EXHIBIT 1.2
OCCIDENTAL PETROLEUM CORPORATION
MEDIUM-TERM NOTES, SERIES [ ]
DUE NINE MONTHS OR MORE FROM DATE OF ISSUE
FORM OF DISTRIBUTION AGREEMENT
[Date]
Dear Sirs:
Occidental Petroleum Corporation, a Delaware corporation (the "Company"),
confirms its agreement with each of [insert name of Agents] (each an "Agent" and
collectively, the "Agents") with respect to the issue and sale by the Company of
its Medium-Term Notes, Series [ ] (the "Notes"). The Notes are to be issued
pursuant to the Indenture (the "Indenture," which term, for the purpose of this
Agreement, shall include the Officers' Certificate delivered from time to time
pursuant to Sections 201 and 301 of the Indenture), dated as of April 1, 1998,
between the Company and The Bank of New York, as trustee (the "Trustee"). As of
the date hereof, the Company has authorized the issuance of up to U.S. $
aggregate offering price (or its equivalent, based upon the applicable exchange
rate at the time of issuance, in such foreign currencies, composite currencies
or currency units as the Company shall designate at the time of issuance) of
Notes to be distributed through or sold to the Agents pursuant to the terms of
this Agreement. It is understood, however, that the Company may from time to
time authorize the issuance of additional Notes and that, at the option of the
Company, such Notes may be distributed through or sold to the Agents pursuant to
the terms of this Agreement, all as though the issuance of such Notes were
authorized as of the date hereof.
This Agreement provides both for the sale of Notes by the Company to
purchasers, in which case the Agents will act as agents of the Company in
soliciting Note purchasers, and (as may from time to time be agreed to by the
Company and one or more Agents) to such Agent or Agents as principal for resale
to purchasers.
Subject to the terms and conditions stated herein and subject to the
reservation by the Company of the right to sell Notes directly on its own
behalf and to any
person, and to designate and select additional agents to become parties to this
Agreement, the Company hereby (i) appoints each Agent as an agent of the Com-
pany for the purpose of soliciting offers to purchase the Notes from the Company
by others and (ii) agrees that whenever the Company determines to sell Notes
directly to an Agent as principal for resale to others, it will enter into a
Terms Agreement relating to such sale in accordance with the provisions of
Section 2(b) hereof. Each Agent will make reasonable efforts to assist the
Company in obtaining performance by each purchaser whose offer to purchase Notes
from the Company has been solicited by such Agent, as agent, and accepted by the
Company, but such Agent shall not have any liability to the Company in the event
any such purchase is not consummated for any reason.
The Company has filed with the Securities and Exchange Commission (the
"Commission") a registration statement on Form S-3 (No. 333- ), and, if
applicable, one or more amendments thereto for the registration of senior debt
securities, including the Notes, under the Securities Act of 1933, as amended
(the "1933 Act"), and the offering thereof from time to time in accordance with
Rule 415 of the rules and regulations of the Commission under the 1933 Act (the
"1933 Act Regulations"). Such registration statement (as amended, if applicable)
has been declared effective by the Commission and the Indenture has been
qualified under the Trust Indenture Act of 1939, as amended (the "1939 Act").
Such registration statement (as amended, if applicable, and any further
registration statements which may be filed by the Company for the purpose of
registering additional Notes and which the Company and the Agents agree is to be
covered by this Agreement) and the prospectus constituting a part thereof,
together with any prospectus supplement relating to the Notes, including, in
each case, all Incorporated Documents (as hereinafter defined), as from time to
time amended or supplemented by the filing of documents pursuant to the
Securities Exchange Act of 1934, as amended (the "1934 Act"), or the 1933 Act or
otherwise, are referred to herein as the "Registration Statement" and the
"Prospectus," respectively, except that, if any revised prospectus or
prospectus supplement shall be provided to the Agents by the Company for use in
connection with the offering of the Notes that is not required to be filed by
the Company pursuant to Rule 424(b) of the 1933 Act Regulations, the term
"Prospectus" shall refer to such revised prospectus or prospectus supplement, as
the case may be, from and after the time it is first provided to the Agents for
such use. The term "Registration Statement" shall include any related
registration statement filed pursuant to Rule 462(b) of the 1933 Act
Regulations. Any reference herein to the Registration Statement, any prelimi-
nary prospectus or the Prospectus shall be deemed to refer to and include the
documents, financial statements and schedules incorporated, or deemed to be
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incorporated, by reference therein pursuant to Item 12 of Form S-3 under the
1933 Act, and any reference to any amendment or supplement to the Registration
Statement or the Prospectus shall be deemed to refer to and include any
documents, financial statements and schedules filed by the Company with the
Commission under the 1934 Act and so incorporated, or deemed to be incorporated,
by reference (such incorporated documents, financial statements and schedules
being herein called the "Incorporated Documents"). Notwithstanding the
foregoing, for purposes of this Agreement any prospectus supplement prepared or
filed with respect to an offering pursuant to the Registration Statement of a
series of debt securities other than the Notes shall not be deemed to have
supplemented the Prospectus.
SECTION 1. Representations and Warranties.
(a) The Company represents and warrants to each Agent as of the date
hereof, as of the date of each acceptance by the Company of an offer for the
purchase of Notes (whether through an Agent as agent or from an Agent as
principal), as of the date of each delivery of Notes by the Company to the
purchasers (whether through an Agent as agent or to an Agent as principal) (the
date of each such delivery to an Agent as principal being hereafter referred to
as a "Settlement Date"), and as of the dates referred to in Section 6(a) hereof
(each of the dates referenced above being referred to hereafter as a
"Representation Date"), as follows:
(i) The Incorporated Documents, when they were filed or became
effective (or, if an amendment with respect to any such Incorporated
Document was filed or became effective, when such amendment was filed or
became effective) with the Commission, as the case may be, complied in all
material respects with the requirements of the 1934 Act and the rules and
regulations of the Commission under the 1934 Act (the "1934 Act
Regulations"), and any Incorporated Documents filed subsequent to the date
hereof and prior to the termination of the offering of the Notes, will,
when they are filed with the Commission, comply in all material respects
with the requirements of the 1934 Act and the 1934 Act Regulations; no
such Incorporated Document, when it was filed or became effective (or, if
an amendment with respect to any such Incorporated Document was filed or
became effective, when such amendment was filed or became effective) with
the Commission, contained, and no Incorporated Document filed subsequent to
the date hereof and prior to the termination of the offering of the Notes
will contain, an untrue statement of a material fact or omitted, or will
omit, to state a material fact required to be stated therein or necessary
to make the statements therein,
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in the light of the circumstances under which they were or will be made,
not misleading.
(ii) Each preliminary prospectus relating to the Notes filed as part
of the Registration Statement as originally filed or as part of any
amendment thereto, or filed pursuant to Rule 424 of the 1933 Act
Regulations, when so filed, and the Registration Statement, at the time it
became effective, complied in all material respects with the provisions
of the 1933 Act and the 1933 Act Regulations; at the applicable
Representation Date, the Registration Statement, and the Prospectus, and
any supplement or amendment thereto relating to the Notes, will comply in
all material respects with the provisions of the 1933 Act and the 1933 Act
Regulations; and the Registration Statement and the Prospectus, and any
such supplement or amendment thereto relating to the Notes, at all such
times did not and will not contain an untrue statement of a material fact
or omit to state a material fact required to be stated therein or necessary
to make the statements therein, in the light of the circumstances under
which they were or will be made, not misleading; except that this
representation and warranty does not apply to statements or omissions in
the Registration Statement, the Prospectus or any preliminary prospectus,
or any amendment or supplement thereto, made in reliance upon information
furnished to the Company in writing by or on behalf of the Agents expressly
for use therein or to those parts of the Registration Statement that
constitute the Trustee's Statement of Eligibility on Form T-1 under the
1939 Act (the "Form T-1"). There is no contract or document of a character
required to be described in the Registration Statement or the Prospectus or
to be filed as an exhibit to the Registration Statement that is not
described or filed as required.
(iii) This Agreement, the Indenture, the Notes and any applicable
Terms Agreement have been duly authorized by the Company and conform in all
material respects to the descriptions thereof in the Prospectus.
(iv) The Indenture (assuming the due execution and delivery thereof
by the Trustee) is, and the Notes (when executed by the Company and
authenticated in accordance with the Indenture and delivered to and paid
for by the purchasers thereof) will be, the legal, valid and binding
obligations of the Company, enforceable against the Company in accordance
with their respective terms, except as such enforceability may be limited
by (A) bankruptcy, insolvency, reorganization, moratorium or other similar
laws now or hereafter in effect relating to or affecting the enforcement of
creditors' rights
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generally, (B) general principles of equity (regardless of whether such
enforcement is considered in a proceeding in equity or at law), (C)
requirements that a claim with respect to any Notes denominated other than
in United States dollars (or a judgment denominated other than in United
States dollars in respect of such claim) be converted into United States
dollars at a rate of exchange prevailing on a date determined pursuant to
applicable law and (D) governmental authority to limit, delay or prohibit
the making of payments outside the United States or in a foreign currency
or composite currency. The Notes (when executed by the Company and
authenticated in accordance with the terms of the Indenture and delivered
to and paid for by the purchasers thereof) will be entitled to the benefits
of the Indenture (subject to the exceptions set forth in the preceding
sentence).
(v) The Company and each of Occidental Chemical Holding
Corporation, a California corporation, and Occidental Oil and Gas
Corporation, a California corporation, until such time as the fact that any
such entity is no longer majority owned by the Company shall have been
disclosed in the Registration Statement and the Prospectus (each a
"Principal Domestic Subsidiary" and collectively the "Principal Domestic
Subsidiaries") is a validly existing corporation in good standing under the
laws of its state of incorporation. The Company and each Principal
Domestic Subsidiary has full corporate power and authority to own its
properties and carry on its business as presently conducted, as described
in the Prospectus, and is duly registered or qualified to conduct business,
and is in good standing, in each jurisdiction in which it owns or leases
property or transacts business and in which such registration or
qualification is necessary, except as to jurisdictions where the failure to
do so would not have a material adverse effect on the Company and its
subsidiaries, taken as a whole. All of the outstanding capital stock or
other securities evidencing equity ownership of each Principal Domestic
Subsidiary has been duly and validly authorized and issued and is fully
paid and non-assessable, and, except as otherwise disclosed in the
Registration Statement and the Prospectus, is owned by the Company,
directly or indirectly through subsidiaries, free and clear of any security
interest, claim, lien or encumbrance. Except as otherwise disclosed in the
Registration Statement and the Prospectus, there are no outstanding rights,
warrants or options to acquire, or instruments convertible into or
exchangeable for, any shares of capital stock or other equity interest in
any such Principal Domestic Subsidiary, except for rights, warrants or
options held by the Company.
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(vi) Except as contemplated in the Prospectus, since the date of the
most recent consolidated financial statements included or incorporated by
reference in the Registration Statement and the Prospectus, unless the Com-
pany has notified the Agents as provided in Section 3(d) hereof, there has
not been any material adverse change in the consolidated financial
condition of the Company and its subsidiaries, taken as a whole.
(vii) The Company is not in violation of its Restated Certificate of
Incorporation or Bylaws, in each case, as amended. The execution and
delivery of this Agreement by the Company, the issuance and sale of the
Notes and the performance by the Company of its obligations under this
Agreement, the Indenture and any applicable Terms Agreement will not
conflict with or constitute a breach of or a default (with the passage of
time or otherwise) under (A) the Restated Certificate of Incorporation or
Bylaws of the Company, in each case, as amended, (B) subject to the
Company's compliance with any applicable covenants pertaining to its
incurrence of unsecured indebtedness contained therein, any agreement or
instrument (which is, individually or in the aggregate, material to the
Company and its subsidiaries, taken as a whole) to which the Company is a
party or by which it is bound or (C) any order of any court or governmental
agency or authority presently in effect and applicable to the Company or
any Principal Domestic Subsidiary. Except for orders, permits and similar
authorizations required under the securities or Blue Sky laws of certain
jurisdictions, including jurisdictions outside the United States, or
required of any securities exchange on which any of the Notes might be
listed, no consent, approval, authorization or other order of any
regulatory body, administrative agency or other governmental body is
legally required for the valid issuance and sale of the Notes. As of the
date of each acceptance by the Company of an offer for the purchase of
Notes and as of the date of each delivery of Notes by the Company, the
Company by such acceptance or delivery, as the case may be, shall be deemed
to represent and warrant to the Agents that, both immediately before and
immediately after giving effect to such acceptance or delivery, the Company
shall be in compliance with the requirements of any applicable covenants
pertaining to its incurrence of unsecured indebtedness contained in the
agreements or instruments referred to in clause (B) above.
(viii) To the best of the Company's knowledge, the accountants who
have audited and reported upon the consolidated financial statements filed
with the Commission as part of the Registration Statement and the
Prospectus
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are independent accountants as required by the 1933 Act. The consolidated
financial statements included in the Registration Statement and Prospectus,
or incorporated therein by reference, fairly present the consolidated
financial position and results of operations of the entities to which such
statements relate at the respective dates and for the respective periods to
which they apply. Such consolidated financial statements have been prepared
in accordance with generally accepted accounting principles consistently
applied, except as set forth in the Registration Statement and Prospectus.
(ix) The Company has complied with, and is and will be in compli-
ance with, the provisions of that certain Florida act relating to
disclosure of doing business with Cuba, codified as Section 517.075 of the
Florida statutes, and the rules and regulations thereunder (collectively,
the "Cuba Act") or is exempt therefrom.
(b) Additional Certifications. Any certificate signed by any officer of
the Company and delivered to an Agent or to counsel for the Agents in connection
with an offering of Notes shall be deemed a representation and warranty by the
Company to such Agent as to the matters covered thereby on the date of such
certificate.
SECTION 2. Solicitations as Agents; Purchases as Principals.
(a) Solicitations as Agents. On the basis of the representations and
warranties herein contained, but subject to the terms and conditions herein set
forth, each Agent agrees, as an agent of the Company, to use its best efforts to
solicit offers to purchase the Notes upon the terms and subject to the
conditions set forth herein and in the Prospectus. The Agents are not
authorized to appoint sub-agents or to engage the services of any other broker
or dealer in connection with the offer or sale of the Notes as agents. In
connection with the solicitation of offers to purchase Notes, the Agents are not
authorized to provide any written information relating to the Company to any
prospective purchaser other than the Prospectus and the Incorporated Documents.
The Company reserves the right, in its sole discretion, to suspend
solicitation of offers to purchase the Notes commencing at any time for any
period of time or permanently. Upon receipt of instructions from the Company,
the Agents will forthwith suspend solicitation of offers to purchase the Notes
from the Company until such time as the Company has advised the Agents that such
solicitation may be resumed.
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The Company agrees to pay each Agent a commission, which such Agent is
hereby authorized to deduct from the sales proceeds of each Note sold by the
Company as a result of a solicitation made by such Agent, equal to the
applicable percentage of the principal amount of each such Note, as set forth in
Exhibit A hereto. Without the consent of the Company, no Agent may reallow any
portion of the commission payable pursuant hereto to dealers or purchasers in
connection with the offer and sale of any Notes as agents.
As an agent, each Agent is authorized, except during periods of suspension
as provided in this Agreement, to solicit offers to purchase the Notes. Each
Agent shall communicate to the Company, orally or in writing, each reasonable
offer to purchase Notes received by such Agent, as agent. Each Agent shall have
the right in its discretion reasonably exercised to reject any offer to purchase
the Notes received by such Agent that it does not deem reasonable, and any such
rejection shall not be deemed a breach of such Agent's agreements contained
herein. The Company shall have the sole right to accept offers to purchase the
Notes and may reject any such offer in whole or in part, and any such rejection
shall not be deemed to be a breach of any agreement of the Company contained
herein. The purchase price, interest rate, maturity date and other terms of the
Notes agreed upon by the Company shall be set forth in a pricing supplement to
the Prospectus to be prepared following each acceptance by the Company of an
offer for the purchase of Notes (a "Pricing Supplement"). All Notes will be
issued at 100% of their principal amount, unless otherwise agreed to by the
Company. Each Agent acknowledges and agrees that any funds which such Agent
receives in respect of a purchase of Notes, which purchase has been solicited by
such Agent, as agent of the Company, will be received, held and disposed of by
such Agent, as agent of the Company.
(b) Purchases as Principal. Each sale of Notes to an Agent as principal
shall be made in accordance with the terms contained herein and pursuant to a
separate agreement which will provide for the sale of such Notes to, and the
purchase and any reoffering thereof by, such Agent. Each such separate
agreement (which may be an oral agreement if confirmed within 24 hours
thereafter by an exchange of any standard form of written telecommunication
(including facsimile transmission) between the Agent and the Company) is herein
referred to as a "Terms Agreement." Unless the context otherwise requires, each
reference contained herein to "this Agreement" shall be deemed to include any
applicable Terms Agreement between the Company and the Agent. Each such Terms
Agreement, whether oral (and confirmed in writing, which confirmation may be by
facsimile transmission) or in writing, shall be with respect to such information
(as applicable) as is specified in
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Exhibit B hereto. An Agent's commitment to purchase Notes pursuant to any Terms
Agreement shall be deemed to have been made on the basis of the representations
and warranties of the Company herein contained and shall be subject to the terms
and conditions herein set forth. Unless expressly prohibited by the Company
pursuant to the Terms Agreement relating to a sale of Notes to the Agent, each
Agent is authorized to utilize a selling or dealer group in connection with the
resale of the Notes purchased pursuant to such Terms Agreement. In connection
with any brokers or dealers whose services are engaged by any Agent with respect
to the offer or sale of the Notes, such Agent agrees that it will use its best
efforts to cause such brokers or dealers to comply with the terms and provisions
of this Agreement, the applicable provisions of the 1933 Act and the 1934 Act
and the applicable rules and regulations of the Commission thereunder, the
applicable rules and regulations of the National Association of Securities
Dealers, Inc. and the applicable rules of any securities exchange having
jurisdiction over the offering of the Notes.
(c) Administrative Procedures. Administrative procedures with respect to
the sale of Notes shall be agreed upon from time to time by the Agents and the
Company (the "Procedures"). The Procedures initially agreed upon shall be those
set forth in Exhibit C hereto. The Agents and the Company agree to perform the
respective duties and obligations specifically provided to be performed by the
Agents and the Company herein and in the Procedures.
(d) Foreign Offerings. Each Agent represents and agrees that (i) such
Agent has not solicited, and will not solicit, offers to purchase any of the
Notes from, (ii) such Agent has not sold, and will not sell, any of the Notes
to, and (iii) such Agent has not distributed, and will not distribute, the
Prospectus to, any person or entity in any jurisdiction outside of the United
States (collectively "Foreign Offers and Sales") except, in each case, in
compliance in all material respects with all applicable laws and, in connection
with the initial offering of, or subscription for, any of the Notes, only with
the prior written consent of the Company and in full compliance with any
requirements and procedures established by the Company with respect to any such
Foreign Offers and Sales. For the purposes of this paragraph, "United States"
means the United States of America, its territories, its possessions (including
the Commonwealth of Puerto Rico) and other areas subject to its jurisdiction.
In particular and without limiting the generality of the foregoing:
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(i) Each Agent agrees to distribute, in connection with any Foreign
Offers and Sales, only those Prospectuses used in connection therewith that
have been appropriately "stickered" for use in the jurisdiction in which
such Foreign Offers and Sales are to be made.
(ii) With respect to the United Kingdom, each Agent represents and
agrees that (A) it has not offered or sold and will not offer or sell any
Notes to persons in the United Kingdom except to persons whose ordinary
activities involve them in acquiring, holding, managing or disposing of
investments (as principal or agent) for the purposes of their businesses or
otherwise in circumstances which have not resulted and will not result in
an offer to the public in the United Kingdom within the meaning of the
Public Offers of Securities Regulations 1995, (B) it has complied and will
comply with all applicable provisions of the Financial Services Act of 1986
(the "Financial Services Act") with respect to anything done by it in
relation to the Notes in, from or otherwise involving the United Kingdom
and (C) it has only issued or passed on, and will only issue or pass on, in
the United Kingdom any document received by it in connection with the issue
of the Notes, other than any document which consists of or any part of
listing particulars, supplementary listing particulars or any other
document required or permitted to be published by listing rules under Part
IV of the Financial Services Act, to a person who is of a kind described in
Article 11(3) of the Financial Services Act 1986 (Investment
Advertisements) (Exemptions) Order 1996 or is a person to whom such
document may otherwise lawfully be issued or passed on.
(iii) With respect to Japan, each Agent understands that the Notes
have not been, and will not be, registered under the Securities and
Exchange Law of Japan, and, accordingly, each Agent represents and agrees
that (A) in connection with the initial offering of any of the Notes, such
Agent has not, directly or indirectly, offered or sold, and will not,
directly or indirectly, offer or sell, any of the Notes in Japan or to any
resident of Japan (including any corporation or other entity incorporated
or organized under the laws of Japan), or to others for re-offering or
resale, directly or indirectly, in Japan or to any such resident of Japan,
except, in each case, in compliance in all material respects with the
Securities and Exchange Law of Japan, and (B) with respect to any such sale
of the Notes made by such Agent, such Agent will effect all necessary
filings in connection with such sale, including, without limitation, any
required filings of notifications with the Minister of
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Finance of Japan, as required pursuant to the provisions of relevant
securities or foreign exchange control legislation of Japan.
(iv) With respect to the Provinces of Canada (the "Provinces"), each
Agent represents and agrees that, in connection with the initial offering
of any of the Notes, (A) such Agent will not, directly or indirectly, offer
or sell any of the Notes in any of the Provinces or to, or for the benefit
of, any resident of any of the Provinces after the date (the "Canadian
Ending Date") set by the Company for the end of the offer of such Notes,
and, without the prior written consent of the Company, such Agent will not
distribute or permit to be distributed any Prospectus in any of the
Provinces or to, or for the benefit of, any resident of any of the
Provinces after the Canadian Ending Date, (B) with respect to anything done
by such Agent in relation to the Notes in, from, or otherwise involving,
any of the Provinces, such Agent has complied, and will comply, in all
material respects, with all applicable provisions of the securities
legislation of Canada and the Provinces (the "Canadian Securities
Legislation") (including, without limitation, the conveyance, or the
provision of assistance to the Company in conveying, any right of
rescission, damages or other right as required by applicable Canadian
Securities Legislation) so that any offer or sale of any of the Notes in
the Provinces, or any of them, will qualify for exemptions from prospectus,
registration and equivalent requirements, or exemptions from other
applicable requirements, as prescribed by the Canadian Securities
Legislation in force at the time when such offer or sale is made, provided
that such offer or sale is made pursuant to the Prospectus, as supplemented
to the extent required by the Canadian Securities Legislation (the
Prospectus, as so supplemented, hereinafter referred to as the "Canadian
Offering Memorandum"), (C) with respect to Notes offered or sold, or to be
offered or sold, by such Agent, or Notes purchased, or to be purchased, by
such Agent, it has provided, and will provide, investors, where required
pursuant to the provisions of applicable Canadian Securities Legislation,
with (1) the Canadian Offering Memorandum, and (2) a list of the documents
filed by the Company with the Commission pursuant to Sections 13(a), 13(c),
14 or 15(d) of the 1934 Act subsequent to the date of the final Prospectus
and will obtain from each of such investors an acknowledgment in form
satisfactory to the Company, and (D) with respect to any such sale of the
Notes made by such Agent, such Agent will effect all necessary filings in
connection with such sale, including, without limitation, any required
filings of (x) reports of trades and (y) the Canadian Offering Memo-
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randum, in each case with provincial securities commissions, as required
pursuant to the provisions of applicable Canadian Securities Legislation.
SECTION 3. Covenants of the Company.
The Company covenants with each Agent as follows:
(a) Notice of Certain Events. The Company will notify the Agents promptly
(i) of the effectiveness of any post-effective amendment to the Registration
Statement (other than a post-effective amendment relating solely to an
offering of debt securities other than the Notes), (ii) of the transmittal to
the Commission for filing of any supplement to the Prospectus (other than a
Pricing Supplement or a supplement relating solely to an offering of debt
securities other than the Notes) or any document to be filed pursuant to the
1934 Act which will be incorporated by reference in the Prospectus, (iii) of the
receipt of any comments from the Commission with respect to the Registration
Statement or the Prospectus (other than any comments relating solely to an
offering of debt securities other than the Notes), (iv) of any request by the
Commission for any amendment to the Registration Statement or any amendment or
supplement to the Prospectus or for additional information (other than any such
request relating solely to an offering of debt securities other than the Notes),
(v) of the issuance by the Commission of any stop order suspending the
effectiveness of the Registration Statement or the initiation of any proceedings
for that purpose and (vi) of the receipt of notice from one or more of Standard
& Poor's Corporation, ▇▇▇▇▇'▇ Investors Service, Inc., Duff & ▇▇▇▇▇▇ Inc. and
Fitch IBCA, Inc. (or any of their respective successors) that the Notes have
been or are going to be placed on what is commonly termed a "watch list" for
possible downgrading. The Company will make every reasonable effort to prevent
the issuance of any such stop order and, if any such stop order is issued, to
obtain the lifting thereof at the earliest possible moment, unless the Company
shall, in its sole discretion, determine that it is not in its best interest to
do so.
(b) Notice of Certain Proposed Filings. At or prior to the filing
thereof, the Company will give the Agents notice of its intention to file any
additional registration statement with respect to the registration of
additional Notes to be covered by this Agreement, any amendment to the
Registration Statement or any amendment or supplement to the Prospectus (other
than a Pricing Supplement or an amendment or supplement relating solely to an
offering of debt securities other than the Notes), whether by the filing of
documents pursuant to the 1934 Act, the 1933 Act or
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otherwise, and will furnish the Agents with copies of any such amendment or
supplement or other documents promptly after the filing thereof.
(c) Copies of the Registration Statement and the Prospectus. The Company
will deliver to the Agents one signed and as many conformed copies of the
Registration Statement (as originally filed) and of each amendment thereto
(including the Incorporated Documents and any exhibits filed therewith or
incorporated by reference therein) as the Agents may reasonably request. The
Company will furnish to the Agents as many copies of the Prospectus (as amended
or supplemented) as the Agents shall reasonably request so long as the Agents
are required to deliver a Prospectus in connection with sales or solicitations
of offers to purchase the Notes.
(d) Revisions of Prospectus--Material Changes. So long as the Agents are
required to deliver a Prospectus in connection with sales or solicitations of
offers to purchase the Notes, if any event shall occur or condition exist as a
result of which it is necessary, in the opinion of counsel for the Company and
of counsel for the Agents, to further amend or supplement the Prospectus in
order that the Prospectus will not include an untrue statement of a material
fact or omit to state any material fact necessary in order to make the
statements therein not misleading, in the light of the circumstances existing at
the time it is delivered to a purchaser, or if it shall be necessary, in the
opinion of such counsel, to amend or supplement the Registration Statement or
the Prospectus in order to comply with the requirements of the 1933 Act or the
1933 Act Regulations, prompt notice shall be given, and confirmed in writing, to
the Agents to cease the solicitation of offers to purchase the Notes in their
capacity as agents and to cease sales of any Notes the Agents may then own as
principal. In addition, if any Agent holds Notes purchased for resale pursuant
to a Terms Agreement during the period ending 90 days after the date of
execution of such Terms Agreement, the Company will promptly prepare and file an
amendment or supplement to the Prospectus so that the Prospectus, as amended or
supplemented, will not include any untrue statement of a material fact or omit
to state any material fact necessary in order to make the statements therein not
misleading, in the light of the circumstances existing at the time it is
delivered to the Agents.
(e) (Intentionally Omitted).
(f) Earnings Statements. The Company will make generally available to its
security holders, in each case as soon as practicable but in any event not later
than 15 months after the acceptance by the Company of an offer to purchase Notes
hereunder, a consolidated earnings statement (which need not be audited)
covering the
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twelve-month period beginning after the latest of (i) the effective date of the
Registration Statement, (ii) the effective date of the most recent post-
effective amendment to the Registration Statement to become effective prior to
the date of such acceptance and (iii) the date of the Company's most recent
annual report on Form 10-K filed with the Commission prior to the date of such
acceptance, which earnings statement will satisfy the provisions of Section
11(a) of the 1933 Act (and, at the option of the Company, Rule 158 of the 1933
Act Regulations). Nothing in this Section 3(f) shall require the Company to make
such earnings statement available more frequently than once in any period of
twelve months.
(g) Blue Sky Qualifications. The Company will endeavor, in cooperation
with the Agents, to qualify the Notes for offering and sale under the applicable
securities laws of such states and other jurisdictions as the Agents may
reasonably designate (provided no registration shall be required outside of the
United States), and will maintain such qualifications in effect for as long as
may be required for the distribution of the Notes; provided, however, that the
Company will promptly notify the Agents of any suspension of any such
qualifications; and provided, further, that the Company shall not be obligated
to register or qualify as a foreign corporation or take any action which would
subject it to general service of process in any jurisdiction where it is not
now so subject.
(h) Suspension of Certain Obligations. The Company shall not be required
to comply with the provisions of subsections (b), (c) or (d) of this Section 3
during any period from the time the Agents shall have been notified to suspend
the solicitation of offers to purchase the Notes in their capacity as agent or
resales of Notes purchased pursuant to a Terms Agreement to the time the Company
shall determine that solicitation of offers to purchase the Notes through any
Agent or Agents or resales as principal of Notes purchased pursuant to a Terms
Agreement by any Agent or Agents should be resumed. Notwithstanding the
foregoing, if any Agent holds Notes purchased for resale pursuant to a Terms
Agreement, the Company shall comply with the provisions of subsections (b), (c)
or (d) of this Section 3 during the 90-day period from and including the date of
execution of such Terms Agreement; provided, however, that the Company shall
have the right, in its reasonable business judgment, to suspend such compliance
during such 90-day period, in which event, such 90-day period shall be extended
by the number of days included in any such period of suspension.
SECTION 4. Payment of Expenses.
14
The Company will pay all expenses incident to the performance of its
obligations under this Agreement, including:
(i) The preparation and filing of the Registration Statement and all
amendments thereto and the Prospectus and any amendments or supplements
thereto and all Incorporated Documents;
(ii) The preparation, filing and printing of this Agreement;
(iii) The preparation, printing, issuance and delivery of the Notes;
(iv) The fees and disbursements of the Trustee and its counsel, of
any calculation agent or exchange rate agent and of The Depository Trust
Company;
(v) The reasonable fees and disbursements of counsel to the Agents
incurred from time to time in connection with the transactions contemplated
hereby;
(vi) The qualification of the Notes under securities laws in
accordance with the provisions of Section 3(g) hereof, including filing
fees and the reasonable fees and disbursements of counsel to the Agents in
connection therewith and in connection with the preparation of any Blue Sky
survey and any legal investment survey;
(vii) The printing and delivery to the Agents in quantities as
hereinabove stated of copies of the Registration Statement and any
amendments thereto, and of the Prospectus and any amendments or supplements
thereto relating to the Notes, and the delivery by the Agents of the
Prospectus and any amendments or supplements thereto in connection with
solicitations of offers to purchase, or confirmations of sales of, the
Notes;
(viii) The preparation, printing and delivery to the Agents of copies
of the Indenture;
(ix) Any fees charged by rating agencies for the rating of the Notes;
15
(x) The fees and expenses, if any, incurred with respect to any
filing with the National Association of Securities Dealers, Inc. relating
to the Agents' obligations hereunder or under a Terms Agreement; and
(xi) Any advertising and other out-of-pocket expenses of the Agents
incurred with the prior written approval of the Company.
SECTION 5. Conditions of Obligations.
The obligations of any Agent to solicit offers to purchase the Notes as
agent of the Company and the obligations of any Agent to purchase Notes pursuant
to any Terms Agreement will be subject at all times to the accuracy, as of the
applicable Representation Date, of the representations and warranties on the
part of the Company herein and the accuracy, as of the date made, of the
statements of the Company's officers made in any certificate furnished
pursuant to the provisions hereof, to the performance and observance by the
Company of all covenants and agreements herein contained on its part to be
performed and observed and to the following additional conditions precedent:
(a) On the date hereof, the Agents shall have received an opinion from
▇▇▇▇▇▇ ▇. ▇▇▇▇▇▇, Esq., Associate General Counsel of the Company, dated as of
the date hereof and in form and substance satisfactory to counsel for the
Agents, to the effect that:
(i) The Company has been duly incorporated and is validly existing in
good standing under the laws of the State of Delaware. Each Principal
Domestic Subsidiary is validly existing in good standing under the laws of
its state of incorporation.
(ii) The Company has full corporate power and corporate authority to
enter into and perform its obligations under this Agreement and the
Indenture, to borrow money as contemplated in this Agreement and the
Indenture, and to issue, sell and deliver the Notes.
(iii) This Agreement has been duly authorized, executed and
delivered by the Company.
(iv) The Indenture has been duly authorized, executed and delivered
by the Company and (assuming the due authorization, execution and delivery
16
thereof by the Trustee) is a valid and binding agreement of the Company
enforceable against the Company in accordance with its terms, except that
(x) such enforceability may be limited by (A) bankruptcy, insolvency,
reorganization, moratorium or other similar laws now or hereafter in
effect relating to creditors' rights generally or (B) general principles of
equity (regardless of whether enforcement is sought in a proceeding in
equity or at law) and (y) the waiver contained in Section 515 of the
Indenture may be deemed unenforceable.
(v) No consent or approval of any United States governmental
authority or other United States person or United States entity is required
in connection with the issuance or sale of the Notes other than
registration thereof under the 1933 Act, qualification of the Indenture
under the 1939 Act, and such registrations or qualifications as may be
necessary under the securities or Blue Sky laws of the various United
States jurisdictions in which the Notes are to be offered or sold. The
opinion expressed in this paragraph (v) is limited to those consents and
approvals which, in such counsel's experience, are normally applicable to
transactions of the type contemplated by this Agreement.
(vi) The Notes have been duly authorized by the Company and, when
executed by the Company and authenticated by the Trustee in accordance with
the terms of the Indenture (assuming the due authorization, execution and
delivery of the Indenture by the Trustee) and issued to and paid for by the
purchasers thereof, will be entitled to the benefits of the Indenture and
will be valid and binding obligations of the Company enforceable against
the Company in accordance with their respective terms, except that (x)
such enforceability may be limited by (A) bankruptcy, insolvency,
reorganization, moratorium or other similar laws now or hereafter in effect
relating to creditors' rights generally or (B) general principles of equity
(regardless of whether such enforcement is sought in a proceeding in equity
or at law) and (y) the waiver contained in Section 515 of the Indenture may
be deemed unenforceable.
(vii) The Registration Statement has become effective under the 1933
Act and the Indenture has been qualified under the 1939 Act, and, to the
best of such counsel's knowledge, no stop order suspending the
effectiveness of the Registration Statement has been issued and no
proceedings for that
17
purpose have been instituted or are pending or contemplated by the
Commission.
(viii) The (x) execution and delivery of this Agreement and the
Indenture by the Company, (y) issuance and sale of the Notes and (z)
performance of the Company's obligations under this Agreement and the
Indenture will not conflict with or constitute a breach of or a default
(with the passage of time or otherwise) under (A) the Restated Certificate
of Incorporation or Bylaws of the Company, in each case, as amended, (B)
any statute, law or regulation to which the Company or any Principal
Domestic Subsidiary or any of their respective properties may be subject or
(C) any judgment, decree or order, known to such counsel, after reasonable
inquiry, of any court or governmental agency or authority entered in any
proceeding to which the Company or any Principal Domestic Subsidiary was or
is now a party or by which it is bound, except that such counsel may state
that the opinion set forth in clause (B) of this paragraph (viii) is
limited to those statutes, laws or regulations in effect on the date of
such opinion which, in such counsel's experience, are normally applicable
to transactions of the type contemplated by this Agreement and that such
counsel expresses no opinion as to the securities or Blue Sky laws of the
various jurisdictions in which the Notes are to be offered.
(ix) The Registration Statement, as of its effective date, and the
Prospectus, as of its date, including each Incorporated Document when such
Incorporated Document was filed or became effective, or if any such
Incorporated Document was amended, when such amendment was filed or became
effective, appeared on their face to be appropriately responsive in all
material respects to the applicable requirements of the 1933 Act or the
1934 Act, as the case may be, except that in each case such counsel need
not (x) assume any responsibility for the accuracy, completeness or
fairness of the statements contained in the Registration Statement or the
Prospectus or (y) express an opinion as to the financial statements and
schedules and other financial data included or incorporated by reference
therein or as to the Trustee's Statement of Eligibility on Form T-1 under
the 1939 Act (the "Form T-1").
(x) The statements in the Prospectus under the captions "Description
of the Debt Securities" and "Description of the Notes," insofar as they
purport to summarize certain provisions of documents specifically referred
to therein, are in all material respects accurate summaries of such
provisions.
18
(xi) Except as set forth in the Prospectus (including the
Incorporated Documents), there is not pending or, to the knowledge of such
counsel, after reasonable inquiry, threatened any action, suit or
proceeding against the Company or any of its subsidiaries before or by any
court or governmental agency or body, which is likely (to the extent not
covered by insurance) to have a material adverse effect on the consolidated
financial condition of the Company and its subsidiaries, taken as a whole.
(xii) To the best of such counsel's knowledge, after reasonable
inquiry, there is no contract or document of a character required to be
described in the Registration Statement or the Prospectus or to be filed as
an exhibit to the Registration Statement that is not described or filed as
required.
(xiii) To the best of such counsel's knowledge, after reasonable
inquiry, the Company is not in violation of its Restated Certificate of
Incorporation or Bylaws, in each case, as amended.
(xiv) To the best of such counsel's knowledge, after reasonable
inquiry, the execution and delivery of this Agreement, the Indenture and
any applicable Terms Agreement by the Company, the issuance and sale of the
Notes and the performance by the Company of its obligations under this
Agreement, the Indenture and any applicable Terms Agreement will not
conflict with or constitute a breach of or a default (with the passage of
time or otherwise) under, subject (except in respect of any Notes issued
and sold on the date of such opinion pursuant to an applicable Terms
Agreement) to the Company's compliance with any applicable covenants
pertaining to its incurrence of unsecured indebtedness, any agreement or
instrument that is, individually or in the aggregate, material to the
Company and its subsidiaries, taken as a whole, to which the Company is a
party or by which it is bound. To the best of such counsel's knowledge,
after reasonable inquiry, the issuance and sale as of the date of this
Agreement of all of the authorized aggregate principal amount of the
Notes, both immediately before and after giving effect to such issuance and
sale, would not conflict with or constitute a breach of or a default (with
the passage of time or otherwise) under any applicable covenants pertaining
to the Company's incurrence of unsecured indebtedness contained in the
agreements or instruments referred to above.
In rendering the opinions set forth in paragraphs (iv) and (vi) above,
such counsel may state that such enforcement may be limited by (i) require-
19
ments that a claim with respect to any Notes denominated other than in
United States dollars (or a judgment denominated other than in United
States dollars in respect of such claim) be converted into United States
dollars at a rate of exchange prevailing on a date determined pursuant to
applicable law and (ii) governmental authority to limit, delay or prohibit
the making of payments outside the United States or in foreign currency or
composite currency.
In rendering the foregoing opinions such counsel may state that with
respect to certain matters he has relied upon advice of other counsel
employed by the Company who are more familiar with such matters.
In addition, such counsel shall state that he has participated in
conferences with officers and other representatives of the Company,
outside counsel for the Company, representatives of the independent public
accountants for the Company, representatives of the Agents and counsel for
the Agents, at which conferences the contents of the Registration Statement
and Prospectus and related matters were discussed and, although he is not
passing upon, and does not assume any responsibility for the accuracy,
completeness or fairness of the statements contained in the Registration
Statement or the Prospectus (other than as set forth in paragraph (x)
above) and has not made any independent check or verification thereof, on
the basis of the foregoing, nothing has come to such counsel's attention
that leads him to believe that either the Registration Statement (including
the Incorporated Documents) at the time such Registration Statement became
effective, and if an amendment to the Registration Statement or an Annual
Report on Form 10-K has been filed by the Company with the Commission
subsequent to the effectiveness of the Registration Statement and prior to
the date of such statement, then at the time such amendment became
effective or at the time of the most recent such filing (to the extent
deemed to be incorporated by reference therein), contained an untrue
statement of a material fact or omitted to state a material fact required
to be stated therein or necessary to make the statements therein not
misleading, or that the Prospectus (including the Incorporated Documents)
as of the date of this Agreement (and, if the opinion is being given
pursuant to Section 6(b) hereof as a result of the Company having entered
into a Terms Agreement as contemplated by the first paragraph of Section
6(b) or having filed an Incorporated Document described in the second
paragraph of Section 6(b), as of the Settlement Date with respect to such
Terms Agreement or as of the filing date of such Incorporated Document, as
the case may be)
20
contained or contains an untrue statement of a material fact or omitted or
omits to state a material fact necessary to make the statements therein, in
the light of the circumstances under which they were made, not misleading,
except that such counsel need express no opinion with respect to the
financial statements, schedules and other financial data included or
incorporated by reference in the Registration Statement or Prospectus or
with respect to the Form T-1.
(b) On the date hereof, the Agents shall have received an opinion from
counsel to the Agents, dated as of the date hereof and in form and substance
satisfactory to the Agents.
(c) Officer's Certificate. Except as contemplated in the Prospectus or
reflected therein by the filing of any amendment or supplement thereto or any
Incorporated Document, at the date hereof and at each Settlement Date with
respect to any Terms Agreement, there shall not have been, since the date of the
most recent consolidated financial statements included or incorporated by
reference in the Prospectus, any material adverse change in the consolidated
financial condition of the Company and its subsidiaries, taken as a whole. On
the date hereof (and, if this certificate is being delivered pursuant to a Terms
Agreement, as of the Settlement Date with respect to such Terms Agreement), the
Agents shall have received a certificate signed by an officer of the Company,
substantially in the form of Appendix I hereto and dated the date hereof, to
the effect (i) that there has been no such material adverse change, (ii) that
the representations and warranties of the Company contained in Section 1(a)
hereof (other than Section 1(a)(vi)) are true and correct in all material
respects with the same force and effect as though expressly made at and as of
the date of such certificate, (iii) that the Company has complied with all
agreements and satisfied all conditions required by this Agreement or the
Indenture on its part to be performed or satisfied at or prior to the date of
such certificate and (iv) that no stop order suspending the effectiveness of the
Registration Statements has been issued and, to the best of such officer's
knowledge, no proceedings for that purpose have been initiated or threatened by
the Commission.
(d) Comfort Letter. On the date hereof, the Agents shall have received a
letter from the Company's independent public accountants, dated as of the date
hereof and in form and substance satisfactory to the Agents, containing
statements and information of a type ordinarily included in accountants'
"comfort letters" to agents with respect to the financial statements and certain
financial information contained or incorporated by reference in the Registration
Statement and the Pro-
21
spectus; and, if financial statements for any assets, business or entity
acquired by the Company are included or incorporated by reference in the
Registration Statement or the Prospectus, the Agents shall have received a
similar "comfort letter" from a firm of independent public accountants, dated as
of the date hereof and in form and substance satisfactory to the Agents, with
respect to such financial statements and any financial information with respect
to such assets, business or entity, as the case may be, contained or
incorporated by reference in the Registration Statement and the Prospectus.
Without limitation to the foregoing, the letter delivered by the Company's
independent public accountants shall state that nothing has come to their
attention that caused them to believe that at a specified date not more than
five days prior to the date of such letter, there was any change in the
outstanding capital stock of the Company or any increase in consolidated long-
term debt of the Company or any decrease in the stockholders' equity of the
Company, in each case as compared with the amounts shown on the most recent
consolidated balance sheet of the Company incorporated by reference in the
Registration Statement and Prospectus or, during the period from the date of
such balance sheet to a specified date not more than five days prior to the date
of such letter, there were any decreases, as compared with the corresponding
period in the preceding year, in consolidated net sales and operating revenues
or net income of the Company, except in each such case as set forth in or
contemplated by the Registration Statement and Prospectus or except for such
exceptions enumerated in such letter as shall have been agreed to by the Agents
and the Company.
(e) Other Documents. On the date hereof and on each Settlement Date with
respect to any applicable Terms Agreement, counsel to the Agents shall have been
furnished with such documents and opinions as such counsel may reasonably
require for the purpose of enabling such counsel to pass upon the issuance and
sale of the Notes as herein contemplated and related proceedings, or in order to
evidence the accuracy and completeness of any of the representations and
warranties, or the fulfillment of any of the conditions, herein contained.
If any condition specified in this Section 5 shall not have been fulfilled
when and as required to be fulfilled, this Agreement may be terminated by any of
the Agents (as to itself only) and any Terms Agreement may be terminated by the
Agent party to such Terms Agreement by notice to the Company at any time, and
any such termination shall be without liability of any party to any other party,
except that the covenants set forth in Section 3(f) hereof, the provisions of
Section 4 hereof, the indemnity and contribution agreements set forth in
Sections 7 and 8 hereof and the provisions of Sections 9 and 13 hereof shall
remain in effect.
22
SECTION 6. Subsequent Documentation Requirements of the Company.
The Company covenants and agrees that so long as Notes are authorized for
sale pursuant to this Agreement and unless the sale of Notes has been suspended
as provided in this Agreement:
(a) Subsequent Delivery of Certificates. Each time that the Registration
Statement or the Prospectus shall be amended or supplemented (other than by (i)
a Pricing Supplement or an amendment or other supplement providing solely for a
change in the interest rates of the Notes or changes in other terms of the Notes
or (ii) an amendment or supplement which relates exclusively to an offering of
debt securities other than the Notes) or there is filed with the Commission any
document incorporated, or deemed to be incorporated, by reference into the
Prospectus (other than a Current Report on Form 8-K unless delivery of a
certificate is reasonably requested by the Agents with respect to such filing)
or the Company sells Notes to an Agent pursuant to a Terms Agreement, the terms
of which so require, the Company shall use its best efforts to furnish or cause
to be furnished to the Agents or to the Agent party to the Terms Agreement, as
the case may be, promptly following such amendment, supplement or filing or on
the Settlement Date with respect to such Terms Agreement, as the case may be, a
certificate in form satisfactory to counsel for the Agents to the effect that
the statements contained in the certificate referred to in Section 5(c) hereof
that was last furnished to the Agents are true and correct at the time of such
amendment, supplement, filing or sale, as the case may be, as though made at and
as of such time (except that such statements shall be deemed to relate to the
Registration Statement and the Prospectus as amended and supplemented to such
time) or, in lieu of such certificate, a certificate of the same tenor as the
certificate referred to in said Section 5(c), modified as necessary to relate to
the Registration Statement and the Prospectus as amended and supplemented to the
time of delivery of such certificate.
(b) Subsequent Delivery of Legal Opinions. Each time that the
Registration Statement or the Prospectus shall be amended or supplemented (other
than by (i) a Pricing Supplement or an amendment or other supplement providing
solely for a change in the interest rates of the Notes or changes in other terms
of the Notes, (ii) an amendment or supplement providing solely for the inclusion
of additional financial information or (iii) an amendment or supplement that
relates exclusively to an offering of debt securities other than the Notes) or
there is filed with the Commission any document incorporated, or deemed to be
incorporated, by reference into the Prospectus (other than any Annual Report on
Form 10-K, Current Report on Form
23
8-K or Quarterly Report on Form 10-Q relating primarily to financial statements
or other financial information as of and for any fiscal quarter) or the Company
sells Notes to an Agent pursuant to a Terms Agreement, the terms of which so
require, the Company shall use its best efforts to furnish or cause to be
furnished, promptly following such amendment, supplement or filing or on the
Settlement Date with respect to such Terms Agreement, as the case may be, to the
Agents or to the Agent party to the Terms Agreement, as the case may be, a
letter substantially in the form of Appendix II hereto (modified, as necessary,
in the case of a Terms Agreement) from the counsel last furnishing the opinion
referred to in Section 5(a) hereof or, in lieu of such letter, a letter from
other counsel satisfactory to counsel for the Agents, dated the date of delivery
of such letter and in form satisfactory to counsel for the Agents, of the same
tenor as the opinion referred to in Section 5(a) hereof (other than the matters
covered by Sections 5(a)(viii)(x) and 5(a)(xi)), but modified, as necessary, to
relate to the Registration Statement and the Prospectus, as amended and
supplemented to the time of delivery of such opinion.
The Company shall use its best efforts to furnish or cause to be furnished
to the Agents, promptly following each filing by the Company of a Quarterly
Report on Form 10-Q or an Annual Report on Form 10-K, a letter from the counsel
last furnishing the opinion referred to in Section 5(a) hereof, or from other
counsel satisfactory to counsel for the Agents, dated the date of delivery of
such letter and in form satisfactory to counsel for the Agents, of the same
tenor as the opinion referred to in Section 5(a)(xi), but modified, as
necessary, to relate to the Registration Statement and Prospectus, as amended
and supplemented to the time of delivery of such letter.
(c) Subsequent Delivery of Comfort Letters. Each time that the
Registration Statement or the Prospectus shall be amended or supplemented to
include additional financial information or there is filed with the Commission
any document incorporated, or deemed to be incorporated, by reference into the
Prospectus which contains additional financial statement information relating to
the Company or the Company sells Notes pursuant to a Terms Agreement, the terms
of which so require, the Company shall use its best efforts to cause the
Company's independent public accountants, promptly following such amendment,
supplement or filing or on the Settlement Date with respect to such Terms
Agreement, as the case may be, to furnish the Agents or to the Agent party to
the Terms Agreement, as the case may be, a letter, dated the date of filing of
such amendment, supplement or document with the Commission, or such Settlement
Date, as the case may be, in form satisfactory to counsel for the Agents (or
such Agent), of the same general tenor as the letter
24
furnished pursuant to Section 5(d) hereof (other than the information required
by the last sentence thereof, except in the case of a Terms Agreement, the terms
of which so require) but modified, as necessary, to relate to the Registration
Statement and Prospectus, as amended and supplemented to the date of such letter
and with such changes as may be necessary to reflect changes in the financial
statements and other information derived from the accounting records of the
Company; provided, however, that if the Registration Statement or the Prospectus
is amended or supplemented solely to include financial information as of and for
a fiscal quarter, the Company's independent public accountants may limit the
scope of such letter to the unaudited financial statements included in such
amendment or supplement.
SECTION 7. Indemnification.
(a) Indemnification of the Agents. The Company agrees to indemnify and
hold harmless each Agent and each person, if any, who controls an Agent within
the meaning of Section 15 of the 1933 Act as follows:
(i) against any and all loss, liability, claim, damage and expense
whatsoever (including, subject to the limitations set forth in subsection
(c) below, the reasonable fees and disbursements of counsel chosen by the
Agents), as incurred, insofar as such loss, liability, claim, damage or
expense arises out of any untrue statement or alleged untrue statement of a
material fact contained in the Registration Statement or the omission or
alleged omission therefrom of a material fact required to be stated therein
or necessary to make the statements therein not misleading, or arises out
of any untrue statement or alleged untrue statement of a material fact
contained in the Prospectus or the omission or alleged omission therefrom
of a material fact necessary in order to make the statements therein, in
the light of the circumstances under which they were made, not
misleading;
(ii) against any and all loss, liability, claim, damage and expense
whatsoever (including, subject to the limitations set forth in subsection
(c) below, the reasonable fees and disbursements of counsel chosen by the
Agents), as incurred, to the extent of the aggregate amount paid in
settlement of any litigation, or investigation or proceeding by any
governmental agency or body, commenced or threatened, or of any claim
whatsoever, insofar as such loss, liability, claim, damage or expense
arises out of any such untrue statement or omission, or any such alleged
untrue statement or omission, if such settlement is effected with the
written consent of the Company; and
25
(iii) against any and all expense whatsoever (including, subject to
the limitations set forth in subsection (c) below, the reasonable fees and
disbursements of counsel chosen by the Agents), as incurred, reasonably
incurred in investigating, preparing or defending against any litigation,
or investigation or proceeding by any governmental agency or body,
commenced or threatened, or any claim whatsoever, based upon any such
untrue statement or omission, or any such alleged untrue statement or
omission;
provided, however, that this indemnity shall not apply to any loss, liability,
claim, damage or expense (A) to the extent arising out of or based upon any
untrue statement or omission or alleged untrue statement or omission made in
reliance upon the Form T-1 under the 1939 Act filed as an exhibit to the
Registration Statement; or (B) to the extent arising out of any untrue statement
or omission or alleged untrue statement or omission in the Prospectus, if such
untrue statement or alleged untrue statement or omission or alleged omission is
corrected in an amendment or supplement to the Prospectus and if, having
previously been furnished by or on behalf of the Company with copies of the
Prospectus, as so amended or supplemented, such Agent thereafter failed to
deliver such Prospectus, as so amended or supplemented, prior to or concurrently
with the sale of a Note or Notes to the person asserting such loss, liability,
claim, damage or expense who purchased such Note or Notes that are the subject
thereof from such Agent; or (C) as to which such Agent may be required to
indemnify the Company pursuant to the provisions of subsection (b) of this
Section 7; or (D) if such loss, liability, claim, damage or expense is covered
by any other written agreement between the Company and such Agent pertaining to
the sale of the Notes pursuant to which such Agent may be required to indemnify
the Company for such loss, liability, claim, damage or expense.
(b) Indemnification of the Company. Each Agent agrees, severally and not
jointly, to indemnify and hold harmless the Company, its directors, each of its
officers who signed the Registration Statement, and each person, if any, who
controls the Company within the meaning of Section 15 of the 1933 Act against
any and all loss, liability, claim, damage and expense described in the
indemnity contained in subsection (a) of this Section 7, as incurred, but only
with respect to untrue statements or omissions, or alleged untrue statements
or omissions, made in the Registration Statement or the Prospectus in reliance
upon and in conformity with written information furnished to the Company by or
on behalf of any such Agent expressly for use in the Registration Statement or
the Prospectus.
26
(c) General. (i) In case any action, suit or proceeding (including any
governmental or regulatory investigation or proceeding) shall be brought against
any Agent or any person controlling such Agent, based upon the Registration
Statement or the Prospectus and with respect to which indemnity may be sought
against the Company pursuant to this Section 7, such Agent or controlling person
shall promptly notify the Company in writing, and the Company shall assume the
defense thereof, including the employment of counsel and payment of all
expenses. Any such Agent or any such controlling person shall have the right to
employ separate counsel in any such action, suit or proceeding and to
participate in the defense thereof, but the fees and expenses of such separate
counsel shall be at the expense of such Agent or such controlling person, unless
(A) the employment of such counsel shall have been specifically authorized in
writing by the Company, (B) the Company shall have failed to assume the defense
and employ counsel or (C) the named parties to any such action, suit or
proceeding (including any impleaded parties) shall include both such Agent or
such controlling person and the Company, and such Agent or such controlling
person shall have been advised by such counsel that there may be one or more
legal defenses available to it that are different from, or additional to, those
available to the Company (in which case, if such Agent or such controlling
person notifies the Company in writing that it elects to employ separate counsel
at the expense of the Company, the Company shall not have the right to assume
the defense of such action, suit or proceeding on behalf of such Agent or such
controlling person, it being understood, however, that the Company shall not, in
connection with any one such action or separate but substantially similar or
related actions in the same jurisdiction arising out of the same general
allegations or circumstances, be liable for the reasonable fees and expenses of
more than one separate firm of attorneys (in addition to any local counsel) for
all such Agents and such controlling persons, which firm shall be designated in
writing by a majority of all such Agents, on behalf of all of such Agents and
such controlling persons).
(ii) In case any action, suit or proceeding (including any governmental or
regulatory investigation or proceeding) shall be brought against the Company,
any of the Company's directors or officers, or any person controlling the
Company, with respect to which indemnity may be sought against any Agent
pursuant to this Section 7, such Agent shall have the rights and duties given to
the Company by subsection (c)(i) of this Section 7, and the Company, the
Company's directors and officers and any such controlling person shall have the
rights and duties given to the Agents by subsection (c)(i) of this Section 7.
SECTION 8. Contribution.
27
In order to provide for just and equitable contribution in circumstances in
which the indemnity agreement provided for in Section 7 hereof is for any reason
held to be unenforceable with respect to the indemnified parties, although
applicable in accordance with its terms, the Company and each Agent shall
contribute to the aggregate losses, liabilities, claims, damages and expenses of
the nature contemplated by said indemnity agreement incurred by the Company
and the Agents, as incurred, (i) in such proportion as is appropriate to reflect
the relative benefits received by the Company, on the one hand, and each of the
Agents, on the other hand, from the offering of the Notes 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 of the Agents, on the other hand, in connection with the
statements or omissions that resulted in such losses, liabilities, claims,
damages and expenses. The relative benefits received by the Company, on the one
hand, and the Agents, on the other hand, shall be deemed to be in the same
proportions as the total net proceeds from the sale of the Notes (before
deducting expenses) received by the Company, on the one hand, and the total
commissions or other compensation or remuneration received by each Agent, on the
other hand, bear to the total purchase price of the Notes as set forth in the
applicable Pricing Supplement. The relative fault of the Company, on the one
hand, and the Agents, on the other hand, shall be determined by reference to,
among other things, whether the untrue or alleged untrue statement of a material
fact or the omission or alleged omission to state a material fact relates to
information supplied by the Company or by the Agents and the parties' relative
intent, knowledge, access to information and opportunity to correct or prevent
such statement or omission. The Agents' respective obligations to contribute
pursuant to this Section 8 are several in proportion to the respective principal
amount of Notes they have purchased hereunder, and not joint. Notwithstanding
the provisions of this Section 8, no Agent shall be required to contribute any
amount in excess of the amount by which the total purchase price at which the
Notes were offered by such Agent to the public 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 1933
Act) shall be entitled to contribution from any person who was not guilty of
such fraudulent misrepresentation. For purposes of this Section 8, each
person, if any, who controls an Agent within the meaning of Section 15 of the
1933 Act shall have the same rights to contribution as such Agent, and each
director of the Company, each officer of the Company who signed the Registration
Statement and each person, if
28
any, who controls the Company within the meaning of Section 15 of the 1933 Act
shall have the same rights to contribution as the Company. Any party entitled to
contribution hereunder will, promptly after receipt of notice of commencement of
any action, suit or proceeding against such party in respect of which a claim
for contribution may be made against another party or parties under this Section
8, notify such party or parties from whom contribution may be sought, but the
omission to so notify such party or parties shall not relieve the party or
parties from whom contribution may be sought from any other obligation it or
they may have otherwise than under this Section 8.
SECTION 9. Representations, Warranties and Agreements to Survive Delivery.
All representations, warranties and agreements contained in this Agreement
or any Terms Agreement, or contained in certificates of officers of the Company
submitted pursuant hereto, shall remain operative and in full force and effect,
regardless of any investigation made by or on behalf of any Agent or any
controlling person of any Agent, or by or on behalf of the Company, and shall
survive each delivery of and payment for any of the Notes.
SECTION 10. Termination.
(a) Termination of this Agreement. This Agreement may be terminated by
the Company (i) for any reason at any time with respect to any Agent or Agents
upon the giving of 10 days' written notice of such termination to each other
party hereto or (ii) at any time upon notice to each other party hereto if no
Notes then remain authorized for sale pursuant hereto. This Agreement may be
terminated by any Agent (as to itself only) either (x) upon the giving of 10
days' written notice of such termination to each other party hereto or (y) at
any time upon notice to the Company if the Company shall have failed to furnish
or cause to be furnished the certificates, opinions or letters referred to in
Section 5 or 6 hereof or if no Notes then remain authorized for sale pursuant
hereto.
(b) Termination of a Terms Agreement. An Agent party to a Terms
Agreement may terminate such Terms Agreement (as to itself only) immediately
upon notice to the Company, at any time prior to the Settlement Date relating
thereto, if (i) between the date of such Terms Agreement and the related
Settlement Date, there shall have been any material adverse change in the
consolidated financial condition of the Company and its subsidiaries, taken as a
whole, (ii) there shall have occurred any material adverse change in the
financial markets in the United States or any
29
outbreak or escalation of hostilities or other national or international
calamity or crisis, the effect of which shall be such as to make it, in the
reasonable judgment of such Agent, impracticable to market or to enforce
contracts for sale of the Notes or other debt securities, (iii) trading in any
securities of the Company shall have been suspended by the Commission or a
national securities exchange in the United States, or if trading generally on
the New York Stock Exchange shall have been suspended, or minimum or maximum
prices for trading shall have been fixed, or maximum ranges for prices for
securities shall have been required, by said exchange or by order of the
Commission or any other governmental authority, or if a banking moratorium shall
have been declared by either Federal or New York authorities or if a banking
moratorium shall have been declared by the relevant authorities in the country
or countries of origin of any foreign currency or currencies in which the Notes
are denominated or payable, (iv) any of the nationally recognized securities
rating agencies referred to in Section 3(a)(vi) shall have publicly announced
that it has (A) placed the Notes or the Company's unsecured senior long term
debt generally on what is commonly termed a "watch list" for possible
downgrading or (B) downgraded the Notes or the Company's unsecured senior long
term debt generally, or (v) the Company shall have failed to furnish or cause to
be furnished the certificates, opinions or letters referred to in Section 6
hereof.
(c) General. In the event of any such termination, no party will have any
liability to any other party hereto, except that (i) a terminating Agent shall
be entitled to any commissions earned in accordance with the third paragraph of
Section 2(a) hereof, (ii) if at the time of termination (A) a terminating Agent
and the Company shall have entered into a Terms Agreement and the Settlement
Date with respect thereto shall not yet have occurred or (B) an offer to
purchase any of the Notes has been accepted by the Company but the time of
delivery to the purchaser or his agent of the Note or Notes relating thereto has
not occurred, the covenants set forth in Sections 3 (subject to the provisions
of Section 3(h)) and 6 hereof shall remain in effect until such Settlement Date
or until such Notes are so delivered, as the case may be, (iii) if at the time
of termination an Agent holds Notes purchased under a Terms Agreement entered
into within 90 days of such termination, the covenants set forth in Section 3(d)
(subject to the provisions of Section 3(h)) shall remain in effect for a period
of 90 days following the date such Terms Agreement is entered into (subject to
extension pursuant to Section 3(h)) and (iv) the covenants set forth in Section
3(f) hereof, the provisions of Section 4 hereof, the indemnity and
contribution agreements set forth in Sections 7 and 8 hereof and the provisions
of Sections 9 and 13 hereof shall remain in effect.
30
SECTION 11. Notices.
All notices and other communications hereunder shall be in writing and
shall be deemed to have been duly given if mailed or transmitted by any standard
form of telecommunication. Notices to the Agents shall be directed, as the case
may be, to [insert Agent's notice provisions]. Notices to the Company shall be
directed to it at ▇▇▇▇▇ ▇▇▇▇▇▇▇▇ ▇▇▇▇▇▇▇▇▇, ▇▇▇ ▇▇▇▇▇▇▇, ▇▇▇▇▇▇▇▇▇▇ ▇▇▇▇▇,
attention of Vice President and Treasurer.
SECTION 12. Parties.
This Agreement shall inure to the benefit of and be binding upon the Agents
(and, in the case of a Terms Agreement, the Agent or Agents party thereto) and
the Company and their respective successors. Nothing expressed or mentioned in
this Agreement is intended or shall be construed to give any person, firm or
corporation, other than the parties hereto and their respective successors and
the controlling persons and officers and directors referred to in Sections 7 and
8 hereof and their heirs and legal representatives, any legal or equitable
right, remedy or claim under or in respect of this Agreement or any provisions
herein contained. This Agreement and all conditions and provisions hereof are
intended to be for the sole and exclusive benefit of the parties hereto and
their respective successors and said controlling persons and officers and
directors and their heirs and legal representatives, and for the benefit of no
other person, firm or corporation. No purchaser of Notes shall be deemed to be
a successor by reason merely of such purchase.
SECTION 13. Governing Law.
This Agreement and the rights and obligations of the parties created hereby
shall be governed by and construed in accordance with the laws of the State of
New York, including without limitation, (S) 5-1401 of the New York General
Obligations Law.
If the foregoing is in accordance with your understanding of our agreement,
please sign and return to the Company a counterpart hereof, whereupon this
instrument along with all counterparts will become a binding agreement between
the Agents and the Company in accordance with its terms.
Very truly yours,
31
Occidental Petroleum Corporation
By
--------------------------
Name:
Title:
CONFIRMED AND ACCEPTED, as of the date
first above written:
[Agents]
32
EXHIBIT A
COMMISSION
TERM (a) RATE (b)
-------- ----------
More than 9 months but less than 1 year.........
From 1 year but less than 18 months.............
From 18 months but less than 2 years............
From 2 years but less than 3 years..............
From 3 years but less than 4 years..............
From 4 years but less than 5 years..............
From 5 years but less than 6 years..............
From 6 years but less than 7 years..............
From 7 years but less than 10 years.............
From 10 years but less than 15 years............
From 15 years but less than 20 years............
From 20 years to 30 years(c)....................
(a) With respect to each Note that is subject to purchase by the Company at the
option of the holder thereof (a "Put Note"), the word "Term" as used in
this Exhibit A refers to the earliest purchase date specified in the
applicable Put Note.
(b) With respect to each Note that is a Discount Security (as defined in the
Indenture), the commission payable to each Agent with respect to each such
Note sold as a result of a solicitation made by such Agent shall be based
on the purchase price of such Note.
(c) With respect to each Note with a term in excess of 30 years from the date
of issue, the commission payable to each Agent with respect to each such
Note sold as a result of a solicitation made by such Agent will be agreed
to by the Company and such Agent at the time of such sale.
A-1
EXHIBIT B
The following terms, if applicable, shall be agreed to by the Agent and the
Company pursuant to each Terms Agreement:
Principal Amount: $________
(or principal amount of
foreign currency)
Interest Rate:
If Fixed Rate Note:
Interest Rate:
Interest Payment Dates:
Regular Record Dates:
If Floating Rate Note:
Base Rate or Rates (or the method of calculating the Base Rate or
Rates):
Initial Interest Rate:
Spread or Spread Multiplier, if any:
Interest Reset Dates:
Interest Payment Dates:
Index Maturity:
Interest Determination Dates:
Maximum Interest Rate, if any:
Minimum Interest Rate, if any:
Interest Reset Period:
Interest Payment Period:
Calculation Agent (if other than the Trustee):
If Redeemable:
Earliest Redemption Date:
Redemption Price:
Stated Maturity:
Purchase Price: ______%
Settlement Date and Time:
Currency of Denomination (if currency is other than U.S. dollar):
Currency of Payment (if currency is other than U.S. dollar):
Denominations:
Additional Terms:
B-1
Also, agreement as to whether the following will be required:*
Officer's Certificate pursuant to Section 6(a) of the Distribution
Agreement.
Legal Opinion pursuant to Section 6(b) of the Distribution Agreement.
Comfort Letter pursuant to Section 6(c) of the Distribution Agreement.
----------------
* The following generally will not be required in connection with a sale of
less than $50,000,000 aggregate principal amount of Notes.
B-2
APPENDIX I
FORM OF OFFICER'S CERTIFICATE
OCCIDENTAL PETROLEUM CORPORATION
I, [name], [title] of Occidental Petroleum Corporation, a Delaware
corporation (the "Company"), pursuant to Section 5(c) of the Distribution
Agreement, dated (the "Distribution Agreement"), between the Company
and each of [insert Agents] (collectively, the "Agents"), relating to the
offering from time to time by the Company directly or through or to the Agents
of up to U.S. $ aggregate offering price of Medium-Term Notes,
Series [ ], of the Company, hereby certify on behalf of the Company that:
1. Except as contemplated in the Prospectus (as defined in the
Distribution Agreement) or reflected therein by the filing of any amendment or
supplement thereto or any Incorporated Document (as defined in the Distribution
Agreement), since the date of the most recent consolidated financial statements
included or incorporated by reference in the Prospectus, there has not been any
material adverse change in the consolidated financial condition of the Company
and its subsidiaries, taken as a whole;
2. The representations and warranties of the Company contained in Section
1(a) of the Distribution Agreement (other than Section 1(a)(vi) thereof) are
true and correct in all material respects with the same force and effect as
though expressly made at and as of the date hereof;
3. The Company has complied with all agreements and satisfied all
conditions required by the Distribution Agreement or the Indenture (as defined
in the Distribution Agreement) on its part to be performed or satisfied at or
prior to the date hereof; and
4. No stop order suspending the effectiveness of the Registration
Statement (as defined in the Distribution Agreement) has been issued and, to the
best of my knowledge, no proceedings for that purpose have been initiated or
threatened by the Securities and Exchange Commission.
IN WITNESS WHEREOF, I have hereunto signed my name this day of ,
.
By:________________________________________
Name:
Title:
B-3
APPENDIX II
FORM OF RELIANCE LETTER OF COUNSEL
[Date]
Re: Occidental Petroleum Corporation Medium-Term Notes, Series [ ]
Dear Sirs:
I have delivered an opinion to you, dated , as counsel to
Occidental Petroleum Corporation (the "Company"), pursuant to Section 5(a) of
the Distribution Agreement, dated (the "Distribution Agreement"),
between the Company and [insert Agents]. You may continue to rely upon such
opinion (other than the matters covered by Sections 5(a)(viii)(x) and 5(a)(xi)
thereof, as to which no opinion is expressed) as if it were dated as of this
date, except that all statements and opinions contained therein shall be deemed
to relate to the Registration Statement and Prospectus (as such terms are
defined in the Distribution Agreement) as amended and supplemented to this date.
This letter is delivered to you pursuant to Section 6(b) of the
Distribution Agreement.
Very truly yours,
B-4
EXHIBIT C
OCCIDENTAL PETROLEUM CORPORATION
MEDIUM-TERM NOTES, SERIES [ ]
ADMINISTRATIVE PROCEDURES
[Date]
The administrative procedures and specific terms of the offering of Medium-
Term Notes, Series [ ] (the "Notes") on a continuous basis by Occidental
Petroleum Corporation (the "Issuer") pursuant to the Distribution Agreement,
dated (the "Distribution Agreement"), between the Issuer and each of
[Insert Agents] (each an "Agent") are explained below. In the Distribution
Agreement, the Agents have agreed to use their best efforts to solicit offers to
purchase the Notes. Each Agent, as principal, may purchase Notes for its own
account pursuant to the terms and settlement details of a terms agreement
entered into between the Issuer and such Agent, as contemplated by the
Distribution Agreement. In the Distribution Agreement, the Issuer reserves the
right to sell Notes directly on its own behalf.
Each Note will be issued under an indenture between the Issuer and The Bank
of New York, as trustee, (the "Trustee"), dated as of April 1, 1998 (the
"Indenture", which term, for purposes hereof, shall include the Officers'
Certificate (the "Officers' Certificate") delivered from time to time pursuant
to Sections 201 and 301 of the Indenture establishing the terms of the Note),
relating to senior debt securities of the Issuer. Notes will bear interest at
fixed rates ("Fixed Rate Notes"), floating rates ("Floating Rate Notes") or will
not bear interest. Each Note will be represented by either a Global Security
(as defined hereinafter) delivered to the Trustee, as agent for The Depository
Trust Company ("DTC"), and recorded in the book-entry system maintained by DTC
(a "Book-Entry Note") or a certificate delivered to the Holder thereof or a
Person designated by such Holder (a "Certificated Note"). Owners of beneficial
interests in a Global Security will be entitled to physical delivery of
Certificated Notes equal in principal amount to their respective beneficial
interests only under certain limited circumstances.
The Trustee will act as Paying Agent for the payment of principal of and
interest on the Notes and will perform, as Paying Agent, unless otherwise
specified in the Notes, the Indenture or herein, the other duties specified
herein. Book-Entry Notes will be issued in accordance with the administrative
procedures set forth in Part I hereof, and Certificated Notes will be issued in
accordance with the administrative procedures set forth in Part II hereof. Any
administrative responsibilities, document control and record-keeping functions
to be performed by the Issuer will be performed by its Treasury Department. To
the extent that the procedures set forth herein conflict with any provision of
the Notes (which, in the case of Book-Entry Notes shall be the related Global
Security), the Indenture or the Distribution Agreement, the relevant provisions
of the Notes, the Indenture or the Distribution Agreement shall be controlling.
Unless otherwise defined herein, terms defined in the Indenture, the Officers'
Certificates or the Notes shall be used herein as therein defined.
C-1
Upon the agreement of the Company, the Trustee and the Agent or Agents with
respect to a particular issue of Notes, subject to the terms of the Indenture,
the terms and procedures with respect to such issue of Notes may be varied from
those set forth herein.
PART I: ADMINISTRATIVE PROCEDURES FOR BOOK-ENTRY NOTES
In connection with the qualification of the Book-Entry Notes for
eligibility in the book-entry system maintained by DTC, the Trustee will perform
the custodial, document control and administrative functions described below,
in accordance with its respective obligations under a Letter of Representations
from the Issuer and the Trustee to DTC dated as of , and a Medium-Term
Note Certificate Agreement between the Trustee and DTC, dated , and its
obligations as a participant in DTC, including DTC's Same-Day Funds Settlement
System ("SDFS").
ISSUANCE: On any date of settlement (as defined under
"Settlement" below) for one or more Book-Entry
Notes, the Issuer will issue a single global
security in fully registered form without coupons
(a "Global Security") representing up to
$200,000,000 principal amount of all such Notes
that have the same Original Issue Price, Stated
Maturity, Earliest Redemption Date, Redemption
Price and other redemption provisions, if any,
Purchase Date or Dates and Purchase Price or
Prices, if any, Interest Payment Dates, Regular
Record Dates, Interest Payment Period, Original
Issue Discount, if any, Yield to Maturity, if
applicable, and, additionally, in the case of
Fixed Rate Notes, interest rate and, in the case
of Floating Rate Notes, Initial Interest Rate,
Base Rate or Rates, 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
(collectively the "Terms"). Each Global Security
will be dated and issued as of the date of its
authentication by the Trustee. Each Global
Security will bear interest from the later of the
Original Issue Date specified therein or from the
most recent Interest Payment Date with respect to
such Global Security (or Predecessor Security) to
which interest has been paid or duly provided for
(such later date being herein referred to as a
"Global Interest Accrual Date"). Book-Entry Notes
may only be denominated and payable in U.S.
dollars. No Global Security 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 (including tranche
numbers), which series consists of approximately
900 CUSIP numbers (of which [ ] remained
unassigned as of [ ]) and relates to Global
Securities representing the Book-Entry Notes. The
Issuer has obtained from the CUSIP Service Bureau
a written list of such series of reserved CUSIP
numbers and has delivered to
C-2
the Trustee and DTC such written list of [ ]
unassigned CUSIP numbers. The Issuer will assign
CUSIP numbers to Global Securities as described
under Settlement Procedure "B" below. DTC will
notify the CUSIP Service Bureau periodically of
the CUSIP numbers that the Issuer has assigned to
Global Securities. At any time when fewer than 100
of the reserved CUSIP numbers of a series remain
unassigned to Global Securities, the Trustee will
notify the Issuer and, if the Issuer deems
necessary, it will reserve additional CUSIP
numbers for assignment to Global Securities
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 Security will be registered in the
name of Cede & Co., as nominee for DTC, on the
Security 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 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: At the request of the Issuer, the Trustee shall
deliver to DTC and the CUSIP Service Bureau at any
time a written notice of consolidation specifying
(i) the CUSIP numbers of two or more Outstanding
Global Securities 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 30 days after such written notice is
delivered and at least 30 days before the next
Interest Payment Date for such Book-Entry Notes,
on which such Global Securities shall be exchanged
for a single replacement Global Security and (iii)
a new CUSIP number, obtained from the Issuer, to
be assigned to such replacement Global Security.
Upon receipt of such a notice, DTC will send to
its Participants (including the Trustee) a written
reorganization notice to the effect that such
C-3
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 Securities to be
exchanged will no longer be valid. On the
specified exchange date, the Trustee will exchange
such Global Securities for a single Global
Security bearing the new CUSIP number, and the
CUSIP numbers of the exchanged Global Securities
will, in accordance with CUSIP Service Bureau
customary procedures, be cancelled and not
immediately reassigned. Notwithstanding the
foregoing, if the Global Securities to be
exchanged exceed $200,000,000 in aggregate
principal amount, one Global Security will be
authenticated and issued to represent each
$200,000,000 of principal amount of the exchanged
Global Securities and an additional Global
Security will be authenticated and issued to
represent any remaining principal amount of such
Global Securities (see "Denominations" below).
MATURITIES: Each Book-Entry Note will mature on a date not
less than nine months after the settlement date
for such Note.
NOTICE OF REDEMPTION
DATES: In the case of a full redemption of all Book-Entry
Notes represented by a single Global Security,
the Trustee will notify DTC not more than 60 but
not less than 30 days prior to the Redemption
Date with respect to such Global Security, of the
CUSIP number of such Global Security, the
Redemption Date and the Redemption Price. In the
case of a redemption of less than all Book-Entry
Notes represented by a single Global Security, the
Trustee will notify DTC not more than 2 business
days before 60 days, but not less than 2 business
days before 30 days, prior to the Redemption Date
with respect to such Global Security, of the CUSIP
number of such Global Security, the Redemption
Date and the Redemption Price.
NOTICE OF PURCHASE
DATES: In the case of any Global Security having a
Purchase Date or Dates specified therein, the
Trustee will notify DTC, upon the earlier of 60
days prior to each such Purchase Date or 5 days
prior to the first date on which a Purchase Notice
with respect to such Purchase Date may be
delivered to the Trustee, of the CUSIP number of
such Global Security, the first and last date on
which a Purchase Notice with respect to such
Purchase Date may be delivered to the Trustee, the
Purchase Date and the Purchase Price.
C-4
DENOMINATIONS: Book-Entry Notes will be sold in denominations of
$1,000 and any amount in excess thereof that is an
integral multiple of $1,000. Global Securities
will be issued in denominations of $1,000 and any
amount in excess thereof that is an integral
multiple of $1,000, up to a maximum denomination
of $200,000,000. If one or more Book-Entry Notes
having an aggregate principal amount in excess of
$200,000,000 would, but for the preceding
sentence, be represented by a single Global
Security, then one Global Security will be issued
to represent each $200,000,000 principal amount of
such Book-Entry Note or Notes and an additional
Global Security will be issued to represent any
remaining principal amount of such Book-Entry Note
or Notes. In such a case, each of the Global
Securities representing such Book-Entry Note or
Notes shall be assigned the same CUSIP number.
INTEREST: General. Interest on each Book-Entry Note will
accrue from the Global Interest Accrual Date of
the Global Security representing such Note and
will be paid on the Interest Payment Dates of the
Global Security representing such Book-Entry Note.
In the case of a Global Security originally issued
between a Regular Record Date and the related
Interest Payment Date or on an Interest Payment
Date, the first interest payment will be made on
the Interest Payment Date immediately following
the next Regular Record Date. Each payment of
interest on a Global Security will include
interest accrued to but excluding the Interest
Payment Date or Maturity. See "Calculation of
Interest" below. Interest payable at the Maturity
of a Book-Entry Note will be payable to the Person
to whom the principal of such Note is payable.
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 any Global Security in the appropriate
weekly supplement to the Corporate Registered Bond
Interest Record published by Standard & Poor's
Corporation.
Regular Record Dates. Unless otherwise specified
in the applicable Global Security, the Regular
Record Date with respect to Fixed Rate Book-Entry
Notes shall be the January 15 or July 15, as the
case may be, next preceding the applicable
Interest Payment Date. The Regular Record Date
with respect to any Interest Payment Date for
Floating Rate Book-Entry Notes shall be the
fifteenth day (whether or not a Business Day) next
preceding such Interest Payment Date.
C-5
Fixed Rate Book-Entry Notes. Unless otherwise
specified in the applicable Global Security,
interest payments on Fixed Rate Book-Entry Notes
will be made semiannually on February 1 and August
1 of each year and at Maturity, subject to the
exceptions specified in "Payments of Principal and
Interest" below.
Floating Rate Book-Entry Notes. Interest payments
will be made on Floating Rate Book-Entry Notes
monthly, quarterly, semiannually or annually of
each year, as specified in the related Global
Security, and at Maturity. Unless otherwise
specified in the applicable Global Security and
subject to the exceptions specified in "Payments
of Principal and Interest" below, interest will be
payable, in the case of Floating Rate Book-Entry
Notes which reset (i) daily, weekly or monthly, on
the third Wednesday of each month; (ii) quarterly,
on the third Wednesday of March, June, September
and December of each year; (iii) semiannually, on
the third Wednesday of each of the two months
specified in the Global Security representing the
applicable Book-Entry Note; and (iv) annually, on
the third Wednesday of the month specified in the
Global Security representing the applicable Book-
Entry Note; and, in each case, at Maturity.
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
(to the extent then determinable by the Trustee)
that will occur with respect to each Global
Security during the six-month period beginning on
such first Business Day. Promptly after each
Interest Determination Date for Floating Rate
Notes, the calculation agent (the "Calculation
Agent") will notify Standard & Poor's Corporation
of the interest rates determined on such Interest
Determination Date.
CALCULATION OF
INTEREST: Fixed Rate Book-Entry Notes. Except as otherwise
specified in the applicable Global Securities,
interest on Fixed Rate Book-Entry Notes (including
interest for partial periods) will be calculated
on the basis of a 360-day year of twelve 30-day
months.
Floating Rate Book-Entry Notes. Interest rates on
Floating Rate Book-Entry Notes will be determined
as set forth in the Global Security representing
the applicable Floating Rate Book-Entry Notes.
Except as otherwise specified in the applicable
Global Securities, interest will be calculated in
the case of
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(a) Commercial Paper Rate, CD Rate, Federal Funds
Rate, LIBOR and Prime Rate Notes, on the basis of
the actual number of days in the interest period
and a 360-day year; and (b) Treasury Rate Notes,
on the basis of the actual number of days in the
interest period and the actual number of days in
the year.
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 Security on the following Interest
Payment Date (other than an Interest Payment Date
coinciding with Maturity) and the total of such
amounts. DTC will check the amount payable on each
Global Security on such Interest Payment Date as
shown in the appropriate weekly supplements to the
Corporate Registered Bond Interest Record
published by Standard & Poor's Corporation. On
such Interest Payment Date, the Issuer will pay to
the Trustee 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."
If any Interest Payment Date for a Fixed Rate
Book-Entry Note is scheduled to occur on a day
that is not a Business Day with respect to such
Fixed Rate Book-Entry Note, the payment due on
such Interest Payment Date will be made on the
following day that is a Business Day with respect
to such Fixed Rate Book-Entry Note, and no
interest shall accrue on the amount payable on
such Interest Payment Date for the period from and
after such Interest Payment Date to such following
day that is a Business Day.
If any Interest Payment Date for a Floating Rate
Book-Entry Note is scheduled to occur on a day
that is not a Business Day with respect to such
Floating Rate Book-Entry Note, such Interest
Payment Date will be the following day that is a
Business Day with respect to such Floating Rate
Book-Entry Note; provided, however, that in the
case of a Floating Rate Book-Entry Note which is a
LIBOR Note, if such following day that is a
Business Day is in the next succeeding calendar
month, such Interest Payment Date will be the
immediately preceding day that is a Business Day.
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
Security
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either maturing at Stated Maturity or maturing (in
whole or in part) on a Redemption Date or Purchase
Date in the following month (to the extent then
determinable by the Trustee). The Issuer, the
Trustee and DTC will confirm the amounts of such
principal and interest payments with respect to
each such Global Security on or about the fifth
Business Day preceding the Maturity of such
Global Security. The Issuer will pay to The Bank
of New York, as the Paying Agent, the principal
amount of such Global Security, together with
interest due at such Maturity. The Paying Agent
will pay such amounts to DTC at the times and in
the manner set forth under "Manner of Payment"
below. If any Maturity of a Global Security
representing Book-Entry Notes is not a Business
Day, the payment due on such day shall be made on
the next succeeding Business Day and no interest
shall accrue on such payment for the period from
and after such Maturity. Promptly after payment to
DTC of the principal and interest due at the
Maturity of such Global Security, the Trustee will
cancel such Global Security in accordance with the
terms of the Indenture, deliver to the Issuer an
appropriate debit advice and return to the Issuer
all such cancelled Global Securities; provided,
however, that in the event only a portion of a
Global Security shall have been redeemed or
purchased by the Issuer, the Trustee will exchange
such Global Security for two Global Securities,
one of which shall represent the portion of the
original Global Security which was so redeemed or
purchased and shall be cancelled immediately after
issuance and the other of which shall represent
the remaining portion of the original Global
Security which was not so redeemed or purchased
and shall bear the CUSIP number of the original
Global Security. On the first Business Day of each
month, the Trustee will deliver to the Issuer by
facsimile transmission a written statement,
indicating the total principal amount of
Outstanding Global Securities for which it serves
as trustee as of the immediately preceding
Business Day.
Manner of Payment. The total amount of any
principal and interest due on Global Securities 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 in any event not later
than 12:00 noon (New York City time) on such date.
The Issuer will make such payment on such Global
Securities by wire transfer to the Trustee. Prior
to 10:00 a.m. (New York City time) on each
Maturity date or as soon as possible thereafter
following the receipt of funds, 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
C-8
DTC, in funds available for immediate use by DTC,
each payment of interest and principal due on a
Global Security on such 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 Securities are recorded in the book-
entry system maintained by DTC. Neither the Issuer
(either as Issuer or as Paying Agent) nor the
Trustee shall have any 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 AND
REJECTION OF OFFERS: The Issuer has the sole right to accept offers to
purchase Book-Entry Notes and may reject any such
offer in whole or in part. Each Agent may, in its
discretion reasonably exercised, reject any offer
to purchase Book-Entry Notes received by it in
whole or in part. Each Agent will advise the
Issuer promptly by telephone or by facsimile
transmission of all offers to purchase Book-Entry
Notes received by such Agent, other than those
rejected by it.
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 Security
representing such Note shall constitute
"settlement" with respect to such Note. Each offer
accepted by the Issuer will be settled on the
fifth Business Day following acceptance of such
offer 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 Business Day following
acceptance of such offer.
SETTLEMENT PROCEDURES: In the event of a purchase of Book-Entry Notes by
one or more of the Agents, as principal,
appropriate settlement details, if different from
those set forth below, will be set forth in an
applicable
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Terms Agreement to be entered into between such
Agent or Agents and the Issuer pursuant to the
Distribution Agreement. Settlement Procedures with
regard to each Book-Entry Note sold by the Issuer
through an Agent, as agent, shall be as follows:
▇. ▇▇▇▇ Agent will advise the Issuer by
facsimile transmission of the following
settlement information:
1. Whether the form of the Global
Security representing such Note is the
Form of Global Fixed Rate Registered
Security, Form of Global Floating
Rate Registered Security, Form of
Global Fixed Rate Registered Security
(with Put Option), Form of Global
Floating Rate Registered Security
(with Put Option), Form of Global
Zero Coupon Registered Security or
Form of Global Discount Registered
Security.
2. Principal amount.
3. Stated Maturity.
4. If such Note is a Fixed Rate Note, the
interest rate.
If such Note is a Floating Rate Note,
the following:
a) Base Rate or Base Rates (or the
method of calculating the Base
Rate or Base Rates);
b) Initial Interest Rate;
c) Spread and/or Spread Multiplier,
if any;
d) Interest Reset Dates;
e) Interest Reset Period;
f) Interest Payment
Dates;
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g) Index Maturity;
h) Interest Payment
Period;
i) Calculation Agent (if other than
The Bank of New York);
j) Maximum Interest Rate, if any;
k) Minimum Interest Rate, if any; and
l) Interest Determination Dates.
5. Earliest Redemption Date, Redemption
Price and other redemption provisions,
if any, and Purchase Date or Dates and
Purchase Price or Prices, if any.
6. Settlement date.
7. Original Issue Price.
8. Original Issue Discount, if any, and
Yield to Maturity, if applicable.
9. Agent's commission, determined as
provided in Section 2 of the
Distribution Agreement between the
Issuer and such Agent.
10. Additional terms or provisions of such
Note, if any.
B. The Issuer will assign a CUSIP number to
the Global Security representing such Note
and then advise the Trustee by telephone
(confirmed in writing at any time on the
same date) or facsimile transmission of
the information set forth in Settlement
Procedure "A" above, such CUSIP number and
the name of such Agent. The Issuer will
also notify the Agent of such CUSIP number
by telephone as soon as practicable.
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C. The Trustee will enter a pending deposit
message through DTC's Participant
Terminal System, providing the following
settlement information to DTC, such
Agent, and Standard & Poor's Corporation:
1. The information set forth in
Settlement Procedure "A" above.
2. Numbers of the participant accounts
maintained by DTC on behalf of the
Trustee and the Agent.
3. Identification as a Fixed Rate Book-
Entry Note or a Floating Rate Book-
Entry Note.
4. Initial Interest Payment Date for such
Note, Regular Record Date and amount
of interest payable on such Interest
Payment Date.
5. Interest Payment Period.
6. CUSIP number of the Global Security
representing such Note.
7. Whether such Global Security will
represent any other Book-Entry Note
(to the extent known at such time).
D. The Issuer will deliver to the Trustee a
pre-printed Global Security to represent
such Note, in a form that has been
approved by the Issuer, the Agents and the
Trustee.
E. The Trustee will complete and authenticate
the Global Security 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
C-12
Note to such Agent's participant account
and (ii) debit such Agent's settlement
account and credit the Trustee's
settlement account for an amount equal to
the price of such 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 Security representing such
Book-Entry Note has been issued and
authenticated and (ii) the Trustee is
holding such Global Security pursuant to
the Medium-Term Note Certificate Agreement
between the Trustee and DTC.
▇. ▇▇▇▇ 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 any 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" above will be
settled in accordance with SDFS operating
procedures in effect on the settlement
date.
J. The Trustee will credit to an account of
the Issuer designated from time to time by
the Issuer to the Trustee funds available
for immediate use in the amount
transferred to the Trustee in accordance
with Settlement Procedure "G" above.
K. The Trustee will retain the Global
Security representing such Note and will
send a photocopy thereof to the Issuer by
first-class mail. Monthly, the Trustee
will send to the Issuer a written
statement, setting forth (i) the principal
amount of Notes Outstanding under the
Indenture as of the date of such report,
(ii) a brief description of any sales of
which the Issuer has advised the Trustee
but which have not yet been settled and
(iii) a description of issuances and
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retirements of, payments on and other
activity relating to the Notes during the
related month.
L. Such 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 institution
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 "L"
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 sale date
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
▇-▇ 5:00 p.m. on settlement date
If a sale is to be settled more than one Business
Day 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.,
respectively, on the first Business Day after the
sale 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 no later than 12:00 noon and
2:00 p.m., respectively, on the second Business
Day before the settlement date. Settlement
Procedures "D" through "L" shall be completed as
soon as possible thereafter but not later than
the respective times (New York City time) set
forth in the preceding table, except that
Settlement Procedures "I" through "L" are subject
to extension in accordance
C-14
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 cancelled, the Trustee will deliver to DTC,
through DTC's Participant Terminal System, a
cancellation message to such effect by no later
than 2:00 p.m. on the Business Day immediately
preceding the scheduled settlement date.
FAILURE TO SETTLE: If the 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 Security 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 Security, the Trustee will
mark such Global Security "cancelled", make
appropriate entries in the Trustee's records and
send such cancelled Global Security to the Issuer.
The CUSIP number assigned to such Global Security
shall, in accordance with CUSIP Service Bureau
customary procedures, be cancelled 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 Security, the Trustee will exchange the
Global Security for two Global Securities, one of
which shall represent such Book-Entry Note or
Notes for which such withdrawal message has been
processed and shall be cancelled immediately
after issuance and the other of which shall
represent the remaining Book-Entry Notes
previously represented by the surrendered Global
Security and shall bear the CUSIP number of the
surrendered Global Security.
If the purchase price for any Book-Entry Note is
not timely paid to the applicable Participants
with respect to such Note by the beneficial
purchaser thereof (or a Person, including an
indirect participant in DTC, acting on behalf of
such purchaser), such Participants and, in turn,
the Agent for such Note may enter SDFS deliver
orders through DTC's Participant Terminal System
reversing the orders entered pursuant to
Settlement Procedures "H" and "G", respectively.
Thereafter, the Trustee will deliver the
withdrawal message and take the related actions
described in the preceding paragraph. If such
failure shall have occurred for any
C-15
reason other than default by the applicable Agent
in the performance of its obligations hereunder
or under the Distribution Agreement, the Issuer
will reimburse such Agent on an equitable basis
for its loss of the use of funds during the period
when the funds were credited to the account of the
Issuer.
Notwithstanding the foregoing, upon any failure to
settle with respect to a Book- Entry Note, DTC may
take such actions as it deems appropriate in
accordance with its SDFS operating procedures
then in effect in order to reverse the orders
entered into DTC's Participant Terminal System
pursuant to Settlement Procedures "H" and "G",
respectively. 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 Security, the Trustee will provide, in
accordance with Settlement Procedures "D" and "E",
for the authentication and issuance of a Global
Security representing the other Book-Entry Notes
to have been represented by such Global Security
and will make appropriate entries in its records.
PROCEDURE FOR POSTINGS: The Issuer will periodically contact one or more
Agents for recommended interest rates, coupons or
spreads ("postings") with respect to Notes being
offered. When the Issuer has determined or changed
its postings with respect to Notes being offered,
it will promptly advise the Agents. At such times
as the Issuer is not posting, the Agents will not
solicit firm offers but may record "indications of
interest" only.
PRICING SUPPLEMENTS: Within five Business Days after any sale of Notes,
the Issuer will file or transmit for filing with
the Securities and Exchange Commission (the
"Commission"), in compliance with Rule 424(b)(3)
of the rules and regulations of the Commission
promulgated under the Securities Act of 1933, as
amended, and Item 309 of Regulation S-T of the
Commission, a copy of a pricing supplement to the
Prospectus (as defined in the Distribution
Agreement) relating to such Notes that reflects
the applicable interest rates and other terms (the
"Pricing Supplement") and will deliver a copy of
such Pricing Supplement to each of the Agents.
SUSPENSION OF SOLICITATION,
AMENDMENT OR SUPPLEMENT: The Issuer may instruct the Agents to suspend
solicitation of purchases of Book-Entry Notes at
any time. Upon receipt of such instructions, each
Agent will forthwith suspend such solicitations
until such time as it has been advised by the
Issuer that such solicitations may be resumed. The
Issuer will, consistent with its obligations under
the Distribution Agreement, promptly advise each
Agent and the Trustee whether orders outstanding
at the time
C-16
such Agent suspends solicitation may be settled
and whether copies of the Prospectus, as in effect
at the time of the suspension, together with the
appropriate Pricing Supplement, may be delivered
in connection with the settlement of such orders.
The Issuer will have the sole responsibility for
such decision and for any arrangements that may be
made in the event that the Issuer determines that
such orders may not be settled or that copies of
such Prospectus and Pricing Supplement may not be
so delivered.
DELIVERY OF
PROSPECTUS: A copy of the most recent Prospectus and of the
applicable Pricing Supplement, if any, must be
provided to a purchaser by the applicable Agent
prior to or at the time of the earlier of (a) the
written confirmation of a sale sent to a purchaser
of Book-Entry Notes or his Agent, and (b) the date
of settlement of any such Book-Entry Notes (see
Settlement Procedures).
ADVERTISING COSTS: The Issuer will determine with the Agents the
amount and nature of advertising that may be
appropriate in offering the Notes. Advertising
expenses approved in writing by the Issuer in
connection with the solicitation of purchases of
the Notes from the Issuer will be paid by the
Issuer.
PART II: ADMINISTRATIVE PROCEDURES FOR CERTIFICATED NOTES
The Trustee will serve as Security Registrar in connection with the
Certificated Notes.
ISSUANCE: Each Certificated Note will be dated and issued as
of the date of its authentication by the Trustee.
Each Certificated Note will bear interest from the
later of the Original Issue Date specified therein
or from the most recent Interest Payment Date with
respect to such Certificated Note (or Predecessor
Security) to which interest has been paid or duly
provided for (such later date being herein
referred to as a "Certificated Interest Accrual
Date").
REGISTRATION: Certificated Notes will be issued only in fully
registered form without coupons.
TRANSFERS AND EXCHANGES: A Certificated Note may be presented for transfer
or exchange at the Corporate Trust Office of the
Trustee. Certificated Notes will be exchangeable
for other Certificated Notes having identical
Terms but different denominations without service
charge. Certificated Notes will not be
exchangeable for Book-Entry Notes.
C-17
MATURITIES: Each Certificated Note will mature on a date not
less than nine months from the settlement date for
such Note.
DENOMINATIONS: Certificated Notes will be issued in denominations
of $1,000 or any amount in excess thereof that is
an integral multiple of $1,000.
INTEREST: General. Interest on each Certificated Note will
accrue from the Certificated Interest Accrual Date
of such Note. In the case of a Certificated Note
originally issued between a Regular Record Date
and the related Interest Payment Date or on an
Interest Payment Date, the first interest payment
will be made on the Interest Payment Date
following the next Regular Record Date. Each
payment of interest on a Certificated Note will
include interest accrued to but excluding the
Interest Payment Date or Maturity. See
"Calculation of Interest" below. Interest will be
payable to the Person in whose name a Certificated
Note is registered on the Security Register at
the close of business on the Regular Record Date
next preceding the applicable Interest Payment
Date; provided, however, interest payable at
Maturity will be payable to the Person to whom
principal of such Certificated Note is payable.
Regular Record Date. Unless otherwise specified in
the applicable Certificated Note, the Regular
Record Date with respect to Fixed Rate
Certificated Notes shall be the January 15 or July
15, as the case may be, next preceding the
applicable Interest Payment Date. The Regular
Record Date with respect to any Interest Payment
Date for Floating Rate Certificated Notes shall be
the fifteenth day (whether or not a Business Day)
next preceding such Interest Payment Date.
Fixed Rate Certificated Notes. Unless otherwise
specified in the applicable Certificated Note,
interest payments on Fixed Rate Certificated Notes
will be made semiannually on February 1 and August
1 of each year and at Maturity, subject to the
exceptions specified in "Payments of Principal and
Interest" below.
Floating Rate Certificated Notes. Interest
payments will be made on Floating Rate
Certificated Notes monthly, quarterly,
semiannually or annually of each year, as
specified in the related Note, and at maturity.
Unless otherwise specified in the applicable
Certificated Note and subject to the exceptions
specified in "Payments of Principal and Interest"
below, interest will be payable, in the case of
Floating Rate Certificated Notes which reset (i)
daily, weekly or monthly, on the third Wednesday
of each month; (ii)
C-18
quarterly, on the third Wednesday of March, June,
September and December of each year; (iii)
semiannually, on the third Wednesday of each of
the two months specified in the applicable
Certificated Note; and (iv) annually, on the third
Wednesday of the month specified in the applicable
Certificated Note and, in each case, at Maturity.
CALCULATION OF
INTEREST: Fixed Rate Certificated Notes. Unless otherwise
specified in the applicable Certificated Note,
interest on Fixed Rate Certificated Notes
(including interest for partial periods) will be
calculated on the basis of a 360-day year of
twelve 30-day months.
Floating Rate Certificated Notes. Interest rates
on Floating Rate Certificated Notes will be
determined as set forth in the applicable Notes.
The Issuer and the Trustee will confirm the amount
of the initial interest payment due on any
Floating Rate Certificated Note for which the
initial Interest Period is shorter or longer than
the Index Maturity. Promptly after each Interest
Determination Date for Floating Rate Certificated
Notes, the Calculation Agent will notify Standard
& Poor's Corporation of the interest rates
determined on such Interest Determination Date.
Unless otherwise specified in the applicable
Certificated Note, interest will be calculated in
the case of (a) Commercial Paper Rate, CD Rate,
Federal Funds Rate, LIBOR and Prime Rate
Certificated Notes, on the basis of the actual
number of days in the interest period and a 360-
day year; and (b) Treasury Rate Notes, on the
basis of the actual number of days in the interest
period and the actual number of days in the year.
PAYMENTS OF PRINCIPAL
AND INTEREST: The Trustee will pay the principal amount of each
Certificated Note at Maturity to the Person in
whose name such Note is registered upon
presentation of such Note to the Trustee. Such
payment, together with payment of interest due at
Maturity of such Note, will be made in funds
available for immediate use by the Holder of such
Note. Certificated Notes presented to the Trustee
at Maturity for payment will be cancelled by the
Trustee in accordance with the terms of the
Indenture and returned to the Issuer. All interest
payments on a Certificated Note (other than
interest due at Maturity) will be made by check
drawn on the Trustee (or another Person appointed
by the Trustee) and mailed by the Trustee to the
Person entitled thereto as provided in such Note;
provided, however, that the holder of $10,000,000
or more of Certificated Notes paying interest on
the same Interest Payment Date will be entitled to
receive payment by wire transfer but only if
appropriate payment instructions have been
received in writing
C-19
by the Trustee not later than the Regular Record
Date or Special Record Date, as the case may be,
for such payment. Following each Regular Record
Date and Special Record Date, the Trustee will
furnish the Issuer with a list of interest
payments to be made on the following Interest
Payment Date for each Certificated Note and in
total for all Certificated Notes. Interest at
Maturity will be payable to the Person to whom the
payment of principal is payable. The Trustee will
provide monthly to the Issuer lists of principal
and interest to be paid on Certificated Notes
maturing in the next month. The Trustee will be
responsible for withholding taxes on interest paid
on Certificated Notes as required by applicable
law. On the first Business Day of each month, the
Trustee will deliver to the Issuer by facsimile
transmission a written statement, indicating the
total principal amount of Outstanding Certificated
Notes for which it serves as trustee as of the
immediately preceding Business Day.
If any Interest Payment Date for a Fixed Rate
Certificated Note is scheduled to occur on a day
that is not a Business Day with respect to such
Fixed Rate Certificated Note, the payment due on
such Interest Payment Date will be made on the
following day that is a Business Day with respect
to such Fixed Rate Certificated Note, and no
interest shall accrue on the amount payable on
such Interest Payment Date for the period from and
after such Interest Payment Date to such following
day that is a Business Day.
If any Interest Payment Date for a Floating Rate
Certificated Note is scheduled to occur on a day
that is not a Business Day with respect to such
Floating Rate Certificated Note, such Interest
Payment Date will be the following day that is a
Business Day with respect to such Floating Rate
Certificated Note; provided, however, that in the
case of a Floating Rate Certificated Note which is
a LIBOR Note, if such following day that is a
Business Day is in the next succeeding calendar
month, such Interest Payment Date will be the
immediately preceding day that is a Business Day.
If the date of Maturity of a Certificated Note is
scheduled to occur on a day that is not a Business
Day with respect to such Certificated Note, the
payment due at Maturity will be made on the
following day that is a Business Day with respect
to such Certificated Note, and no interest shall
accrue on the amount payable at Maturity for the
period from and after the date of Maturity.
ACCEPTANCE AND
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REJECTION OF OFFERS: The Issuer has the sole right to accept offers to
purchase Certificated Notes and may reject any
offer in whole or in part. Each Agent may, in its
discretion reasonably exercised, reject any offer
to purchase Certificated Notes received by it in
whole or part. Each Agent will advise the Issuer
promptly by telephone or facsimile transmission of
all offers to purchase Certificated Notes received
by such Agent, other than those rejected by it.
SETTLEMENT: The receipt by the Issuer of immediately available
funds in exchange for an authenticated
Certificated Note delivered to the selling Agent
and such Agent's delivery of such Note against
receipt of immediately available funds shall
constitute "settlement" with respect to such Note.
Each offer accepted by the Issuer will be settled
on the fifth Business Day following acceptance of
such offer pursuant to the timetable for
settlement set forth below, unless the Issuer and
the purchaser agree to settlement on another day;
provided, however, that the Issuer will notify the
Trustee at least twenty-four hours prior to the
time of settlement.
SETTLEMENT PROCEDURES: In the event of a purchase of Certificated Notes
by one or more of the Agents, as principal,
appropriate settlement details, if different from
those set forth below, will be set forth in an
applicable Terms Agreement to be entered into
between such Agent or Agents and the Issuer
pursuant to the Distribution Agreement.
Settlement Procedures with regard to each
Certificated Note sold by the Issuer through an
Agent, as agent, shall be as follows:
▇. ▇▇▇▇ Agent will advise the Issuer by facsimile
transmission of the following settlement
information:
1. Whether the form of such Certificated Note
is the Form of Definitive Fixed Rate
Registered Security, Form of Definitive
Floating Rate Registered Security, Form of
Definitive Fixed Rate Registered Security
(with Put Option), Form of Definitive
Floating Rate Registered Security (with
Put Option), Form of Definitive Zero
Coupon Registered Security or Form of
Definitive Discount Registered Security.
2. Name in which such Note is to be
registered (the "Registered Owner").
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3. Address of the Registered Owner and
address for payment of principal and
interest.
4. Taxpayer identification or Social Security
number of the Registered Owner (if
available).
5. Principal amount.
6. Stated Maturity.
7. If such Note is a Fixed Rate Note, the
interest rate.
If such Note is a Floating Rate Note, the
following:
a) Base Rate or Base Rates (or the method
of calculating the Base Rate or
Rates);
b) Initial Interest Rate;
c) Spread and/or Spread Multiplier, if
any;
d) Interest Reset Dates;
e) Interest Reset Period;
f) Interest Payment Dates;
g) Index Maturity;
h) Interest Payment Period;
i) Calculation Agent (if other than The
Bank of New York);
j) Maximum Interest Rate, if any;
k) Minimum Interest Rate, if any; and
l) Interest Determination Dates.
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8. Earliest Redemption Date, Redemption Price
and other redemption provisions, if any,
and Purchase Date or Dates and Purchase
Price or Prices, if any.
9. Settlement date.
10. Original Issue Price.
11. Original Issue Discount, if any, and Yield
to Maturity, if applicable.
12. Agent's commission, determined as provided
in Section 2 of the Distribution Agreement
between the Issuer and such Agent.
13. Additional terms or provisions of such
Note, if any.
B. The Issuer will advise the Trustee by
telephone (confirmed in writing at any time on
the same date) or facsimile transmission of
the information set forth in Settlement
Procedure "A" above and the name of such
Agent.
C. The Issuer will deliver (if not previously
delivered) to the Trustee a pre-printed four-
ply packet for such Note, which packet will
contain the following documents in forms that
have been approved by the Issuer, the Agents
and the Trustee:
1. Note with customer confirmation.
2. Stub One--For the Trustee.
3. Stub Two--For the Agent.
4. Stub Three--For the Issuer.
D. The Trustee will complete and authenticate
such Note and deliver it (with the
confirmation) and Stubs One and Two to such
Agent, and such Agent will acknowledge receipt
of the Note by stamping or otherwise marking
Stub One and returning it to the Trustee. Such
delivery will be made only against such
acknowledgment of receipt and evidence that
instructions have been given by such Agent for
payment to the account of the Issuer at
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the Trustee, in funds available for immediate
use, of an amount equal to the price of such
Note less Agent's commission. In the event
that the instructions given by such Agent for
payment to the account of the Issuer are
revoked, the Issuer as promptly as possible
wire transfer to the account of such Agent an
amount of immediately available funds equal to
the amount of such payment and such Agent will
return such Note to the Trustee.
E. Such Agent will deliver such Note (with
confirmation) to the customer against payment
in immediately available funds. Such Agent
will obtain the acknowledgment of receipt of
such Note by retaining Stub Two.
F. The Trustee will retain Stub One and will send
Stub Three to the Issuer by first-class mail.
Monthly, the Trustee will send to the Issuer a
written statement, setting forth (i) the
principal amount of the Notes Outstanding
under the Indenture as of the date of such
report, (ii) a brief description of any sales
of which the Issuer has advised the Trustee
but which have not yet been settled and (iii)
a description of issuances and retirements of,
payments on and other activity relating to the
Notes during the related month.
SETTLEMENT PROCEDURES
TIMETABLE: For offers of Certificated Notes solicited by an
Agent, as agent, and accepted by the Issuer,
Settlement Procedures "A" through "F" set forth
above shall be completed on or before the
respective times (New York City time) set forth
below:
SETTLEMENT
PROCEDURE TIME
--------- ----
A 3:00 p.m. on day before settlement date
B 4:00 p.m. on day before settlement date
C-D 2:15 p.m. on settlement date
E 3:00 p.m. on settlement date
F 5:00 p.m. on settlement date
FAILURE TO SETTLE: If a purchaser fails to accept delivery of and
make payment for any Certificated Note, the
selling Agent will notify the Issuer and the
Trustee by telephone and return such Note to the
Trustee. Upon receipt of such Note, the Issuer
will immediately wire transfer to the account of
the Agent an amount equal to the amount previously
credited thereto in respect of such Note. Such
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wire transfer will be made on the settlement date,
if possible, and in any event not later than the
day following the settlement date. If the failure
shall have occurred for any reason other than a
default by the applicable Agent in the performance
of its obligations hereunder and under the
Distribution Agreement, the Issuer will reimburse
such 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.
Immediately upon receipt of the Certificated Note
in respect of which such failure occurred, the
Trustee will mark such Note "cancelled", make
appropriate entries in the Trustee's records and
send such cancelled Note to the Issuer.
PROCEDURE FOR POSTINGS: The Issuer will periodically contact one or more
Agents for recommended postings with respect to
Certificated Notes being offered. When the Issuer
has determined or changed its postings with
respect to Certificated Notes being offered, it
will promptly advise the Agents. At such times as
the Issuer is not posting, the Agents will not
solicit firm offers but may record "indications of
interest" only.
PRICING SUPPLEMENTS: Within five Business Days after any sale of
Certificated Notes, the Issuer will file or
transmit for filing with the Commission in
compliance with Rule 424(b)(3) of the rules and
regulations of the Commission promulgated under
the Securities Act of 1933, as amended, and Item
309 of Regulation S-T of the Commission, a copy of
a Pricing Supplement to the Prospectus relating to
such Notes that reflects the applicable interest
rates and other terms and will deliver a copy of
such Pricing Supplement to each of the Agents.
SUSPENSION OF SOLICITATION,
AMENDMENT OR SUPPLEMENT: The Issuer may instruct the Agents to suspend
solicitation of purchases of Certificated Notes at
any time. Upon receipt of such instructions, each
Agent will forthwith suspend such solicitations
until such time as it has been advised by the
Issuer that such solicitations may be resumed. The
Issuer will, consistent with its obligations under
the Distribution Agreement, promptly advise each
Agent and the Trustee whether orders outstanding
at the time such Agent suspends solicitation may
be settled and whether copies of the Prospectus,
as in effect at the time of the suspension,
together with the appropriate Pricing Supplement,
may be delivered in connection with the
settlement of such orders. The Issuer will have
the sole responsibility for such decision and for
any arrangements that may be made in the event
that the Issuer determines that such orders may
not be settled or that copies of such Prospectus
and Pricing Supplement may not be so delivered.
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DELIVERY OF
PROSPECTUS: A copy of the most recent Prospectus and of the
applicable Pricing Supplement, if any, must be
provided to a purchaser by the applicable Agent
prior to or at the time of the earlier of (a) the
written confirmation of a sale sent to a purchaser
of Certificated Notes or his agent and (b) the
delivery of any such Certificated Notes to a
purchaser or his agent (see Settlement
Procedures).
ADVERTISING COSTS: The Issuer will determine with the Agents the
amount and nature of advertising that may be
appropriate in offering the Certificated Notes.
Advertising expenses approved in writing by the
Issuer in connection with the solicitation of
purchases of Certificated Notes from the Issuer
will be paid by the Issuer.
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