or regulation of any court or governmental agency or body having
jurisdiction over the Company, the Guarantor or the Guarantor's
Significant Subsidiaries or any of their properties; and no consent,
approval, authorization, order, registration or qualification of or with any
court or governmental agency or body is required for the solicitation of
offers to purchase Securities or related Guarantees, the issue and sale of
the Securities and the related Guarantees or the consummation by the Company
or the Guarantor of the other transactions contemplated by this Agreement,
any Terms Agreement or the Indentures, except such as have been, or will
have been prior to the Commencement Date (as defined in Section 3 hereof),
obtained under the Act or the Trust Indenture Act and such consents,
approvals, authorizations, registrations or qualifications as may be
required under state securities or Blue Sky laws in connection with the
solicitation by such Agent of offers to purchase Securities and related
Guarantees and with purchases of Securities and related Guarantees by such
Agent as principal, as the case may be, in each case in the manner
contemplated hereby;
(j) Neither the Company nor the Guarantor nor any of the Guarantor's
Significant Subsidiaries is in violation of its Articles of Incorporation or
By-laws or in default in the performance or observance of any material
obligation, covenant or condition contained in any indenture, mortgage, deed
of trust, loan agreement, lease or other agreement or instrument to which it
is a party or by which it or any of its properties may be bound; and the
Company has no Significant Subsidiaries;
(k) The statements set forth in the Prospectus under the caption
"Description of Debt Securities," "Description of Notes" and "Certain Tax
Consequences," insofar as they purport to constitute a summary of the terms
of the Securities, "Guarantees," insofar as it purports to constitute a
summary of the terms of the Guarantees, under the caption "Certain United
States Federal Income Tax Considerations," and under the caption "Plan of
Distribution" and "Supplemental Plan of Distribution," and the information
incorporated by reference in the Prospectus under the captions "Regulation
and Supervision of Bank Holding Companies," "Regulation and Supervision of
Banks," "Properties" and "Legal Proceedings" in the Company's Annual Report
on Form 10-K for the Fiscal Year ended December 31, 1996, insofar as they
purport to describe the provisions of the laws and documents referred to
therein, are accurate, complete and fair;
(l) Other than as set forth in the Prospectus, there are no legal or
governmental proceedings pending to which the Company, the Guarantor or any
of the Guarantor's Significant Subsidiaries is a party or to which any
property of the Company, the Guarantor or any of the Guarantor's Significant
Subsidiaries is subject, which, if determined adversely to the Company, the
Guarantor or any of the Guarantor's Significant Subsidiaries, would
individually or in the aggregate have a material adverse effect
5
on the current or future consolidated financial position, shareholders'
equity or results of operations of the Company, the Guarantor and the
Guarantor's Significant Subsidiaries, and, to the best knowledge of the
Company, the Guarantor or any of the Guarantor's Significant Subsidiaries,
no such proceedings are threatened or contemplated by governmental
authorities or threatened by others;
(m) Neither the Company nor the Guarantor is and, after giving effect
to each offering and sale of the Securities and the Guarantees, neither the
Company nor the Guarantor will be an "investment company" or an entity
"controlled" by an "investment company," as such terms are defined in the
Investment Company Act of 1940, as amended (the "Investment Company Act").
The Company is exempt from the provisions of the Investment Company Act by
virtue of compliance with the provisions of Rule 3a-5 thereunder;
(n) Neither the Company, the Guarantor nor any of the Guarantor's
affiliates does business with the government of Cuba or with any person or
affiliate located in Cuba within the meaning of Section 517.075, Florida
Statutes;
(o) Immediately after any sale of Securities and related Guarantees by
the Company hereunder or under any Terms Agreement, the aggregate amount of
Securities and related Guarantees which shall have been issued and sold by
the Company hereunder or under any Terms Agreement and of any debt
securities of the Company (other than such Securities and related
Guarantees) that shall have been issued and sold pursuant to the
Registration Statement will not exceed the amount of debt securities
registered under the Registration Statement; and
(p) The accountants who have certified certain financial statements
included or incorporated by reference in the Prospectus are independent
public accountants as required by the Act and the rules and regulations of
the Commission thereunder.
2. (a) On the basis of the representations and warranties herein
contained, and subject to the terms and conditions herein set forth, each of the
Agents hereby severally and not jointly agrees, as agent of the Company, to use
its reasonable efforts to solicit and receive offers to purchase the Securities
and related Guarantees from the Company upon the terms and conditions set forth
in the Prospectus as amended or supplemented from time to time. So long as this
Agreement shall remain in effect with respect to any Agent, the Company shall
not, without the consent of such Agent, solicit or accept offers to purchase, or
sell, any debt securities with a maturity at the time of original issuance of 9
months to 30 years except pursuant to this Agreement, any Terms Agreement, or
except pursuant to a private placement not constituting a public offering under
the Act or except in connection with a firm commitment underwriting pursuant to
an underwriting agreement that does not provide for a continuous offering of
medium-term debt securities. However, the Company reserves the right to sell,
and may solicit and accept offers to purchase, Securities and related Guarantees
directly on its own behalf in transactions with persons other than broker-
dealers, and, in the case of any such sale not resulting from a solicitation
made by any Agent, no commission will be payable with respect to such sale.
These provisions shall not limit Section 4(f) hereof or any similar provision
included in any Terms Agreement.
Procedural details relating to the issue and delivery of Securities
and related Guarantees, the solicitation of offers to purchase Securities and
related Guarantees and the payment in each case therefor shall be as set forth
in the Administrative Procedure attached hereto as Annex II as it may be amended
from time to time by written agreement between the Agents, the Company and the
Guarantor (the "Administrative Procedure"). The provisions of the Administrative
Procedure shall apply to all
6
transactions contemplated hereunder other than those made pursuant to a Terms
Agreement. Each Agent, the Company and the Guarantor agree to perform the
respective duties and obligations specifically provided to be performed by each
of them in the Administrative Procedure. The Company will furnish to the Trustee
a copy of the Administrative Procedure as from time to time in effect.
The Company reserves the right, in its sole discretion, to instruct
the Agents to suspend at any time, for any period of time or permanently, the
solicitation of offers to purchase the Securities and related Guarantees. As
soon as practicable, but in any event not later than one business day in New
York City, after receipt of notice from the Company, the Agents will suspend
solicitation of offers to purchase Securities and related Guarantees from the
Company until such time as the Company has advised the Agents that such
solicitation may be resumed. During such period, the Company and the Guarantor
shall not be required to comply with the provisions of Sections 4(h), 4(i), 4(j)
and 4(k). Upon advising the Agents that such solicitation may be resumed,
however, the Company and the Guarantor shall simultaneously provide the
documents required to be delivered by Sections 4(h), 4(i), 4(j) and 4(k), and
the Agents shall have no obligation to solicit offers to purchase the Securities
and the related Guarantees until such documents have been received by the
Agents. In addition, any failure by the Company and the Guarantor to comply
with its obligations hereunder, including without limitation its obligations to
deliver the documents required by Sections 4(h), 4(i), 4(j) and 4(k), shall
automatically terminate the Agents' obligations hereunder, including without
limitation its obligations to solicit offers to purchase the Securities and the
related Guarantees hereunder as agent or to purchase Securities and related
Guarantees hereunder as principal.
The Company agrees to pay each Agent a commission, at the time of
settlement of any sale of a Security by the Company as a result of a
solicitation made by such Agent, in an amount equal to the following applicable
percentage of the principal amount of such Security sold:
7
COMMISSION
(PERCENTAGE
OF AGGREGATE
PRINCIPAL
AMOUNT OF
RANGE OF MATURITIES SECURITIES SOLD)
------------------- ----------------
From 9 months to less than 1 year.... .125%
From 1 year to less than 18 months... .150%
From 18 months to less than 2 years.. .200%
From 2 years to less than 3 years.... .250%
From 3 years to less than 4 years.... .350%
From 4 years to less than 5 years.... .450%
From 5 years to less than 6 years.... .500%
From 6 years to less than 7 years.... .550%
From 7 years to less than 10 years... .600%
From 10 years to less than 15 years.. .625%
From 15 years to less than 20 years.. .675%
From 20 years to 30 years............ .750%
(b) Each sale of Securities and related Guarantees to any Agent as
principal shall be made in accordance with the terms of this Agreement and
(unless the Company and such Agent shall otherwise agree) a Terms Agreement
which will provide for the sale of such Securities and related Guarantees to,
and the purchase thereof by, such Agent; a Terms Agreement may also specify
certain provisions relating to the reoffering of such Securities and related
Guarantees by such Agent; the commitment of any Agent to purchase Securities and
related Guarantees as principal, whether pursuant to any Terms Agreement or
otherwise, shall be deemed to have been made on the basis of the representations
and warranties of the Company and the Guarantor herein contained and shall be
subject to the terms and conditions herein set forth; each Terms Agreement shall
specify the principal amount of Securities and related Guarantees to be
purchased by any Agent pursuant thereto, the price to be paid to the Company for
such Securities and related Guarantees, any provisions relating to rights of,
and default by, underwriters acting together with such Agent in the reoffering
of the Securities and related Guarantees and the time and date and place of
delivery of and payment for such Securities and related Guarantees; and such
Terms Agreement shall also specify any requirements for opinions of counsel,
accountants' letters and officers' certificates pursuant to Section 4 hereof.
Each Agent proposes to offer Securities and related Guarantees purchased by it
as principal for sale at prevailing market prices or prices related thereto at
the time of sale, which may be equal to, greater than or less than the price at
which such Securities and related Guarantees are purchased by such Agent from
the Company.
For each sale of Securities and related Guarantees to an Agent as
principal that is not made pursuant to a Terms Agreement, the procedural details
relating to the issue and delivery of such Securities and related Guarantees and
payment therefor shall be as set forth in the Administrative Procedure. For
each such sale of Securities and related Guarantees to an Agent as principal
that is not made pursuant to
8
a Terms Agreement, the Company agrees to pay such Agent a commission (or grant
an equivalent discount) as provided in Section 2(a) hereof and in accordance
with the schedule set forth therein.
Each time and date of delivery of and payment for Securities and
related Guarantees to be purchased by an Agent as principal, whether set forth
in a Terms Agreement or in accordance with the Administrative Procedure, is
referred to herein as a "Time of Delivery."
(c) Each Agent agrees, with respect to any Security denominated in a
currency other than U.S. dollars, as agent, directly or indirectly, not to
solicit offers to purchase, and as principal under any Terms Agreement or
otherwise, directly or indirectly, not to offer, sell or deliver, such Security
in, or to residents of, the country issuing such currency, except as permitted
by applicable law.
3. The documents required to be delivered pursuant to Section 6 hereof on
the Commencement Date (as defined below) shall be delivered to the Agents at the
offices of Brown & Wood LLP, New York, New York, at 11:00 a.m., New York City
time, on the date of this Agreement, which date and time of such delivery may be
postponed by agreement between the Agents and the Company but in no event shall
be later than the day prior to the date on which solicitation of offers to
purchase Securities and related Guarantees is commenced or on which any Terms
Agreement is executed (such time and date being referred to herein as the
"Commencement Date").
4. The Company and the Guarantor jointly and severally covenant and
agree with each Agent:
(a) (i) To make no amendment or supplement to the Registration
Statement or the Prospectus (A) prior to the Commencement Date which shall
be disapproved by any Agent promptly after reasonable notice thereof or (B)
after the date of any Terms Agreement or other agreement by an Agent to
purchase Securities and related Guarantees as principal and prior to the
related Time of Delivery which shall be disapproved by any Agent party to
such Terms Agreement or so purchasing as principal promptly after reasonable
notice thereof; (ii) to prepare, with respect to any Securities and related
Guarantees to be sold through or to such Agent pursuant to this Agreement, a
Pricing Supplement with respect to such Securities and related Guarantees in
a form previously approved by such Agent and to file such Pricing Supplement
pursuant to Rule 424(b)(3) under the Act not later than the close of
business of the Commission on the fifth business day after the date on which
such Pricing Supplement is first used; (iii) if the Company elects to rely
on Rule 462(b), to file a Rule 462(b) Registration Statement with the
Commission in compliance with Rule 462(b) by 10:00 p.m., Washington, D.C.
time, on the date of this Agreement and, at the time of such filing, to
either pay the Commission the filing fee for the Rule 462(b) Registration
Statement or give irrevocable instructions for the payment of such fee
pursuant to Rule 111(b) under the Act; (iv) to make no amendment or
supplement to the Registration Statement or Prospectus, other than any
Pricing Supplement, at any time prior to having afforded each Agent a
reasonable opportunity to review and comment thereon; (v) to file promptly
all reports and any definitive proxy or information statements required to
be filed by the Company or the Guarantor with the Commission pursuant to
Section 13(a), 13(c), 14 or 15(d) of the Exchange Act for so long as the
delivery of a prospectus is required in connection with the offering or sale
of the Securities and the related Guarantees, and during such same period to
advise such Agent, promptly after the Company or the Guarantor receives
notice thereof, of the time when any amendment to the Registration Statement
has been filed or has become effective or any supplement to the Prospectus
or any amended Prospectus (other than any Pricing Supplement that relates to
Securities and related Guarantees not purchased through or by such Agent)
has been filed with the Commission, of the
9
issuance by the Commission of any stop order or of any order preventing or
suspending the use of any prospectus relating to the Securities and the
related Guarantees, of the suspension of the qualification of the Securities
and the related Guarantees for offering or sale in any jurisdiction, of the
initiation or threatening of any proceeding for any such purpose, or of any
request by the Commission for the amendment or supplement of the
Registration Statement or Prospectus or for additional information; and (v)
in the event of the issuance of any such stop order or of any such order
preventing or suspending the use of any such prospectus or suspending any
such qualification, to use promptly its best efforts to obtain its
withdrawal;
(b) Promptly from time to time to take such action as such Agent may
reasonably request to qualify the Securities and the related Guarantees for
offering and sale under the securities laws of such jurisdictions as such
Agent may request and to comply with such laws so as to permit the
continuance of sales and dealings therein for as long as may be necessary to
complete the distribution or sale of the Securities and the related
Guarantees; provided, however, that in connection therewith the Company and
the Guarantor shall not be required to qualify as a foreign corporation or
to file a general consent to service of process in any jurisdiction;
(c) Prior to 10:00 a.m., New York City time, on the business day
next succeeding the date of each Terms Agreement and from time to time, to
furnish such Agent with copies of the Registration Statement and each
amendment thereto, with copies of the Prospectus as each time amended or
supplemented, other than any Pricing Supplement (except as provided in the
Administrative Procedure), in the form in which it is filed with the
Commission pursuant to Rule 424 under the Act, and with copies of the
documents incorporated by reference therein, all in such quantities as such
Agent may reasonably request; and, if the delivery of a prospectus is
required at any time in connection with the offering or sale of the
Securities and the related Guarantees (including Securities and related
Guarantees purchased from the Company by such Agent as principal) and if at
such time any event shall have occurred 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 in order to make
the statements therein, in the light of the circumstances under which they
were made when such Prospectus is delivered, not misleading, or, if for any
other reason it shall be necessary during such same period to amend or
supplement the Prospectus or to file under the Exchange Act any document
incorporated by reference in the Prospectus in order to comply with the Act,
the Exchange Act or the Trust Indenture Act, to notify such Agent and
request such Agent, in its capacity as agent of the Company, to suspend
solicitation of offers to purchase Securities and related Guarantees from
the Company (and, if so notified, such Agent shall cease such solicitations
as soon as practicable, but in any event not later than one business day
later); and if the Company and the Guarantor shall decide to amend or
supplement the Registration Statement or the Prospectus as then amended or
supplemented, to so advise such Agent promptly by telephone (with
confirmation in writing) and to prepare and cause to be filed promptly with
the Commission an amendment or supplement to the Registration Statement or
the Prospectus as then amended or supplemented that will correct such
statement or omission or effect such compliance; provided, however, that if
during such same period such Agent continues to own Securities and related
Guarantees purchased from the Company by such Agent as principal or such
Agent is otherwise required to deliver a prospectus in respect of
transactions in the Securities and the related Guarantees, the Company and
the Guarantor shall promptly prepare and file with the Commission such an
amendment or supplement;
10
(d) To make generally available to its securityholders as soon as
practicable, but in any event not later than eighteen months after the
effective date of the Registration Statement (as defined in Rule 158(c)
under the Act), an earnings statement (which need not be audited) complying
with Section 11(a) of the Act and the rules and regulations of the
Commission thereunder (including, at the option of the Company and the
Guarantor, Rule 158);
(e) So long as any Securities and related Guarantees are
outstanding, to furnish to such Agent copies of all reports or other
communications (financial or other) furnished to stockholders, and deliver
to such Agent (i) as soon as they are available, copies of any reports and
financial statements furnished to or filed with the Commission or any
national securities exchange on which any class of securities of the Company
or the Guarantor are listed; and (ii) such additional information concerning
the business and financial condition of the Company and the Guarantor as
such Agent may from time to time reasonably request (such financial
statements to be on a consolidated basis to the extent the accounts of the
Company, the Guarantor and the Guarantor's subsidiaries are consolidated in
reports furnished to its stockholders generally or to the Commission);
(f) That, from the date of any Terms Agreement with such Agent or
other agreement by such Agent to purchase Securities and related Guarantees
as principal and continuing to and including the later of (i) the
termination of the trading restrictions for the Securities and the related
Guarantees purchased thereunder, as notified to the Company by such Agent
and (ii) the related Time of Delivery, not to offer, sell, contract to sell
or otherwise dispose of any debt securities of the Company or the Guarantor
which both mature more than 9 months after such Time of Delivery and are
substantially similar to the Securities, without the prior written consent
of such Agent;
(g) That each acceptance by the Company of an offer to purchase
Securities and related Guarantees hereunder (including any purchase by such
Agent as principal not pursuant to a Terms Agreement), and each execution
and delivery by the Company and the Guarantor of a Terms Agreement with such
Agent, shall be deemed to be an affirmation to such Agent that the
representations and warranties of the Company and the Guarantor contained in
or made pursuant to this Agreement are true and correct as of the date of
such acceptance or of such Terms Agreement, as the case may be, as though
made at and as of such date, and an undertaking that such representations
and warranties will be true and correct as of the settlement date for the
Securities and the related Guarantees relating to such acceptance or as of
the Time of Delivery relating to such sale, as the case may be, as though
made at and as of such date (except that such representations and warranties
shall be deemed to relate to the Registration Statement and the Prospectus
as amended and supplemented relating to such Securities and related
Guarantees);
(h) That reasonably in advance of each time the Registration
Statement or the Prospectus shall be amended or supplemented (other than by
a Pricing Supplement), each time a document filed under the Act or the
Exchange Act is incorporated by reference into the Prospectus, and each time
the Company sells Securities and related Guarantees to such Agent as
principal pursuant to a Terms Agreement and such Terms Agreement specifies
the delivery of an opinion or opinions by Brown & Wood LLP, counsel to the
Agents, as a condition to the purchase of Securities and related Guarantees
pursuant to such Terms Agreement, the Company and the Guarantor shall
furnish to such counsel such papers and information as they may reasonably
request to enable them to furnish to such Agent the opinion or opinions
referred to in Section 6(b) hereof;
11
(i) That each time the Registration Statement or the Prospectus
shall be amended or supplemented (other than by a Pricing Supplement), each
time a document filed under the Act or the Exchange Act is incorporated by
reference into the Prospectus and each time the Company sells Securities and
related Guar antees to such Agent as principal pursuant to a Terms Agreement
and such Terms Agreement specifies the delivery of an opinion under this
Section 4(i) as a condition to the purchase of Securities and related
Guarantees pursuant to such Terms Agreement, the Company and the Guarantor
shall furnish or cause to be furnished forthwith to such Agent a written
opinion of ▇▇▇▇ ▇▇▇▇▇ ▇▇▇▇ & ▇▇▇▇▇▇, counsel for the Company and the
Guarantor, or other counsel for the Company and the Guarantor satisfactory
to such Agent, dated the date of such amendment, supplement, incorporation
or Time of Delivery relating to such sale, as the case may be, in form
satisfactory to such Agent, to the effect that such Agent may rely on the
opinion of such counsel referred to in Section 6(c) hereof which was last
furnished to such Agent to the same extent as though it were dated the date
of such letter authorizing reliance (except that the statements in such last
opinion shall be deemed to relate to the Registration Statement and the
Prospectus as amended and supplemented to such date) or, in lieu of such
opinion, an opinion of the same tenor as the opinion of such counsel
referred to in Section 6(c) hereof but modified to relate to the
Registration Statement and the Prospectus as amended and supplemented to
such date;
(j) That each time the Registration Statement or the Prospectus
shall be amended or supplemented and each time that a document filed under
the Act or the Exchange Act is incorporated by reference into the
Prospectus, in either case to set forth financial information included in or
derived from the Company's or the Guarantor's consolidated financial
statements or accounting records, and each time the Company sells Securities
and related Guarantees to such Agent as principal pursuant to a Terms
Agreement and such Terms Agreement specifies the delivery of a letter under
this Section 4(j) as a condition to the purchase of Securities and related
Guarantees pursuant to such Terms Agreement, the Company and the Guarantor
shall cause the independent certified public accountants who have certified
the financial statements of the Guarantor, the Guarantor's subsidiaries
included or incorporated by reference in the Registration Statement
forthwith to furnish such Agent a letter, dated the date of such amendment,
supplement, incorporation or Time of Delivery relating to such sale, as the
case may be, in form satisfactory to such Agent, of the same tenor as the
letter referred to in Section 6(d) hereof but modified to relate to the
Registration Statement and the Prospectus as amended or supplemented to the
date of such letter, with such changes as may be necessary to reflect
changes in the financial statements and other information derived from the
accounting records of the Guarantor and the Guarantor's subsidiaries, to the
extent such financial statements and other information are available as of a
date not more than five business days prior to the date of such letter;
provided, however, that, with respect to any financial information or other
matter, such letter may reconfirm as true and correct at such date as though
made at and as of such date, rather than repeat, statements with respect to
such financial information or other matter made in the letter referred to in
Section 6(d) hereof which was last furnished to such Agent;
(k) That each time the Registration Statement or the Prospectus
shall be amended or supplemented (other than by a Pricing Supplement), each
time a document filed under the Act or the Exchange Act is incorporated by
reference into the Prospectus and each time the Company sells Securities and
related Guarantees to such Agent as principal and the applicable Terms
Agreement specifies the delivery of a certificate under this Section 4(k) as
a condition to the purchase of Securities and the related Guarantees
pursuant to such Terms Agreement, the Company and the Guarantor shall
furnish or cause to be furnished forthwith to such Agent a certificate,
dated the
12
date of such supplement, amendment, incorporation or Time of Delivery
relating to such sale, as the case may be, in such form and executed by such
officers of the Company and the Guarantor as shall be satisfactory to such
Agent, to the effect that the statements contained in the certificates
referred to in Section 6(i) hereof which was last furnished to such Agent
are true and correct at such date as though made at and as of such date
(except that such statements shall be deemed to relate to the Registration
Statement and the Prospectus as amended and supplemented to such date) or,
in lieu of such certificate, certificates of the same tenor as the
certificates referred to in said Section 6(i) but modified to relate to the
Registration Statement and the Prospectus as amended and supplemented to
such date; and
(l) To offer to any person who has agreed to purchase Securities and
related Guarantees from the Company as the result of an offer to purchase
solicited by such Agent the right to refuse to purchase and pay for such
Securities and related Guarantees if, on the related settlement date fixed
pursuant to the Administrative Procedure, any condition set forth in Section
6(a), 6(e), 6(f) or 6(g) hereof shall not have been satisfied (it being
understood that the judgment of such person with respect to the
impracticability or inadvisability of such purchase of Securities and
related Guarantees shall be substituted, for purposes of this Section 4(l),
for the respective judgments of an Agent with respect to certain matters
referred to in such Sections 6(e) and 6(g), and that such Agent shall have
no duty or obligation whatsoever to exercise the judgment permitted under
such Sections 6(e) and 6(g) on behalf of any such person).
5. The Company and the Guarantor jointly and severally covenant and
agree with each Agent that the Company and the Guarantor will pay or cause to be
paid the following: (i) the fees, disbursements and expenses of the Company's
and the Guarantor's counsel and accountants in connection with the registration
of the Securities and the related Guarantees under the Act and all other
expenses in connection with the preparation, printing and filing of the
Registration Statement, any Preliminary Prospectus, the Prospectus and any
Pricing Supplements and all other amendments and supplements thereto and the
mailing and delivering of copies thereof to such Agent; (ii) the fees,
disbursements and expenses of counsel for the Agents in connection with the
establishment of the program contemplated hereby, any opinions to be rendered by
such counsel hereunder and under any Terms Agreement and the transactions
contemplated hereunder and under any Terms Agreement; (iii) the cost of
printing, producing or reproducing this Agreement, any Terms Agreement, any
Indenture, any Blue Sky and Legal Investment Memoranda, closing documents
(including any compilations thereof) and any other documents in connection with
the offering, purchase, sale and delivery of the Securities and the related
Guarantees; (iv) all expenses in connection with the qualification of the
Securities and the related Guarantees for offering and sale under state
securities laws as provided in Section 4(b) hereof, including the fees and
disbursements of counsel for the Agents in connection with such qualification
and in connection with the Blue Sky and legal investment surveys; (v) any fees
charged by securities rating services for rating the Securities and the related
Guarantees; (vi) any filing fees incident to, and the fees and disbursements of
counsel for the Agents in connection with, any required review by the National
Association of Securities Dealers, Inc. of the terms of the sale of the
Securities and the related Guarantees; (vii) the cost of preparing the
Securities and the related Guarantees; (viii) the fees and expenses of any
Trustee and any agent of any Trustee and any transfer or paying agent of the
Company and the fees and disbursements of counsel for any Trustee or such agent
in connection with any Indenture, the Securities and the related Guarantees;
(ix) any advertising expenses connected with the solicitation of offers to
purchase and the sale of Securities and the related Guarantees so long as such
advertising expenses have been approved by the Company; and (x) all other costs
and expenses incident to the performance of its obligations
13
hereunder which are not otherwise specifically provided for in this Section.
Except as provided in Sections 7 and 8 hereof, each Agent shall pay all other
expenses it incurs.
6. The obligation of any Agent, as agent of the Company, at any time
("Solicitation Time") to solicit offers to purchase the Securities and the
related Guarantees and the obligation of any Agent to purchase Securities and
the related Guarantees as principal, pursuant to any Terms Agreement or
otherwise, shall in each case be subject, in such Agent's discretion, to the
condition that all representations and warranties and other statements of the
Company and the Guarantor herein (and, in the case of an obligation of an Agent
under a Terms Agreement, in or incorporated by reference in such Terms
Agreement) are true and correct at and as of the Commencement Date and any
applicable date referred to in Section 4(k) hereof that is prior to such
Solicitation Time or Time of Delivery, as the case may be, and at and as of such
Solicitation Time or Time of Delivery, as the case may be, and, further, to the
condition that prior to such Solicitation Time or Time of Delivery, as the case
may be, the Company and the Guarantor shall have performed all of its
obligations hereunder theretofore to be performed, and the following additional
conditions:
(a) (i) With respect to any Securities and the related Guarantees
sold at or prior to such Solicitation Time or Time of Delivery, as the case
may be, the Prospectus as amended or supplemented (including the Pricing
Supplement) with respect to such Securities and the related Guarantees shall
have been filed with the Commission pursuant to Rule 424(b) under the Act
within the applicable time period prescribed for such filing by the rules
and regulations under the Act and in accordance with Section 4(a) hereof;
(ii) if the Company has elected to rely upon Rule 462(b), the Rule 462(b)
Registration Statement shall have become effective by 10;00 p.m.,
Washington, D.C. time, on the date of this Agreement; (iii) no stop order
suspending the effectiveness of the Registration Statement shall have been
issued and no proceeding for that purpose shall have been initiated or
threatened by the Commission; and (iv) all requests for additional
information on the part of the Commission shall have been complied with to
the reasonable satisfaction of such Agent;
(b) Brown & Wood LLP, counsel to the Agents, shall have furnished to
such Agent (i) an opinion or opinions, dated the Commencement Date, in form
and substance satisfactory to the Agents and (ii) if and to the extent
requested by such Agent, with respect to each applicable date referred to in
Section 4(h) hereof that is on or prior to such Solicitation Time or Time of
Delivery, as the case may be, an opinion or opinions, dated such applicable
date, to the effect that such Agent may rely on the opinion or opinions
which were last furnished to such Agent pursuant to this Section 6(b) to the
same extent as though it or they were dated the date of such letter
authorizing reliance (except that the statements in such last opinion or
opinions shall be deemed to relate to the Registration Statement and the
Prospectus as amended and supplemented to such date) or, in any case, in
lieu of such an opinion or opinions, an opinion or opinions of the same
tenor as the opinion or opinions referred to in clause (i) but modified to
relate to the Registration Statement and the Prospectus as amended and
supplemented to such date; and in each case such counsel shall have received
such papers and information as they may reasonably request to enable them to
pass upon such matters;
(c) ▇▇▇▇ ▇▇▇▇▇ ▇▇▇▇ & ▇▇▇▇▇▇, counsel for the Company and the
Guarantor, or other counsel for the Company and the Guarantor satisfactory
to such Agent, shall have furnished to such Agent their written opinions,
dated the Commencement Date and each applicable date referred
14
to in Section 4(i) hereof that is on or prior to such Solicitation Time or
Time of Delivery, as the case may be, in form and substance satisfactory to
such Agent, substantially to the effect that:
(i) Each of the Company and the Guarantor and each of the
Guarantor's Significant Subsidiary has been duly incorporated and is
validly existing as a corporation in good standing under the laws of the
jurisdiction of its incorporation, with full power and authority to own
its properties and conduct its business as described in the Prospectus
as amended or supplemented;
(ii) The Guarantor is duly registered as a bank holding company
under the BHC Act;
(iii) The Guarantor has an authorized capitalization as set forth
in the Prospectus as amended or supplemented and all of the issued
shares of capital stock of the Guarantor have been duly and validly
authorized and issued and are fully paid and non-assessable. All of the
issued shares of the Company and each other Significant Subsidiary of
the Guarantor have been duly and validly authorized and issued and are
fully paid and non-assessable (subject to the provisions of Section 55
of Title 12 of the United States Code in the case of Significant
Subsidiary which are national banks) and are owned by the Guarantor,
directly or through subsidiaries ,free and clear of any security
interest, mortgage, pledge, lien, encumbrance, claim or equity;
(iv) To the best of such counsel's knowledge and other than as set
forth in the Prospectus, there are no legal or governmental proceedings
pending to which the Company, the Guarantor or any of the Guarantor's
Significant Subsidiary is a party or to which any property of the
Company, the Guarantor or any of the Guarantor's Significant Subsidiary
is subject, which, if determined adversely to the Company, the Guarantor
or any of the Guarantor's Significant Subsidiary, would individually or
in the aggregate have a material adverse effect on the current or future
consolidated financial position, shareholders' equity or results of
operations of the Company, the Guarantor and the Guarantor's Significant
Subsidiary; and to the best of such counsel's knowledge, no such
proceedings are threatened or contemplated by governmental authorities
or threatened by others;
(v) This Agreement and any applicable Terms Agreement have been
duly authorized, executed and delivered by the Company and the
Guarantor;
(vi) The Securities have been duly authorized and, when duly
executed, authenticated, issued and delivered by the Company, will
constitute valid and legally binding obligations of the Company entitled
to the benefits provided by the Indentures; and the Indentures conform
and the Securities will conform to the descriptions thereof in the
Prospectus as amended or supplemented. The Guarantees have been duly
authorized and, when duly executed, authenticated, issued and delivered
by the Guarantor, will constitute valid and legally binding obligations
of the Guarantor entitled to the benefits provided by the Indentures;
and the Guarantees will conform to the description thereof in the
Prospectus as amended or supplemented; the Guarantees have been duly
authorized and, upon due issuance and delivery of the related Securities
and due endorsement of the Guarantees, the Guarantees will have been
duly executed, authenticated, issued and delivered and will constitute
valid and legally binding obligations of the Guarantor entitled to the
benefits
15
provided by the Indentures, which will be substantially in the form
filed as an exhibit to the Registration Statement; the Indentures have
been duly authorized and duly qualified under the Trust Indenture Act
and constitutes a valid and legally binding instrument, enforceable in
accordance with their terms, subject, as to enforcement, to bankruptcy,
insolvency, reorganization and other laws of general applicability
relating to or affecting creditors' rights and to general equity
principles; and the Indentures conform and the Securities and the
Guarantees of any particular issuance of Securities will conform to the
descriptions thereof contained in the Prospectus as amended or
supplemented to relate to such issuance;
(vii) The issue and sale of the Securities and the related
Guarantees, the compliance by the Company and the Guarantor with all of
the provisions of the Securities and the related Guarantees, the
Indentures, this Agreement and any applicable Terms Agreement and the
consummation of the transactions herein and therein contemplated will
not conflict with or result in a breach or violation of any of the terms
or provisions of, or constitute a default under, any indenture,
mortgage, deed of trust, loan agreement or other agreement or instrument
known to such counsel to which the Company, the Guarantor or any of the
Guarantor's Significant Subsidiaries is a party or by which the Company,
the Guarantor or any of the Guarantor's Significant Subsidiaries is
bound or to which any of the property or assets of the Company, the
Guarantor or any of the Guarantor's Significant Subsidiaries is subject,
nor will such action result in any violation of the provisions of the
Articles of Incorporation of the Company, the Guarantor or any of the
Guarantor's Significant Subsidiaries or the By-laws of the Company, the
Guarantor or any of the Guarantor's Significant Subsidiaries or any
statute or any order, rule or regulation known to such counsel of any
court or governmental agency or body having jurisdiction over the
Company, the Guarantor or any of the Guarantor's Significant
Subsidiaries or any of their properties; and no consent, approval,
authorization, order, registration or qualification of or with any court
or governmental agency or body is required for the solicitation of
offers to purchase Securities and the related Guarantees, the issue and
sale of the Securities and the related Guarantees or the consummation by
the Company or the Guarantor of the other transactions contemplated by
this Agreement, any applicable Terms Agreement, or the Indentures,
except such as have been obtained under the Act and the Trust Indenture
Act and such consents, approvals, authorizations, registrations or
qualifications as may be required under state securities or Blue Sky
laws in connection with the solicitation by the Agents of offers to
purchase Securities and the related Guarantees from the Company and with
purchases of Securities and the related Guarantees by an Agent as
principal, as the case may be, in each case in the manner contemplated
hereby;
(viii) Neither the Company nor the Guarantor nor any of the
Guarantor's Significant Subsidiaries is in violation of its Articles of
Incorporation or By-laws, as the case may be, or in default in the
performance or observance of any material obligation, covenant or
condition contained in any indenture, mortgage, deed of trust, loan
agreement, lease or other agreement or instrument to which it is a party
or by which it or any of its properties may be bound, and the Company
has no Significant Subsidiaries;
(ix) The statements set forth in the Prospectus under the captions
"Description of the Debt Securities," "Description of Notes" and
"Certain Tax Considerations," insofar as they purport to constitute a
summary of the terms of the Securities, under the caption "Guarantees,"
insofar as they purport to constitute a summary of the terms of the
Guarantees, under the caption "Certain United States Federal Income Tax
Considerations,"
16
and under the captions "Plan of Distribution" and "Supplemental Plan of
Distribution," and the information incorporated by reference in the
Prospectus under the captions "Regulation and Supervision of Bank
Holding Companies," "Regulation and Supervision of Banks," "Properties"
and "Legal Proceedings" in the Company's Annual Report on Form 10-K for
the Fiscal Year ended December 31, 1996, insofar as they purport to
describe the provisions of the laws and documents referred to therein,
are accurate, complete and fair;
(x) Neither the Company nor the Guarantor is and, after giving
effect to each offering and sale of the Securities and the Guarantees,
neither the Company nor the Guarantor will be an "investment company" or
an entity "controlled" by an "investment company," as such terms are
defined in the Investment Company Act. The Company is exempt from the
provisions of the Investment Company Act by virtue of compliance with
the provisions of Rule 3a-5 thereunder;
(xi) The documents incorporated by reference in the Prospectus
(other than the financial statements and related schedules therein, as
to which such counsel need express no opinion), when they became
effective or were filed with the Commission, as the case may be,
complied as to form in all material respects with the requirements of
the Act or the Exchange Act, as applicable, and the rules and
regulations of the Commission thereunder; and they have no reason to
believe that any of such documents, when they became effective or were
so filed, as the case may be, contained, in the case of a registration
statement which became effective under the Act, an untrue statement of a
material fact or omitted to state a material fact required to be stated
therein or necessary to make the statements therein not misleading, and,
in the case of other documents which were filed under the Act or the
Exchange Act with the Commission, an untrue statement of a material fact
or omitted to state a material fact necessary in order to make the
statements therein, in the light of the circumstances under which they
were made when such documents were so filed, not misleading;
(xii) The Registration Statement is effective under the Act and, to
the best of such counsel's knowledge, no stop order suspending the
Registration Statement has been issued under the Act or proceedings for
that purpose have been instituted or threatened by the Commission;
(xiii) The Registration Statement and the Prospectus as amended and
supplemented and any further amendments and supplements thereto made by
the Company or the Guarantor prior to the date of such opinion (other
than the financial statements and related schedules therein, as to which
such counsel need express no opinion) comply as to form in all material
respects with the requirements of the Act and the Trust Indenture Act
and the rules and regulations thereunder; although they do not assume
any responsibility for the accuracy, completeness or fairness of the
statements contained in the Registration Statement or the Prospectus,
except for those referred to in the opinion in subsection (ix) of this
Section 6(c), they have no reason to believe that, as of its effective
date, the Registration Statement or any further amendment or supplement
thereto made by the Company or the Guarantor prior to the date of such
opinion (other than the financial statements and related schedules
therein, as to which such counsel need express no opinion) contained an
untrue statement of a material fact or omitted to state a material fact
required to be stated therein or necessary to make the statements
therein not misleading or that, as of the date of such
17
opinion, the Prospectus as amended or supplemented or any further
amendment or supplement thereto made by the Company or the Guarantor
prior to the date of such opinion (other than the financial statements
and related schedules therein, as to which such counsel need express no
opinion) contained an untrue statement of a material fact or omitted to
state a material fact necessary to make the statements therein, in light
of the circumstances in which they were made, not misleading; and they
do not know of any amendment to the Registration Statement required to
be filed or any contracts or other documents of a character required to
be filed as an exhibit to the Registration Statement or required to be
incorporated by reference into the Prospectus as amended or supplemented
or required to be described in the Registration Statement or the
Prospectus as amended or supplemented which are not filed or
incorporated by reference or described as required.
(d) Not later than 10:00 a.m., New York City time, on the
Commencement Date and on each applicable date referred to in Section 4(j)
hereof that is on or prior to such Solicitation Time or Time of Delivery, as
the case may be, the independent certified public accountants who have
certified the financial statements included or incorporated by reference in
the Registration Statement shall have furnished to such Agent a letter,
dated the Commencement Date or such applicable date, as the case may be, in
form and substance satisfactory to such Agent, to the effect set forth in
Annex III hereto;
(e) (i) Neither the Company, the Guarantor nor any of the Guarantor's
Significant Subsidiaries shall have sustained since the date of the latest
audited financial statements included or incorporated by reference in the
Prospectus as amended or supplemented prior to the date of the Pricing
Supplement relating to the Securities and the related Guarantees to be
delivered at the relevant Time of Delivery any loss or interference with its
business from fire, explosion, flood or other calamity, whether or not
covered by insurance, or from any labor dispute or court or governmental
action, order or decree, otherwise than as set forth or contemplated in the
Prospectus as amended or supplemented prior to the date of the Pricing
Supplement relating to the Securities and the related Guarantees to be
delivered at the relevant Time of Delivery and (ii) since the respective
dates as of which information is given in the Prospectus as amended or
supplemented prior to the date of the Pricing Supplement relating to the
Securities and the related Guarantees to be delivered at the relevant Time
of Delivery there shall not have been any material change in the capital
stock or long-term debt of the Company, the Guarantor (other than the share
repurchase plan that has been disclosed to the Agents) or any of the
Guarantor's Significant Subsidiaries or any change, or any development
involving a prospective change, in or affecting the general affairs,
management, financial position, shareholders' equity or results of
operations of the Company, the Guarantor and the Guarantor's Significant
Subsidiaries, otherwise than as set forth or contemplated in the Prospectus
as amended or supplemented prior to the date of the Pricing Supplement
relating to the Securities and the related Guarantees to be delivered at the
relevant Time of Delivery, the effect of which, in any such case described
in Clause (i) or (ii), is in the judgment of such Agent so material and
adverse as to make it impracticable or inadvisable to proceed with the
solicitation by such Agent of offers to purchase Securities and related
Guarantees from the Company or the purchase by such Agent of Securities and
related Guarantees from the Company as principal, as the case may be, on the
terms and in the manner contemplated in the Prospectus as amended or
supplemented prior to the date of the Pricing Supplement relating to the
Securities and the related Guarantees to be delivered at the relevant Time
of Delivery;
(f) On or after the date hereof (i) no downgrading shall have
occurred in the rating accorded the Company's or the Guarantor's debt
securities by any "nationally recognized statistical
18
rating organization," as that term is defined by the Commission for purposes
of Rule 436(g)(2) under the Act, 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 Company's or the Guarantor's
debt securities;
(g) On or after the date hereof 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 or the NASDAQ National
Market System; (ii) a suspension or material limitation in trading in the
Company's or Guarantor's securities on the NASDAQ National Market System;
(iii) a general moratorium on commercial banking activities in Pennsylvania
or New York declared by either Federal, Pennsylvania or New York State
authorities; or (iv) the outbreak or escalation of hostilities involving the
United States or the declaration by the United States of a national
emergency or war, if the effect of any such event specified in the Clause
(iv) in the judgment of such Agent makes it impracticable or inadvisable to
proceed with the solicitation of offers to purchase Securities and related
Guarantees or the purchase of the Securities and the related Guarantees from
the Company as principal pursuant to the applicable Terms Agreement or
otherwise, as the case may be, on the terms and in the manner contemplated
in the Prospectus;
(h) With respect to any Security denominated in a currency other
than the U.S. dollar, more than one currency or a composite currency or any
Security the principal or interest of which is indexed to such currency,
currencies or composite currency, there shall not have occurred a suspension
or material limitation in foreign exchange trading in such currency,
currencies or composite currency by a major international bank, a general
moratorium on commercial banking activities in the country or countries
issuing such currency, currencies or composite currency, the outbreak or
escalation of hostilities involving, the occurrence of any material adverse
change in the existing financial, political or economic conditions of, or
the declaration of war or a national emergency by, the country or countries
issuing such currency, currencies or composite currency or the imposition or
proposal of exchange controls by any governmental authority in the country
or countries issuing such currency, currencies or composite currency;
(i) The Company shall have complied with the provisions of Section
4(c) hereof with respect to the furnishing of prospectuses on the business
day next succeeding the date of each Terms Agreement; and
(j) The Company and the Guarantor shall have furnished or caused to
be furnished to such Agent certificates of officers of the Company and the
Guarantor dated the Commencement Date and each applicable date referred to
in Section 4(k) hereof that is on or prior to such Solicitation Time or Time
of Delivery, as the case may be, in such form and executed by such officers
of the Company and the Guarantor as shall be satisfactory to such Agent, as
to the accuracy of the representations and warranties of the Company and the
Guarantor herein at and as of the Commencement Date or such applicable date,
as the case may be, as to the performance by the Company and the Guarantor
of all of their obligations hereunder to be performed at or prior to the
Commencement Date or such applicable date, as the case may be, as to the
matters set forth in subsections (a) and (e) of this Section 6, and as to
such other matters as such Agent may reasonably request.
7. (a) The Company and the Guarantor jointly and severally will
indemnify and hold harmless each Agent against any losses, claims, damages
or liabilities, joint or several, to which
19
such Agent may become subject, under the Act or otherwise, insofar as such
losses, claims, damages or liabilities (or actions in respect thereof) arise
out of or are based upon an untrue statement or alleged untrue statement of
a material fact contained in any Preliminary Prospectus, the Registration
Statement, the Prospectus, the Prospectus as amended or supplemented or any
other prospectus relating to the Securities or the related Guarantees, or
any amendment or supplement thereto, or arise out of or are based upon the
omission or alleged omission to state therein a material fact required to be
stated therein or necessary to make the statements therein not misleading,
and will reimburse such Agent for any legal or other expenses reasonably
incurred by it in connection with investigating or defending any such action
or claim as such expenses are incurred; provided, however, that the Company
or the Guarantor shall not be liable in any such case to the extent that any
such loss, claim, damage or liability arises out of or is based upon an
untrue statement or alleged untrue statement or omission or alleged omission
made in any Preliminary Prospectus, the Registration Statement, the
Prospectus, the Prospectus as amended or supplemented or any other
prospectus relating to the Securities and the related Guarantees, or any
such amendment or supplement, in reliance upon and in conformity with
written information furnished to the Company or the Guarantor by such Agent
expressly for use therein.
(b) Each Agent will indemnify and hold harmless the Company and the
Guarantor against any losses, claims, damages or liabilities to which the
Company or the Guarantor may become subject, under the Act or otherwise,
insofar as such losses, claims, damages or liabilities (or actions in
respect thereof) arise out of or are based upon an untrue statement or
alleged untrue statement of a material fact contained in any Preliminary
Prospectus, the Registration Statement, the Prospectus, the Prospectus as
amended or supplemented or any other prospectus relating to the Securities
and the related Guarantees, or any amendment or supplement thereto, or arise
out of or are based upon the omission or alleged omission to state therein a
material fact required to be stated therein or necessary to make the
statements therein not misleading, in each case to the extent, but only to
the extent, that such untrue statement or alleged untrue statement or
omission or alleged omission was made in any Preliminary Prospectus, the
Registration Statement, the Prospectus, the Prospectus as amended or
supplemented or any other prospectus relating to the Securities and the
related Guarantees, or any such amendment or supplement, in reliance upon
and in conformity with written information furnished to the Company or the
Guarantor by such Agent expressly for use therein; and will reimburse the
Company or the Guarantor for any legal or other expenses reasonably incurred
by the Company or the Guarantor in connection with investigating or
defending any such action or claim as such expenses are incurred.
(c) Promptly after receipt by an indemnified party under subsection
(a) or (b) above of notice of the commencement of any action, such
indemnified party shall, if a claim in respect thereof is to be made against
the indemnifying party under such subsection, notify the indemnifying party
in writing of the commencement thereof; but the omission so to notify the
indemnifying party shall not relieve it from any liability which it may have
to any indemnified party otherwise than under such subsection. In case any
such action shall be brought against any indemnified party and it shall
notify the indemnifying party of the commencement thereof, the indemnifying
party shall be entitled to participate therein and, to the extent that it
shall wish, jointly with any other indemnifying party similarly notified, to
assume the defense thereof, with counsel satisfactory to such indemnified
party (who shall not, except with the consent of the indemnified party, be
counsel to the indemnifying party), and, after notice from the indemnifying
party to such indemnified party of its election so to assume the defense
thereof, the indemnifying party shall not be liable to such indemnified
party under such subsection for any legal expenses of other counsel or any
other
20
expenses, in each case subsequently incurred by such indemnified party, in
connection with the defense thereof other than reasonable costs of
investigation. No indemnifying party shall, without the written consent of
the indemnified party, effect the settlement or compromise of, or consent to
the entry of any judgment with respect to, any pending or threatened action
or claim in respect of which indemnification or contribution may be sought
hereunder (whether or not the indemnified party is an actual or potential
party to such action or claim) unless such settlement, compromise or
judgment (i) includes an unconditional release of the indemnified party from
all liability arising out of such action or claim and (ii) does not include
a statement as to, or an admission of, fault, culpability or a failure to
act, by or on behalf of any indemnified party.
(d) If the indemnification provided for in this Section 7 is
unavailable or insufficient to hold harmless an indemnified party under
subsection (a) or (b) above in respect of any losses, claims, damages or
liabilities (or actions in respect thereof) referred to therein, then each
indemnifying party shall contribute to the amount paid or payable by such
indemnified party as a result of such losses, claims, damages or liabilities
(or actions in respect thereof) in such proportion as is appropriate to
reflect the relative benefits received by the Company and the Guarantor on
the one hand and each Agent on the other from the offering of the Securities
and the related Guarantees to which such loss, claim, damage or liability
(or action in respect thereof) relates. If, however, the allocation provided
by the immediately preceding sentence is not permitted by applicable law or
if the indemnified party failed to give the notice required under subsection
(c) above, then each indemnifying party shall contribute to such amount paid
or payable by such indemnified party in such proportion as is appropriate to
reflect not only such relative benefits but also the relative fault of the
Company and the Guarantor on the one hand and each Agent on the other in
connection with the statements or omissions which resulted in such losses,
claims, damages or liabilities (or actions in respect thereof), as well as
any other relevant equitable considerations. The relative benefits received
by the Company and the Guarantor on the one hand and each Agent on the other
shall be deemed to be in the same proportion as the total net proceeds from
the sale of Securities and related Guarantees (before deducting expenses)
received by the Company and the Guarantor bear to the total commissions or
discounts received by such Agent in respect thereof. The relative fault
shall be determined by reference to, among other things, whether the untrue
or alleged untrue statement of a material fact or the omission or alleged
omission to state a material fact required to be stated therein or necessary
in order to make the statements therein not misleading relates to
information supplied by the Company and the Guarantor on the one hand or by
any Agent on the other and the parties' relative intent, knowledge, access
to information and opportunity to correct or prevent such statement or
omission. The Company, the Guarantor and each Agent agree that it would not
be just and equitable if contribution pursuant to this subsection (d) were
determined by per capita allocation (even if all Agents were treated as one
entity for such purpose) or by any other method of allocation which does not
take account of the equitable considerations referred to above in this
subsection (d). The amount paid or payable by an indemnified party as a
result of the losses, claims, damages or liabilities (or actions in respect
thereof) referred to above in this subsection (d) shall be deemed to include
any legal or other expenses reasonably incurred by such indemnified party in
connection with investigating or defending any such action or claim.
Notwithstanding the provisions of this subsection (d), an Agent shall not be
required to contribute any amount in excess of the amount by which the total
public offering price at which the Securities and the related Guarantees
purchased by or through it were sold exceeds the amount of any damages which
such Agent has otherwise been required to pay by reason of such untrue or
alleged untrue statement or omission or alleged omission. No person guilty
of fraudulent misrepresentation (within the meaning of
21
Section 11(f) of the Act) shall be entitled to contribution from any person
who was not guilty of such fraudulent misrepresentation. The obligations of
each of the Agents under this subsection (d) to contribute are several in
proportion to the respective purchases made by or through it to which such
loss, claim, damage or liability (or action in respect thereof) relates and
are not joint.
(e) The obligations of the Company and the Guarantor under this
Section 7 shall be in addition to any liability which the Company or the
Guarantor may otherwise have and shall extend, upon the same terms and
conditions, to each person, if any, who controls any Agent within the
meaning of the Act; and the obligations of each Agent under this Section 7
shall be in addition to any liability which such Agent may otherwise have
and shall extend, upon the same terms and conditions, to each officer and
director of the Company and to each person, if any, who controls the Company
or the Guarantor within the meaning of the Act.
8. Each Agent, in soliciting offers to purchase Securities and related
Guarantees from the Company and in performing the other obligations of such
Agent hereunder (other than in respect of any purchase by an Agent as principal,
pursuant to a Terms Agreement or otherwise), is acting solely as agent for the
Company and not as principal. Each Agent will make reasonable efforts to assist
the Company in obtaining performance by each purchaser whose offer to purchase
Securities and related Guarantees from the Company was solicited by such Agent
and has been accepted by the Company, but such Agent shall not have any
liability to the Company or the Guarantor in the event such purchase is not
consummated for any reason. If the Company shall default on its obligation to
deliver Securities and related Guarantees to a purchaser whose offer it has
accepted, the Company shall (i) hold each Agent harmless against any loss, claim
or damage arising from or as a result of such default by the Company and (ii)
notwithstanding such default, pay to the Agent that solicited such offer any
commission to which it would be entitled in connection with such sale.
9. The respective indemnities, agreements, representations, warranties
and other statements by any Agent, the Company and the Guarantor set forth in or
made pursuant to this Agreement shall remain in full force and effect regardless
of any investigation (or any statement as to the results thereof) made by or on
behalf of any Agent or any controlling person of any Agent, the Company or the
Guarantor, or any officer or director or any controlling person of the Company
or the Guarantor, and shall survive each delivery of and payment for any of the
Securities and the related Guarantees.
10. The provisions of this Agreement relating to the solicitation of
offers to purchase Securities and related Guarantees from the Company may be
suspended or terminated at any time by the Company as to any Agent or by any
Agent as to such Agent upon the giving of written notice of such suspension or
termination to such Agent or the Company, as the case may be. In the event of
such suspension or termination with respect to any Agent, (x) this Agreement
shall remain in full force and effect with respect to any Agent as to which such
suspension or termination has not occurred, (y) this Agreement shall remain in
full force and effect with respect to the rights and obligations of any party
which have previously accrued or which relate to Securities and related
Guarantees which are already issued, agreed to be issued or the subject of a
pending offer at the time of such suspension or termination and (z) in any
event, this Agreement shall remain in full force and effect insofar as the
fourth paragraph of Section 2(a), and Sections 4(d), 4(e), 5, 7, 8 and 9 hereof
are concerned.
11. Except as otherwise specifically provided herein or in the
Administrative Procedure, all statements, requests, notices and advices
hereunder shall be in writing, or by telephone if promptly confirmed in writing,
and if to ▇▇▇▇▇▇▇, ▇▇▇▇▇ & Co. shall be sufficient in all respects when
delivered
22
or sent by facsimile transmission or registered mail to ▇▇ ▇▇▇▇▇
▇▇▇▇▇▇, ▇▇▇ ▇▇▇▇, ▇▇▇ ▇▇▇▇ ▇▇▇▇▇, Facsimile Transmission No. (▇▇▇) ▇▇▇-▇▇▇▇,
Attention: Credit Department, Bear, ▇▇▇▇▇▇▇ & Co. Inc., ▇▇ ▇▇▇▇▇ ▇▇▇▇▇▇, ▇▇▇
▇▇▇▇, ▇▇▇ ▇▇▇▇ ▇▇▇▇▇, Facsimile Transmission No. (212) ______________,
Attention: ____________, and ▇▇▇▇▇, ▇▇▇▇▇▇▇▇ & ▇▇▇▇▇, Inc., ▇ ▇▇▇▇▇ ▇▇▇▇▇
▇▇▇▇▇▇, ▇▇▇ ▇▇▇▇, ▇▇▇ ▇▇▇▇ ▇▇▇▇▇, Facsimile Transmission No. (212)
______________, Attention: ____________; and if to the Company shall be
sufficient in all respects when delivered or sent by facsimile transmission or
registered mail to One Keystone Plaza, Front and Market Streets, P.O. Box 3660,
Harrisburg, PA 17105-3660, Facsimile Transmission No. (717) ______________,
Attention: ____________; and if to the Guarantor shall be sufficient in all
respects when delivered or sent by facsimile transmission or registered mail to
One Keystone Plaza, Front and Market Streets, P.O. Box 3660, Harrisburg, PA
17105-3660, Facsimile Transmission No. (717) ______________, Attention:
____________.
12. This Agreement and any Terms Agreement shall be binding upon, and
inure solely to the benefit of, each Agent, the Company and the Guarantor, and
to the extent provided in Sections 7, 8 and 9 hereof, the officers and directors
of the Company and the Guarantor and any person who controls any Agent, the
Company or the Guarantor and their respective personal representatives,
successors and assigns, and no other person shall acquire or have any right
under or by virtue of this Agreement or any Terms Agreement. No purchaser of
any of the Securities and the related Guarantees through or from any Agent
hereunder shall be deemed a successor or assign by reason merely of such
purchase.
13. Time shall be of the essence in this Agreement and any Terms
Agreement. As used herein, the term "business day" shall mean any day when the
Commission's office in Washington, D.C. is open for business.
14. This Agreement and any Terms Agreement shall be governed by, and
construed in accordance with, the laws of the State of New York.
15. This Agreement and any Terms Agreement may be executed by any one or
more of the parties hereto and thereto in any number of counterparts, each of
which shall be an original, but all of such respective counterparts shall
together constitute one and the same instrument.
23
If the foregoing is in accordance with your understanding, please sign
and return to us eight counterparts hereof, whereupon this letter and the
acceptance by each of you thereof shall constitute a binding agreement between
the Company and each of you in accordance with its terms.
Very truly yours,
KEYSTONE FINANCIAL MID-ATLANTIC
FUNDING CORP.
By: _____________________________
Name:
Title:
KEYSTONE FINANCIAL, INC.
By: _____________________________
Name:
Title:
Accepted in New York, New York,
as of the date hereof:
_______________________________
(▇▇▇▇▇▇▇, ▇▇▇▇▇ & Co.)
BEAR, ▇▇▇▇▇▇▇ & CO. INC.
By: ___________________________
Name:
Title:
▇▇▇▇▇, ▇▇▇▇▇▇▇▇ & ▇▇▇▇▇, INC.
By: ___________________________
Name:
Title:
24
ANNEX I
KEYSTONE FINANCIAL MID-ATLANTIC FUNDING CORP.
SENIOR/SUBORDINATED MEDIUM-TERM NOTES
DUE FROM 9 MONTHS TO 30 YEARS
FROM DATE OF ISSUE
UNCONDITIONALLY GUARANTEED AS TO PAYMENT OF THE
PRINCIPAL, PREMIUM, IF ANY, AND INTEREST, IF ANY, BY
KEYSTONE FINANCIAL, INC.
TERMS AGREEMENT
---------------
_______________, 1997
▇▇▇▇▇▇▇, ▇▇▇▇▇ & Co.
▇▇ ▇▇▇▇▇ ▇▇▇▇▇▇
▇▇▇ ▇▇▇▇, ▇▇▇ ▇▇▇▇ ▇▇▇▇▇
Bear, ▇▇▇▇▇▇▇ & Co. Inc.
▇▇ ▇▇▇▇▇ ▇▇▇▇▇▇
▇▇▇ ▇▇▇▇, ▇▇▇ ▇▇▇▇ ▇▇▇▇▇
▇▇▇▇▇, ▇▇▇▇▇▇▇▇ & ▇▇▇▇▇, Inc.
▇ ▇▇▇▇▇ ▇▇▇▇▇ ▇▇▇▇▇▇
▇▇▇ ▇▇▇▇, ▇▇▇ ▇▇▇▇ ▇▇▇▇▇
Ladies and Gentlemen:
Keystone Financial Mid-Atlantic Funding Corp. (the "Company")
proposes, subject to the terms and conditions stated herein and in the
Distribution Agreement, dated _________, 1997 (the "Distribution Agreement"),
between the Company on the one hand and ▇▇▇▇▇▇▇, ▇▇▇▇▇ & Co., Bear, ▇▇▇▇▇▇▇ &
Co. Inc. and ▇▇▇▇▇, ▇▇▇▇▇▇▇▇ & ▇▇▇▇▇, Inc. (the "Agents") on the other, to issue
and sell to ▇▇▇▇▇▇▇, ▇▇▇▇▇ & Co., Bear, ▇▇▇▇▇▇▇ & Co. Inc. and ▇▇▇▇▇, ▇▇▇▇▇▇▇▇ &
▇▇▇▇▇, Inc. the securities specified in the Schedule hereto (the "Purchased
Securities"). Each of the provisions of the Distribution Agreement not
specifically related to the solicitation by the Agents, as agents of the
Company, of offers to purchase Securities and related Guarantees is incorporated
herein by reference in its entirety, and shall be deemed to be part of this
Terms Agreement to the same extent as if such provisions had been set forth in
full herein. Nothing contained herein or in the Distribution Agreement shall
make any party hereto an agent of the Company or make such party subject to the
provisions therein relating to the solicitation of offers to purchase Securities
and related Guarantees from the Company, solely by virtue of its execution of
this Terms Agreement. Each of the representations and warranties set forth
therein shall be deemed to have been made at and as of the date of this Terms
Agreement, except that each representation and warranty in Section 1 of the
Distribution Agreement which makes reference to the Prospectus shall be deemed
to be a representation and warranty as of the date of the Distribution Agreement
in relation to the Prospectus
I-1
(as therein defined), and also a representation and warranty as of the date of
this Terms Agreement in relation to the Prospectus as amended and supplemented
to relate to the Purchased Securities.
An amendment to the Registration Statement, or a supplement to the
Prospectus, as the case may be, relating to the Purchased Securities, in the
form heretofore delivered to you is now proposed to be filed with the
Commission.
Subject to the terms and conditions set forth herein and in the
Distribution Agreement incorporated herein by reference, the Company agrees to
issue and sell to [▇▇▇▇▇▇▇, ▇▇▇▇▇ & CO.,] [BEAR, ▇▇▇▇▇▇▇ & CO. INC.,] [▇▇▇▇▇,
▇▇▇▇▇▇▇▇ & ▇▇▇▇▇, INC.] and [▇▇▇▇▇▇▇, ▇▇▇▇▇ & CO.,] [BEAR, ▇▇▇▇▇▇▇ & CO. INC.,]
[▇▇▇▇▇, ▇▇▇▇▇▇▇▇ & ▇▇▇▇▇, INC.] agrees to purchase from the Company the
Purchased Securities, at the time and place, in the principal amount and at the
purchase price set forth in the Schedule hereto.
I-2
If the foregoing is in accordance with your understanding, please sign
and return to us ...... counterparts hereof, and upon acceptance hereof by you
this letter and such acceptance hereof, including those provisions of the
Distribution Agreement incorporated herein by reference, shall constitute a
binding agreement between you and the Company.
KEYSTONE FINANCIAL MID-ATLANTIC
FUNDING CORP.
By: _______________________________
Name:
Title:
KEYSTONE FINANCIAL, INC.
By: _______________________________
Name:
Title:
Accepted:
[__________________________
(▇▇▇▇▇▇▇, ▇▇▇▇▇ & CO.)]
[BEAR, ▇▇▇▇▇▇▇ & CO. INC.
By: _______________________
Name:
Title:]
[▇▇▇▇▇, ▇▇▇▇▇▇▇▇ & ▇▇▇▇▇, INC.
By: _______________________
Name:
Title:]
I-3
SCHEDULE TO ANNEX I
Title of Purchased Securities:
[ %] [SENIOR][SUBORDINATED] Medium-Term Notes[, SERIES ....]
Aggregate Principal Amount:
[$.................... or units of other Specified Currency]
[PRICE TO PUBLIC:]
Purchase Price by [▇▇▇▇▇▇▇, ▇▇▇▇▇ & CO.] [BEAR, ▇▇▇▇▇▇▇ & CO. INC.] [▇▇▇▇▇,
▇▇▇▇▇▇▇▇ & ▇▇▇▇▇, INC.]:
% of the principal amount of the Purchased Securities[, PLUS ACCRUED
INTEREST FROM ............... TO ...............] [AND ACCRUED AMORTIZATION, IF
ANY, FROM ................. TO ................]
Method of and Specified Funds for Payment of Purchase Price:
[BY CERTIFIED OR OFFICIAL BANK CHECK OR CHECKS, PAYABLE TO THE ORDER
OF THE COMPANY, IN IMMEDIATELY AVAILABLE FUNDS]
[BY WIRE TRANSFER TO A BANK ACCOUNT SPECIFIED BY THE COMPANY IN
IMMEDIATELY AVAILABLE FUNDS]
Indenture:
[SENIOR INDENTURE, DATED AS OF ___________, 1997, BETWEEN THE COMPANY, THE
GUARANTOR AND ..................., AS SENIOR TRUSTEE] [SUBORDINATED
INDENTURE, DATED AS OF __________, 1997, BETWEEN THE COMPANY, THE GUARANTOR
AND ____________, AS SUBORDINATED TRUSTEE.]
Time of Delivery:
Closing Location for Delivery of Securities:
Maturity:
Interest Rate:
[ %]
Interest Payment Dates:
[MONTHS AND DATES]
Sch. I-1
Documents to be Delivered:
The following documents referred to in the Distribution Agreement
shall be delivered as a condition to the Closing:
[(1) THE OPINION OR OPINIONS OF COUNSEL TO THE AGENTS REFERRED TO IN
SECTION 4(h).]
[(2) THE OPINION OF COUNSEL TO THE COMPANY REFERRED TO IN SECTION 4(i).]
[(3) THE ACCOUNTANTS' LETTER REFERRED TO IN SECTION 4(j).]
[(4) THE OFFICERS' CERTIFICATE REFERRED TO IN SECTION 4(k).]
Other Provisions (including Syndicate Provisions, if applicable):
Sch. I-2
ANNEX II
KEYSTONE FINANCIAL MID-ATLANTIC FUNDING CORP.
ADMINISTRATIVE PROCEDURE
------------------------
This Administrative Procedure relates to the Securities and the
related Guarantees defined in the Distribution Agreement, dated ___________,
1997 (the "Distribution Agreement"), between Keystone Financial Mid-Atlantic
Funding Corp. (the "Company"), Keystone Financial, Inc. (the "Guarantor") and
▇▇▇▇▇▇▇, ▇▇▇▇▇ & Co., Bear, ▇▇▇▇▇▇▇ & Co. Inc. and ▇▇▇▇▇, ▇▇▇▇▇▇▇▇ & ▇▇▇▇▇, Inc.
(together, the "Agents"), to which this Administrative Procedure is attached as
▇▇▇▇▇ ▇▇. Defined terms used herein and not defined herein shall have the
meanings given such terms in the Distribution Agreement, the Prospectus as
amended or supplemented or the Indentures.
The procedures to be followed with respect to the settlement of sales
of Securities and related Guarantees directly by the Company to purchasers
solicited by an Agent, as agent, are set forth below. The terms and settlement
details related to a purchase of Securities and related Guarantees by an Agent,
as principal, from the Company will be set forth in a Terms Agreement pursuant
to the Distribution Agreement, unless the Company and such Agent otherwise agree
as provided in Section 2(b) of the Distribution Agreement, in which case the
procedures to be followed in respect of the settlement of such sale will be as
set forth below. An Agent, in relation to a purchase of a Security by a
purchaser solicited by such Agent, is referred to herein as the "Selling Agent"
and, in relation to a purchase of a Security by such Agent as principal other
than pursuant to a Terms Agreement, as the "Purchasing Agent."
The Company will advise each Agent in writing of those persons with
whom such Agent is to communicate regarding offers to purchase Securities and
related Guarantees and the related settlement details.
Each Security will be issued only in fully registered form and will be
represented by either a global security (a "Global Security") delivered to the
Trustee, as agent for The Depository Trust Company (the "Depositary") and
recorded in the book-entry system maintained by the Depositary (a "Book-Entry
Security") or a certificate issued in definitive form (a "Certificated
Security") delivered to a person designated by an Agent, as set forth in the
applicable Pricing Supplement. An owner of a Book-Entry Security will not be
entitled to receive a certificate representing such a Security, except as
provided in the Indentures.
Book-Entry Securities will be issued in accordance with the
Administrative Procedure set forth in Part I hereof, and Certificated Securities
will be issued in accordance with the Administrative Procedure set forth in Part
II hereof.
PART I: ADMINISTRATIVE PROCEDURE FOR BOOK-ENTRY SECURITIES
-----------------------------------------------------------
In connection with the qualification of the Book-Entry Securities for
eligibility in the book-entry system maintained by the Depositary, the Trustee
will perform the custodial, document control and administrative functions
described below, in accordance with its respective obligations under a Letter of
Representation from the Company and the Trustee to the Depositary, dated the
date hereof, and a
II-1
Medium-Term Note Certificate Agreement between the Trustee and the Depositary,
dated as of .................., 19.., (the "Certificate Agreement"), and its
obligations as a participant in the Depositary, including the Depositary's Same-
Day Funds Settlement System ("SDFS").
Posting Rates by the Company:
The Company and the Agents will discuss from time to time the rates of
interest per annum to be borne by and the maturity of Book-Entry Securities that
may be sold as a result of the solicitation of offers by an Agent. The Company
may establish a fixed set of interest rates and maturities for an offering
period ("posting"). If the Company decides to change already posted rates, it
will promptly advise the Agents to suspend solicitation of offers until the new
posted rates have been established with the Agents.
Acceptance of Offers by the Company:
Each Agent will promptly advise the Company by telephone or other
appropriate means of all reasonable offers to purchase Book-Entry Securities,
other than those rejected by such Agent. Each Agent may, in its discretion
reasonably exercised, reject any offer received by it in whole or in part. Each
Agent also may make offers to the Company to purchase Book-Entry Securities as a
Purchasing Agent. The Company will have the sole right to accept offers to
purchase Book-Entry Securities and may reject any such offer in whole or in
part.
The Company will promptly notify the Agent or Purchasing Agent, as the
case may be, of its acceptance or rejection of an offer to purchase Book-Entry
Securities. If the Company accepts an offer to purchase Book-Entry Securities,
it will confirm such acceptance in writing to the Selling Agent or Purchasing
Agent, as the case may be, and the Trustee.
Communication of Sale Information to the Company by Agent and Settlement
Procedures:
A. After the acceptance of an offer by the Company, the Selling Agent or
Purchasing Agent, as the case may be, will communicate promptly, but in no event
later than the time set forth under "Settlement Procedure Timetable" below, the
following details of the terms of such offer (the "Sale Information") to the
Company by telephone (confirmed in writing) or by facsimile transmission or
other acceptable written means:
(1) Principal Amount of Book-Entry Securities to be purchased;
(2) If a Fixed Rate Book-Entry Security, the interest rate and initial
interest payment date;
(3) Trade Date;
(4) Settlement Date;
(5) Maturity Date;
(6) Specified Currency and, if the Specified Currency is other than U.S.
dollars, the applicable Exchange Rate for such Specified Currency (it
being understood that currently the Depositary accepts deposits of
Global Securities denominated in U.S. dollars only);
II-2
(7) Indexed Currency, the Base Rate and the Exchange Rate Determination
Date, if applicable;
(8) Issue Price;
(9) Selling Agent's commission or Purchasing Agent's discount, as the case
may be;
(10) Net Proceeds to the Company;
(11) If a redeemable Book-Entry Security, such of the following as are
applicable:
(i) Redemption Commencement Date,
(ii) Initial Redemption Price (% of par), and
(iii) Amount (% of par) that the Redemption Price shall decline (but
not below par) on each anniversary of the Redemption
Commencement Date;
(12) If a Floating Rate Book-Entry Security, such of the following as are
applicable:
(i) Interest Rate Basis,
(ii) Index Maturity,
(iii) Spread or Spread Multiplier,
(iv) Maximum Rate,
(v) Minimum Rate,
(vi) Initial Interest Rate,
(vii) Interest Reset Dates,
(viii) Calculation Dates,
(ix) Interest Determination Dates,
(x) Interest Payment Dates,
(xi) Regular Record Dates, and
(xii) Calculation Agent;
(13) Name, address and taxpayer identification number of the registered
owner(s);
(14) Denomination of certificates to be delivered at settlement;
(15) Book-Entry Security or Certificated Security; and
(16) Selling Agent or Purchasing Agent.
B. After receiving the Sale Information from the Selling Agent or
Purchasing Agent, as the case may be, the Company will communicate such Sale
Information to the Trustee by facsimile transmission or other acceptable written
means. The Trustee will assign a CUSIP number to the Global Security from a
list of CUSIP numbers previously delivered to the Trustee by the Company
representing such Book-Entry Security and then advise the Company and the
Selling Agent or Purchasing Agent, as the case may be, of such CUSIP number.
C. The Trustee will enter a pending deposit message through the
Depositary's Participant Terminal System, providing the following settlement
information to the Depositary, and the Depositary shall forward such information
to such Agent and Standard & Poor's Corporation:
II-3
(1) The applicable Sale Information;
(2) CUSIP number of the Global Security representing such Book-Entry
Security;
(3) Whether such Global Security will represent any other Book-Entry
Security (to the extent known at such time);
(4) Number of the participant account maintained by the Depositary on
behalf of the Selling Agent or Purchasing Agent, as the case may be;
(5) The interest payment period; and
(6) Initial Interest Payment Date for such Book-Entry Security, number of
days by which such date succeeds the record date for the Depositary's
purposes (which in the case of Floating Rate Securities which reset
weekly shall be the date five calendar days immediately preceding the
applicable Interest Payment Date and in the case of all other Book-
Entry Securities shall be the Regular Record Date, as defined in the
Security) and, if calculable at that time, the amount of interest
payable on such Interest Payment Date.
D. The Trustee will complete and authenticate the Global Security
previously delivered by the Company representing such Book-Entry Security.
E. The Depositary will credit such Book-Entry Security to the
Trustee's participant account at the Depositary.
F. The Trustee will enter an SDFS deliver order through the Depositary's
Participant Terminal System instructing the Depositary to (i) debit such Book-
Entry Security to the Trustee's participant account and credit such Book-Entry
Security to such Agent's participant account and (ii) debit such Agent's
settlement account and credit the Trustee's settlement account for an amount
equal to the price of such Book-Entry Security less such Agent's commission.
The entry of such a deliver order shall constitute a representation and warranty
by the Trustee to the Depositary that (a) the Global Security representing such
Book-Entry Security has been issued and authenticated and (b) the Trustee is
holding such Global Security pursuant to the Certificate Agreement.
G. Such Agent will enter an SDFS deliver order through the Depositary's
Participant Terminal System instructing the Depositary (i) to debit such Book-
Entry Security to such Agent's participant account and credit such Book-Entry
Security to the participant accounts of the Participants with respect to such
Book-Entry Security and (ii) to debit the settlement accounts of such
Participants and credit the settlement account of such Agent for an amount equal
to the price of such Book-Entry Security.
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. Upon confirmation of receipt of funds, the Trustee will transfer to
the account of the Company maintained at ____________________, or such other
account as the Company may have previously specified to the Trustee, in funds
available for immediate use in the amount transferred to the Trustee in
accordance with Settlement Procedure "F."
II-4
J. Upon request, the Trustee will send to the Company a statement setting
forth the principal amount of Book-Entry Securities outstanding as of that date
under the Indentures.
▇. ▇▇▇▇ Agent will confirm the purchase of such Book-Entry Security to
the purchaser either by transmitting to the Participants with respect to such
Book-Entry Security a confirmation order or orders through the Depositary's
institutional delivery system or by mailing a written confirmation to such
purchaser.
L. The Depositary will, at any time, upon request of the Company or the
Trustee, promptly furnish to the Company or the Trustee a list of the names and
addresses of the participants for whom the Depositary has credited Book-Entry
Securities.
Preparation of Pricing Supplement:
If the Company accepts an offer to purchase a Book-Entry Security, it
will prepare a Pricing Supplement reflecting the terms of such Book-Entry
Security and arrange to have delivered to the Selling Agent or Purchasing Agent,
as the case may be, at least ten copies of such Pricing Supplement, not later
than 5:00 p.m., New York City time, on the Business Day following the Trade Date
(as defined below), or if the Company and the purchaser agree to settlement on
the Business Day following the date of acceptance of such offer, not later than
noon, New York City time, on such date. The Company will arrange to have ten
Pricing Supplements filed with the Commission not later than the close of
business of the Commission on the fifth Business Day following the date on which
such Pricing Supplement is first used.
Delivery of Confirmation and Prospectus to Purchaser by Selling Agent:
The Selling Agent will deliver to the purchaser of a Book-Entry
Security a written confirmation of the sale and delivery and payment
instructions. In addition, the Selling Agent will deliver to such purchaser or
its agent the Prospectus as amended or supplemented (including the Pricing
Supplement) in relation to such Book-Entry Security prior to or together with
the earlier of the delivery to such purchaser or its agent of (a) the
confirmation of sale or (b) the Book-Entry Security.
Date of Settlement:
The receipt by the Company of immediately available funds in payment
for a Book-Entry Security and the authentication and issuance of the Global
Security representing such Book-Entry Security shall constitute "settlement"
with respect to such Book-Entry Security. All orders of Book-Entry Securities
solicited by a Selling Agent or made by a Purchasing Agent and accepted by the
Company on a particular date (the "Trade Date") will be settled on a date (the
"Settlement Date") which is the third Business Day after the Trade Date pursuant
to the "Settlement Procedure Timetable" set forth below, unless the Company and
the purchaser agree to settlement on another Business Day which shall be no
earlier than the next Business Day after the Trade Date.
Settlement Procedure Timetable:
For orders of Book-Entry Securities solicited by a Selling Agent and
accepted by the Company for settlement on the third Business Day after the Trade
Date, Settlement Procedures "A" through "I" set
II-5
forth above shall be completed as soon as possible but not later than the
respective times (New York City time) set forth below:
SETTLEMENT
PROCEDURE TIME
--------- ----
A 5:00 p.m. on the Business Day following the Trade Date or 10:00
a.m. on the Business Day prior to the Settlement Date,
whichever is earlier
B 12:00 noon on the second Business Day immediately preceding the
Settlement Date
C 2:00 p.m. on the second Business Day immediately preceding the
Settlement 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 5:00 p.m. on the Settlement Date
If the initial interest rate for a Floating Rate Book-Entry Security
has not been determined at the time that Settlement Procedure "A" is completed,
Settlement Procedures "B" and "C" shall be completed as soon as such rate has
been determined but no later than 2:00 p.m. on the second Business Day
immediately preceding the Settlement Date. Settlement Procedure "H" is subject
to extension in accordance with any extension of Fedwire closing deadlines and
in the other events specified in the SDFS operating procedures in effect on the
Settlement Date.
If settlement of a Book-Entry Security is rescheduled or canceled, the
Trustee, upon obtaining knowledge thereof, will deliver to the Depositary,
through the Depositary's Participation 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 the Trustee fails to enter an SDFS deliver order with respect to a
Book-Entry Security pursuant to Settlement Procedure "F," the Trustee may
deliver to the Depositary, through the Depositary's Participant Terminal System,
as soon as practicable a withdrawal message instructing the Depositary to debit
such Book-Entry Security to the Trustee's participant account, provided that the
Trustee's participant account contains a principal amount of the Global Security
representing such Book-Entry Security 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 Securities represented by a Global Security, the Trustee will
mark such Global Security "canceled," make appropriate entries in the Trustee's
records and send such canceled Global Security to the Company. The CUSIP number
assigned to such Global Security shall, in accordance with CUSIP Service Bureau
procedures, 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
Securities represented by a Global Security, the Trustee will exchange such
Global Security for two Global Securities, one of which shall represent such
Book-Entry Security or Securities and shall be canceled immediately after
issuance and the other of which shall represent the remaining Book-Entry
Securities previously represented by the surrendered Global Security and shall
bear the CUSIP number of the surrendered Global Security.
II-6
If the purchase price for any Book-Entry Security is not timely paid
to the participants with respect to such Book-Entry Security by the beneficial
purchaser thereof (or a person, including an indirect participant in the
Depositary, acting on behalf of such purchaser), such participants and, in turn,
the Agent for such Book-Entry Security may enter deliver orders through the
Depositary's Participant Terminal System debiting such Book-Entry Security to
such participant's account and crediting such Book-Entry Security to such
Agent's account and then debiting such Book-Entry Security to such Agent's
participant account and crediting such Book-Entry Security to the Trustee's
participant account and shall notify the Company and the Trustee thereof.
Thereafter, the Trustee will (i) immediately notify the Company of such order
and the Company shall transfer to such Agent funds available for immediate use
in an amount equal to the price of such Book-Entry Security which was credited
to the account of the Company maintained at the Trustee in accordance with
Settlement Procedure I, and (ii) deliver the withdrawal message and take the
related actions described in the preceding paragraph. If such failure shall
have occurred for any reason other than default by the applicable Agent to
perform its obligations hereunder or under the Distribution Agreement, the
Company will reimburse such Agent on an equitable basis for the loss of its use
of funds during the period when the funds were credited to the account of the
Company.
Notwithstanding the foregoing, upon any failure to settle with respect
to a Book-Entry Security, the Depositary 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 Securities to
have been represented by a Global Security, the Trustee will provide, in
accordance with Settlement Procedure "D," for the authentication and issuance of
a Global Security representing the other Book-Entry Securities to have been
represented by such Global Security and will make appropriate entries in its
records. The Company will, from time to time, furnish the Trustee with a
sufficient quantity of Securities.
PART II: ADMINISTRATIVE PROCEDURE FOR CERTIFICATED SECURITIES
--------------------------------------------------------------
Posting Rates by Company:
The Company and the Agents will discuss from time to time the rates of
interest per annum to be borne by and the maturity of Certificated Securities
that may be sold as a result of the solicitation of offers by an Agent. The
Company may establish a fixed set of interest rates and maturities for an
offering period ("posting"). If the Company decides to change already posted
rates, it will promptly advise the Agents to suspend solicitation of offers
until the new posted rates have been established with the Agents.
Acceptance of Offers by Company:
Each Agent will promptly advise the Company by telephone or other
appropriate means of all reasonable offers to purchase Certificated Securities,
other than those rejected by such Agent. Each Agent may, in its discretion
reasonably exercised, reject any offer received by it in whole or in part. Each
Agent also may make offers to the Company to purchase Certificated Securities as
a Purchasing Agent. The Company will have the sole right to accept offers to
purchase Certificated Securities and may reject any such offer in whole or in
part.
II-7
The Company will promptly notify the Selling Agent or Purchasing
Agent, as the case may be, of its acceptance or rejection of an offer to
purchase Certificated Securities. If the Company accepts an offer to purchase
Certificated Securities, it will confirm such acceptance in writing to the
Selling Agent or Purchasing Agent, as the case may be, and the Trustee.
Communication of Sale Information to Company by Agent:
After the acceptance of an offer by the Company, the Selling Agent or
Purchasing Agent, as the case may be, will communicate the following details of
the terms of such offer (the "Sale Information") to the Company by telephone
(confirmed in writing) or by facsimile transmission or other acceptable written
means:
(1) Principal Amount of Certificated Securities to be purchased;
(2) If a Fixed Rate Certificated Security, the interest rate and
initial interest payment date;
(3) Trade Date;
(4) Settlement Date;
(5) Maturity Date;
(6) Specified Currency and, if the Specified Currency is other
than U.S. dollars, the applicable Exchange Rate for such
Specified Currency;
(7) Indexed Currency, the Base Rate and the Exchange Rate
Determination Date, if applicable;
(8) Issue Price;
(9) Selling Agent's commission or Purchasing Agent's discount, as
the case may be;
(10) Net Proceeds to the Company;
(11) If a redeemable Certificated Security, such of the following
as are applicable:
(i) Redemption Commencement Date,
(ii) Initial Redemption Price (% of par), and
(iii) Amount (% of par) that the Redemption Price shall
decline (but not below par) on each anniversary of the
Redemption Commencement Date;
(12) If a Floating Rate Certificated Security, such of the
following as are applicable:
(i) Interest Rate Basis,
(ii) Index Maturity,
(iii) Spread or Spread Multiplier,
(iv) Maximum Rate,
(v) Minimum Rate,
II-8
(vi) Initial Interest Rate,
(vii) Interest Reset Dates,
(viii) Calculation Dates,
(ix) Interest Determination Dates,
(x) Interest Payment Dates,
(xi) Regular Record Dates, and
(xii) Calculation Agent;
(13) Name, address and taxpayer identification number of the
registered owner(s);
(14) Denomination of certificates to be delivered at settlement;
(15) Book-Entry Security or Certificated Security; and
(16) Selling Agent or Purchasing Agent.
Preparation of Pricing Supplement by Company:
If the Company accepts an offer to purchase a Certificated Security,
it will prepare a Pricing Supplement reflecting the terms of such Certificated
Security and arrange to have delivered to the Selling Agent or Purchasing Agent,
as the case may be, at least ten copies of such Pricing Supplement, not later
than 5:00 p.m., New York City time, on the Business Day following the Trade
Date, or if the Company and the purchaser agree to settlement on the date of
acceptance of such offer, not later than noon, New York City time, on such date.
The Company will arrange to have ten Pricing Supplements filed with the
Commission not later than the close of business of the Commission on the fifth
Business Day following the date on which such Pricing Supplement is first used.
Delivery of Confirmation and Prospectus to Purchaser by Selling Agent:
The Selling Agent will deliver to the purchaser of a Certificated
Security a written confirmation of the sale and delivery and payment
instructions. In addition, the Selling Agent will deliver to such purchaser or
its agent the Prospectus as amended or supplemented (including the Pricing
Supplement) in relation to such Certificated Security prior to or together with
the earlier of the delivery to such purchaser or its agent of (a) the
confirmation of sale or (b) the Certificated Security.
Date of Settlement:
All offers of Certificated Securities solicited by a Selling Agent or
made by a Purchasing Agent and accepted by the Company will be settled on a date
(the "Settlement Date") which is the fifth Business Day after the date of
acceptance of such offer, unless the Company and the purchaser agree to
settlement (a) on another Business Day after the acceptance of such offer or (b)
with respect to an offer accepted by the Company prior to 10:00 a.m., New York
City time, on the date of such acceptance.
Instruction from Company to Trustee for Preparation of Certificated Securities:
After receiving the Sale Information from the Selling Agent or
Purchasing Agent, as the case may be, the Company will communicate such Sale
Information to the Trustee by telephone (confirmed in writing) or by facsimile
transmission or other acceptable written means.
II-9
The Company will instruct the Trustee by facsimile transmission or
other acceptable written means to authenticate and deliver the Certificated
Securities no later than 2:15 p.m., New York City time, on the Settlement Date.
Such instruction will be given by the Company prior to 3:00 p.m., New York City
time, on the Business Day immediately preceding the Settlement Date unless the
Settlement Date is the date of acceptance by the Company of the offer to
purchase Certificated Securities in which case such instruction will be given by
the Company by 11:00 a.m., New York City time.
Preparation and Delivery of Certificated Securities by Trustee and Receipt of
Payment Therefor:
The Trustee will prepare each Certificated Security and appropriate
receipts that will serve as the documentary control of the transaction.
In the case of a sale of Certificated Securities to a purchaser
solicited by a Selling Agent, the Trustee will, by 2:15 p.m., New York City
time, on the Settlement Date, deliver the Certificated Securities to the Selling
Agent for the benefit of the purchaser of such Certificated Securities against
delivery by the Selling Agent of a receipt therefor. On the Settlement Date the
Selling Agent will deliver payment for such Certificated Securities in
immediately available funds to the Company in an amount equal to the issue price
of the Certificated Securities less the Selling Agent's commission; provided
that the Selling Agent reserves the right to withhold payment for which it has
not received funds from the purchaser. The Company shall not use any proceeds
advanced by a Selling Agent to acquire securities.
In the case of a sale of Certificated Securities to a Purchasing
Agent, the Trustee will, by 2:15 p.m., New York City time, on the Settlement
Date, deliver the Certificated Securities to the Purchasing Agent against
delivery of payment for such Certificated Securities in immediately available
funds to the Company in an amount equal to the issue price of the Certificated
Securities less the Purchasing Agent's discount.
Failure of Purchaser to Pay Selling Agent:
If a purchaser (other than a Purchasing Agent) fails to make payment
to the Selling Agent for a Certificated Security, the Selling Agent will
promptly notify the Trustee and the Company thereof by telephone (confirmed in
writing) or by facsimile transmission or other acceptable written means. The
Selling Agent will immediately return the Certificated Security to the Trustee.
Immediately upon receipt of such Certificated Security by the Trustee, the
Company will return to the Selling Agent an amount equal to the amount
previously paid to the Company in respect of such Certificated Security. The
Company will reimburse the Selling Agent on an equitable basis for its loss of
the use of funds during the period when they were credited to the account of the
Company.
The Trustee will cancel the Certificated Security in respect of which
the failure occurred, make appropriate entries in its records and, unless
otherwise instructed by the Company, destroy the Certificated Security.
II-10
ANNEX III
ACCOUNTANTS' LETTER
-------------------
Pursuant to Sections 4(j) and 6(d), as the case may be, of the
Distribution Agreement, the Guarantor's independent certified public accountants
shall furnish letters to the effect that:
(i) They are independent certified public accountants with respect to
the Guarantor and its subsidiaries within the meaning of the Act and the
applicable published rules and regulations thereunder;
(ii) In their opinion, the financial statements and any supplementary
financial information and schedules audited (and, if applicable,
financial forecasts and/or pro forma financial information) examined by
them and included or incorporated by reference in the Registration
Statement or the Prospectus comply as to form in all material respects
with the applicable accounting requirements of the Act or the Exchange
Act, as applicable, and the related published rules and regulations
thereunder; and, if applicable, they have made a review in accordance
with standards established by the American Institute of Certified Public
Accountants of the consolidated interim financial statements, selected
financial data, pro forma financial information, financial forecasts
and/or condensed financial statements derived from audited financial
statements of the Guarantor for the periods specified in such letter, as
indicated in their reports thereon, copies of which have been furnished
to the Agents;
(iii) They have made a review in accordance with standards
established by the American Institute of Certified Public Accountants of
the unaudited condensed consolidated statements of income, consolidated
balance sheets and consolidated statements of cash flows included in the
Prospectus and/or included in the Guarantor's quarterly report on Form
10-Q incorporated by reference into the Prospectus as indicated in their
reports thereon copies of which are attached hereto; and on the basis of
specified procedures including inquiries of officials of the Guarantor
who have responsibility for financial and accounting matters regarding
whether the unaudited condensed consolidated financial statements
referred to in paragraph (vi)(A)(i) below comply as to form in all
material respects with the applicable accounting requirements of the Act
and the Exchange Act and the related published rules and regulations,
nothing came to their attention that caused them to believe that the
unaudited condensed consolidated financial statements do not comply as
to form in all material respects with the applicable accounting
requirements of the Act and the Exchange Act and the related published
rules and regulations;
III-1
(iv) The unaudited selected financial information with respect to the
consolidated results of operations and financial position of the
Guarantor for the five most recent fiscal years included in the
Prospectus and included or incorporated by reference in Item 6 of the
Guarantor's Annual Report on Form 10-K for the most recent fiscal year
agrees with the corresponding amounts (after restatement where
applicable) in the audited consolidated financial statements for five
such fiscal years which were included or incorporated by reference in
the Guarantor's Annual Reports on Form 10-K for such fiscal years;
(v) They have compared the information in the Prospectus under
selected captions with the disclosure requirements of Regulation S-K and
on the basis of limited procedures specified in such letter nothing came
to their attention as a result of the foregoing procedures that caused
them to believe that this information does not conform in all material
respects with the disclosure requirements of Items 301, 302, 402 and
503(d), respectively, of Regulation S-K;
(vi) On the basis of limited procedures, not constituting an
examination in accordance with generally accepted auditing standards,
consisting of a reading of the unaudited financial statements and other
information referred to below, a reading of the latest available interim
financial statements of the Guarantor and its subsidiaries, inspection
of the minute books of the Guarantor and its subsidiaries since the date
of the latest audited financial statements included or incorporated by
reference in the Prospectus, inquiries of officials of the Guarantor and
its subsidiaries responsible for financial and accounting matters and
such other inquiries and procedures as may be specified in such letter,
nothing came to their attention that caused them to believe that:
(A) (i) the unaudited condensed consolidated statements of income,
consolidated balance sheets and consolidated statements of cash flows
included in the Prospectus and/or included or incorporated by reference
in the Guarantor's Quarterly Reports on Form 10-Q incorporated by
reference in the Prospectus do not comply as to form in all material
respects with the applicable accounting requirements of the Exchange Act
and the related published rules and regulations, or (ii) any material
modifications should be made to the unaudited condensed consolidated
statements of income, consolidated balance sheets and consolidated
statements of cash flows included in the Prospectus or included in the
Guarantor's Quarterly Reports on Form 10-Q incorporated by reference in
the Prospectus for them to be in conformity with generally accepted
accounting principles;
(B) any other unaudited income statement data and balance sheet items
included in the Prospectus do not agree with the corresponding items in
the unaudited consolidated financial statements from which such data and
items were derived, and any such unaudited data and items were not
determined on a basis substantially consistent with the basis for the
corresponding amounts in the audited consolidated financial statements
included or incorporated by reference in the Guarantor's Annual Report
on Form 10-K for the most recent fiscal year;
III-2
(C) the unaudited financial statements which were not included in the
Prospectus but from which were derived the unaudited condensed financial
statements referred to in clause (A) and any unaudited income statement
data and balance sheet items included in the Prospectus and referred to
in Clause (B) were not determined on a basis substantially consistent
with the basis for the audited financial statements included or
incorporated by reference in the Guarantor's Annual Report on Form 10-K
for the most recent fiscal year;
(D) any unaudited pro forma consolidated condensed financial
statements included or incorporated by reference in the Prospectus do
not comply as to form in all material respects with the applicable
accounting requirements of the Act and the published rules and
regulations thereunder or the pro forma adjustments have not been
properly applied to the historical amounts in the compilation of those
statements;
(E) as of a specified date not more than five days prior to the date
of such letter, there have been any changes in the consolidated capital
stock (other than issuances of capital stock upon exercise of options
and stock appreciation rights, upon earn-outs of performance shares and
upon conversions of convertible securities, in each case which were
outstanding on the date of the latest balance sheet included or
incorporated by reference in the Prospectus) or any increase in the
consolidated long-term debt of the Guarantor and its subsidiaries, or
any decreases in consolidated net current assets or stockholders' equity
or other items specified by the Agents, or any increases in any items
specified by the Agents, in each case as compared with amounts shown in
the latest balance sheet included or incorporated by reference in the
Prospectus, except in each case for changes, increases or decreases
which the Prospectus discloses have occurred or may occur or which are
described in such letter; and
(F) for the period from the date of the latest financial statements
included or incorporated by reference in the Prospectus to the specified
date referred to in Clause (E) there were any decreases in consolidated
net revenues or operating profit or the total or per share amounts of
consolidated net income or other items specified by the Agents, or any
increases in any items specified by the Agents, in each case as compared
with the comparable period of the preceding year and with any other
period of corresponding length specified by the Agents, except in each
case for increases or decreases which the Prospectus discloses have
occurred or may occur or which are described in such letter; and
(vi) In addition to the audit referred to in their report(s) included
or incorporated by reference in the Prospectus and the limited
procedures, inspection of minute books, inquiries and other procedures
referred to in paragraphs (iii) and (vi) above, they have carried out
certain specified procedures, not constituting an audit in accordance
with generally accepted auditing standards, with respect to certain
amounts, percentages and financial information specified by the Agents
which are derived from the general accounting records of the Guarantor
and its subsidiaries, which appear in the Prospectus (excluding
documents incorporated by reference), or in Part II of, or in exhibits
and schedules to, the Registration Statement specified by the Agents or
in documents incorporated by reference in the Prospectus specified by
the Agents, and
III-3
have compared certain of such amounts, percentages and financial
information with the accounting records of the Guarantor and its
subsidiaries and have found them to be in agreement.
All references in this Annex III to the Prospectus shall be deemed to
refer to the Prospectus (including the documents incorporated by reference
therein) as defined in the Distribution Agreement as of the Commencement Date
referred to in Section 6(d) thereof and to the Prospectus as amended or
supplemented (including the documents incorporated by reference therein) as of
the date of the amendment, supplement, incorporation or the Time of Delivery
relating to the Terms Agreement requiring the delivery of such letter under
Section 4(j) thereof.
III-4