Exhibit 1
DISTRIBUTION AGREEMENT
THE SERVICEMASTER COMPANY
$300,000,000
MEDIUM-TERM NOTES, SERIES A
Due from 9 months or More from Date of Issue
Distribution Agreement
April 18, 2000
▇.▇. ▇▇▇▇▇▇ Securities Inc.
▇▇ ▇▇▇▇ ▇▇▇▇▇▇
▇▇▇ ▇▇▇▇, ▇▇▇ ▇▇▇▇ ▇▇▇▇▇
▇▇▇▇▇▇▇, Sachs & Co.
▇▇ ▇▇▇▇▇ ▇▇▇▇▇▇
▇▇▇ ▇▇▇▇, ▇▇▇ ▇▇▇▇ ▇▇▇▇▇
Bank of America Securities LLC
▇▇▇ ▇▇▇▇▇ ▇▇▇▇▇ ▇▇▇▇▇▇, ▇▇▇ ▇▇▇▇▇
▇▇▇▇▇▇▇▇▇, ▇▇▇▇▇ ▇▇▇▇▇▇▇▇ ▇▇▇▇▇
Bank One Capital Markets, Inc.
1 Bank ▇▇▇ ▇▇▇▇▇
▇▇▇▇▇ ▇▇▇-▇▇▇▇
▇▇▇▇▇▇▇, ▇▇▇▇▇▇▇▇ ▇▇▇▇▇
Ladies and Gentlemen:
The ServiceMaster Company, a Delaware corporation (the "COMPANY"),
confirms its agreement with each of you with respect to the issue and sale from
time to time by the Company of its Medium-Term Notes, Series A due from 9 months
or more from date of issue (the "SECURITIES") in an aggregate initial offering
price of up to $300,000,000 (or the equivalent thereof in one or more foreign
currencies or composite currencies), as such amount may be reduced by the
aggregate initial offering price of any other securities issued by the Company,
whether within or without the United States ("OTHER SECURITIES") pursuant to the
registration statement referred to below, and agrees with each of you
(individually, an "AGENT", and collectively, the "AGENTS", which term shall
include any additional agents appointed pursuant to Section hereof) as set forth
in this Agreement. The Securities will be issued under an indenture (the
"INDENTURE") dated as of November 18, 1999 among the Company, as issuer, and
▇▇▇▇▇▇ Trust and Savings Bank, as Trustee (the "TRUSTEE"). The Securities shall
have the maturities, interest rates, redemption provisions, if any, and other
terms set forth in the Prospectus referred to below as it may be amended or
supplemented from time to time. The Securities will be issued, and the terms and
rights thereof established, from time to time by the Company in accordance with
the Indenture.
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On the basis of the representations and warranties herein contained,
but subject to the terms and conditions stated herein and to the reservation by
the Company of the right to sell Securities directly to investors (other than
broker-dealers) on its own behalf, the Company hereby (i) appoints the Agents as
the exclusive agents of the Company for the purpose of soliciting and receiving
offers to purchase Securities from the Company by others pursuant to Section
hereof and (ii) agrees that, except as otherwise contemplated herein, whenever
it determines to sell Securities directly to any Agent as principal, it will
enter into a separate agreement (each such agreement a "TERMS AGREEMENT"),
substantially in the form of Exhibit A hereto, relating to such sale in
accordance with Section hereof.
The Company has prepared and filed with the Securities and Exchange
Commission (the "COMMISSION") in accordance with the provisions of Securities
Act of 1933, as amended, and the rules and regulations of the Commission
thereunder (collectively, the "SECURITIES ACT"), a registration statement (the
file number of which is 333-91381) on Form S-3, relating to among other things
debt securities (the "SHELF SECURITIES") to be issued from time to time by the
Company. The Company also has filed with, or proposes to file with, the
Commission pursuant to Rule 424 under the Securities Act a prospectus supplement
describing certain terms of the Securities. The registration statement as
amended to the date of this Agreement is hereinafter referred to as the
"REGISTRATION STATEMENT" and the related prospectus covering the Shelf
Securities in the form first used to confirm sales of the Securities is
hereinafter referred to as the "BASIC PROSPECTUS". The Basic Prospectus as
supplemented by the prospectus supplement specifically relating to the
Securities in the form first used to confirm sales of the Securities is
hereinafter referred to as the "PROSPECTUS". If the Company has filed an
abbreviated registration statement pursuant to Rule 462(b) under the Securities
Act (the "RULE 462 REGISTRATION STATEMENT"), then any reference herein to the
term "Registration Statement" shall be deemed to include such Rule 462
Registration Statement. Any reference in this Agreement to the Registration
Statement, the Basic Prospectus, any preliminary form of Prospectus (a
"PRELIMINARY PROSPECTUS") previously filed with the Commission pursuant to Rule
424 or the Prospectus shall be deemed to refer to and include the documents
incorporated by reference therein pursuant to Item 12 of Form S-3 under the
Securities Act which were filed under the Securities Exchange Act of 1934, as
amended, and the rules and regulations of the Commission thereunder
(collectively, the "EXCHANGE Act"), on or before the date of this Agreement or
the date of the Basic Prospectus, any preliminary prospectus or the Prospectus,
as the case may be; and any reference to "AMEND", "AMENDMENT" or "SUPPLEMENT"
with respect to the Registration Statement, the Basic Prospectus, 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 (a "PRICING SUPPLEMENT"), shall be deemed to refer to and include any
documents filed under the Exchange Act after the date of this Agreement, or the
date of the Basic Prospectus, any preliminary prospectus or the Prospectus, as
the case may be, which are deemed to be incorporated by reference therein.
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1. REPRESENTATIONS. The Company represents and warrants to, and agrees
with, each Agent as of the Commencement Date (as hereinafter defined), as of
each date on which the Company accepts an offer to purchase Securities
(including any purchase by an Agent as principal pursuant to a Terms Agreement
or otherwise), as of each date the Company issues and sells Securities and as of
each date the Registration Statement or the Prospectus is amended or
supplemented, as follows (it being understood that such representations and
warranties shall be deemed to relate to the Registration Statement, the Basic
Prospectus and the Prospectus, each as amended or supplemented to each such
date):
(a) the Registration Statement has been declared effective by the Commission
under the Securities Act; no stop order suspending the effectiveness of the
Registration Statement has been issued and no proceeding for that purpose has
been instituted or, to the knowledge of the Company, threatened by the
Commission; and the Registration Statement and Prospectus (as amended or
supplemented, if applicable) comply, or will comply, as the case may be, in all
material respects with the Securities Act and the Trust Indenture Act of 1939,
as amended, and the rules and regulations of the Commission thereunder
(collectively, the "TRUST INDENTURE ACT"), and do not and will not, as of the
applicable effective date as to the Registration Statement and any amendment or
supplement thereto and as of the date of the Prospectus and any amendment or
supplement thereto, contain any untrue statement of a material fact or omit to
state any material fact required to be stated therein or necessary to make the
statements therein, in light of the circumstances under which they were made,
not misleading; except that the foregoing representations and warranties shall
not apply to that part of the Registration Statement which constitutes the
Statement of Eligibility and Qualification (Form T-1) under the Trust Indenture
Act of the Trustee, and statements or omissions in the Registration Statement or
the Prospectus made in reliance upon and in conformity with information relating
to any Agent furnished to the Company in writing by such Agent expressly for use
therein;
(b) the documents incorporated by reference in the Prospectus, when they
became effective or were filed with the Commission, as the case may be,
conformed in all material respects to the requirements of the Securities Act or
the Exchange Act, as applicable, 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, in light of the
circumstances under which they were made, 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 Securities Act or the Exchange Act, as
applicable, 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, in light of the circumstances under which they were made,
not misleading;
(c) the financial statements, and the related notes thereto, of ServiceMaster
included or incorporated by reference in the Registration Statement and the
Prospectus present fairly in all material respects the consolidated financial
position of ServiceMaster and its consolidated subsidiaries as of the dates
indicated and the results of their operations and the changes in their
consolidated cash flows for the periods specified; said financial statements
have been prepared in conformity with generally accepted accounting principles
applied on a consistent basis, and the supporting schedules included or
incorporated by reference in the Registration Statement present fairly in all
material respects the information required to be stated therein; and the pro
forma financial information, and the related notes thereto, if any, included or
incorporated by reference in the Registration
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Statement and the Prospectus has been prepared in accordance with the applicable
requirements of the Securities Act and the Exchange Act, as applicable and is
based upon good faith estimates and assumptions believed by the Company to be
reasonable;
(d) 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 or any of its
significant subsidiaries (as defined in the Commission's Regulation S-X), or any
material adverse change, or any development involving a prospective material
adverse change, in or affecting the general affairs, business, prospects,
management, financial position, stockholders' equity or results of operations of
the Company and its subsidiaries, taken as a whole, otherwise than as set forth
or contemplated in the Prospectus; and except as set forth or contemplated in
the Prospectus neither the Company nor any of its subsidiaries has entered into
any transaction or agreement (whether or not in the ordinary course of business)
material to the Company and its subsidiaries taken as a whole;
(e) the Company has been duly incorporated and is validly existing as a
corporation in good standing under the laws of its jurisdiction of
incorporation, with power and authority (corporate and other) to own its
properties and conduct its business as described in the Prospectus, and has been
duly qualified as a foreign corporation for the transaction of business and is
in good standing under the laws of each other jurisdiction in which it owns or
leases properties, or conducts any business, so as to require such
qualification, other than where the failure to be so qualified or in good
standing would not have a material adverse effect on the Company and its
subsidiaries taken as a whole;
(f) each of the Company's significant subsidiaries (as defined in the
Commission's Regulation S-X) has been duly incorporated or organized and is
validly existing as a corporation, limited liability company or limited
partnership under the laws of its jurisdiction of incorporation or organization,
with power and authority (corporate or partnership or other) to own its
properties and conduct its business, as described in the Prospectus, and has
been duly qualified as a foreign corporation, limited liability company or
limited partnership for the transaction of business and is in good standing
under the laws of each jurisdiction in which it owns or leases properties, or
conducts any business so as to require such qualification, other than where the
failure to be so qualified or in good standing would not have a material adverse
effect on the Company and its subsidiaries taken as a whole; and all the
outstanding shares of capital stock, limited liability company interests or
partnership interests, as the case may be, of each significant subsidiary of the
Company have been duly authorized and validly issued, are fully-paid and
non-assessable, and (except as described in the Prospectus) are owned by the
Company, directly or indirectly, free and clear of all liens, encumbrances,
security interests and claims;
(g) each of this Agreement and any other applicable Terms Agreement has been
duly authorized, executed and delivered by the Company;
(h) the Securities have been duly authorized, and, when executed,
authenticated and issued under the Indenture and delivered to and paid for by
the purchasers thereof in accordance with this Agreement and any applicable
Terms Agreement, will have been duly executed, issued and delivered by the
Company and will constitute valid and binding obligations of the Company
entitled to the benefits provided by the Indenture; the Indenture has been duly
authorized, executed and delivered by the Company and qualified under the Trust
Indenture Act and constitutes a
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valid and binding instrument; and the Indenture conforms, and the Securities of
any particular issuance of Securities will conform, to the descriptions thereof
in the Prospectus as amended or supplemented to relate to such issuance of
Securities;
(i) neither the Company nor any of its subsidiaries is, or with the giving of
notice or lapse of time or both would be, in violation of or in default under,
its Certificate of Incorporation or By-Laws or agreement of limited partnership
or other organizational document, as the case may be, or any indenture,
mortgage, deed of trust, loan agreement or other agreement or instrument to
which the Company or any of its subsidiaries is a party or by which it or any of
them or any of their respective properties is bound, except for violations and
defaults which individually and in the aggregate would not reasonably be
expected to have a material adverse effect on the Company and its subsidiaries
taken as a whole; the issue and sale of the Securities and the performance by
the Company of all of its obligations under the Securities, the Indenture, 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 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 or any of its subsidiaries is a party or by which the Company
or any of its subsidiaries is bound or to which any of the property or assets of
the Company or any of its subsidiaries is subject, that is material for the
Company and its subsidiaries taken as a whole, nor will such action result in
any violation of the provisions of the Certificate of Incorporation or the
By-Laws of the Company or any applicable law or statute or any order, rule or
regulation of any court or governmental agency or body having jurisdiction over
the Company, its subsidiaries or any of their respective properties except where
such would not have a material adverse effect on the Company and its
Subsidiaries taken as a whole (a "MATERIAL ADVERSE EFFECT"); and no consent,
approval, authorization, order, license, registration or qualification of or
with any such court or governmental agency or body is required for the issue and
sale of the Securities or the consummation by the Company of the transactions
contemplated by this Agreement, any applicable Terms Agreement or the Indenture,
except such as have been, or will have been prior to the Commencement Date (as
defined in Section hereof), obtained under the Securities Act or the Trust
Indenture Act and such consents, approvals, authorizations, orders, licenses,
registrations or qualifications as have been obtained under the Securities Act
or the Trust Indenture Act and as may be required under state securities or Blue
Sky laws in connection with the offer and sale of the Securities;
(j) other than as set forth or contemplated in the Prospectus, there are no
legal or governmental investigations, actions, suits or proceedings pending or,
to the knowledge of the Company, threatened against or affecting the Company or
any of its subsidiaries or any of their respective properties or to which the
Company or any of its subsidiaries is or may be a party or to which any property
of the Company or any of its subsidiaries is or may be the subject which, if
determined adversely to the Company or any of its subsidiaries, could
individually or in the aggregate reasonably be expected to have, a material
adverse effect on the general affairs, business, prospects, management,
financial position, stockholders' equity or results of operations of the Company
and its subsidiaries taken as a whole and, to the best of the Company's
knowledge, no such proceedings are threatened or contemplated by governmental
authorities or threatened by others; and there are no statutes, regulations,
contracts or other documents that are required to be filed as an exhibit to the
Registration Statement or required to be described in the Registration Statement
or the Prospectus which are not filed or described as required;
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(k) immediately after any sale of Securities by the Company hereunder or
under any applicable Terms Agreement, the aggregate amount of Securities which
shall have been issued and sold by the Company hereunder or under any Terms
Agreement taken together with any other securities of the Company (other than
the Securities) that shall have been issued and sold pursuant to the
Registration Statement will not exceed the amount of securities registered under
the Registration Statement;
(l) ▇▇▇▇▇▇ ▇▇▇▇▇▇▇▇ LLP, who have certified certain financial statements of
the Company and its subsidiaries are independent public accountants as required
by the Securities Act;
(m) the Company and its subsidiaries have good and marketable title in fee
simple to all items of real property and good and marketable title to all
personal property owned by them, in each case free and clear of all liens,
encumbrances and defects except such as are described or referred to in the
Prospectus or such as do not materially affect the value of such property or do
not interfere with the use made or proposed to be made of such property by the
Company and its subsidiaries; and any real property and buildings held under
lease by the Company and its subsidiaries are held by them under valid, existing
and enforceable leases with such exceptions as are not material or do not
interfere with the use made or proposed to be made of such property and
buildings by the Company or its subsidiaries;
(n) the Company is not and, after giving effect to the offering and sale of
the Securities, will not be an "investment company" or, to the Company's
knowledge, 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");
(o) the Company has complied with all provisions of Section 517.075, Florida
Statutes (Chapter 92-198, Laws of Florida) relating to doing business with the
Government of Cuba or with any person or affiliate located in Cuba;
(p) the Company and its subsidiaries have filed all federal, state or
material local and foreign tax returns which have been required to be filed and
have paid all taxes shown thereon and all assessments received by them or any of
them to the extent that such taxes have become due and are not being contested
in good faith; and, except as disclosed in the Registration Statement and the
Prospectus, there is no tax deficiency which has been or might reasonably be
expected to be asserted or threatened against the Company or any of its
subsidiaries;
(q) each of the Company and its subsidiaries owns, possesses or has obtained
all licenses, permits, certificates, consents, orders, approvals and other
authorizations from, and has made all declarations and filings with, all
federal, state, local and other governmental authorities (including foreign
regulatory agencies), all self-regulatory organizations and all courts and other
tribunals, domestic or foreign, necessary to own or lease, as the case may be,
and to operate its properties and to carry on its business as conducted as of
the date hereof, except where such would not cause a Material Adverse Effect,
and neither the Company nor any such subsidiary has received any actual notice
of any proceeding relating to revocation or modification of any such license,
permit, certificate, consent, order, approval or other authorization, except as
described in the Registration Statement and the Prospectus; and each of the
Company and its subsidiaries is in compliance in all material respects with all
laws and regulations relating to the conduct of its business as conducted as of
the date hereof;
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(r) there are no existing or, to the best knowledge of the Company,
threatened labor disputes with the employees of the Company or any of its
subsidiaries which would reasonably be expected to have a material adverse
effect on the Company and its subsidiaries taken as a whole;
(s) the Company and its subsidiaries (i) are in compliance with any and all
applicable foreign, federal, state and local laws and regulations relating to
the protection of human health and safety, the environment or hazardous or toxic
substances or wastes, pollutants or contaminants ("ENVIRONMENTAL LAWS"), (ii)
have received all permits, licenses or other approvals required of them under
applicable Environmental Laws to conduct their respective businesses and (iii)
are in compliance with all terms and conditions of any such permit, license or
approval, except where such noncompliance with Environmental Laws, failure to
receive required permits, licenses or other approvals or failure to comply with
the terms and conditions of such permits, licenses or approvals would not,
singly or in the aggregate, reasonably be expected to have a material adverse
effect on the Company and its subsidiaries, taken as a whole;
(t) in the ordinary course of its business, the Company conducts a periodic
review of the effect of Environmental Laws on the business, operations and
properties of the Company and its subsidiaries, in the course of which it
identifies and evaluates associated costs and liabilities (including, without
limitation, any capital or operating expenditures required for clean-up, closure
of properties or compliance with Environmental Laws or any permit, license or
approval, any related constraints on operating activities and any potential
liabilities to third parties). On the basis of such review and except as
disclosed in the most recent Form 10-K of the Company, the Company has
reasonably concluded that such associated costs and liabilities would not,
singly or in the aggregate, reasonably be expected to have a material adverse
effect on the Company and its subsidiaries, taken as a whole;
(u) each employee benefit plan, within the meaning of Section 3(3) of the
Employee Retirement Income Security Act of 1974, as amended ("ERISA"), that is
maintained, administered or contributed to by the Company or any of its
affiliates for employees or former employees of the Company and its affiliates
has been maintained in compliance in all material respects with its terms and
the requirements of any applicable statutes, orders, rules and regulations,
including but not limited to ERISA and the Internal Revenue Code of 1986, as
amended ("CODE"). No prohibited transaction, within the meaning of Section 406
of ERISA or Section 4975 of the Code has occurred with respect to any such plan
excluding transactions effected pursuant to a statutory or administrative
exemption. For each such plan which is subject to the funding rules of Section
412 of the Code or Section 302 of ERISA no "accumulated funding deficiency" as
defined in Section 412 of the Code has been incurred, whether or not waived, and
the fair market value of the assets of each such plan (excluding for these
purposes accrued but unpaid contributions) exceeded the present value of all
benefits accrued under such plan determined using reasonable actuarial
assumptions.
(v) Each of the Company and its subsidiaries owns or possesses, or can
acquire, or reasonably believes it can acquire, on reasonable terms, rights
adequate to the present operations of the businesses now operated by it under
the patents, patent rights, licenses, inventions, copyrights, know-how
(including trade secrets and other unpatented and/or unpatentable proprietary or
confidential information, systems or procedures), trademarks, service marks and
trade names (collectively, the "INTELLECTUAL PROPERTY") presently employed by it
in connection with the businesses now operated by it, except to the extent that
the failure to own, possess or acquire such rights would not, singly or in the
aggregate, reasonably be expected to have a material adverse effect on the
Company and its subsidiaries taken as a whole, and neither the Company nor any
of
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its subsidiaries has received any notice of infringement of or conflict with
asserted rights of others with respect to any of the foregoing.
2 . SOLICITATIONS AS AGENT; PURCHASES AS PRINCIPAL.
(a) SOLICITATIONS AS AGENT. On the basis of the representations and warranties
herein contained, but 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 offers to purchase the Securities 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 (which consent shall not be unreasonably withheld), solicit or accept
offers to purchase, or sell, Securities or any other similar, medium-term debt
securities with a maturity at the time of original issuance of 9 months or more
except pursuant to this Agreement and any Terms Agreement, or except pursuant to
a private placement not constituting a public offering under the Securities 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 directly on its own
behalf to investors (other than broker-dealers).
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 Securities. Upon receipt of at least one
business day's prior notice from the Company, each Agent will suspend
solicitation of offers to purchase Securities from the Company until such time
as the Company has advised such Agent or Agents that such solicitation may be
resumed. During the period of time that such solicitation is suspended, the
Company shall not be required to deliver any opinions, letters or certificates
in accordance with Sections , and hereof; PROVIDED that if the Registration
Statement or Prospectus is amended or supplemented during the period of
suspension (other than by an amendment or supplement providing solely for a
change in the interest rates, redemption provisions, amortization schedules or
maturities offered for the Securities or for a change that the Agents deem to be
immaterial), no Agent shall be required to resume soliciting offers to purchase
Securities until the Company has delivered such opinions, letters and
certificates as such Agent may reasonably request.
The Company agrees to pay each Agent, as consideration for the sale of
each Security resulting from a solicitation made or an offer to purchase
received by such Agent, a commission in the form of a discount from the purchase
price of such Security in an amount equal to the following applicable percentage
of the principal amount of such Security sold:
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(
RANGE OF MATURITIES COMMISSION (PERCENTAGE
OF AGGREGATE PRINCIPAL
AMOUNT OF SECURITIES SOLD)
From 9 months to less than 1 year .125%
From 1 year to less than 18 months .15%
From 18 months to less than 2 years .20%
From 2 years to less than 3 years .25%
From 3 years to less than 4 years .35%
From 4 years to less than 5 years .45%
From 5 years to less than 6 years .50%
From 6 years to less than 7 years .55%
From 7 years to less than 10 years .60%
From 10 years to less than 15 years .625%
From 15 years to less than 20 years .70%
20 years and more .75%
The Agents are authorized to solicit offers to
purchase Securities only in the principal amount of $1,000
(or, in the case of Securities not denominated in U.S.
dollars, the equivalent thereof in the applicable foreign
currency or composite currency, rounded down to the nearest
1,000 units of such foreign currency or composite currency) or
any amount in excess thereof which is an integral multiple of
$1,000 (or, in the case of Securities not denominated in U.S.
dollars, 1,000 units of such foreign currency or composite
currency). Each Agent shall communicate to the Company, orally
or in writing, each offer to purchase Securities received by
such Agent as agent that in its judgment should be considered
by the Company. The Company shall have the sole right to
accept offers to purchase the Securities and may reject any
such offer in whole or in part. Each Agent shall have the
right, in its sole discretion, to reject any offer to purchase
Securities, as a whole or in part, that it considers to be
unacceptable and any such rejection shall not be deemed a
breach of its agreements herein contained. The procedural
details relating to the issue and delivery of Securities sold
by an Agent as agent and the payment therefor are set forth in
the Administrative Procedures (as hereinafter defined).
(b) PURCHASE AS PRINCIPAL. Each sale of Securities to any Agent as
principal shall be made in accordance with the terms of this Agreement and
(unless such Agent shall otherwise agree) a Terms Agreement which will provide
for the sale of such Securities to, and the purchase thereof by, such Agent. A
Terms Agreement will be substantially in the form of Exhibit A hereto but may
take the form of an exchange of any standard form of written telecommunication
between an Agent and the Company and may also specify certain provisions
relating to the reoffering of such Securities by
9
such Agent, as mutually agreed by the Company and such Agent. The commitment of
any Agent to purchase securities 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 herein contained and shall be
subject to the terms and conditions herein and in the applicable Terms Agreement
set forth. Each agreement by an Agent to purchase Securities as principal
(pursuant to a Terms Agreement or otherwise) shall specify the principal amount
of Securities to be purchased by such Agent pursuant thereto, the price to be
paid to the Company for such Securities, the maturity date of such Securities,
the interest rate or interest rate basis, if any, applicable to such Securities,
any other terms of such Securities, the time and date and place of delivery of
and payment for such Securities (the time and date of any and each such delivery
and payment, the "TIME OF DELIVERY"), any provisions relating to rights of, and
default by, underwriters acting together with such Agent in the reoffering of
Securities, and shall also specify any requirements for opinions of counsel,
accountants' letters and officers' certificates pursuant to Section hereof.
Unless otherwise specified in a Terms Agreement, the procedural details relating
to the issue and delivery of Securities purchased by an Agent as principal and
the payment therefore shall be as set forth in the Administrative Procedures.
(c) OBLIGATIONS SEVERAL. The Company acknowledges that the obligations
of the Agents are several and not joint and, subject to the provisions of this
Section , each Agent shall have complete discretion as to the manner in which it
solicits purchasers for the Securities and as to the identity thereof.
(d) ADMINISTRATIVE PROCEDURES. The Agents and the Company agree to
perform their respective duties and obligations specifically provided to be
performed in the Medium-Term Notes Administrative Procedures (the
"ADMINISTRATIVE PROCEDURES") attached hereto as Exhibit B, as the same may be
amended from time to time. The Administrative Procedures may be amended only by
written agreement of the Company and the Agents.
(e) OTHER SECURITIES. The Company agrees to notify each Agent in
writing of sales by the Company of Other Securities. 2. COMMENCEMENT DATE. The
documents required to be delivered pursuant to Section hereof on the
Commencement Date (as defined below) shall be delivered to the Agents at the
offices of ▇▇▇▇▇ ▇▇▇▇ & ▇▇▇▇▇▇▇▇, ▇▇▇ ▇▇▇▇▇▇▇▇▇ ▇▇▇▇▇▇, ▇▇▇ ▇▇▇▇, ▇▇▇ ▇▇▇▇, 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 is commenced or the first date on
which the Company accepts an offer by any Agent to purchase Securities as
principal (such time and date being referred to herein as the "COMMENCEMENT
DATE").
2. COVENANTS OF THE COMPANY. The Company covenants and agrees with each Agent:
(a) to make no amendment or supplement to the Registration Statement or the
Prospectus prior to the termination of the offering of the Securities pursuant
to this Agreement or any Terms Agreement which shall be disapproved by any Agent
after reasonable opportunity to comment thereon, PROVIDED, HOWEVER, that the
foregoing shall not apply to any of the Company's periodic filings with the
Commission described in clause below; subject to the foregoing clause , promptly
to cause each supplement to the Prospectus to be filed with or transmitted for
filing to the Commission in accordance with Rule 424(b) under the Securities Act
and to prepare, with respect to any Securities to be sold through or to such
Agent pursuant to this Agreement, a Pricing Supplement with respect to such
Securities in a form previously approved by such Agent and to file
10
such Pricing Supplement in accordance with Rule 424(b) under the Securities Act;
and promptly to file all reports and any definitive proxy or information
statements required to be filed by the Company 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. The Company will promptly advise each Agent of the filing of any
amendment or supplement to the Basic Prospectus or any amendment to the
Registration Statement and of the effectiveness of any such amendment to the
Registration Statement, of the issuance by the Commission of any stop order
suspending the effectiveness of the Registration Statement or any order
preventing or suspending the use of any prospectus relating to the Securities or
the initiation or threatening of any proceeding for that purpose, or of any
request by the Commission for any amendment or supplement of the Registration
Statement or Prospectus or for additional information; and of the receipt by the
Company of any notification with respect to any suspension of the qualification
of the Securities for offering or sale in any jurisdiction, or of the initiation
or threatening of any proceeding for any such purpose. The Company agrees to use
its reasonable best efforts to prevent the issuance of any such stop order or of
any such order preventing or suspending the use of any such prospectus or of any
notification suspending any such qualification and, if issued, to use promptly
its reasonable best efforts to obtain withdrawal thereof as soon as possible. If
the Basic Prospectus is amended or supplemented as a result of the filing under
the Exchange Act of any document incorporated by reference in the Prospectus, no
Agent shall be obligated to solicit offers to purchase Securities so long as it
is not reasonably satisfied with such document from a legal compliance or
disclosure adequacy perspective;
(b) to endeavor to qualify the Securities for offer and sale under the
securities or Blue Sky laws of such jurisdictions as the Agents shall reasonably
request and to continue such qualification in effect so long as reasonably
required in connection with the distribution of the Securities; PROVIDED that
the Company shall not be required to file a general consent to service of
process in any jurisdiction;
(c) to furnish each Agent and counsel to the Agents, at the expense of
the Company, a signed copy of the Registration Statement (as originally filed)
and each amendment thereto, in each case including exhibits and documents
incorporated by reference therein and, during the period mentioned in Section
below, to furnish each Agent as many copies of the Prospectus (including all
amendments and supplements thereto) and documents incorporated by reference
therein as such Agent may reasonably request;
(d) if at any time when a prospectus relating to the Securities is
required to be delivered under the Securities Act, any event shall occur 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 when such Prospectus is delivered to a purchaser, not misleading,
or, if in the opinion of the Agents or the Company, it is necessary at any time
to amend or supplement the Prospectus to comply with law, to immediately notify
the Agents by telephone (with confirmation in writing) and request each Agent in
its capacity as agent of the Company, to suspend solicitation of offers to
purchase Securities from the Company (and, if so notified by telephone, such
Agent shall cease such solicitations and cease using the Prospectus as soon as
practicable, but in any event not later than one business day later); and to
cease sales of any Securities such Agent may then own as principal. If the
Company shall decide to amend or supplement the Registration Statement or the
Prospectus, as then amended or
11
supplemented, it shall so advise each Agent promptly by telephone (with
confirmation in writing) and, at its expense, shall prepare and cause to be
filed promptly with the Commission an amendment or supplement to the
Registration Statement or the Prospectus, as then amended or supplemented, that
will correct such statement or omission or effect such compliance and will
supply such amended or supplemented Prospectus to the Agents in such quantities
as they may reasonably request. If such amendment or supplement and the
documents, opinions, letters and certificates furnished to the Agents pursuant
to Sections, and in connection with the preparation and filing of such amendment
or supplement are reasonably satisfactory in all respects to the Agents, then
upon the filing with the Commission of such amendment or supplement to the
Prospectus or upon the effectiveness of an amendment to the Registration
Statement, the Agents will resume the solicitation of offers to purchase
Securities hereunder. Notwithstanding any other provision of this Section , if
during the period an Agent continues to own Securities purchased from the
Company by such Agent as principal or in the event such Agent, in the opinion of
its counsel, is otherwise required to deliver a prospectus in respect of a
transaction in the Securities, if any event described in this Section occurs the
Company will, at its own expense, promptly prepare and file with the Commission
an amendment or supplement, reasonably satisfactory in all respects to such
Agent, that will correct such statement or omission or effect such compliance,
will supply such amended or supplemented Prospectus to such Agent in such
quantities as such Agent may reasonably request and shall furnish to such Agent
pursuant to Sections , , and such documents, certificates, opinions and letters
as it may request in connection with the preparation and filing of such
amendment or supplement;
(e) to furnish to the Agents during the term of this Agreement such
relevant documents and certificates of officers of the Company relating to the
business, operations and affairs of the Company, the Registration Statement, the
Basic Prospectus, any amendments or supplements thereto, the Indenture, the
Securities, this Agreement, the Administrative Procedures, any applicable Terms
Agreement and the performance by the Company of its obligations hereunder or
thereunder as the Agents may from time to time reasonably request and shall
notify the Agents promptly in writing of any downgrading, or of its receipt of
any notice of any intended or potential downgrading or any review or possible
change that does not indicate an improvement in the rating accorded any of
securities of, or guaranteed by, the Company by any "nationally recognized
statistical rating organization", as such term is defined for purposes of Rule
436(g)(2) under the Securities Act;
(f) to make generally available to its security holders and to the
Agents as soon as practicable earnings statements which shall satisfy the
provisions of Section 11(a) of the Securities Act and Rule 158 of the Commission
promulgated thereunder covering periods of at least twelve months beginning in
each case with the first fiscal quarter of the Company occurring after the
"effective date" (as defined in Rule 158) of the Registration Statement with
respect to each sale of Securities;
(g) so long as any Securities are outstanding, to furnish upon request
to such Agent copies of all reports or other communications (financial or other)
furnished to holders of Securities and 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 is listed;
(h) that, from the date of any applicable Terms Agreement with an
Agent or other agreement by an Agent to purchase Securities as principal and
continuing to and including the business day following the related Time of
Delivery, not to offer, sell, contract to sell or otherwise dispose of any debt
securities of
12
or guaranteed by the Company which are substantially similar to the Securities,
without the prior written consent of such Agent;
(i) that each time the Registration Statement or the Prospectus shall
be amended or supplemented (other than by an amendment or supplement providing
solely for a change in the interest rates, redemption provisions, amortization
schedules or maturities offered on the Securities or for a change which the
Agents deem to be immaterial) and each time the Company sells Securities to such
Agent as principal pursuant to a Terms Agreement or other agreement and such
Terms Agreement or other agreement specifies the delivery of an opinion under
this Section as a condition to the purchase of Securities pursuant to such Terms
Agreement or other agreement, the Company shall furnish or cause to be furnished
forthwith to such Agent written opinions of the General Counsel of the Company,
and ▇▇▇▇▇▇▇▇ & ▇▇▇▇▇, counsel to the Company, or other counsel for the Company
satisfactory to such Agent, dated the date of such amendment or supplement, or
the related Time of Delivery relating to such sale, as the case may be, in form
and substance satisfactory to such Agent, of the same tenor as the opinions
referred to in Sections and , respectively, hereof but modified to relate to the
Registration Statement and the Prospectus as amended and supplemented to the
date of such opinion, or, in lieu of either such opinion, counsel last
furnishing such an opinion, may furnish to the Agents a letter to the effect
that such Agent may rely on the opinion of such counsel which was last furnished
to such Agent to the same extent as though it were dated the date of such letter
(except that the statements in such last opinion shall be deemed to relate to
the Registration Statement and the Prospectus as amended or supplemented to date
of delivery of such letter);
(j) that each time the Registration Statement or the Prospectus shall
be amended or supplemented to include or incorporate amended or supplemented
financial information and each time the Company sells Securities to such Agent
as principal pursuant to a Terms Agreement or other agreement and such Terms
Agreement or other agreement specifies the delivery of a letter under this
Section as a condition to the purchase of Securities pursuant to such Terms
Agreement or other agreement, the Company shall cause the independent certified
public accountants who have certified the financial statements of the Company
and its subsidiaries included or incorporated by reference in the Registrations
Statement forthwith to furnish such Agent a letter, dated the date of such
amendment or supplement or the related Time of Delivery relating to such sale,
as the case may be, in form and substance satisfactory to such Agent, of the
same tenor as the letter referred to in Section 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 such
amended or supplemented financial information included or incorporated by
reference in the Registration Statement or the Prospectus as amended or
supplemented, 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 matters made in the letter referred to in
Section 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 an amendment or supplement providing
solely for a change in the interest rates, redemption provisions, amortization
schedules or maturities offered on the Securities or for a change which the
Agents deem to be immaterial), and each time the Company sells Securities to
such Agent as principal and the applicable Terms Agreement or other agreement
specifies the delivery of a certificate under this Section as a condition to the
purchase of Securities pursuant to such Terms Agreement or other agreement, the
Company shall furnish or
13
cause to be furnished forthwith to such Agent a certificate signed by an
executive officer of the Company, dated the date of such amendment or supplement
or the related Time of Delivery relating to such sale, as the case may be, in
form satisfactory to such Agent, of the same tenor as the certificates referred
to in Section but modified to relate to the Registration Statement and the
Prospectus as amended and supplemented to the date of delivery of such
certificate or to the effect that the statements contained in the certificate
referred to in Section 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 or supplemented to such date).
5. COSTS AND EXPENSES. The Company covenants and agrees with each
Agent that the Company will, whether or not any sale of Securities is
consummated, pay all costs and expenses incident to the performance of its
obligations hereunder and under any applicable Terms Agreement, including
without limiting the generality of the foregoing, all costs and expenses: (i)
incident to the preparation, issuance, execution, authentication and delivery of
the Securities, including any expenses of the Trustee, (ii) incident to the
preparation, printing and filing under the Securities Act of the Registration
Statement, the Prospectus and any preliminary prospectus (including in each case
all exhibits, amendments and supplements thereto), (iii) incurred in connection
with the registration or qualification and determination of eligibility for
investment of the Securities under the laws of such jurisdictions as the Agents
(or in connection with any Terms Agreement, the applicable Agent) may designate
(including reasonable fees of counsel for the Agents (or such Agent) and their
disbursements), (iv) in connection with the listing of the Securities on any
stock exchange, (v) related to any filing with National Association of
Securities Dealers, Inc., (vi) in connection with the printing (including word
processing and duplication costs) and delivery of this Agreement, any Terms
Agreement the Indenture, any Blue Sky Memoranda and any Legal Investment Survey
and the furnishing to the Agents and dealers of copies of the Registration
Statement and the Prospectus, including mailing and shipping, as herein
provided, (vii) payable to rating agencies in connection with the rating of the
Securities, (viii) the reasonable fees and disbursements of counsel for the
Agents incurred in connection with the offering and sale of the Securities,
including any opinions to be rendered by such counsel hereunder and (ix) any
advertising and out-of-pocket expenses incurred by the Agents in connection with
the offering and sale of the Securities.
1. CONDITIONS. The obligation of any Agent, as agent of the Company,
at any time ("SOLICITATION TIME") to solicit offers to purchase the Securities,
the obligation of any Agent to purchase Securities as principal pursuant to any
Terms Agreement or otherwise, and the obligation of any other purchaser to
purchase Securities shall in each case be subject (1) to the condition that all
representations and warranties of the Company herein and all statements of
officers of the Company made in any certificate furnished pursuant to the
provisions hereof are true and correct (i) in the case of an Agent's obligation
to solicit offers to purchase Securities, at and as of such Solicitation Time
and (ii) in the case of any Agent's or any other purchaser's obligation to
purchase Securities, at and as of the time the Company accepts the offer to
purchase such Securities and, as the case may be, at and as of the related Time
of Delivery or time of purchase; (2) to the condition that at or prior to such
Solicitation Time, time of acceptance, Time of Delivery or time of purchase, as
the case may be, the Company shall have complied in all material respects with
all its agreements and all conditions on its part to be performed or satisfied
hereunder; and (3) to the following additional conditions when and as specified:
14
(a) Prior to such Solicitation Time or corresponding Time of Delivery
or time of purchase, as the case may be:
(i) the Prospectus as amended or supplemented (including, if applicable,
the Pricing Supplement) with respect to such Securities shall have been filed
with the Commission pursuant to Rule 424(b) under the Securities Act within the
applicable time period prescribed for such filing by the rules and regulations
under the Securities Act; no stop order suspending the effectiveness of the
Registration Statement shall be in effect and no proceeding for that purpose
shall have been initiated or threatened by the Commission; and all requests for
additional information on the part of the Commission shall have been complied
with to the reasonable satisfaction of such Agent;
(ii) there shall not have occurred any downgrading, nor shall any
notice have been given of downgrading, any intended or potential downgrading or
any review or possible change that does not indicate an improvement, in the
rating accorded any securities of or guaranteed by the Company by any
"nationally recognized statistical rating organization", as such term is defined
by the Commission for purposes of Rule 436(g)(2) under the Securities Act;
(iii) there shall not have been since the respective dates as to
which information is given in the Prospectus, any material change in the capital
stock or long-term debt of the Company or any of its significant subsidiaries
(as defined in the Commission's Regulation S-X) or any material adverse change
or any development involving a material adverse change, in or affecting the
general affairs, business, prospects, management, financial position,
stockholders' equity or results of operations of the Company and its
subsidiaries, taken as a whole, the effect of which in the judgment of the
applicable Agent makes it impracticable or inadvisable to proceed with the
solicitation by such Agent of offers to purchase Securities from the Company or
the purchase by such Agent of Securities from the Company as principal, as the
case may be, on the terms and in the manner contemplated in the Prospectus, as
so amended or supplemented; and neither the Company nor any of its subsidiaries
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
(iv) trading generally shall not have been suspended or materially
limited on or by, as the case may be, any of the New York Stock Exchange, the
American Stock Exchange, the National Association of Securities Dealers, Inc.,
the Chicago Board Options Exchange, the Chicago Mercantile Exchange or the
Chicago Board of Trade, (B) trading of any securities of or guaranteed by the
Company shall not have been suspended on any exchange or in any over-the-counter
market, (C) a general moratorium on commercial banking activities in New York
shall not have been declared by either Federal or New York State authorities, or
(D) there shall not have occurred any outbreak or escalation of hostilities or
any change in financial markets or any calamity or crisis that, in the judgment
of such Agent or Agents or of such other purchaser, is material and adverse and
which in the judgment of such Agent or Agents or of other purchaser makes it
impracticable to proceed with the solicitation by such Agent of offers to
purchase Securities from the Company or the purchase by such Agent of Securities
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 at the
Solicitation Time or at the time such offer to purchase was made.
15
(b) On the Commencement Date, and in the case of a purchase
of Securities by an Agent as principal pursuant to a Terms Agreement or
otherwise, if called for by the applicable Terms Agreement or other agreement,
at the corresponding Time of Delivery, the General Counsel of the Company, shall
have furnished to the relevant Agent or Agents his written opinion, dated the
Commencement Date or Time of Delivery, as the case may be, in form and substance
satisfactory to such Agent or Agents, to the effect that:
(i) the Company is validly existing as a corporation in good
standing under the laws of its jurisdiction of incorporation;
(ii) the Company has been duly qualified as a foreign corporation for
the transaction of business and is in good standing under the laws of each other
jurisdiction in which it owns or leases properties, or conducts any business, so
as to require such qualification, other than where the failure to be so
qualified or in good standing would not have a material adverse effect on the
Company and its subsidiaries taken as a whole;
(iii) each of the subsidiaries of the Company which constitute
"significant subsidiaries" within the meaning of that term under the
Commission's Regulation S-X (the "SUBSIDIARIES") is a partnership, limited
liability company or corporation existing and in good standing under the laws of
its respective jurisdiction of organization or incorporation. Each Subsidiary is
qualified to do business and is in good standing under the laws of each other
jurisdiction in which it owns or leases properties, or conducts any business, so
as to require such qualification, other than where the failure to be so
qualified and in good standing would not have a material adverse effect on the
Company and its subsidiaries taken as a whole; and all of the equity or other
ownership interests of each of the Subsidiaries is owned directly or indirectly
by the Company, except as specified in such opinion;
(iv) the Company and each of the Subsidiaries has the power
(corporate, limited liability company or partnership or other) to own and lease
its properties and to conduct its business as described in the Prospectus;
(v) after due inquiry, such counsel (A) has no knowledge of any
legal action or governmental investigation, action, suit or proceeding that is
pending or threatened against the Company or any of its subsidiaries that has
caused such counsel to conclude that such proceeding is required by Item 103 of
Regulation S-K to be described in the Prospectus and is not so described and (B)
has no knowledge of any contract, document, or court order to which the Company
is a party or to which any of the properties of the Company is subject that has
caused such counsel to conclude that such contract, document or court order is
required to be filed as an exhibit to the Registration Statement or required to
be described in the Registration Statement or the Prospectus which are not filed
or described as required;
(vi) the execution and delivery of this Agreement, any applicable
Terms Agreement or other agreement pursuant to which an Agent purchases
Securities as principal, the Indenture, the supplemental indenture relating to
the Securities, if any, and the Securities (collectively, the "TRANSACTION
DOCUMENTS") have been duly authorized by all necessary actions by the Company;
(vii) neither the Company nor any of its Subsidiaries is, or with
the giving of notice or lapse of time or both would be, in violation of or in
default under, its Certificate of Incorporation or By-Laws or agreement of
limited partnership or limited liability company, as the case may be. The
execution and delivery by the Company of this Agreement, any applicable Terms
Agreement or other agreement pursuant to which an Agent purchases Securities as
principal, the performance of the Company's obligations under the Transaction
Documents and the Company's sale of
16
the Securities do not (i) violate the Certificate of Incorporation or By-Laws of
the Company or (ii) constitute a violation by the Company of any applicable
provision of any law, statute, rule regulation or court order (except that such
counsel need express no opinion as to (A) any prohibition against fraud or
misrepresentation or (B) whether performance of the indemnification or
contribution provisions in this Agreement would be permitted or (C) compliance
with any disclosure requirement) or (iii) materially breach, or result in a
material default under, any existing obligation of the Company or any of its
subsidiaries under any of the agreements with which such counsel is familiar;
(viii) the Company was not required to obtain any consent, approval,
authorization or order, of any governmental agency for the issuance, delivery
and sale of the Securities under this Agreement, any applicable Terms Agreement
or other agreement pursuant to which an Agent purchases Securities as principal,
except for the order by the Commission declaring the Registration Statement
effective and such as may be required under state securities or Blue Sky laws in
connection with offers and sales of the Securities from the Company and with
purchasers of Securities;
(ix) the Registration Statement has been declared effective under
the Securities Act and such counsel has no knowledge that any stop order
suspending its effectiveness has been issued or that any proceedings for that
purpose are pending before, or overtly threatened by, the Commission. Section
309(a) of the Trust Indenture Act provides that the Indenture shall be deemed to
have been qualified under that Act when the Registration Statement became
effective under the Securities Act;
(x) The statements under Item 3 in the most recently filed Annual
Report on Form 10-K incorporated by reference in the Registration Statement and
the Prospectus were correct in all material respects on the date that the Annual
Report was filed with the Commission. Insofar as the statements constitute a
summary of the legal matters, documents or proceedings referred to therein, such
statements adequately present the information called for with respect to such
legal matters, documents or proceedings;
(xi) Nothing has come to such counsel's attention that has caused
such counsel to conclude that the Company or any of its subsidiaries (a) does
not own or have the rights under any license, permit, certificate, consent,
order, approval or other authorization from or has not made any declaration or
filing with, any federal, state, local or other governmental authority
(including foreign regulatory agencies) or any court or tribunal, domestic or
foreign, necessary to own or lease, as the case may be, and to operate its
properties and to carry on its business as conducted as of the date hereof; or
(b) has received any actual notice of any proceeding relating to revocation or
modification of any license, permit, certificate, consent, order, approval or
other authorization cited in immediately preceding clause (a); or (c) does not
have any material right required to use the Intellectual Property employed by it
in connection with the business conducted by it as of the date hereof; or (d)
is, or with the giving of notice or lapse of time or both would be, in violation
of or in default under any material indenture, mortgage, deed of trust, loan
agreement or other material agreement or instrument known to me to which the
Company or any of its subsidiaries, is a party or by which it or any of them or
any of their respective subsidiaries is bound.
(xii) such counsel is of the opinion that each document incorporated
by reference in the Registration Statement and the Prospectus as amended or
supplemented (except for the financial statements and related schedules and
other financial and statistical information therein, as to which such counsel
need express no opinion) complied as to form when filed with the Commission in
all material respects with the Exchange Act, and the rules and regulations of
the Commission thereunder, (B) nothing has come to the attention of such counsel
that has caused such counsel to
17
believe that (except for the financial statements and schedules and other
financial and statistical information included therein as to which such counsel
need express no belief) each part of the Registration Statement (including the
documents incorporated by reference therein) filed with the Commission pursuant
to the Securities Act relating to the Securities, when such part became
effective contained and, as of the date such opinion is delivered contains, any
untrue statement of a material fact or omitted or omits to state a material fact
required to be stated therein or necessary to make the statements therein not
misleading, (C) such counsel is of the opinion that Registration Statement and
the Prospectus and any amendments and supplements thereto (except for the
financial statements and schedules and other financial and statistical
information included therein as to which such counsel need express no opinion)
comply as to form in all material respects with the requirements of the
Securities Act and the Trust Indenture Act and (D) nothing has come to the
attention of such counsel that has caused such counsel to believe that (except
for the financial statements and schedules and other financial and statistical
information included therein as to which such counsel need express no belief)
the Registration Statement and the Prospectus, as amended or supplemented, if
applicable, as of the date such opinion is delivered contains any untrue
statement of a material fact or omits to state a material fact necessary in
order to make the statements therein, in the light of the circumstances under
which they were made, not misleading; PROVIDED that in the case of an opinion
delivered on the Commencement Date or pursuant to Section 4(i) , the opinion and
belief set forth in clauses 6 (b) (xii) (c) and 6 (b) (xii) (o) above shall be
deemed not to cover information concerning an offering of particular Securities
to the extent such information will be set forth in a supplement to the Basic
Prospectus;
(c) On the Commencement Date, and in the case of a purchase of
Securities by an Agent as principal pursuant to a Terms Agreement or otherwise,
if called for by the applicable Terms Agreement or other agreement, at the
corresponding Time of Delivery, ▇▇▇▇▇▇▇▇ & ▇▇▇▇▇, counsel for the Company, shall
have furnished to the relevant Agent or Agents their written opinion, dated the
Commencement Date or Time of Delivery, as the case may be, in form and substance
satisfactory to such Agent or Agents, to the effect set forth in clauses (i) ,
(iv) (as to the Company only), (v), (viii), (ix) and (xii) (B), (C) and (D) of
paragraph (b) above and to the further effect that:
(i) this Agreement or the applicable Terms Agreement have been duly
authorized, executed and delivered by the Company;
(ii) the Securities have been duly authorized and, when executed and
authenticated in accordance with the terms of the Indenture and delivered to and
paid for by any purchaser of Securities sold through an Agent as agent or any
Agent as principal pursuant to any Terms Agreement or other agreement, will
constitute valid and binding obligations of the Company entitled to the benefits
provided by the Indenture, enforceable against the Company in accordance with
their terms, except as the enforceability thereof may be limited by bankruptcy,
insolvency or other similar laws now or hereafter in effect relating to or
affecting the enforcement of creditors rights generally and by general equitable
principles;
(iii) the Indenture has been duly authorized, executed and delivered
by the Company and (assuming the due authorization, execution and delivery
thereof by the Trustee) constitutes a valid and binding instrument of the
Company, enforceable against the Company in accordance with its terms, except as
the enforceability thereof may be limited by bankruptcy, insolvency or other
similar laws now or hereafter in effect relating to or affecting the enforcement
of creditors rights generally and by general equitable principles; and Section
309(a) of the TIA provides
18
that the Indenture was deemed to have been qualified under the Act when the
Registration Statement became effective under the Securities Act;
(iv) the Company is not and, after giving effect to the offering and
sale of the Securities, will not be an "investment company", as such term is
defined in the Investment Company Act;
(v) such counsel is of the opinion ascribed to it in the Prospectus
under the caption "Tax Considerations", if any;
(vi) the execution and delivery by the Company of this Agreement,
any applicable Terms Agreement or other agreement pursuant to which an Agent
purchases Securities as principal, the performance of the Company's obligations
under the Transaction Documents and the Company's sale of the Securities do not
(i) violate the Certificate of Incorporation or By-Laws of the Company or (ii)
constitute a violation by the Company of any applicable provision of any law,
statute, rule or regulation (except that such counsel expresses no opinion as to
compliance with any disclosure requirement or any prohibition against fraud or
misrepresentation or as to whether performance of the indemnification or
contribution provisions in this Agreement would be permitted) or (iii)
constitute a breach by the Company or any of its subsidiaries, or result in a
default by the Company or any of its subsidiaries under, any existing obligation
under any of the agreements listed on a schedule to such opinion (such opinion
to state that representatives of the Company have advised such counsel that the
agreements included in such schedule include all material debt agreements and
instruments of or binding on the Company or any of its subsidiaries). Such
counsel may also state that the agreements listed in such schedule contain debt
incurrence tests and other financial covenants and tests and, although such
counsel has not attempted to independently apply any of these tests,
representatives of the Company have advised such counsel that they have applied
all of these tests and covenants and have determined that none of these tests or
covenants will be breached by the Company's sale of the Securities or by any of
the other actions cited at the beginning of this paragraph (vi), and that such
counsel has assumed without investigation that such advice and determinations
are correct; and
(vii) the statements in the Prospectus under the captions
"Description of Debt Securities" and "Description of Notes" and the statements
in Item 15 of the Registration Statement, to the extent that those statements
summarize laws, governmental rules or regulations or documents, are correct in
all material respects.
In rendering the opinions set forth in paragraphs (b)
and (c) above, such counsel may rely (A) as to matters
involving the application of laws other than the laws of the
United States and the States of Delaware and Illinois, to the
extent such counsel deems proper and to the extent specified
in such opinion, if at all, upon an opinion or opinions (in
form and substance reasonably satisfactory to the Agents'
counsel) of other counsel reasonably acceptable to the Agents'
counsel, familiar with the applicable laws; and (B) as to
matters of fact, to the extent such counsel deems proper, on
certificates of responsible officers of the Company and
certificates or other written statements of officials of
jurisdictions having custody of documents respecting the
corporate existence or good standing of the Company. The
opinions of such counsel for the Company shall state that the
opinion of any such other counsel upon which they relied is in
form satisfactory to such counsel and, in such counsel's
opinion, the Agents and they are justified in relying thereon.
With respect to the matters to be covered in clause (xii) of
paragraph (b) above, counsel may state their opinion and
belief is
19
basedupon their participation in the preparation of the
Registration Statement and the Prospectus and any
amendment or supplement thereto (other than, in the
case of the opinion delivered pursuant to paragraph (c)
above, the documents incorporated by reference therein)
and review and discussion of the contents thereof (including,
in the case of the opinion delivered pursuant to
paragraph (c) above, the documents incorporated by
reference therein) but is without independent check or
verification except as specified.
(d) On the Commencement Date, and in the case of a purchase of
Securities by an Agent as principal pursuant to a Terms Agreement or otherwise,
if called for by the applicable Terms Agreement or other agreement, at the
corresponding Time of Delivery, ▇▇▇▇▇ ▇▇▇▇ & ▇▇▇▇▇▇▇▇, counsel to the Agents,
shall have furnished to the relevant Agent or Agents such opinion or opinions,
dated the Commencement Date or Time of Delivery, as the case may be, with
respect to the validity of the Indenture, the Securities, the Registration
Statement, the Prospectus as amended or supplemented and other related matters
as such Agent or Agents may reasonably request, 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.
(e) On the Commencement Date, and in the case of a purchase of
Securities by an Agent as principal pursuant to a Terms Agreement or otherwise,
if called for by the applicable Terms Agreement or other agreement, at the
corresponding Time of Delivery, the Company's independent certified public
accountants who have certified the financial statements of the Company and its
subsidiaries included or incorporated by reference in the Registration Statement
and Prospectus, as then amended or supplemented, shall have furnished to the
relevant Agent or Agents a letter, dated the Commencement Date or Time of
Delivery, as the case may be, in form and substance satisfactory to such Agent
or Agents a letter, containing statements and information of the type ordinarily
included in accountants' "comfort letters" to underwriters with respect to the
financial statements and certain financial information relating to the Company
contained in or incorporated by reference in the Registration Statement and the
Prospectus, as then amended or supplemented.
(f) On the Commencement Date, and in the case of a purchase of
Securities by an Agent as principal pursuant to a Terms Agreement or otherwise,
if called for by the applicable Terms Agreement or other agreement, at the
corresponding Time of Delivery, the relevant Agent or Agents shall have received
a certificate or certificates signed by an executive officer of the Company,
dated the Commencement Date or Time of Delivery, as the case may be, to the
effect set forth in Sections and above and to the further effect that (1) the
representations and warranties of the Company contained herein are true and
correct on and as of the Commencement Date or Time of Delivery, as the case may
be, as if made on and as of such date, (2) the Company has complied in all
material respects with all agreements and all conditions on its part to be
performed or satisfied hereunder or under the applicable Terms Agreement or
other agreement at or prior to the Commencement Date or Time of Delivery, as the
case may be, and (3) there has not been any material change in the capital stock
or long-term debt of the Company or any of its Subsidiaries or any material
adverse change, or any development involving a material adverse change, in or
affecting the general affairs, business, prospects, management, financial
position, stockholders' equity or results of operations of the Company and its
subsidiaries taken as a whole from that set forth in or contemplated by the
Registration Statement or the Prospectus.
20
(g) On the Commencement Date and at each Time of Delivery, the
Company shall have furnished to the relevant Agent or Agents such further
certificates, information and documents as such Agent or Agents may reasonably
request.
7. INDEMNIFICATION AND CONTRIBUTION. (a) The Company agrees to
indemnify and hold harmless each Agent and each person, if any, who controls
such Agent, each affiliate of any Agent which assists such Agent in the
distribution of the Securities within the meaning of either Section 15 of the
Securities Act or Section 20 of the Exchange Act, from and against any and all
losses, claims, damages and liabilities (including without limitation the
reasonable legal fees and other expenses incurred in connection with any suit,
action or proceeding or any claim asserted) caused by any untrue statement or
alleged untrue statement of a material fact contained in the Registration
Statement or any amendment thereof or the Prospectus (as amended or supplemented
if the Company shall have furnished any amendments or supplements thereto) or
any preliminary prospectus or caused by any omission or alleged omission to
state therein a material fact required to be stated therein or necessary to make
the statements therein not misleading, except insofar as such losses, claims,
damages or liabilities are caused by any untrue statement or omission or alleged
untrue statement or omission made in reliance upon and in conformity with
information relating to any Agent furnished to the Company in writing by such
Agent expressly for use therein; PROVIDED that the foregoing indemnity with
respect to any preliminary prospectus shall not inure to the benefit of any
Agent (or to the benefit of any person controlling such Agent) from whom the
person asserting any such losses, claims, damages or liabilities purchased
Securities if such untrue statement or omission or alleged untrue statement or
omission made in such preliminary prospectus is eliminated or remedied in the
Prospectus (as amended or supplemented if the Company shall have furnished any
amendments or supplements thereto) and if a copy of the Prospectus (as so
amended or supplemented, but excluding the documents incorporated by reference
therein), if required by law to have been furnished to such person at or prior
to the written confirmation of the sale of such Securities to such person, shall
not have been so furnished.
(b) Each Agent agrees, severally and not jointly, to indemnify
and hold harmless the Company, its directors, its officers who sign the
Registration Statement and each person who controls the Company within the
meaning of Section 15 of the Securities Act and Section 20 of the Exchange Act,
to the same extent as the foregoing indemnity from the Company to each Agent,
but only with reference to information relating to such Agent furnished to the
Company in writing by such Agent expressly for use in the Registration
Statement, the Prospectus, any amendment or supplement thereto, or any
preliminary prospectus.
(c) If any suit, action, proceeding (including any
governmental or regulatory investigation), claim or demand shall be brought or
asserted against any person in respect of which indemnity may be sought pursuant
to either of the two preceding paragraphs, such person (the "INDEMNIFIED
PERSON") shall promptly notify the person against whom such indemnity may be
sought (the "INDEMNIFYING PERSON") in writing, and the Indemnifying Person, upon
request of the Indemnified Person, shall retain counsel reasonably satisfactory
to the Indemnified Person to represent the Indemnified Person and any others the
Indemnifying Person may designate in such proceeding and shall pay the fees and
expenses of such counsel related to such proceeding. In any such proceeding, any
Indemnified Person shall have the right to retain its own counsel, but the fees
and expenses of such counsel shall be at the expense of such Indemnified Person
unless (i)the Indemnifying Person and the
21
Indemnified Person shall have mutually agreed to the contrary, (ii) the
Indemnifying Person has failed within a reasonable time to retain counsel
reasonably satisfactory to the Indemnified Person or (iii) the named parties in
any such proceeding (including any impleaded parties) include both the
Indemnifying Person and the Indemnified Person and representation of both
parties by the same counsel would be inappropriate due to actual or potential
differing interests between them. It is understood that the Indemnifying Person
shall not, in connection with any proceeding or related proceeding in the same
jurisdiction, be liable for the fees and expenses of more than one separate firm
(in addition to any local counsel) for all Indemnified Persons, and that all
such fees and expenses shall be reimbursed as they are incurred. Any such
separate firm for the Agents, each affiliate of any Agent which assists such
Agent in the distribution of the Securities and such control persons of the
Agents shall be designated in writing by ▇.▇. ▇▇▇▇▇▇ Securities Inc. or, if ▇.▇.
▇▇▇▇▇▇ Securities Inc. is not an Indemnified Party by the Agents that are
Indemnified Parties and any such separate firm for the Company, its directors,
its officers who sign the Registration Statement and such control persons of the
Company or authorized representatives shall be designated in writing by the
Company. The Indemnifying Person shall not be liable for any settlement of any
proceeding effected without its written consent, but if settled with such
consent or if there be a final judgment for the plaintiff, the Indemnifying
Person agrees to indemnify any Indemnified Person from and against any loss or
liability by reason of such settlement or judgment. Notwithstanding the
foregoing sentence, if at any time an Indemnified Person shall have requested an
Indemnifying Person to reimburse the Indemnified Person for fees and expenses of
counsel as contemplated by the third sentence of this paragraph, the
Indemnifying Person agrees that it shall be liable for any settlement of any
proceeding effected without its written consent if (i) such settlement is
entered into more than 60 days after receipt by such Indemnifying Person of the
aforesaid request and (ii) such Indemnifying Person shall not have reimbursed
the Indemnified Person in accordance with such request prior to the date of such
settlement (or delivered a notice to such Indemnified Person setting forth its
good faith objection to such request's conformity with the provisions of this
Section). No Indemnifying Person shall, without the prior written consent of the
Indemnified Person, effect any settlement of any pending or threatened
proceeding in respect of which any Indemnified Person is or could have been a
party and indemnity could have been sought hereunder by such Indemnified Person,
unless such settlement includes an unconditional release of such Indemnified
Person from all liability on claims that are the subject matter of such
proceeding.
(d) If the indemnification provided for in Section or is unavailable
to an Indemnified Person or insufficient in respect of any losses, claims,
damages or liabilities referred to herein in connection with any offering of
Securities, then each Indemnifying Person under such paragraph, in lieu of
indemnifying such Indemnified Person thereunder, shall contribute to the amount
paid or payable by such Indemnified Person as a result of such losses, claims,
damages or liabilities (i) in such proportion as is appropriate to reflect the
relative benefits received by the Company on the one hand and each Agent on the
other from the offering of the Securities or (ii) if the allocation provided by
clause (i) above is not permitted by applicable law, in such proportion as is
appropriate to reflect not only the relative benefits referred to in clause (i)
above but also the relative fault of the Company on the one hand and each Agent
on the other in connection with the statements or omissions that resulted in
such losses, claims, damages or liabilities, as well as any other relevant
equitable considerations. The relative benefits received by the Company on the
one hand and each Agent on the other in connection with the offering of such
Securities
22
shall be deemed to be in the same respective proportion as the net proceeds from
the offering of such Securities (before deducting expenses) received by the
Company and the total discounts and commissions received by each Agent in
respect thereof bear to the aggregate offering price of such Securities. The
relative fault of the Company on the one hand and of each Agent on the other
shall be determined by reference to, among other things, whether the untrue or
alleged untrue statement of a material fact or the omission or alleged omission
to state a material fact relates to information supplied by the Company or by
such Agent and the parties' relative intent, knowledge, access to information
and opportunity to correct or prevent such statement or omission.
The Company and each Agent agrees that it would not be just and
equitable if contribution pursuant to this Section 7(d) were determined by PRO
RATA allocation (even if all Agents were treated as one entity for such purpose)
or by any other method of allocation that does not take account of the equitable
considerations referred to above in this Section 7 (d) . The amount paid or
payable by an Indemnified Person as a result of the losses, claims, damages and
liabilities referred to above in this Section 7 shall be deemed to include,
subject to the limitations set forth above, any reasonable legal or other
expenses incurred by such Indemnified Person in connection with investigating or
defending any such action or claim. Notwithstanding the provisions of this
Section 7, in no event shall an Agent be required to contribute any amount in
excess of the amount by which the total price at which the Securities referred
to in Section 7 (d) that were sold by or through such Agent exceeds the amount
of any damages that such Agent has otherwise been required to pay by reason of
such untrue or alleged untrue statement or omission or alleged omission. No
person guilty of fraudulent misrepresentation (within the meaning of Section
11(f) of the Securities Act) shall be entitled to contribution from any person
who was not guilty of such fraudulent misrepresentation. The obligation of each
Agent to contribute pursuant to this Section is several (in the proportion that
the principal amount of the Securities the sale of which by or through such
Agent gave rise to such losses, claims, damages or liabilities bears to the
aggregate principal amount of the Securities the sale of which by or through any
Agent gave rise to such losses, claims, damages or liabilities) and is not
joint.
(e) The indemnity and contribution agreements contained in this
Section 7 are in addition to any liability which the Indemnifying Persons may
otherwise have to the Indemnified Persons referred to above.
8. TERMINATION. (a) This Agreement may be terminated at any time
(ii) by the Company with respect to any or all of the Agents or (ii) by any
Agent with respect to itself only, in each case upon the giving of written
notice of such termination to each other party hereto. Any Terms Agreement shall
be subject to termination in the absolute discretion of the Agent or Agents that
are parties thereto on the terms set forth or incorporated by reference therein.
The termination of this Agreement shall not require termination of any agreement
by an Agent to purchase Securities as principal (whether pursuant to a Terms
Agreement or otherwise) and the termination of such an agreement shall not
require termination of this Agreement. In the event this Agreement is terminated
with respect to any Agent, (x) this Agreement shall remain in full force and
effect with respect to any Agent as to which such 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 which are already issued, agreed to be issued or the
subject of a pending offer at the time of such termination and (z) in any event,
the provisions of the fourth paragraph of Section 2(a) , Section 2(c), the last
sentence of Section 4(d) and Sections 4(f), 4(g), 5,7,9,10,11,12 and 15 shall
survive; PROVIDED that if at the time of
23
termination an offer to purchase Securities has been accepted by the Company but
the time of delivery to the purchaser or its agent of such Securities has not
yet occurred, the provisions of Sections 2(b), 2(d), 4(a) through , 4(e), 4(h)
through 4(k) and 6 shall also survive until such time of delivery. If any Terms
Agreement is terminated, the provisions of the last sentence of Section 4(d) and
Sections 2(b), 2(d), 4(a), 4(b), 4(e) through 4(k),5,6,7,8 (b), 10,11,12 and 15
(which shall have been incorporated by reference in such Terms Agreement) shall
survive.
(b) If any Terms Agreement shall be terminated by an Agent or Agents
because of any failure or refusal on the part of the Company to comply with the
terms or to fulfill any of the conditions of any Terms Agreement or if for any
reason the Company shall be unable to perform its obligations under any Terms
Agreement or any condition of any Agent's obligations cannot be fulfilled, the
Company agrees to reimburse each Agent or such Agents as have so terminated,
severally, for all out-of-pocket expenses (including the fees and expenses of
their counsel) reasonably incurred by such Agent or Agents in connection with
the respective offering of Securities.
9. POSITION OF THE AGENTS. Each Agent, in soliciting offers to
purchase Securities 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 and does not assume any obligation
towards or relationship of agency or trust with any purchaser of Securities.
Each Agent will make reasonable efforts to assist the Company in obtaining
performance by each purchaser whose offer to purchase Securities 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 in the event such
purchase is not consummated for any reason. If the Company shall default on its
obligation to deliver Securities to a purchaser whose offer it has accepted in
accordance with the Administrative Procedures, the Company shall (i) hold the
relevant Agent harmless against any loss, claim, damage or liability 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.
10. REPRESENTATIONS AND INDEMNITIES TO SURVIVE. The respective
indemnities and contribution agreements, representation, warranties and other
statements of the Company, its officers and the Agents set forth in or made
pursuant to this Agreement or any agreement by an Agent to purchase Securities
as principal shall remain in full force and effect regardless of any termination
of this Agreement or any such agreement, any investigation made by or on behalf
of any Agent or any controlling person of any Agent, or the Company, or any
officer or director or any controlling person of the Company, and shall survive
each delivery of and payment for any of the Securities.
11. NOTICES. Except as otherwise specifically provided herein or
in the Administrative Procedures, all statements, requests, notices and advices
hereunder shall be in writing and effective only on receipt, and will be
delivered by hand, by mail (postage prepaid), by telegram (charges prepaid) or
by telex. Communications to the Agents will be sent, in the case of ▇.▇. ▇▇▇▇▇▇
Securities Inc., to ▇▇ ▇▇▇▇ ▇▇▇▇▇▇, ▇▇▇ ▇▇▇▇, ▇▇▇ ▇▇▇▇ ▇▇▇▇▇ (Fax: (212)
▇▇▇-▇▇▇▇) Attention: Medium-Term Note Department, in the case of ▇▇▇▇▇▇▇, Sachs
& Co., to ▇▇ ▇▇▇▇▇ ▇▇▇▇▇▇, ▇▇▇ ▇▇▇▇, ▇▇▇ ▇▇▇▇ ▇▇▇▇▇ (Fax: (▇▇▇) ▇▇▇-▇▇▇▇)
Attention: Medium Term Note Trading; in the case of Banc of America Securities
LLC, to ▇▇▇ ▇▇▇▇▇ ▇▇▇▇▇ ▇▇▇▇▇▇, ▇▇▇ ▇▇▇▇▇, ▇▇▇▇▇▇▇▇▇, ▇▇▇▇▇ ▇▇▇▇▇▇▇▇ ▇▇▇▇▇ (Fax:
(▇▇▇) ▇▇▇-▇▇▇▇) Attention: ▇▇▇▇ ▇▇▇▇▇▇▇▇▇; in the case of Banc One Capital
Markets, Inc., to ▇ ▇▇▇▇ ▇▇▇ ▇▇▇▇▇, ▇▇▇▇▇ ▇▇▇-▇▇▇▇, ▇▇▇▇▇▇▇, ▇▇▇▇▇▇▇▇
24
60670 (Fax: (▇▇▇) ▇▇▇-▇▇▇▇) Attention: ▇▇▇▇▇▇ ▇. ▇▇▇▇▇▇ and, if sent to the
Company, to it at ▇▇▇ ▇▇▇▇▇▇▇▇▇▇▇▇▇ ▇▇▇, ▇▇▇▇▇▇▇ ▇▇▇▇▇, ▇▇▇▇▇▇▇▇ ▇▇▇▇▇ (Fax:
(▇▇▇) ▇▇▇-▇▇▇▇); Attention: General Counsel, and Attention: Treasurer (Fax:
(▇▇▇) ▇▇▇-▇▇▇▇.)
12. SUCCESSORS. This Agreement and any Terms Agreement shall be
binding upon, and inure solely to the benefit of, each Agent and the Company,
and their respective successors and the officers, directors and controlling
persons referred to in Section and (to the extent expressly provided in Section
) the purchasers of Securities, and no other person shall acquire or have any
right or obligation under or by virtue of this Agreement or any Terms Agreement.
13. AMENDMENTS. This Agreement may be amended or supplemented if,
but only if, such amendment or supplement is in writing and is signed by the
Company and each Agent; PROVIDED that the Company may from time to time, on
written notice to the Agents but without the consent of any Agent, amend this
Agreement to add as a party hereto one or more additional firms registered under
the Exchange Act, whereupon each such firm shall become an Agent hereunder on
the same terms and conditions as the other Agents that are parties hereto. The
Agents shall sign any amendment or supplement giving effect to the addition of
any such firm as an Agent under this Agreement.
14. BUSINESS DAY. Time shall be of the essence in this Agreement
and any Terms Agreement. As used herein, the term "BUSINESS DAY" shall mean any
day which is not a Saturday or Sunday or legal holiday or a day on which banks
in New York City are required or authorized by law or executive order to close.
15. APPLICABLE LAW. This Agreement and any Terms Agreement shall
be governed by, and construed in accordance with, the laws of the State of New
York, without giving effect to the conflict of laws provisions thereof.
16. COUNTERPARTS. This Agreement and any Terms Agreement
may be signed in counterparts, each of which shall be an original, and all of
which together shall constitute one and the same instrument.
17. HEADINGS. The headings of the sections of this Agreement have
been inserted for convenience of reference only and shall not be deemed a part
of this Agreement.
25
If the foregoing is in accordance with your understanding, please sign and
return to us 5 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,
The ServiceMaster Company
By: /S/ ▇▇▇▇ ▇. ▇▇▇▇▇▇▇▇
------------------------
Name: ▇▇▇▇ ▇. ▇▇▇▇▇▇▇▇
Title: Senior Vice President & Treasurer
Accepted in New York, New York,
as of the date first above written:
▇.▇. ▇▇▇▇▇▇ Securities Inc.
By: /S/ ▇▇▇▇▇ ▇▇▇▇▇
-------------------------------
Name: ▇▇▇▇▇ ▇▇▇▇▇
Title: Vice President
▇▇▇▇▇▇▇, ▇▇▇▇▇ & Co.
By: /S/ ▇▇▇▇▇▇▇, SACHS & CO.
---------------------------
Name: ▇▇▇▇▇▇▇, ▇▇▇▇▇ & Co.
Title:
Banc of America Securities LLC
By: /S/ ▇▇▇▇ ▇. ▇▇▇▇▇▇▇▇▇
-------------------------------
Name: ▇▇▇▇ ▇. ▇▇▇▇▇▇▇▇▇
Title: Managing Director
Banc One Capital Markets, Inc.
By: /S/ ▇▇▇▇▇▇▇▇▇ ▇▇▇▇▇
------------------------------
Name: ▇▇▇▇▇▇▇▇▇ ▇▇▇▇▇
Title: Vice President
26
EXHIBIT A
THE SERVICEMASTER COMPANY
MEDIUM TERM NOTES, SERIES A
TERMS AGREEMENT
-----\-------, ----
The ServiceMaster Company
▇▇▇ ▇▇▇▇▇▇▇▇▇▇▇▇▇ ▇▇▇
▇▇▇▇▇▇▇ ▇▇▇▇▇, ▇▇▇▇▇▇▇▇ ▇▇▇▇▇
Attention: ___________________
Re:DISTRIBUTION AGREEMENT DATED AS OF APRIL 18, 2000 (THE DISTRIBUTION
AGREEMENT")
The undersigned agrees to purchase your Medium-Term Notes, Series A
having the following terms:
Specified Currency:
Principal Amount:
Original Issue Date:
Settlement Date, Time and Place:
Maturity Date:
Purchase Price: [ ]% of Principal Amount, plus accrued
interest, if any, from Settlement Date
Price to Public: [ ]% of Principal Amount, plus accrued
interest, if any, from Settlement Date
Redemption Date(s): [ ], commencing
Initial Redemption Price:
Annual Redemption Price Decrease:
Repayment Date(s):
Repayment Price:
Initial Accrual Period OID:
Original Yield to Maturity
27
(For Fixed Rate Notes)
Interest Rate:
Applicability of modified payment upon
acceleration:
If yes, state issue price:
Amortization Schedule:
]
[(For Floating Rate Notes)
Initial Interest Rate:
Interest Rate Basis (Commercial paper,
LIBOR, Treasury, Prime, Federal Funds,
_________):
Index Maturity (30, 60, 90 days,
6 months, 1 year, other):
Interest Reset Period (monthly,
quarterly, semiannually, annually):
Interest payment Period (monthly,
quarterly, semiannually, annually):
Spread:
Spread Multiplier: Points (+/-)
Maximum Interest Rate: %
Minimum Interest Rate: %
%
Initial Interest Reset Date:
Interest Reset Dates:
Interest Determination Dates:
Interest Payment Dates:
Calculation Agent: ]
Other terms of Securities:
Provisions relating to underwriter
default; if any:
The provisions of Sections 1,2 (b), and 2 (d) and 4 through
8,10,11,12,13 and 15 of the Distribution Agreement and the related definitions
are incorporated by reference herein and shall be deemed to have the same force
and effect as if set forth in full herein.
This Agreement is subject to termination in our absolute discretion on
the terms incorporated by referenced herein. If this Agreement is so terminated,
the provisions set forth in the last sentence of Section 8 (a) of the
Distribution Agreement shall survive for the purpose of this Agreement.
28
[The certificate referred to in Section 4(k) of the Distribution
Agreement, the opinions referred to in Section 4(i) of the Distribution
Agreement and the accountants' letter referred to in Section 4(j) of the
Distribution Agreement will be required.]
[Agent]
By:______________________________
Name:
Title:
Accepted:
THE SERVICEMASTER COMPANY
By:---------------------------------
Name:
Title:
29
EXHIBIT B
ADMINISTRATIVE PROCEDURES
The Medium-Term Notes, Series A, due more than nine months from their date
of issue (the "Notes") are to be offered on a continuing basis by The
ServiceMaster Company ("Issuer"). ▇.▇. ▇▇▇▇▇▇ Securities Inc., ▇▇▇▇▇▇▇, ▇▇▇▇▇ &
Co., Banc of America Securities LLC, and Banc One Capital Markets, Inc., as
agents (individually, an "Agent" and collectively, the "Agents") have agreed to
use their reasonable best efforts to solicit purchases of the Notes. The Issuer
reserves the right to sell Notes directly or indirectly on its own behalf to
investors (other than broker-dealers). An Agent will not be obligated to, but
may from time to time, purchase Notes as principal for its own account. The
Notes are being sold pursuant to a Distribution Agreement dated April 18, 2000
(the "Agency Agreement"), between the Issuer and the Agents, and will be issued
pursuant to an indenture dated as of November 18, 1999 (the "Indenture"),
between the Company and ▇▇▇▇▇▇ Trust and Savings Bank, as trustee (the
"Trustee"). Capitalized terms used herein and not defined herein shall have the
meanings ascribed to such terms in the Agency Agreement. The Notes have been
registered under the Securities Act of 1933 (the "Act").
Each Note will be represented by either a Global Security (as defined in
the Indenture), such Global Security, for purposes hereof either a global note
(a "Global Note") or a master note (a "Master Note"), registered in the name of
a nominee of The Depository Trust Company, as Depositary ("DTC") (a "Book-Entry
Note"), or a certificate issued in definitive form (a "Certificated Note"). It
is currently contemplated that both Notes that bear interest at a fixed rate (a
"Fixed Rate Note") and Notes that bear interest at a variable rate (a "Floating
Rate Note") and that are denominated and payable in U.S. dollars may be issued
as Book-Entry Notes.
Administrative procedures and specific terms of the offering are explained
below. The Issuer will advise the Agents in writing of those persons handling
administrative responsibilities with whom the Agents are to communicate
regarding offers to purchase Notes and the details of their delivery.
Administrative procedures may be modified from time to time as reflected in the
applicable Pricing Supplement (as defined below) or elsewhere.
30
PART I: ADMINISTRATIVE PROCEDURES FOR CERTIFICATED NOTES AND GENERALLY
APPLICABLE ADMINISTRATIVE PROCEDURES
ISSUE/
AUTHENTICATION DATE: Each Note shall be dated as of the date of its
authentication by the Trustee. Each Note will also
bear an original issue date (the "Issue Date")
which, with respect to any Note (or portion
thereof), shall mean the date of its original
issuance (i.e., the settlement date) and shall be
specified therein. The issue date will remain the
same for all Notes subsequently issued upon
transfer, exchange or substitution of an original
Note regardless of their dates of authentication.
MATURITIES: Each Note shall mature on a Business Day, selected
by the purchaser and agreed to by the Issuer, which
shall be nine months or more from the date of issue.
PRICE TO PUBLIC: Each Note shall be issued at 100% of principal
amount unless otherwise specified in a supplement to
the Prospectus (a "Pricing Supplement").
DENOMINATIONS: The denominations of the Notes shall be $1,000 and
integral multiples of $1,000 in excess thereof. (Any
Notes denominated other than in U.S. dollars will be
issuable in denominations as set forth in such
Notes.)
REGISTRATION: Notes shall be issued only in fully registered form.
MINIMUM PURCHASE: The minimum aggregate amount of Notes denominated
and payable in U.S. dollars which may be offered to
any purchaser will be $1,000.
INTEREST: Each Note shall bear interest in accordance with its
terms, as described in the Prospectus Supplement (as
defined in the Agency Agreement), as supplemented by
the applicable Pricing Supplement.
CALCULATION OF INTEREST: Interest on Fixed Rate Notes and interest rates on
Floating Rate Notes will be determined as set forth
in the form of Notes. With respect to Floating Rate
Notes, the Calculation Agent shall determine the
interest rate for each Interest Reset Date and
communicate such interest rate to the Issuer, and
the Issuer will promptly notify the Trustee and the
Paying Agent of each such determination.
31
PAYMENTS OF INTEREST
AND PRINCIPAL: All interest payments (excluding interest payments
made at maturity) will be made by check mailed to
the person entitled thereto; provided, however, that
if a holder of one or more Notes of like tenor and
terms with an aggregate principal amount equal to or
greater than U.S. $10,000,000 or such lesser amount
in the discretion of the Company (or the equivalent
thereof in foreign currencies or currency units)
shall designate in writing to the Paying Agent at
its corporate trust office in The City of New York
on or prior to the Regular Record Date relating to
the Interest Payment Date an appropriate account
with a bank, the Paying Agent will, subject to
applicable laws and regulations and until it
receives notice to the contrary, make such payment
and all succeeding payments to such person by wire
transfer to the designated account. If a payment
cannot be made by wire transfer because the
information received by the Paying Agent is
incomplete, a notice will be mailed to the holder at
its registered address requesting such information.
Upon presentation of the relevant Note, the Trustee
(or any duly appointed Paying Agent) will pay in
immediately available funds the principal amount of
such Note at maturity and accrued interest, if any,
due at maturity; provided that the Note is presented
to the Trustee (or any such Paying Agent) to make
payments in accordance with its normal procedures.
The Issuer will provide the Trustee (and any such
Paying Agent) with funds available for such purpose.
Notes presented to the Trustee at maturity for
payment will be canceled and destroyed by the
Trustee and a certificate of destruction will be
delivered to the Issuer. On the fifth Business Day
(as defined below) immediately preceding each
interest payment date, the Trustee will furnish to
the Issuer a statement showing the total amount of
the interest payments to be made on such interest
payment date. The Trustee will provide monthly to
the Issuer a list of the principal and interest to
be paid on Notes maturing in the next succeeding six
months. The Trustee will assume responsibility for
withholding taxes on interest paid as required by
law.
32
ACCEPTANCE OF OFFERS: Agent will promptly advise the Issuer of each
reasonable offer to purchase Notes received by it,
other than those rejected by the Agent. The Agent
may, in its discretion reasonably exercised, without
notice to the Issuer, reject any offer received by
it, in whole or in part. The Issuer will have the
sole right to accept offers to purchase Notes and
may reject any such offer, in whole or in part. If
the Issuer rejects an offer, the Issuer will
promptly notify the applicable Agent.
SETTLEMENT: All offers accepted by the Issuer will be settled on
the third Business Day next succeeding the date of
acceptance unless otherwise agreed by any purchaser,
the applicable Agent and the Issuer. The settlement
date shall be specified upon receipt of an offer.
Prior to 3:00 p.m., New York City time, on the
business day prior to the settlement date, the
Issuer will instruct the Trustee to authenticate and
deliver the Notes pursuant to the terms communicated
by the Presenting Agent (as defined below) pursuant
to the next succeeding section no later than 2:15
p.m., New York City time, on that day.
DETAILS FOR SETTLEMENT: For each offer accepted by the Issuer, the Agent who
presented the offer (the "PRESENTING AGENT") shall
communicate to the Issuer, Attention: Treasurer
(Fax: (▇▇▇) ▇▇▇-▇▇▇▇) who will provide a copy to the
Trustee, Attention: ▇▇▇▇▇▇▇ ▇▇▇▇▇▇, ▇▇▇▇▇▇ Trust and
Savings Bank (Fax: (▇▇▇) ▇▇▇-▇▇▇▇) by facsimile
transmission or other acceptable means the following
information (the "PURCHASE INFORMATION"):
1. Exact name in which the Note or Notes are to be
registered ("REGISTERED OWNER").
2. Exact address of registered owner.
3. Taxpayer identification number of registered
owner.
4. Principal amount of each Note to be delivered to
the registered owner.
5. Specified Currency and, if other than U.S.
dollar, denominations.
6. In the case of a Fixed Rate Note, the interest
rate or, in the case of a Floating Rate Note, the
interest rate formula, the Initial Interest Rate
(if known at such
33
time), Index Maturity, Interest Reset Period,
Interest Reset Dates, Spread or Spread Multiplier (if
any), minimum interest rate (if any) and maximum
interest rate (if any).
7. Interest Payment Period and Interest Payment
Dates.
8. Maturity Date of Notes.
9. Issue Price of Notes.
10. Settlement date for Notes.
11. Presenting Agent's commission (to be paid in the
form of a discount from the proceeds remitted to
the Issuer upon settlement).
12. Redemption provisions, if any.
13. Repayment provisions, if any.
14. Original issue discount provisions, if any.
15. In the case of Currency Indexed Notes, the
above-listed information, as applicable and the
Base Exchange Rate(s), Base Interest Rate and
Indexed Currencies.
16. In the case of Dual Currency Notes, the
above-listed information, as applicable, and the
Optional Payment Currency, Designated Exchange
Rate and Option Election Dates.
The issue date of, and the settlement date for, Notes
will be the same. Before accepting any offer to
purchase Notes to be settled in less than three days,
the Issuer shall verify that the Trustee will have
adequate time to prepare and authenticate the Notes.
Prior to preparing the Notes for delivery, the Trustee
will confirm the Purchase Information by telephone
with the Presenting Agent and the Issuer.
34
CONFIRMATION: For each accepted offer, the Presenting Agent will
issue a confirmation, in writing, telephonically or
through any other commonly used method of
communication to the purchaser and a confirmation to
the Issuer, Attention: Treasurer (Fax: (630)
271-5604).
NOTE DELIVERIES AND
CASH PAYMENT: Upon the receipt of appropriate
documentation and instructions from the Issuer and
verification thereof, the Trustee will cause the
Notes to be prepared and authenticated and hold the
Notes for delivery against payment.
The Trustee will deliver the Notes, in accordance
with instructions from the Issuer, to the Presenting
Agent, as the Issuer's agent, for the benefit of the
purchaser only against payment in immediately
available funds in an amount equal to the face
amount of the Notes less the Presenting Agent's
commission plus any premium or less any discount;
PROVIDED, HOWEVER, that the Trustee may deliver
Notes to the Presenting Agent against receipt
therefor and, later the same day, receipt of such
funds in such amount. Upon receipt of such payment,
the Trustee shall pay promptly an amount equal
thereto to the Issuer in immediately available funds
by wire transfer to the account of the Issuer
maintained at Bank One, N.A., 1 Bank ▇▇▇ ▇▇▇▇▇,
▇▇▇▇▇▇▇, ▇▇▇▇▇▇▇▇ ▇▇▇▇▇, (▇▇▇) ▇▇▇-▇▇▇▇, ABA Number
071000013, Account Number 51-24093.
The Presenting Agent, as the Issuer's agent, will
deliver the Notes (with the written confirmation
provided for above) to the purchaser thereof against
payment by such purchaser in immediately available
funds. Delivery of any confirmation or Note will be
made in compliance with "Delivery of Prospectus"
below.
FAILS: In the event that a purchaser shall fail to accept
delivery of and make payment for a Note on the
settlement date, the Presenting Agent will notify
the Trustee and the Issuer, by telephone, confirmed
in writing. If the Note has been delivered to the
Presenting Agent, as the Issuer's agent, the
Presenting Agent shall return such Note to the
Trustee. If funds have been advanced for the
purchase of such Note, the Trustee will, immediately
upon receipt of such Note contact the Issuer (to the
attention of Treasurer (Fax:(630)
35
271-5604) advising the Issuer of such failure. At
such time, the Issuer will refund the payment
previously made by the Presenting Agent in
immediately available funds. Such payments will be
made on the settlement date, if possible, and in any
event not later than the business day following the
settlement date. If such failure shall have occurred
for any reason other than the failure of the
Presenting Agent to provide the Purchase Information
to the Issuer or to provide a confirmation to the
purchaser, the Issuer will reimburse the Presenting
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 Issuer.
Immediately upon receipt of the Note in respect of
which the failure occurred, the Trustee will cause
the Security Registrar to make appropriate entries
to reflect the fact that the Note was never issued
and will destroy the Note.
PROCEDURE FOR
RATE CHANGES: The Issuer and the Agent will discuss from time to
time the price of, and the rates to be borne by, the
Notes that may be sold as a result of the
solicitation of offers by the Agent. Once the Agent
has recorded any indication of interest in Notes
upon certain terms, and communicated with the
Issuer, if the Issuer plans to accept an offer to
purchase Notes upon such terms, it will prepare a
Pricing Supplement to the Prospectus, as then
amended or supplemented, reflecting the terms of
such Notes and will arrange to transmit such Pricing
Supplement to the Commission for filing in
accordance with and within the time prescribed by
the applicable paragraph of Rule 424(b) under the
Act. The Issuer will supply at least two copies of
the Prospectus as then amended or supplemented, and
bearing such Pricing Supplement, to the Presenting
Agent. No settlements with respect to Notes upon
such terms may occur prior to such transmitting and
the Agent will not, prior to such transmitting, mail
confirmations to customers who have offered to
purchase Notes upon such terms. After such
transmitting, sales, mailing of confirmations and
settlements may occur with respect to Notes upon
such terms, subject to the provisions of "Delivery
of Prospectus" below.
36
Outdated Pricing Supplements and copies of the
Prospectus to which they are attached (other than
those retained for files), will be destroyed.
SUSPENSION OF SOLICITATION;
AMENDMENT OR
SUPPLEMENT: As provided in the Agency Agreement, the Issuer may
suspend solicitation of purchases at any time and,
upon receipt of notice from the Issuer, the Agents
will, as promptly as practicable, but in no event
later than one business day following such notice,
suspend solicitation until such time as the Issuer
has advised them that solicitation of purchases may
be resumed.
If the Agents receive the notice from the Issuer
contemplated by Section 2(a) of the Agency
Agreement, they will promptly suspend solicitation
and will only resume solicitation as provided in the
Agency Agreement. If the Issuer decides to amend or
supplement the Registration Statement or the
Prospectus relating to the Notes, it will promptly
advise the Agents and will furnish each Agent with
the proposed amendment or supplement in accordance
with the terms of the Agency Agreement. The Issuer
will promptly file or mail to the Commission for
filing such amendment or supplement, provide the
Agents with copies of any such amendment or
supplement, confirm to the Agents that such
amendment or supplement has been filed with the
Commission and advise the Agents that solicitation
may be resumed. Any such suspension shall not affect
the Issuer's obligations under the Agency Agreement;
and in the event that at the time the Issuer
suspends solicitation of purchases there shall be
any offers already accepted by the Issuer
outstanding for settlement, the Issuer will have the
sole responsibility for fulfilling such obligations;
the applicable Agent will make reasonable efforts to
assist the Issuer to fulfill such obligations, but
the applicable Agent will not be obligated to
fulfill such obligations. The Issuer will in
addition promptly advise the applicable Agent and
the Trustee if such offers are not to be settled and
if copies of the Prospectus as in effect at the time
of the suspension may not be delivered in connection
with the settlement of such offers.
DELIVERY OF PROSPECTUS: A copy of the Prospectus, as most recently amended
or supplemented on the date of delivery thereof
(except as provided below), must be delivered to a
purchaser prior to or together with the earlier of
delivery of (i) the written
37
confirmation provided for above, and (ii) any Note
purchased by such purchaser at the following
address: if to ▇.▇. ▇▇▇▇▇▇ Securities Inc., to ▇▇
▇▇▇▇ ▇▇▇▇▇▇, ▇▇▇ ▇▇▇▇, ▇.▇. ▇▇▇▇▇, Telecopy Number
(▇▇▇) ▇▇▇-▇▇▇▇, Attention: Transaction Execution
Group; if to ▇▇▇▇▇▇▇, Sachs & Co., to ▇▇ ▇▇▇▇▇
▇▇▇▇▇▇, ▇▇▇ ▇▇▇▇, ▇▇▇ ▇▇▇▇ ▇▇▇▇▇, Telecopy Number
(▇▇▇) ▇▇▇-▇▇▇▇, Attention: Medium Term Note Trading;
if to Banc of America Securities LLC, to ▇▇▇ ▇▇▇▇▇
▇▇▇▇▇ ▇▇▇▇▇▇, ▇▇▇ ▇▇▇▇▇, ▇▇▇▇▇▇▇▇▇, ▇▇▇▇▇ ▇▇▇▇▇▇▇▇
▇▇▇▇▇, Telecopy Number (▇▇▇) ▇▇▇-▇▇▇▇, Attention:
▇▇▇▇ ▇▇▇▇▇▇▇▇▇; and if to Banc One Capital Markets,
Inc., to 1 Bank ▇▇▇ ▇▇▇▇▇, ▇▇▇▇▇ ▇▇▇-▇▇▇▇, ▇▇▇▇▇▇▇,
▇▇▇▇▇▇▇▇ ▇▇▇▇▇, Telecopy Number (▇▇▇) ▇▇▇-▇▇▇▇,
Attention: ▇▇▇▇▇▇ ▇. ▇▇▇▇▇▇. The Issuer shall ensure
that the Presenting Agent receives copies of the
Prospectus and each amendment or supplement thereto
(including appropriate Pricing Supplements) in such
quantities and within such time limits as will
enable the Presenting Agent to deliver such
confirmation or Note to a purchaser as contemplated
by these procedures and in compliance with the
preceding sentence. If, since the date of acceptance
of a purchaser's offer, the Prospectus shall have
been supplemented solely to reflect any sale of
Notes on terms different from those agreed to
between the Issuer and such purchaser or a change in
posted rates not applicable to such purchaser, such
purchaser shall not receive the Prospectus as
supplemented by such new supplement, but shall
receive the Prospectus as supplemented to reflect
the terms of the Notes being purchased by such
purchaser and otherwise as most recently amended or
supplemented on the date of delivery of the
Prospectus.
AUTHENTICITY OF SIGNATURES: The Issuer will cause the Trustee to furnish the
Agents from time to time with the specimen
signatures of each of the Trustee's officers,
employees or agents who have been authorized by the
Trustee to authenticate Notes, but the Agents will
have no obligation or liability to the Issuer or the
Trustee in respect of the authenticity of the
signature of any officer, employee or agent of the
Issuer or the Trustee on any Note.
ADVERTISING COST: The Issuer will determine with the Agents the amount
of advertising that may be appropriate in offering
the Notes.
38
BUSINESS DAY: "BUSINESS DAY" means any day (other than a Saturday
or Sunday) on which banking institutions in The City
of New York are open for business (and, (i) with
respect to LIBOR Notes which is also a day on which
dealings in deposits in U.S. dollars are transacted
in the London interbank market, and (ii) with
respect to Notes denominated in a Specified Currency
other than U.S. dollars, on which banking
institutions in the principal financial center of
the country of the Specified Currency are open for
business).
PART II: ADMINISTRATIVE PROCEDURES FOR GLOBAL NOTE METHOD OF BOOK-ENTRY NOTES
The following explains the administrative procedures for the Global
Note method of the DTC book-entry system. Any reference to "Book-Entry Notes" in
this Part II refers to the Global Note method (for a discussion of the Master
Note method of the DTC book-entry system, see Part III below). Certain generally
applicable administrative procedures are set forth in Part I above (See
"Issue/Authentication Date", "Price to Public", "Minimum Purchase",
"Authenticity of Signatures", "Advertising Cost", and "Business Day"). In
connection with the qualification of the Book-Entry Notes for eligibility in the
book-entry system maintained by DTC, the Trustee will perform the custodial,
document control and administrative functions described below, in accordance
with its respective obligations under a Letter of Representations (the "LETTER")
from the Issuer and the Trustee to DTC dated as of the date hereof, and a
Medium-Term Note Certificate Agreement between the Trustee and DTC and its
obligations as a participant in DTC, including DTC's Same-Day Funds Settlement
System ("SDFS"). Both Fixed and Floating Rate Notes denominated and payable in
U.S. dollars may be issued in book-entry form. Single and Multi-Indexed Notes
may also be issued in book-entry form.
ISSUANCE: On any date of settlement (as defined under
"Settlement" below) for one or more Book-Entry
Notes, the Issuer will issue a single global
security in fully registered form without coupons (a
"Global Note") representing up to $300,000,000
principal amount of all such Notes that have the
same Stated Maturity, redemption provisions, if any,
repayment provisions, if any, Interest Payment
Dates, Original Issue Date, original issue discount
provisions, if any, and, in the case of Fixed Rate
Notes, interest rate, or in the case of Floating
Rate Notes, interest rate formula, initial interest
rate, Index Maturity, Interest Reset Period,
Interest Reset Dates, Spread or Spread Multiplier
(if any), minimum interest rate (if any) and maximum
interest rate (if any) and, in the case of Fixed
Rate Notes or Floating Rate Notes that are also
Currency Indexed Notes, Specified Currency, Indexed
Currency, Face Amount and Base Exchange Rate and the
Base Interest Rate, if any,
39
or that are also other Indexed Notes, the same terms
(all of the foregoing are collectively referred to
as the "Terms"). Each Global Note will be dated and
issued as of the date of its authentication by the
Trustee. Each Global Note will bear an "Issue Date",
which will be (i) with respect to an original Global
Note (or any portion thereof), its original issue
date, and (ii) following a consolidation of Global
Notes, the most recent Interest Payment Date to
which interest has been paid or duly provided for on
the predecessor Global Notes, regardless of the date
of authentication of such subsequently issued Global
Note. Each Book-Entry Note will be deemed to have
been dated and issued as of the settlement date,
which date shall be the Original Issue Date. No
Global Note will represent any Certificated Note.
IDENTIFICATION
NUMBERS: The Issuer has arranged with the CUSIP Service
Bureau of Standard & Poor's Corporation (the "CUSIP
Service Bureau") for the reservation of a series of
CUSIP numbers consisting of approximately 900 CUSIP
numbers relating to Book-Entry Notes. The Trustee,
the Issuer and DTC have obtained from the CUSIP
Service Bureau a written list of such reserved CUSIP
numbers. The Trustee will assign CUSIP numbers to
Global Notes as described below under Settlement
Procedure "B". DTC will notify the CUSIP Service
Bureau periodically of the CUSIP numbers that the
Trustee has assigned to Global Notes. The Trustee
will notify the Issuer at any time when fewer than
100 of the reserved CUSIP numbers remain unassigned
to Global Notes, and, if it deems necessary, the
Issuer will reserve additional CUSIP numbers for
assignment to Global Notes representing Book-Entry
Notes. Upon obtaining such additional CUSIP numbers,
the Issuer shall deliver a list of such additional
CUSIP numbers to the Trustee and DTC.
REGISTRATION: Each Global Note will be issued only in fully
registered form without coupons. Each Global Note
will be registered in the name of Cede & Co., as
nominee for DTC, on the Securities Register
maintained under the Indenture. The beneficial owner
of a Book-Entry Note (or one or more indirect
participants in DTC designated by such owner) will
designate one or more participants in DTC (with
respect to such Note, the "Participants") to act as
agent or agents for such owner in connection with
the book-entry system
40
maintained by DTC, and DTC will record in book-entry
form, in accordance with instructions provided by
such Participants, a credit balance with respect to
such Note in the account of such Participants. The
ownership interest of such beneficial owner in such
Note will be recorded through the records of such
Participants or through the separate records of such
Participants and one or more indirect participants
in DTC.
TRANSFERS: Transfers of a Book-Entry Note will be accomplished
by book entries made by DTC and, in turn, by
Participants (and, in certain cases, one or more
indirect participants in DTC) acting on behalf of
beneficial transferors and transferees of such Note.
EXCHANGES: The Trustee may deliver to DTC and the CUSIP Service
Bureau at any time a written notice of consolidation
(a copy of which shall be attached to the Global
Note resulting from such consolidation) specifying
(i) the CUSIP numbers set forth on two or more
outstanding Global Notes that represent Book-Entry
Notes having the same Terms and for which interest
has been paid to the same date, (ii) a date,
occurring at least thirty days after such written
notice is delivered and at least thirty days before
the next Interest Payment Date for such Book-Entry
Notes, on which such Global Notes shall be exchanged
for a single replacement Global Note and (iii) a new
CUSIP number to be assigned to such replacement
Global Note. Upon receipt of such a notice, DTC will
send to its Participants (including the Trustee) a
written reorganization notice to the effect that
such exchange will occur on such date. Prior to the
specified exchange date, the Trustee will deliver to
the CUSIP Service Bureau a written notice setting
forth such exchange date and the new CUSIP number
and stating that, as of such exchange date, the
CUSIP numbers of the Global Notes to be exchanged
will no longer be valid. On the specified exchange
date, the Trustee will exchange such Global Notes
for a single Global Note bearing the new CUSIP
number and a new Original Issue Date and the CUSIP
numbers of the exchanged Global Notes will, in
accordance with CUSIP Service Bureau procedures, be
canceled and not immediately reassigned.
Notwithstanding the foregoing, if the Global Notes
to be exchanged exceed $300,000,000 in aggregate
principal amount, one Global Note will be
authenticated and issued to represent each
$300,000,000 of principal amount of the exchanged
Global Notes and an
41
additional Global Note will be authenticated and
issued to represent any remaining principal amount
of such Global Notes (see "Denominations"below).
MATURITIES: Each Book-Entry Note will mature on a Business Day
nine months or more from the settlement date for
such Note.
NOTICE OF
REPAYMENT TERMS: With respect to each Book-Entry Note that is
repayable at the option of the Holder the Trustee
will furnish DTC on the settlement date pertaining
to such Book-Entry Note a notice setting forth the
terms of such repayment option. Such terms shall
include the start date and end dates of the first
exercise period, the purchase date following such
exercise period, the frequency that such exercise
periods occur (i.e., quarterly, semiannually,
annually, etc.) and if the repayment option expires
before maturity, the same information (except
frequency) concerning the last exercise period. It
is understood that the exercise period shall be at
least 15 calendar days long and that the purchase
date shall be at least 7 calendar days after the
last day of the exercise period.
REDEMPTION AND
REPAYMENT: The Trustee will comply with the terms of the Letter
with regard to redemptions and repayments of the
Notes. If a Global Note is to be redeemed or repaid
in part, the Trustee will exchange such Global Note
for two Global Notes, one of which shall represent
the portion of the Global Note being redeemed or
repaid and shall be canceled immediately after
issuance and the other of which shall represent the
remaining portion of such Global Note and shall bear
the CUSIP number of the surrendered Global Note.
DENOMINATIONS: Book-Entry Notes will be issued in principal amounts
of $1,000 or any amount in excess thereof that is an
integral multiple of $1,000. Global Notes will be
denominated in principal amounts not in excess of
$300,000,000. If one or more Book-Entry Notes having
an aggregate principal amount in excess of
$300,000,000 would, but not for the preceding
sentence, be represented by a single Global Note,
then one Global Note will be issued to represent
each $300,000,000 principal amount of such
Book-Entry Note or Notes and an additional Global
Note will be issued to represent any remaining
principal
42
amount of such Book-Entry Note or Notes. In such a
case, each of the Global Notes representing such
Book-Entry Note or Notes shall be assigned the same
CUSIP number.
INTEREST: GENERAL. Interest on each Book-Entry Note will begin
to accrue from the Original Issue Date of the Global
Note representing such Note or from the most recent
date to which interest has been paid, as the case
may be, in accordance with the terms of the Note, as
described in the Prospectus Supplement (as defined
in the Agency Agreement), as supplemented by the
applicable Pricing Supplement. Standard & Poor's
Corporation will use the information received in the
pending deposit message described under the
Settlement Procedure "C" below in order to include
the amount of any interest payable and certain other
information regarding the related Global Note in the
appropriate weekly bond report published by Standard
& Poor's Corporation.
NOTICE OF INTEREST PAYMENT AND REGULAR RECORD DATES.
On the first Business Day of January, April, July
and October of each year, the Trustee will deliver
to the Issuer and DTC a written list of Regular
Record Dates and Interest Payment Dates that will
occur with respect to Book-Entry Notes during the
six-month period beginning on such first Business
Day. Promptly after each Interest Determination Date
or Calculation Date, as applicable (as defined in or
pursuant to the applicable Note) for Floating Rate
Notes, the Issuer, upon receiving notice thereof,
will notify Standard & Poor's Corporation of the
interest rate determined on such Interest
Determination Date or Calculation Date, as
applicable.
CALCULATION OF
INTEREST: Interest on Fixed Rate Book-Entry Notes (including
interest for partial periods) and interest rates on
Floating Rate Book-Entry Notes will be determined as
set forth in the form of Notes. With respect to
Floating Rate Book-Entry Notes, the Calculation
Agent shall determine the interest for each Interest
Reset Date and communicate such interest rate to the
Issuer and the Issuer will promptly notify the
Trustee and the Paying Agent of each such
determination.
43
PAYMENTS OF PRINCIPAL
AND INTEREST: PAYMENTS OF INTEREST ONLY. Promptly after each
Regular Record Date, the Trustee will deliver to the
Issuer and DTC a written notice specifying by CUSIP
number the amount of interest to be paid on each
Global Note on the following Interest Payment Date
(other than an Interest Payment Date coinciding with
maturity) and the total of such amounts. The Issuer
will confirm with the Trustee the amount payable on
each Global Note on such Interest Payment Date. DTC
will confirm the amount payable on each Global Note
on such Interest Payment Date by reference to the
daily or weekly bond reports published by Standard &
Poor's Corporation. The Issuer will pay to the
Trustee, as paying agent, the total amount of
interest due on such Interest Payment Date (other
than at maturity), and the Trustee will pay such
amount to DTC at the times and in the manner set
forth below under "Manner of Payment".
PAYMENTS AT MATURITY. On or about the first Business
Day of each month, the Trustee will deliver to the
Issuer and DTC a written list of principal and
interest to be paid on each Global Note maturing
either at Stated Maturity or on a Redemption or
Repayment Date in the following month. The Issuer,
the Trustee and DTC will confirm the amounts of such
principal and interest payments with respect to each
such Global Note on or about the fifth Business Day
preceding the maturity of such Global Note. The
Issuer will pay to the Trustee, as paying agent, the
principal amount of such Global Note, together with
interest due at such maturity. The Trustee will pay
such amounts to DTC at the times and in the manner
set forth below under "Manner of Payment". Promptly
after payment to DTC of the principal and interest
due at the maturity of such Global Note, the Trustee
will cancel and destroy such Global Note in
accordance with the terms of the Indenture and
deliver a certificate of destruction to the Issuer.
MANNER OF PAYMENT. The total amount of any principal
and interest due on Global Notes on any Interest
Payment Date or at maturity shall be paid by the
Issuer to the Trustee in funds available for use by
the Trustee as of 9:30 A.M. (New York City time), or
as soon as practicable thereafter on such date. The
Issuer will confirm instructions regarding payment
in writing to the Trustee. Prior
44
to 10:00 A.M. (New York City time) on each Maturity
Date or as soon as possible thereafter, following
receipt of such funds from the Issuer, the Trustee
will pay by separate wire transfer (using Fedwire
message entry instructions in a form previously
specified by DTC) to an account at the Federal
Reserve Bank of New York previously specified by
DTC, in funds available for immediate use by DTC,
each payment of principal (together with interest
thereon) due on Global Notes on any Maturity Date.
On each Interest Payment Date, interest payments
shall be made to DTC in same-day funds in accordance
with existing arrangements between the Trustee and
DTC. Thereafter, on each such date, DTC will pay, in
accordance with its SDFS operating procedures then
in effect, such amounts in funds available for
immediate use to the respective Participants in
whose names the Book-Entry Notes represented by such
Global Notes are recorded in the book-entry system
maintained by DTC. Neither the Issuer nor the
Trustee shall have any direct responsibility or
liability for the payment by DTC to such
Participants of the principal of and interest on the
Book-Entry Notes.
WITHHOLDING TAXES. The amount of any taxes required
under applicable law to be withheld from any
interest payment on a Book-Entry Note will be
determined and withheld by the Participant, indirect
participant in DTC or other Person responsible for
forwarding payments and materials directly to the
beneficial owner of such Note.
ACCEPTANCE OF
OFFERS: Each Agent will promptly advise the Issuer of each
reasonable offer to purchase Notes received by it,
other than those rejected by such Agent. The Agent
may, in its discretion reasonably exercised, without
notice to the Issuer, reject any offer received by
it, in whole or in part. The Issuer will have the
sole right to accept offers to purchase Notes and
may reject any such offer, in whole or in part. If
the Issuer rejects an offer, the Issuer will
promptly notify the applicable Agent.
SETTLEMENT: The receipt by the Issuer of immediately available
funds in payment for a Book-Entry Note and the
authentication and issuance of the Global Note or
Global Notes representing such Note shall constitute
"settlement" with respect to such Note. All orders
accepted by the Issuer will be settled on the third
Business Day from the date of the sale
45
pursuant to the timetable for settlement set forth
below unless the Issuer and the purchaser agree to
settlement on another day which shall be no earlier
than the next Business Day.
SETTLEMENT
PROCEDURES: Settlement Procedures with regard to each Book-Entry
Note sold by the Issuer through an Agent as agent,
shall be as follows:
A. For each offer accepted by the Issuer, the
Presenting Agent shall communicate to the Issuer,
Attention: Treasurer (Fax: (▇▇▇) ▇▇▇-▇▇▇▇) who will
provide a copy to the Trustee, Attention: ▇▇▇▇▇▇▇
▇▇▇▇▇▇, ▇▇▇▇▇▇ Trust and Savings Bank (Fax: (312)
461-3525) by facsimile transmission or other
acceptable means, the information set forth below:
1. Principal amount.
2. Maturity Date of Notes.
3. In the case of a Fixed Rate Book-Entry
Note, the interest rate or, in the case
of a Floating Rate Book-Entry Note, the
interest rate formula, the Initial
Interest Rate (if known at such time),
Index Maturity, Interest Reset Period,
Interest Reset Dates, Spread or Spread
Multiplier (if any), minimum interest
rate (if any) and maximum interest rate
(if any).
4. Interest Payment Period and Interest
Payment Dates.
5. Redemption provisions, if any.
6. Repayment provisions, if any.
7. Settlement date (Original Issue Date).
8. Price to public of the Note (expressed as
a percentage).
9. Agent's commission (to be paid in the
form of a discount from the proceeds
remitted to the Issuer upon settlement).
46
10. Original issue discount provisions, if
any.
11. In the case of Currency Indexed Notes,
the above-listed information, as
applicable, and the Base Exchange
Rate(s), Base Interest Rate and Indexed
Currencies.
12. In the case of Dual Currency Notes, the
above-listed information, as applicable,
and the Optional Payment Currency,
Designated Exchange Rate and Optional
Election Dates.
13. Net proceeds to the Issuer.
B. The Trustee will confirm the information set
forth in Settlement Procedure "A" above by
telephone with the applicable Agent and the
Issuer.
C. The Trustee will assign a CUSIP number to the
Global Note representing such Note and will
telephone the Issuer and advise the Issuer of
such CUSIP number. The Trustee will enter a
pending deposit message through DTC's Participant
Terminal System, providing the following
settlement information to DTC (which shall route
such information to Standard & Poor's
Corporation) and the Presenting Agent:
1. The applicable information set forth in
Settlement Procedure "A".
2. Identification as a Fixed Rate Book-Entry
Note or a Floating Rate Book-Entry Note.
3. Initial Interest Payment Date for such
Note, number of days by which such date
succeeds the related DTC Record Date
(which, in the case of Floating Rate
Notes which reset daily or weekly shall
be the date five calendar days
immediately preceding the applicable
Interest Payment Date and in the case of
all other Notes
47
shall be the Regular Record Date as defined in
the Note), the amount of interest payable on
such Interest Payment Date per $1,000
principal amount of Notes at Maturity,
and amount of interest payable per $1,000
principal amount of Notes in the case of
Fixed Rate Notes.
4. CUSIP number of the Global Note
representing such Note.
5. Whether such Global Note will represent
any other Book-Entry Note (to the extent
known at such time).
D. To the extent the Issuer has not already done so,
the Issuer will deliver to the Trustee a Pricing
Supplement in a form that has been approved by the
Issuer and the applicable Agent. The Issuer will
also deliver to the Trustee a Global Note
representing such Note.
E. The Trustee will complete and authenticate the
Global Note representing such Note.
F. DTC will credit such Note to the Trustee's
participant account at DTC.
G. The Trustee will enter an SDFS deliver order through
DTC's Participant Terminal System instructing DTC to
(i) debit such Note to the Trustee's participant
account and credit such Note to the applicable
Agent's participant account and (ii) debit the
applicable Agent's settlement account and credit the
Trustee's settlement account for an amount equal to
the price of such Note less such Agent's commission.
The entry of such a deliver order shall constitute a
representation and warranty by the Trustee to DTC
that (i) the Global Note representing such
Book-Entry Note has been executed, delivered and
authenticated and (ii) the Trustee is holding such
Global Note pursuant to the relevant Medium-Term
Note Certificate Agreement between the Trustee and
DTC.
48
H. The applicable Agent will enter an SDFS deliver
order through DTC's Participant Terminal System
instructing DTC (i) to debit such Note to such
Agent's participant account and credit such Note to
the participant accounts of the Participants with
respect to such Note and (ii) to debit the
settlement accounts of such Participants and credit
the settlement account of such Agent for an amount
equal to the price of such Note.
I. Transfers of funds in accordance with SDFS deliver
orders described in Settlement Procedures "G" and
"H" will be settled in accordance with SDFS
operating procedures in effect on the settlement
date.
J. The Trustee, upon confirming receipt of such funds
in accordance with Settlement Procedure "G", will
wire transfer to the account of the Issuer
maintained at Bank One, N.A., 1 Bank ▇▇▇ ▇▇▇▇▇,
▇▇▇▇▇▇▇, ▇▇▇▇▇▇▇▇ ▇▇▇▇▇, (▇▇▇) ▇▇▇-▇▇▇▇, ABA Number
071000013, Account Number 51-24093, in funds
available for immediate use, the amount transferred
to the Trustee in accordance with Settlement
Procedure "G".
K. The Agent will confirm the purchase of such Note to
the purchaser either by transmitting to the
Participants with respect to such Note a
confirmation order or orders through DTC's
institutional delivery system or by mailing a
written confirmation to such purchaser.
SETTLEMENT PROCEDURES
TIMETABLE: For orders of Book-Entry Notes solicited by an
Agent, as agent, and accepted by the Issuer for
settlement on the first Business Day after the sale
date, Settlement Procedures "A" through "K" set
forth above shall be completed as soon as possible
but not later than the respective times (New York
City time) set forth below:
49
SETTLEMENT PROCEDURE TIME
A 11:00 a.m. on the sale date
B 12:00 noon on the sale date
C 2:00 p.m. on the sale date
D 3:00 p.m. on the day before
settlement
E 9:00 a.m. on settlement date
F 10:00 a.m. on settlement date
G-H 2:00 p.m. on settlement date
I 4:45 p.m. on settlement date
J-K 5:00 p.m. on settlement date
If a sale is to be settled two Business Days after
the sale date, Settlement Procedures "A", "B" and
"C" shall be completed as soon as practicable but
not later than 11:00 a.m., 12:00 noon and 2:00 p.m.,
as the case may be, on the first Business Day after
the sale date.
If a sale is to be settled more than two Business
Days after the sale date, Settlement Procedure "A"
shall be completed as soon as practicable but no
later than 11:00 a.m. on the first Business Day
after the sale date and Settlement Procedures "B"
and "C" shall be completed as soon as practicable
but no later than 12:00 noon and 2:00 p.m., as the
case may be, on the second Business Day before the
settlement date. If the initial interest rate for a
Floating Rate Book-Entry Note has not been
determined at the time that Settlement Procedure "A"
is completed, Settlement Procedures "B" and "C"
shall be completed as soon as such rate has been
determined but not later than 12:00 noon and 2:00
p.m., respectively, on the Business Day before the
settlement date. Settlement Procedure "I" is subject
to extension in accordance with any extension of
Fedwire closing deadlines and in the other events
specified in the SDFS operating procedures in effect
on the settlement date.
If settlement of a Book-Entry Note is rescheduled or
canceled, the Trustee, upon receipt of notice from
the Issuer, will deliver to DTC, through DTC's
Participant Terminal System, a cancellation message
to such effect by no later than 2:00 p.m. on the
Business Day immediately preceding the scheduled
settlement date.
50
FAILURE TO SETTLE: If the applicable Agent or Trustee fails to enter an
SDFS deliver order with respect to a Book-Entry Note
pursuant to Settlement Procedure "G", the Trustee
may deliver to DTC, through DTC's Participant
Terminal System, as soon as practicable, a
withdrawal message instructing DTC to debit such
Note to the Trustee's participant account. DTC will
process the withdrawal message, provided that the
Trustee's participant account contains a principal
amount of the Global Note representing such Note
that is at least equal to the principal amount to be
debited. If a withdrawal message is processed with
respect to all the Book-Entry Notes represented by a
Global Note, the Trustee will ▇▇▇▇ such Global Note
"canceled", make appropriate entries in its records
and send such canceled Global Note to the Issuer.
The CUSIP number assigned to such Global Note 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 Notes
represented by a Global Note, the Trustee will
exchange such Global Note for two Global Notes, one
of which shall represent such Book-Entry Note or
Notes and shall be canceled immediately after
issuance and the other of which shall represent the
remaining Book-Entry Notes previously represented by
the surrendered Global Note and shall bear the CUSIP
number of the surrendered Global Note.
If the purchase price for any Book-Entry Note is not
timely paid to the Participants with respect to such
Note by the beneficial purchaser thereof (or a
person, including an indirect participant in DTC,
acting on behalf of such purchaser), such
Participants and, in turn, the Presenting Agent may
enter SDFS deliver orders through DTC's Participant
Terminal System reversing the orders entered
pursuant to Settlement Procedures "G" and "H",
respectively. Thereafter, the Trustee will deliver
the withdrawal message and take the applicable
related actions described in the preceding
paragraph. If such failure shall have occurred for
any reason other than the failure of the Presenting
Agent to provide the Purchase Information to the
Issuer or to provide a confirmation to the
purchaser, the Issuer will reimburse the Presenting
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 Issuer.
51
Notwithstanding the foregoing, upon any failure to
settle with respect to a Book-Entry Note, DTC may
take any actions in accordance with its SDFS
operating procedures then in effect. In the event of
a failure to settle with respect to one or more, but
not all, of the Book-Entry Notes to have been
represented by a Global Note, the Trustee will
provide, in accordance with Settlement Procedures
"D" and "E", for the authentication and issuance of
a Global Note representing the other Book-Entry
Notes to have been represented by such Global Note
and will make appropriate entries in its records.
PROCEDURE FOR RATE
CHANGES: The Issuer and the Agents will discuss from time to
time the price of, and the rates to be borne by the
Notes that may be sold as a result of the
solicitation of offers by the Agents. Once an Agent
has recorded any indication of interest in Notes
upon certain terms, and communicated with the
Issuer, if the Issuer plans to accept an offer to
purchase Notes upon such terms, it will prepare a
Pricing Supplement to the Prospectus, as then
amended or supplemented, reflecting the terms of
such Notes and will arrange to transmit such Pricing
Supplement to the Commission for filing in
accordance with and within the time prescribed by
the applicable paragraph of Rule 424(b) under the
Act. The Issuer will supply at least two copies of
the Prospectus as then amended or supplemented, and
bearing such Pricing Supplement, to the Presenting
Agent. No settlements with respect to Notes upon
such terms may occur prior to such transmitting and
the Presenting Agent will not, prior to such
transmitting, mail confirmations to customers who
have, offered to purchase Notes upon such terms.
After such transmitting, sales, mailing of
confirmations and settlements may occur with respect
to Notes upon such terms, subject to the provisions
of "Delivery of Prospectus" below.
Outdated Stickers, and copies of the Prospectus to
which they are attached (other than those retained
for files), will be destroyed.
52
SUSPENSION OF SOLICITATION;
AMENDMENT OR
SUPPLEMENT: As provided in the Agency Agreement, the Issuer may
suspend solicitation of purchases at any time, and,
upon receipt of notice from the Issuer, the Agents
will as promptly as practicable, but in no event
later than one Business Day following such notice,
suspend solicitation until such time as the Issuer
has advised them that solicitation of purchases may
be resumed.
If an Agent receives the notice from the Issuer
contemplated by Section 2(a) of the Agency
Agreement, they will promptly suspend solicitation
and will only resume solicitation as provided in the
Agency Agreement. If the Issuer decides to amend or
supplement the Registration Statement or the
Prospectus relating to the Notes, it will promptly
advise the Agents and will furnish the Agents with
the proposed amendment or supplement in accordance
with the terms of the Agency Agreement. The Issuer
will promptly file or mail to the Commission for
filing such amendment or supplement, provide the
Agents with copies of any such amendment or
supplement, confirm to the Agents that such
amendment or supplement has been filed with the
Commission and advise the Agents that solicitation
may be resumed. Any such suspension shall not affect
the Issuer's obligations under the Agency Agreement;
and in the event that at the time the Issuer
suspends solicitation of purchases there shall be
any offers already accepted by the Issuer
outstanding for settlement, the Issuer will have the
sole responsibility for fulfilling such obligations;
the applicable Agent will make reasonable efforts to
assist the Issuer to fulfill such obligations, but
the applicable Agent will not be obligated to
fulfill such obligations. The Issuer will in
addition promptly advise the applicable Agent and
the Trustee if such offers are not to be settled and
if copies of the Prospectus as in effect at the time
of the suspension may not be delivered in connection
with the settlement of such offers.
DELIVERY OF PROSPECTUS: A copy of the Prospectus, as most recently amended
or supplemented on the date of delivery thereof
(except as provided below), must be delivered to a
purchaser prior to or together with the earlier of
delivery of (i) the written confirmation provided
for above, and (ii) any Note purchased by such
purchaser at the following
53
address: if to ▇.▇. ▇▇▇▇▇▇ Securities Inc., to ▇▇
▇▇▇▇ ▇▇▇▇▇▇, ▇▇▇ ▇▇▇▇, ▇.▇. ▇▇▇▇▇, Telecopy Number
(▇▇▇) ▇▇▇-▇▇▇▇, Attention: Transaction Execution
Group; if to ▇▇▇▇▇▇▇, ▇▇▇▇▇ & Co., to ▇▇ ▇▇▇▇▇
▇▇▇▇▇▇, ▇▇▇ ▇▇▇▇, ▇▇▇ ▇▇▇▇ ▇▇▇▇▇, Telecopy Number
(▇▇▇) ▇▇▇-▇▇▇▇, Attention: Medium Term Note Trading;
if to Banc of America Securities LLC, to ▇▇▇ ▇▇▇▇▇
▇▇▇▇▇ ▇▇▇▇▇▇, ▇▇▇ ▇▇▇▇▇, ▇▇▇▇▇▇▇▇▇, ▇▇▇▇▇ ▇▇▇▇▇▇▇▇
▇▇▇▇▇, Telecopy Number (▇▇▇) ▇▇▇-▇▇▇▇, Attention:
▇▇▇▇ ▇▇▇▇▇▇▇▇▇; and if to Banc One Capital Markets,
Inc., to 1 Bank ▇▇▇ ▇▇▇▇▇, ▇▇▇▇▇ ▇▇▇-▇▇▇▇, ▇▇▇▇▇▇▇,
▇▇▇▇▇▇▇▇ ▇▇▇▇▇, Telecopy Number (▇▇▇) ▇▇▇-▇▇▇▇,
Attention: ▇▇▇▇▇▇ ▇. ▇▇▇▇▇▇. The Issuer shall ensure
that the Presenting Agent receives copies of the
Prospectus and each amendment or supplement thereto
(including appropriate Pricing Supplements) in such
quantities and within such time limits as will
enable the Presenting Agent to deliver such
confirmation or Note to a purchaser as contemplated
by these procedures and in compliance with the
preceding sentence. If, since the date of acceptance
of a purchaser's offer, the Prospectus shall have
been supplemented solely to reflect any sale of
Notes on terms different from those agreed to
between the Issuer and such purchaser or a change in
posted rates not applicable to such purchaser, such
purchaser shall not receive the Prospectus as
supplemented by such new supplement, but shall
receive the Prospectus as supplemented to reflect
the terms of the Notes being purchased by such
purchaser and otherwise as most recently amended or
supplemented on the date of delivery of the
Prospectus.
PART III: ADMINISTRATIVE PROCEDURES FOR MASTER NOTE METHOD OF BOOK-ENTRY NOTES
The following explains the administrative procedures for the Master
Note method of the DTC book-entry system. Any reference to "Book-Entry Notes" in
this Part III refers to the Master Note method (for a discussion of the Global
Note method of the book-entry system, see Part II above). (Certain generally
applicable administrative procedures are set forth in Part I above See "Issue/
Authentication Date", "Price to Public", "Minimum Purchase", "Authenticity of
Signatures", "Advertising Cost", and "Business Day"). In connection with the
qualification of the Book-Entry Notes for eligibility in the book-entry system
maintained by DTC, the Trustee will perform the custodial, document control and
administrative functions described below, in accordance with its respective
obligations under a Letter of Representations (the "Letter") from the Issuer and
the Trustee to DTC dated as of the date hereof, and a Medium-Term Note
Certificate Agreement between the Trustee and DTC and its
54
obligations as a participant in DTC, including DTC's Same-Day Funds Settlement
System ("SDFS"). Both Fixed and Floating Rate Notes denominated and payable in
U.S. dollars may be issued in book-entry form. Single and Multi-Indexed Notes
may also be issued in book-entry form.
ISSUANCE: On or before any date of settlement (as defined
under "Settlement" below) for one or more Book-Entry
Notes represented by one or more Master Notes, the
Issuer will deliver one or more Pricing Supplements
(with a Prospectus and a Prospectus Supplement
attached thereto unless previously delivered to the
Trustee) to the Trustee identifying each issue of
Book-Entry Notes that have the same Stated Maturity,
redemption provisions, if any, Interest Payment
Dates, Original Issue Date, original issue discount
provisions, if any, and, in the case of Fixed Rate
Notes, interest rate, or, in case of Floating Rate
Notes, interest rate formula, initial interest rate,
Index Maturity, Interest Reset Period, Interest
Reset Dates, Spread or Spread Multiplier (if any),
minimum interest rate (if any) and maximum interest
rate (if any) and, in the case of Fixed Rate Notes
or Floating Rate Notes that are also Currency
Indexed Notes, Specified Currency, Indexed Currency,
Face Amount and Base Exchange Rate and the Base
Interest Rate, if any, or that are also Other
Indexed Notes, the same terms (all of the foregoing
are collectively referred to as the "Terms"). Each
Pricing Supplement shall be accompanied by a letter
from the Issuer (i) advising the Trustee that as of
the date of such letter, the Issuer has issued Notes
pursuant to the Indenture having the Terms specified
in such Pricing Supplement, (ii) confirming that
such Notes are debt obligations of the Issuer
referred to and evidenced by the Master Note
registered in the name of Cede & Co., as nominee for
DTC and (iii) requesting the Trustee to make an
appropriate entry identifying such debt obligations
on the records of the Issuer maintained by the
Trustee. Each Book-Entry Note will be deemed to have
been dated and issued as of the settlement date,
which date shall be the Original Issue Date. No
Master Note will represent any Certificated Note.
IDENTIFICATION
NUMBERS: The Issuer has arranged with the CUSIP Service
Bureau of Standard & Poor's Corporation (the "CUSIP
Service Bureau") for the reservation of a series of
CUSIP numbers, consisting of approximately 900 CUSIP
numbers relating to
55
Book-Entry Notes. The Trustee, the Issuer and DTC
have obtained from the CUSIP Service Bureau a
written list of such reserved CUSIP numbers. The
Trustee will assign CUSIP numbers to each issue of
Book-Entry Notes identified by a Pricing Supplement
as described below under Settlement Procedure "B".
DTC will notify the CUSIP Service Bureau
periodically of the CUSIP numbers that the Trustee
has assigned to each issue of Book-Entry Notes. The
Trustee will notify the Issuer at any time when
fewer than 100 of the reserved CUSIP numbers remain
unassigned to issues of Book-Entry Notes, and, if it
deems necessary, the Issuer will reserve additional
CUSIP numbers for assignment to issues of Book-Entry
Notes. Upon obtaining such additional CUSIP numbers,
the Issuer shall deliver a list of such additional
CUSIP numbers to the Trustee and DTC.
REGISTRATION: The Master Note representing the Book-Entry Notes
will be issued only in fully registered form without
coupons. The Master Note will be registered in the
name of Cede & Co., as nominee for DTC, on the
Securities Register maintained under the Indenture.
The beneficial owner of a Book-Entry Note (or one or
more indirect participants in DTC designated by such
owner) will designate one or more direct
participants in DTC (with respect to such Book-Entry
Note, the "Participants") to act as agent or agents
for such owner in connection with the book-entry
system maintained by DTC, and DTC will record in
book-entry form, in accordance with instructions
provided by such Participants, a credit balance with
respect to such Note in the account of such
Participants. The ownership interest of such
beneficial owner in such Book-Entry Note will be
recorded through the records of such Participants or
through the separate records of such Participants
and one or more indirect participants in DTC.
TRANSFERS: Transfers of a Book-Entry Note will be accomplished
by book entries made by DTC and, in turn, by
Participants (and in certain cases, one or more
indirect participants in DTC) acting on behalf of
beneficial transferors and transferees of such Note.
56
EXCHANGES: The Trustee may deliver to DTC and the CUSIP Service
Bureau at any time a written notice of consolidation
specifying (i) the CUSIP numbers set forth on two or
more Pricing Supplements that identify issues of
Book-Entry Notes having the same Terms and for which
interest has been paid to the same date, (ii) a
date, occurring at least thirty days after such
written notice is delivered and at least thirty days
before the next Interest Payment Date for such
issues of Book-Entry Notes and (iii) a new CUSIP
number to be assigned to such issues of Book-Entry
Notes having the same Terms. Upon receipt of such a
notice, DTC will send to its Participants (including
the Trustee) a written reorganization notice to the
effect that such exchange will occur on such date.
Prior to the specified exchange date, the Trustee
will deliver to the CUSIP Service Bureau a written
notice setting forth such exchange date and the new
CUSIP number and stating that, as of such exchange
date, the CUSIP numbers of the relevant issues of
Book-Entry Notes will no longer be valid. On the
specified exchange date, the CUSIP numbers of the
relevant issues of Book-Entry Notes will, in
accordance with the CUSIP Service Bureau procedures,
be canceled and not immediately reassigned.
MATURITIES: Each issue of Book-Entry Notes will mature on a
Business Day 9 months or more from the settlement
date for such issue of Book Entry Notes.
NOTICE OF
REPAYMENT: With respect to each Book-Entry Note that is
repayable at the option of the Holder the Trustee
will furnish DTC on the settlement date pertaining
to such Book-Entry Note a notice setting forth the
terms of such repayment option. Such terms shall
include the start date and end dates of the first
exercise period, the purchase date following such
exercise period, the frequency that such exercise
periods occur (i.e., quarterly, semiannually,
annually, etc.) and if the repayment option expires
before maturity, the same information (except
frequency) concerning the last exercise period. It
is understood that the exercise period shall be at
least 15 calendar days long and that the purchase
date shall be at least 7 calendar days after the
last day of the exercise period.
57
REDEMPTION AND
REPAYMENT: The Trustee will comply with the terms of the Letter
with regard to redemptions and repayments of the
Notes. If an issue of Book-Entry Notes is to be
redeemed or repaid in part, the Trustee will make
appropriate entries in its records to reflect the
remaining portion of such issue of Book Entry Notes,
which portion shall bear the same CUSIP number as
prior to the redemption or repayment, as the case
may be.
DENOMINATIONS: Book-Entry Notes will be issued in principal amounts
of $1,000 or any amount in excess thereof that is an
integral multiple of $1,000.
INTEREST: GENERAL. Interest on each Book-Entry Note will begin
to accrue from the Original Issue Date of an issue
of Book-Entry Notes or from the most recent date to
which interest has been paid, as the case may be,
and will be calculated and paid in the manner
described in the Prospectus Supplement (as defined
in the Agency Agreement), as supplemented by the
applicable Pricing Supplement. Standard & Poor's
Corporation will use the information received in the
pending deposit message described under Settlement
Procedure "C" below in order to include the amount
of any interest payable and certain other
information regarding the related issue of
Book-Entry Notes in the appropriate weekly bond
report published by Standard & Poor's Corporation.
NOTICE OF INTEREST PAYMENT AND REGULAR RECORD DATES.
On the first Business Day of January, April, July
and October of each year, the Trustee will deliver
to the Issuer and DTC a written list of Regular
Record Dates and Interest Payment Dates that will
occur with respect to Book-Entry Notes during the
six-month period beginning on such first Business
Day. Promptly after each Interest Determination Date
or Calculation Date, as applicable (as set forth in
the Prospectus Supplement, as supplemented by the
applicable Pricing Supplement, and pursuant to the
applicable Note) for Floating Rate Notes, the
Issuer, upon receiving notice thereof, will notify
Standard & Poor's Corporation of the interest rate
determined on such Interest Determination Date or
Calculation Date, as applicable.
58
CALCULATION OF INTEREST: Interest on Fixed Rate Book-Entry Notes (including
interest for partial periods) and interest rates on
Floating Rate Book-Entry Notes will be determined as
set forth in the Prospectus Supplement, as
supplemented by the applicable Pricing Supplement,
and pursuant to the applicable Note. With respect to
Floating Rate Book-Entry Notes, the Calculation
Agent shall determine the interest for each Interest
Reset Date and communicate such interest rate to the
Issuer and the Issuer will promptly notify the
Trustee and the Paying Agent of each such
determination.
PAYMENTS OF PRINCIPAL
AND INTEREST PAYMENTS OF INTEREST ONLY. Promptly after each
Regular Record Date, the Trustee will deliver to the
Issuer and DTC a written notice specifying by CUSIP
number the amount of interest to be paid on each
issue of Book-Entry Notes on the following Interest
Payment Date (other than an Interest Payment Date
coinciding with Maturity) and the total of such
amounts. The Issuer will confirm with the Trustee
the amount payable on each issue of Book-Entry Notes
on such Interest Payment Date. DTC will confirm the
amount payable on each issue of Book-Entry Notes on
such Interest Payment Date by reference to the daily
or weekly bond reports published by Standard &
Poor's Corporation. The Issuer will pay to the
Trustee, as paying agent, the total amount of
interest due on such Interest Payment Date (other
than the maturity), and the Trustee will pay such
amount to DTC at the times and in the manner set
forth below under "Manner of Payment".
PAYMENTS AT MATURITY: On or about the first Business
Day of each month, the Trustee will deliver to the
Issuer and DTC a written list of principal and
interest to be paid on each issue of Book-Entry
Notes represented by a single CUSIP number maturing
either at Stated Maturity or on a Redemption or
Repayment Date in the following month. The Issuer,
the Trustee and DTC will confirm the amounts of such
principal and interest payments with respect to each
such issue of Book-Entry Notes on or about the fifth
Business Day preceding the maturity of such issue of
Book-Entry Notes. The Issuer will pay to the
Trustee, as paying agent, the principal amount of
each issue of Book-Entry Notes identified by a
single CUSIP number, together with interest due at
such maturity. The Trustee will pay such amounts to
DTC at the times and in the manner set forth
59
below under "Manner of Payment". Promptly after
payment to DTC of the principal and interest due at
maturity of each issue of Book-Entry Notes, the
Trustee will reduce the principal amount of the
Master Note representing the issue of Book-Entry
Notes and so advise the Issuer.
MANNER OF PAYMENT. The total amount of any principal
and interest due on each issue of Book-Entry Notes
identified by a single CUSIP number on any Interest
Payment Date or at maturity shall be paid by the
Issuer to the Trustee in funds available for use by
the Trustee as of 9:30 a.m. (New York City time), or
as soon as practicable thereafter on such date. The
Issuer will confirm instructions regarding payment
in writing to the Trustee. Prior to 10:00 a.m. (New
York City time) on each Maturity Date or as soon as
possible thereafter, following receipt of such funds
from the Issuer, the Trustee will pay by separate
wire transfer (using Fedwire message entry
instructions in a form previously specified by DTC)
to an account at the Federal Reserve Bank of New
York previously specified by DTC, in funds available
for immediate use by DTC, each payment of principal
(together with interest thereon) due on each issue
of Book-Entry Notes on any Maturity Date. On each
Interest Payment Date, interest payments shall be
made to DTC in same-day funds in accordance with
existing arrangements between the Trustee and DTC.
Thereafter, on each such date, DTC will pay, in
accordance with its SDFS operating procedures then
in effect, such amounts in funds available for
immediate use to the respective Participants in
whose names the Book-Entry Notes represented by the
Master Note are recorded in the book-entry system
maintained by DTC. Neither the Issuer nor the
Trustee shall have any direct responsibility or
liability for the payment by DTC to such
Participants of the principal of and interest on the
Book-Entry Notes.
WITHHOLDING TAXES. The amount of any taxes required
under applicable law to be withheld from any
interest payment on a Book-Entry Note will be
determined and withheld by the Participant, indirect
participant in DTC or other Person responsible for
forwarding payments and materials directly to the
beneficial owner of such Note.
61
ACCEPTANCE OF
OFFERS: Each Agent will promptly advise the Issuer of each
reasonable offer to purchase Notes received by it,
other than those rejected by each Agent. The Agent
may, in its discretion reasonably exercised, without
notice to the Issuer, reject any offer received by
it, in whole or in part. The Issuer will have the
sole right to accept offers to purchase Notes and
may reject any such offer, in whole or in part. If
the Issuer rejects an offer, the Issuer will
promptly notify the applicable Agent. SETTLEMENT:
The receipt by the Issuer of immediately available
funds in payment for a Book-Entry Note and receipt
by the Trustee of a properly completed Pricing
Supplement shall constitute "settlement" with
respect to such Book-Entry Note. All orders accepted
by the Issuer will be settled on the third Business
Day from the date of sale pursuant to the timetable
for settlement set forth below unless the Issuer and
the purchaser agree to settlement on another day
which shall be no earlier than the next Business
Day.
SETTLEMENT PROCEDURES: Settlement Procedures with regard to each Book-Entry
Note sold by the Issuer through an Agent as agent,
shall be as follows:
A. For each offer accepted by the Issuer, the
Presenting Agent shall communicate to the Issuer,
Attention: Treasurer (Fax: (▇▇▇) ▇▇▇-▇▇▇▇) who will
provide a copy to the Trustee, Attention: ▇▇▇▇▇▇▇
▇▇▇▇▇▇, ▇▇▇▇▇▇ Trust and Savings Bank (Fax: (312)
461-3525) by facsimile transmission or other
acceptable means, the information set forth below:
1. Principal amount.
2. Maturity Date of Notes.
3. In the case of a Fixed Rate Book-Entry
Note, the interest rate or, in the case
of a Floating Rate Book-Entry Note, the
interest rate formula, the Initial
Interest Rate (if known at such time),
Index Maturity, Interest Reset Period,
Interest Reset Dates, Spread or Spread
Multiplier (if any), minimum interest
rate (if any) and maximum interest rate
(if any).
62
4. Interest Payment Period and Interest
Payment Dates.
5. Redemption provisions, if any.
6. Repayment provisions, if any.
7. Settlement date (Original Issue Date).
8. Price to public of the Note (expressed
as a percentage).
9. The Agent's commission (to be paid in the
form of a discount from the proceeds
remitted to the Issuer upon settlement).
10. Original issue discount provisions, if
any.
11. In the case of Currency Indexed Notes,
the above-listed information, as
applicable, and the Base Exchange
Rate(s), Base Interest Rate and Indexed
Currencies.
12. In the case of Dual Currency Notes, the
above-listed information, as applicable,
and the Optional Payment Currency,
Designated Exchange Rate and Optional
Election Dates.
13. Net proceeds to the Issuer.
B. The Trustee will confirm the information set forth
in Settlement Procedure "A" by telephone with the
Agent and the Issuer.
C. The Trustee will assign a CUSIP number to the issue
of Book Entry Notes and will telephone the Issuer
and notify the Issuer of such CUSIP number. The
Trustee will enter a pending deposit message through
DTC's Participant Terminal System, providing the
following settlement information to DTC (which shall
route such information to Standard & Poor's
Corporation) and the Presenting Agent:
63
1. The applicable information set forth in
Settlement Procedure "A".
2. Identification as a Fixed Rate Book-Entry
Note or a Floating Rate Book-Entry Note.
3. Initial Interest Payment Date for each
issue of Book-Entry Notes, number of days
by which such date succeeds the related
DTC Record Date (which, in the case of
Floating Rate Notes which reset daily or
weekly shall be the date five calendar
days immediately preceding the applicable
Interest Payment Date and in the case of
all other Notes shall be the Regular
Record Date as defined in the Prospectus
Supplement), the amount of interest
payable on such Interest Payment Date per
$1,000 principal amount of Notes at
Maturity, and amount of interest payable
per $1,000 principal amount of Notes in
the case of Fixed Rate Notes.
4. CUSIP number of such issue of Book-Entry
Notes.
5. Whether such CUSIP number will identify
any other issue of Book-Entry Notes (to
the extent known at such time).
D. To the extent the Issuer has not already done so,
the Issuer will deliver to the Trustee a Pricing
Supplement in a form that has been approved by the
Issuer and the applicable Agent and a letter
advising of the relevant issuance.
E. DTC will credit such Book-Entry Notes to the
Trustee's participant account at DTC.
F. The Trustee will enter an SDFS deliver order through
DTC's Participant Terminal System instructing DTC to
(i) debit such Book-Entry Notes to the Trustee's
participant account and credit such Book-Entry Notes
to the applicable Agent's participant account and
(ii) debit the
64
applicable Agent's settlement account and credit the
Trustee's settlement account for an amount equal to
the price of such Book-Entry Notes less such Agent's
commission. The entry of such a deliver order shall
constitute a representation and warranty by the
Trustee to DTC that (i) such Book-Entry Notes have
been executed, delivered and authenticated and (ii)
the Trustee is holding the Master Note representing
such Book-Entry Notes pursuant to the relevant
Medium-Term Note Certificate Agreement between the
Trustee and DTC.
G. The applicable Agent will enter an SDFS deliver
order through DTC's Participant Terminal System
instructing DTC (i) to debit such Note to such
Agent's participant account and credit such Note to
the participant accounts of the Participants with
respect to such Note and (ii) to debit the
settlement accounts of such Participants and credit
the settlement account of such Agent for an amount
equal to the price of such Note.
H. Transfers of funds in accordance with SDFS deliver
orders described in Settlement Procedures "F" and
"G" will be settled in accordance with SDFS
operating procedures in effect on the settlement
date.
I. The Trustee, upon confirming receipt of such funds
in accordance with Settlement Procedure "F", will
wire transfer to the account of the Issuer
maintained at Bank One, N.A., 1 Bank ▇▇▇ ▇▇▇▇▇,
▇▇▇▇▇▇▇, ▇▇▇▇▇▇▇▇ ▇▇▇▇▇, (▇▇▇) ▇▇▇-▇▇▇▇, ABA Number
071000013, Account Number 51-24093, in funds
available for immediate use, the amount transferred
to the Trustee in accordance with Settlement
Procedure "F".
J. The applicable Agent will confirm the purchase of
such Note to the purchaser either by transmitting to
the Participants with respect to such Note a
confirmation order or orders through DTC's
institutional delivery system or by mailing a
written confirmation to such purchaser.
65
SETTLEMENT PROCEDURES
TIMETABLE: For orders of Book-Entry Notes solicited by the
Agent, as agent, and accepted by the Issuer for
settlement on the first Business Day after the sale
date, Settlement Procedures "A" through "J" set
forth above shall be completed as soon as possible
but not later than the respective times (New York
City time) set forth below:
SETTLEMENT PROCEDURE TIME
A 11:00 a.m. on the sale date
B 12:00 noon on the sale date
C 2:00 p.m. on the sale date
D 3:00 p.m. on the day before
settlement
E 9:00 a.m. on settlement date
F-G 2:00 p.m. on settlement date
H 4:45 p.m. on settlement date
I-J 5:00 p.m. on settlement date
If a sale is to be settled two Business Days after
the sale date, Settlement Procedures "A", "B" and
"C" shall be completed as soon as practicable but
not later than 11:00 a.m., 12:00 noon and 2:00 p.m.,
as the case may be, on the first Business Day after
the sale date.
If a sale is to be settled more than two Business
Days after the sale date, Settlement Procedure "A"
shall be completed as soon as practicable but no
later than 11:00 a.m. on the First Business Day
after the sale date and Settlement Procedures "B"
and "C" shall be completed as soon as practicable
but no later than 12:00 noon and 2:00 p.m., as the
case may be, on the second Business Day before the
settlement date. If the initial interest rate for a
Floating Rate Book-Entry Note has not been
determined at the time that Settlement Procedure "A"
is completed, Settlement Procedures "B" and "C"
shall be completed as soon as such rate has been
determined but not later than 12:00 noon and 2:00
p.m., respectively, on the Business Day before the
settlement date. Settlement Procedure "H" is subject
to extension in accordance with any extension of
Fedwire closing deadlines and in the other events
specified in the SDFS operating procedures in effect
on the settlement date.
If settlement of a Book-Entry Note is rescheduled or
canceled, the Trustee, upon receipt of notice from
the Issuer, will deliver to DTC, through
67
DTC's Participant Terminal System, a cancellation
message to such effect by no later than 2:00 p.m. on
the Business Day immediately preceding the scheduled
settlement date.
FAILURE TO SETTLE: If the applicable Agent or Trustee fails to enter an
SDFS deliver order with respect to a Book-Entry Note
pursuant to Settlement Procedure "F", the Trustee
may deliver to DTC, through DTC's Participant
Terminal System, as soon as practicable, a
withdrawal message instructing DTC to debit such
Note to the Trustee's participant account. DTC will
process the withdrawal message, provided that the
Trustee's participant account contains a principal
amount of Book-Entry Notes represented by the Master
Note that is at least equal to the principal amount
to be debited. If a withdrawal message is processed
with respect to all the Book-Entry Notes identified
by a single CUSIP number, the Trustee will advise
the Issuer and will make appropriate entries in its
records. The CUSIP number assigned to such issue of
Book-Entry Notes 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 issue of Book-Entry Notes identified by a
single CUSIP number, the Trustee will advise the
Issuer and will make appropriate entries in its
records.
If the purchase price for any Book-Entry Note is not
timely paid to the Participants with respect to such
Note by the beneficial purchaser thereof (or a
person, including an indirect participant in DTC,
acting on behalf of such purchaser), such
Participants and, in turn, the Presenting Agent may
enter SDFS deliver orders through DTC's Participant
Terminal System reversing the orders entered
pursuant to Settlement Procedures "F" and "G",
respectively. Thereafter, the Trustee will deliver
the withdrawal message and take the applicable
related actions described in the preceding
paragraph. If such failure shall have occurred for
any reason other than the failure by the Presenting
Agent to provide the Purchase Information to the
Issuer or to provide a confirmation to the
purchaser, the Issuer will reimburse the Presenting
Agent on an equitable basis for its loss of the use
of the funds during the period when they were
credited to the account of the Issuer.
68
Notwithstanding the foregoing, upon any failure to
settle with respect to a Book-Entry Note, DTC may
take any actions in accordance with its SDFS
operating procedures then in effect.
PERIODIC STATEMENTS
FROM THE TRUSTEE: Periodically, the Trustee will send to the Issuer a
statement setting forth the principal amount of
Book-Entry Notes outstanding as of that date and
setting forth a brief description of any sales of
Book-Entry Notes of which the Issuer has advised the
Trustee but which have not yet been settled.
PROCEDURE FOR RATE
CHANGES: The Issuer and the Agents will discuss from time to
time the price of, and the rates to be borne by the
Notes that may be sold as a result of the
solicitation of offers by the Agent. Once an Agent
has recorded any indication of interest in Notes
upon certain terms, and communicated with the
Issuer, if the Issuer plans to accept an offer to
purchase Notes upon such terms, it will prepare a
Pricing Supplement to the Prospectus, as then
amended or supplemented, reflecting the terms of
such Notes and will arrange to transmit such Pricing
Supplement to the Commission for filing in
accordance with and within the time prescribed by
the applicable paragraph of Rule 424(b) under the
Act. The Issuer will supply at least two copies of
the Prospectus as then amended or supplemented, and
bearing such Pricing Supplement, to the Presenting
Agent. No settlements with respect to Notes upon
such terms may occur prior to such transmitting and
the Presenting Agent will not, prior to such
transmitting, mail confirmations to customers who
have, offered to purchase Notes upon such terms.
After such transmitting, sales, mailing of
confirmations and settlements may occur with respect
to Notes upon such terms, subject to the provisions
of "Delivery of Prospectus" below.
Outdated Stickers, and copies of the Prospectus to
which they are attached (other than those retained
for files), will be destroyed.
SUSPENSION OF SOLICITATION;
AMENDMENT OR
SUPPLEMENT: As provided in the Agency Agreement, the Issuer may
suspend solicitation of purchases at any time, and,
upon receipt of notice from the Issuer, the Agents
will as promptly as practicable, but in no
69
event later than one Business Day following such
notice, suspend solicitation until such time as the
Issuer has advised them that solicitation of
purchases may be resumed.
If the Agents receive the notice from the Issuer
contemplated by Section 2(a) of the Agency
Agreement, they will promptly suspend solicitation
and will only resume solicitation as provided in the
Agency Agreement. If the Issuer decides to amend or
supplement the Registration Statement or the
Prospectus relating to the Notes, it will promptly
advise the Agents and will furnish the Agents with
the proposed amendment or supplement in accordance
with the terms of the Agency Agreement. The Issuer
will promptly file or mail to the Commission for
filing such amendment or supplement, provide the
Agents with copies of any such amendment or
supplement, confirm to the Agents that such
amendment or supplement has been filed with the
Commission and advise the Agents that solicitation
may be resumed. Any such suspension shall not affect
the Issuer's obligations under the Agency Agreement;
and in the event that at the time the Issuer
suspends solicitation of purchases there shall be
any offers already accepted by the Issuer
outstanding for settlement, the Issuer will have the
sole responsibility for fulfilling such obligations;
the applicable Agent will make reasonable efforts to
assist the Issuer to fulfill such obligations, but
the applicable Agent will not be obligated to
fulfill such obligations. The Issuer will in
addition promptly advise the applicable Agent and
the Trustee if such offers are not to be settled and
if copies of the Prospectus as in effect at the time
of the suspension may not be delivered in connection
with the settlement of such offers.
DELIVERY OF PROSPECTUS: A copy of the Prospectus, as most recently amended
or supplemented on the date of delivery thereof
(except as provided below), must be delivered to a
purchaser prior to or together with the earlier of
delivery of (i) the written confirmation provided
for above, and (ii) any Note purchased by such
purchaser at the following address: if to ▇.▇.
▇▇▇▇▇▇ Securities Inc., to ▇▇ ▇▇▇▇ ▇▇▇▇▇▇, ▇▇▇ ▇▇▇▇,
▇.▇. ▇▇▇▇▇, Telecopy Number (▇▇▇) ▇▇▇-▇▇▇▇,
Attention: Transaction Execution Group; if to
▇▇▇▇▇▇▇, Sachs & Co., to
70
▇▇ ▇▇▇▇▇ ▇▇▇▇▇▇, ▇▇▇ ▇▇▇▇, ▇▇▇ ▇▇▇▇ ▇▇▇▇▇, Telecopy
Number (▇▇▇) ▇▇▇-▇▇▇▇, Attention: Medium Term Note
Trading; if to Banc of America Securities LLC, to
▇▇▇ ▇▇▇▇▇ ▇▇▇▇▇ ▇▇▇▇▇▇, ▇▇▇ ▇▇▇▇▇, ▇▇▇▇▇▇▇▇▇, ▇▇▇▇▇
▇▇▇▇▇▇▇▇ ▇▇▇▇▇, Telecopy Number (▇▇▇) ▇▇▇-▇▇▇▇,
Attention: ▇▇▇▇ ▇▇▇▇▇▇▇▇▇; and if to Banc One
Capital Markets, Inc., to 1 Bank ▇▇▇ ▇▇▇▇▇, ▇▇▇▇▇
▇▇▇-▇▇▇▇, ▇▇▇▇▇▇▇, ▇▇▇▇▇▇▇▇ ▇▇▇▇▇, Telecopy Number
(▇▇▇) ▇▇▇-▇▇▇▇, Attention: ▇▇▇▇▇▇ ▇. ▇▇▇▇▇▇. The
Issuer shall ensure that the Presenting Agent
receives copies of the Prospectus and each amendment
or supplement thereto (including appropriate Pricing
Supplements) in such quantities and within such time
limits as will enable the Presenting Agent to
deliver such confirmation or Note to a purchaser as
contemplated by these procedures and in compliance
with the preceding sentence. If, since the date of
acceptance of a purchaser's offer, the Prospectus
shall have been supplemented solely to reflect any
sale of Notes on terms different from those agreed
to between the Issuer and such purchaser or a change
in posted rates not applicable to such purchaser,
such purchaser shall not receive the Prospectus as
supplemented by such new supplement, but shall
receive the Prospectus as supplemented to reflect
the terms of the Notes being purchased by such
purchaser and otherwise as most recently amended or
supplemented on the date of delivery of the
Prospectus.
71
CROSS-REFERENCE TARGET LIST
NOTE: DUE TO THE NUMBER OF TARGETS SOME TARGET NAMES MAY NOT APPEAR
IN THE TARGET PULL-DOWN LIST.
(This list is for the use of the wordprocessor only, is not a part
of this document and may be discarded.)
ARTICLE/SECTION TARGET NAME ARTICLE/SECTION TARGET NAME ARTICLE/SECTION TARGET NAME ARTICLE/SECTION
=========================== =========================== =========================== ===============
reps furn.agt reg.comply agt.term.agt
avail.sec.hldr reg.true
sol.agt.purch.prin pos.agt
sol.agt sec.out ▇▇▇▇.▇▇▇▇.▇▇▇▇
not.sell coun.agnt.opin rep.indem.surv
purch.prin
oblig.sev furn.opin acct.ltr notices
▇▇▇▇▇.▇▇▇ furn.ltr rec.ltr
succ
▇▇▇▇▇▇▇▇.▇▇▇▇ furn.cert indem.contrib
co.indem.agt amend
▇▇▇.▇▇ cost.exp ▇▇▇.▇▇▇▇▇.▇▇
cov.co.sec ▇▇▇.▇▇▇
cond indem.unavail
no.amend pros ref.rel.bene
file.rpts
no.downgrading term
qual.sec co.coun.opin agt.term.anytime
untrue
fair.pres
coun.opin
72