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EXHIBIT 1
DELTA AIR LINES, INC.
$300,000,000
Medium-Term Notes,
Series C
Distribution Agreement
January 8, 1999
▇▇▇▇▇▇▇ ▇▇▇▇▇ ▇▇▇▇▇▇ Inc.
Seven ▇▇▇▇▇ ▇▇▇▇▇ ▇▇▇▇▇▇
▇▇▇ ▇▇▇▇, ▇▇▇ ▇▇▇▇ ▇▇▇▇▇
▇▇▇▇▇▇▇, Sachs & Co.
▇▇ ▇▇▇▇▇ ▇▇▇▇▇▇
▇▇▇ ▇▇▇▇, ▇▇▇ ▇▇▇▇ ▇▇▇▇▇
▇▇▇▇▇▇▇ ▇▇▇▇▇ & Co.
▇▇▇▇▇▇▇ Lynch, Pierce, ▇▇▇▇▇▇ & ▇▇▇▇▇
Incorporated
▇▇▇▇▇▇▇ ▇▇▇▇▇ World Headquarters
World Financial Center
▇▇▇▇▇ ▇▇▇▇▇, ▇▇▇▇ ▇▇▇▇▇
▇▇▇ ▇▇▇▇, ▇▇▇ ▇▇▇▇ ▇▇▇▇▇
▇▇▇▇▇▇ ▇▇▇▇▇▇▇ & Co. Incorporated
▇▇▇▇ ▇▇▇▇▇▇▇▇
▇▇▇ ▇▇▇▇, ▇▇▇ ▇▇▇▇ ▇▇▇▇▇
Dear Sirs:
Delta Air Lines, Inc., a Delaware corporation (the "Company"), proposes
to issue and sell from time to time its Medium-Term Notes, Series C (the
"Securities") in an aggregate amount up to $300,000,000 and agrees with each of
you (individually, an "Agent") as set forth in this Agreement.
Subject to the terms and conditions stated herein and to the
reservation by the Company of the right to sell Securities directly on its own
behalf, the Company hereby (i) appoints each Agent as an agent of the Company
for the purpose of soliciting and receiving offers to purchase Securities from
the Company pursuant to Section 2(a) hereof and (ii) agrees that, except as
otherwise contemplated
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herein, whenever it determines to sell Securities directly to any Agent as
principal, it will enter into a separate agreement (each a "Terms Agreement"),
substantially in the form of Annex I hereto, relating to such sale in accordance
with Section 2(b) hereof.
The Securities will be issued under an indenture, dated as of
May 1, 1991 (the "Indenture"), between the Company and The Bank of New York,
successor to The Citizens and Southern National Bank of Florida, as Trustee (the
"Trustee"). The Securities shall have the maturity ranges, interest rates, if
any, redemption provisions and other terms set forth in the Prospectus referred
to below as it may be amended or supplemented from time to time. The Securities
will be issued, and the terms and rights thereof established from time to time
by the Company in accordance with the Indenture.
1. The Company represents and warrants to, and agrees with,
each Agent that:
(a) A registration statement (the "Initial Registration
Statement") in respect of the Securities has been filed with the
Securities and Exchange Commission (the "Commission"); the Initial
Registration Statement and any post-effective amendment thereto, each
in the form heretofore delivered or to be delivered to the Agents and,
excluding exhibits to the Initial Registration Statement, but including
all documents incorporated by reference in the prospectus contained
therein, have been declared effective by the Commission in such form,
other than a registration statement, if any, increasing the size of the
offering (a "Rule 462(b) Registration Statement"), filed pursuant to
Rule 462(b) under the Securities Act of 1933, as amended (the "Act"),
which became effective upon filing; no other document with respect to
the Initial Registration Statement or document incorporated by
reference therein has heretofore been filed or transmitted for filing
with the Commission; and no stop order suspending the effectiveness of
the Initial Registration Statement has been issued and no proceeding
for that purpose has been initiated or threatened by the Commission
(any preliminary prospectus included in the Initial Registration
Statement or filed with the Commission pursuant to Rule 424(a) of the
rules and regulations of the Commission under the Act, being
hereinafter called a "Preliminary Prospectus"; the various parts of the
Initial
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Registration Statement, including all exhibits thereto and including
(i) the information contained in the form of final prospectus filed
with the Commission pursuant to Rule 424(b) under the Act in accordance
with Section 4(a) hereof and deemed by virtue of Rule 430A under the
Act to be part of the registration statement at the time it was
declared effective and (ii) the documents incorporated by reference in
the prospectus contained in the Initial Registration Statement at the
time such part of the registration statement became effective but
excluding Form T-1, each as amended at the time such part of the
registration statement became effective or such part of the Rule 462(b)
Registration Statement, if any, became or hereafter becomes effective
being hereinafter collectively called the "Registration Statement";
such final Prospectus, in the form first filed pursuant to Rule 424(b)
under the Act, being hereinafter called the "Prospectus"; any reference
herein to any Preliminary Prospectus or the Prospectus shall be deemed
to refer to and include the documents incorporated by reference therein
pursuant to Item 12 of Form S-3 under the Act, as of the date of such
Preliminary Prospectus or Prospectus, as the case may be; any reference
to any amendment or supplement to any Preliminary Prospectus or the
Prospectus, including any supplement to the Prospectus that sets forth
only the terms of a particular issue of the Securities (a "Pricing
Supplement"), shall be deemed to refer to and include any documents
filed after the date of such Preliminary Prospectus or Prospectus, as
the case may be, under the Securities Exchange Act of 1934, as amended
(the "Exchange Act"), and incorporated by reference in such Preliminary
Prospectus or the Prospectus, as the case may be; any reference to any
amendment to the Registration Statement shall be deemed to refer to and
include any annual report of the Company filed pursuant to Section
13(a) or 15(d) of the Exchange Act after the effective date of the
Registration Statement that is incorporated by reference in the
Registration Statement; and any reference to the Prospectus as amended
or supplemented shall be deemed to refer to the Prospectus as amended
or supplemented (including by the applicable Pricing Supplement filed
in accordance with Section 4(a) hereof) in relation to the Securities
sold pursuant to this Agreement, in the form in which it is filed with
the Commission pursuant to Rule 424(b) under the Act in accordance with
Section 4(a) hereof, including any
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documents incorporated by reference therein as of the
date of such filing);
(b) The documents incorporated by reference in the Prospectus,
when they became effective or were filed with the Commission, as the
case may be, conformed in all material respects to the requirements of
the Act or the Exchange Act, as applicable, and the rules and
regulations of the Commission thereunder, and none of such documents
contained an untrue statement of a material fact or omitted to state a
material fact required to be stated therein or necessary to make the
statements therein not misleading; and any further documents so filed
and incorporated by reference in the Prospectus, or any amendment or
supplement thereto, when such documents become effective or are filed
with the Commission, as the case may be, will conform in all material
respects to the requirements of the Act or the Exchange Act, as
applicable, and the rules and regulations of the Commission thereunder
and will not contain an untrue statement of a material fact or omit to
state a material fact required to be stated therein or necessary to
make the statements therein not misleading; provided, however, that
this representation and warranty shall not apply to any statements or
omissions made in reliance upon and in conformity with information
furnished in writing to the Company by any Agent expressly for use in
the Prospectus as amended or supplemented to relate to a particular
issuance of Securities;
(c) The Registration Statement and the Prospectus conform, and
any amendments or supplements thereto will conform, in all material
respects to the requirements of the Act and the Trust Indenture Act of
1939, as amended (the "Trust Indenture Act"), and the rules and
regulations of the Commission thereunder and do not and will not, as of
the applicable effective date in the case of the Registration Statement
and any amendment thereto and as of the applicable filing date in the
case of the Prospectus and any amendment or supplement thereto, contain
an untrue statement of a material fact or omit to state a material fact
required to be stated therein or necessary to make the statements
therein not misleading; provided, however, that this representation and
warranty shall not apply to any statements or omissions made in
reliance upon and in conformity with information furnished in writing
to the Company by any Agent expressly for use in the Prospectus as
amended or
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supplemented to relate to a particular issuance of Securities;
(d) Since the date of the latest audited financial statements
included or incorporated by reference in the Prospectus, there has been
no material adverse change in, or any development known to the Company
which would have a material adverse effect on, the financial condition
or operations of the Company and its subsidiaries, taken as a whole,
whether or not arising from transactions in the ordinary course of
business, except as set forth in or contemplated by the Prospectus;
(e) The Company has been duly incorporated and is validly
existing as a corporation in good standing under the laws of the State
of Delaware, with power and authority (corporate and other) to own its
properties and conduct its business as it is now being conducted except
where the failure to have such power or authority would not
individually or in the aggregate have a material adverse effect on the
financial condition or operations of the Company and its subsidiaries,
taken as a whole; the Company is an "air carrier" within the meaning of
the Federal Aviation Act of 1958, as amended, and is duly qualified as
a foreign corporation for the transaction of business and in good
standing under the laws of each other jurisdiction in which it has
intrastate routes or has a principal office or major overhaul facility
and where the failure to so qualify would have a material adverse
effect on the financial condition or operations of the Company and its
subsidiaries, taken as a whole; and each subsidiary of the Company has
been duly incorporated and is validly existing as a corporation in good
standing under the laws of its jurisdiction of incorporation;
(f) The Company has an authorized capital stock as set forth
in the Prospectus and all of the issued shares of capital stock of the
Company have been duly and validly authorized and issued and are fully
paid and non-assessable; and all of the issued shares of capital stock
of each subsidiary of the Company have been duly and validly authorized
and issued, are fully paid and non-assessable and (except for
directors' qualifying shares) are owned directly or indirectly by the
Company, free and clear of all liens, encumbrances, equities or claims;
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(g) The Securities have been duly authorized, and, when issued
and delivered pursuant to this Agreement and any Terms Agreement, will
have been duly executed, authenticated, issued and delivered and will
constitute valid and legally binding obligations of the Company,
enforceable in accordance with their terms (subject, as to enforcement,
to bankruptcy, insolvency, reorganization and other laws of general
applicability relating to or affecting creditors' rights and to general
equity principles), and will be entitled to the benefits provided by
the Indenture; the Indenture has been duly authorized, executed and
delivered by the Company and the Trustee, has been duly qualified under
the Trust Indenture Act and constitutes a valid and legally binding
instrument, enforceable against the Company in accordance with its
terms, subject, as to enforcement, to bankruptcy, insolvency,
reorganization and other laws of general applicability relating to or
affecting creditors' rights and to general equity principles; and the
Indenture conforms in all material respects and the Securities of any
particular issuance of Securities will conform in all material respects
to the descriptions thereof contained in the Prospectus as amended or
supplemented to relate to such issuance of Securities;
(h) The issue and sale of the Securities, the compliance by
the Company with all of the provisions of the Securities, the
Indenture, this Agreement and any Terms Agreement, and the consummation
of the transactions herein and therein contemplated will not conflict
with or result in a breach or violation of any of the terms or
provisions of, or constitute a default under, any indenture, mortgage,
deed of trust, loan agreement or other agreement or instrument to which
the Company or any of its subsidiaries is a party or by which the
Company or any of its subsidiaries is bound or to which any of the
property or assets of the Company or any of its subsidiaries is subject
(except for such conflicts, breaches, violations and defaults that
would not have a material adverse effect on the financial condition or
operations of the Company and its subsidiaries, taken as a whole, and
that would not affect the validity of the Securities), nor will such
action result in any violation of the provisions of the Certificate of
Incorporation, as amended, or the By-Laws of the Company or any statute
or any order, rule or regulation of any court or governmental agency or
body having jurisdiction over the Company or any of
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its subsidiaries or any of their properties; and no consent, approval,
authorization, order, registration or qualification of or with any such
court or governmental agency or body is required for the solicitation
of offers to purchase Securities, the issue and sale of the Securities
or the consummation by the Company of the other transactions
contemplated by this Agreement, any Terms Agreement or the Indenture,
except such as have been obtained under the Act or the Trust Indenture
Act and such consents, approvals, authorizations, registrations or
qualifications as may be required under state securities or Blue Sky
laws in connection with the solicitation by such Agent of offers to
purchase Securities from the Company and with purchases of Securities
by such Agent as principal, as the case may be, in each case in the
manner contemplated hereby;
(i) Other than as set forth in the Prospectus, there are no
legal or governmental proceedings pending to which the Company or any
of its subsidiaries is a party or to which any property of the Company
or any of its subsidiaries is subject, which, in the reasonable
judgment of the Company, individually or in the aggregate is likely to
have a material adverse effect on the consolidated financial position
or operations of the Company and its subsidiaries taken as a whole,
and, to the best of the Company's knowledge, no such proceedings are
threatened or contemplated by governmental authorities or threatened by
others; and
(j) Immediately after any sale of Securities by the Company
hereunder or under any Terms Agreement, the aggregate amount of
Securities which shall have been issued and sold by the Company
hereunder or under any Terms Agreement and of any debt securities of
the Company (other than such Securities) that shall have been issued
and sold pursuant to the Registration Statement will not exceed the
amount of debt securities registered under the Registration Statement.
2. (a) On the basis of the representations and warranties, and
subject to the terms and conditions herein set forth, each of the Agents hereby
severally and not jointly agrees, as agent of the Company, to use its reasonable
efforts to solicit and receive offers to purchase the Securities from the
Company upon the terms and conditions set forth in the Prospectus as amended or
supplemented from time to time. The Company may from time
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to time offer Securities for sale otherwise than through an Agent; provided,
however, that so long as this Agreement shall be in effect with respect to any
Agent, the Company shall not solicit or accept offers to purchase, or sell, any
Securities through any agent other than an Agent, unless such solicitation or
acceptance is on terms with respect to commissions substantially similar to
those set forth herein and the Company shall give the Agents reasonable notice
of the appointment of such agents for the purpose of soliciting the Securities.
However, the Company reserves the right to sell, and may solicit and accept
offers to purchase, Securities directly on its own behalf, and, in the case of
any such sale not resulting from a solicitation made by any Agent, no commission
will be payable with respect to such sale. These provisions shall not limit
Section 4(f) hereof or any similar provision included in any Terms Agreement.
Procedural details relating to the issue and delivery of
Securities, the solicitation of offers to purchase Securities and the payment in
each case therefor shall be as set forth in the Administrative Procedure
attached hereto as Annex II as it may be amended from time to time by written
agreement between the Agents and the Company (the "Administrative Procedure").
The provisions of the Administrative Procedure shall apply to all transactions
contemplated hereunder other than those made pursuant to a Terms Agreement. Each
Agent and the Company agree to perform the respective duties and obligations
specifically provided to be performed by each of them in the Administrative
Procedure. The Company will furnish to the Trustee a copy of the Administrative
Procedure as from time to time in effect.
The Company reserves the right, in its sole discretion, to
instruct the Agents to suspend at any time, for any period of time or
permanently, the solicitation of offers to purchase the Securities. As soon as
practicable, but in any event not later than one business day in New York City,
after receipt of notice from the Company, the Agents will suspend solicitation
of offers to purchase Securities from the Company until such time as the Company
has advised the Agents that such solicitation may be resumed.
The Company agrees to pay each Agent a commission, at the time
of settlement of any sale of a Security by the Company as a result of a
solicitation made by such Agent, in an amount equal to the following applicable
percentage of the principal amount of such Security sold:
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Commission
(percentage of
aggregate
principal amount
Range of Maturities of Securities sold)
------------------- -------------------
From 9 months to less than 1 year ............ 0.125%
From 1 year to less than 18 months ........... 0.150%
From 18 months to less than 2 years .......... 0.200%
From 2 years to less than 3 years ............ 0.250%
From 3 years to less than 4 years ............ 0.350%
From 4 years to less than 5 years ............ 0.450%
From 5 years to less than 6 years ............ 0.500%
From 6 years to less than 7 years ............ 0.550%
From 7 years to less than 10 years ........... 0.600%
From 10 years to less than 15 years .......... 0.625%
From 15 years to less than 20 years .......... 0.700%
From 20 years to less than 30 years .......... 0.750%
30 years and more ...................... [to be negotiated]
(b) Each sale of Securities to any Agent as principal shall be
made in accordance with the terms of this Agreement and (unless the Company and
such Agent shall otherwise agree) a Terms Agreement which will provide for the
sale of such Securities to, and the purchase thereof by, such Agent. Such Agent
shall be authorized to engage the services of any other broker or dealer in
connection with the reoffering of Securities purchased by such Agent as
principal, and a Terms Agreement may specify certain provisions relating to the
reoffering of such Securities by such Agent. The commitment of any Agent to
purchase Securities as principal, whether pursuant to any Terms Agreement or
otherwise, shall be deemed to have been made on the basis of the representations
and warranties of the Company herein contained and shall be subject to the terms
and conditions herein set forth. Each Terms Agreement shall specify the
principal amount of Securities to be purchased by any Agent pursuant thereto,
the price to be paid to the Company for such Securities, any provisions relating
to rights of, and default by, underwriters acting together with such Agent in
the reoffering of the Securities and the time and date and place of delivery of
and payment for such Securities. Such Terms Agreement shall also specify any
requirements for opinions of counsel, accountants' letters and officers'
certificates pursuant to Section 4 hereof.
For each sale of Securities to an Agent as principal that is
not made pursuant to a Terms Agreement, the procedural details relating to the
issue and delivery of
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such Securities and payment therefor shall be as set forth in the Administrative
Procedure. For each such sale of Securities to an Agent as principal that is not
made pursuant to a Terms Agreement, and unless otherwise agreed by the Company
and such Agent, the Company agrees to pay such Agent a commission (or grant an
equivalent discount) as provided in Section 2(a) hereof and in accordance with
the schedule set forth therein.
Each time and date of delivery of and payment for Securities
to be purchased by an Agent as principal, whether set forth in a Terms Agreement
or in accordance with the Administrative Procedure, is referred to herein as a
"Time of Delivery".
3. The documents required to be delivered pursuant to Section
6 hereof on the Commencement Date (as defined below) shall be delivered to the
Agents at the offices of ▇▇▇▇▇▇▇▇ & ▇▇▇▇▇▇▇▇, located at ▇▇▇ ▇▇▇▇▇ ▇▇▇▇▇▇, ▇▇▇
▇▇▇▇, ▇▇▇ ▇▇▇▇ ▇▇▇▇▇, at 11:00 a.m., New York City time, on the date of this
Agreement, which date and time of such delivery may be postponed by agreement
between the Agents and the Company but in no event shall be later than the day
prior to the date on which solicitation of offers to purchase Securities is
commenced or on which any Terms Agreement is executed (such time and date being
referred to herein as the "Commencement Date").
4. The Company covenants and agrees with each Agent:
(a) (i) To make no amendment or supplement to the Registration
Statement or the Prospectus (A) prior to the Commencement Date which
shall be disapproved by any Agent promptly after reasonable notice
thereof or (B) after the date of any Terms Agreement or other agreement
by an Agent to purchase Securities as principal and prior to the
related Time of Delivery which shall be disapproved by any Agent party
to such Terms Agreement or so purchasing as principal promptly after
reasonable notice thereof; (ii) to prepare, with respect to any
Securities to be sold through or to such Agent pursuant to this
Agreement, a Pricing Supplement with respect to such Securities in a
form previously approved by such Agent and to file or transmit for
filing such Pricing Supplement pursuant to Rule 424(b)(3) under the Act
not later than the close of business of the Commission on the fifth
business day after the date on which such Pricing Supplement is
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first used; (iii) to make no amendment or supplement to the
Registration Statement or Prospectus, other than any Pricing
Supplement, at any time prior to having afforded each Agent a
reasonable opportunity to review and comment on it; (iv) to file
promptly all reports and any definitive proxy or information statements
required to be filed by the Company with the Commission pursuant to
Section 13(a), 13(c), 14 or 15(d) of the Exchange Act for so long as
the delivery of a prospectus is required in connection with the
offering or sale of the Securities, and during such time period to
advise such Agent, promptly after the Company receives notice thereof,
of the time when any amendment to the Registration Statement has been
filed or has become effective or any supplement to the Prospectus or
any amended Prospectus has been filed or transmitted for filing with
the Commission, of the issuance by the Commission of any stop order or
of any order preventing or suspending the use of any prospectus
relating to the Securities, of the suspension of the qualification of
the Securities for offering or sale in any jurisdiction, of the
initiation or threatening of any proceeding for any such purpose, or of
any request by the Commission for the amendment or supplement of the
Registration Statement or Prospectus or for additional information; and
(v) in the event of the issuance of any such stop order or of any such
order preventing or suspending the use of any prospectus relating to
the Securities or suspending any such qualification, to use promptly
its best efforts to obtain its withdrawal;
(b) Promptly from time to time to take such action as such
Agent reasonably may request to qualify the Securities for offering and
sale under the securities laws of such jurisdictions as such Agent may
request and to comply with such laws so as to permit the continuance of
sales and dealings in such jurisdictions for as long as may be
necessary to complete the distribution or sale of the Securities;
provided, however, that in connection therewith the Company shall not
be required to qualify as a foreign corporation or to file a general
consent to service of process in any such jurisdiction or subject
itself to taxation as doing business in any such jurisdiction;
(c) To furnish such Agent with copies of the Registration
Statement and each amendment thereto, with copies of the Prospectus as
each time amended or supplemented, other than any Pricing Supplement
(except
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as provided in the Administrative Procedure), in the form in which it
is filed with the Commission pursuant to Rule 424 under the Act, and
with copies of the documents incorporated by reference therein, all in
such quantities as such Agent may reasonably request from time to time;
and, if the delivery of a prospectus is required at any time in
connection with the offering or sale of the Securities (including
Securities purchased from the Company by such Agent as principal) and
if at such time any event shall have occurred as a result of which the
Prospectus as then amended or supplemented would include an untrue
statement of a material fact or omit to state any material fact
necessary in order to make the statements therein, in the light of the
circumstances under which they were made when such Prospectus is
delivered, not misleading, or, if for any other reason it shall be
necessary during such same period to amend or supplement the Prospectus
or to file under the Exchange Act any document incorporated by
reference in the Prospectus in order to comply with the Act, the
Exchange Act or the Trust Indenture Act, to notify such Agent and
request such Agent, in its capacity as agent of the Company, to suspend
solicitation of offers to purchase Securities from the Company (and, if
so notified, such Agent shall cease such solicitations as soon as
practicable, but in any event not later than one business day later);
and if the Company shall decide to amend or supplement the Registration
Statement or the Prospectus as then amended or supplemented, to so
advise such Agent promptly by telephone (with confirmation in writing)
and to prepare and cause to be filed promptly with the Commission an
amendment or supplement to the Registration Statement or the Prospectus
as then amended or supplemented that will correct such statement or
omission or effect such compliance; provided, however, that if during
such same period such Agent continues to own Securities purchased from
the Company by such Agent as principal or such Agent is otherwise
required to deliver a prospectus in respect of transactions in the
Securities, the Company shall promptly prepare and file with the
Commission such an amendment or supplement;
(d) To make generally available to its security holders as
soon as practicable, but in any event not later than eighteen months
after (i) the effective date of the Registration Statement, (ii) the
effective date of each post-effective amendment to the Registration
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Statement, and (iii) the date of each filing by the Company with the
Commission of an Annual Report on Form 10-K that is incorporated by
reference in the Registration Statement, an earning statement (as
defined in Rule 158 under the Act) of the Company and its subsidiaries
(which need not be audited) complying with Section 11(a) of the Act and
the rules and regulations of the Commission thereunder (including, at
the option of the Company, Rule 158);
(e) So long as any Securities are outstanding, to furnish to
such Agent copies of all reports or other communications (financial or
other) furnished to stockholders, and deliver to such Agent (i) as soon
as they are available, copies of any reports and financial statements
furnished to or filed with the Commission or any national securities
exchange on which any class of securities of the Company is listed; and
(ii) such additional information concerning the business and financial
condition of the Company as such Agent may from time to time reasonably
request (such financial statements to be on a consolidated basis to the
extent the accounts of the Company and its subsidiaries are
consolidated in reports furnished to its stockholders generally or to
the Commission);
(f) That, from the date of any Terms Agreement with such Agent
or other agreement by such Agent to purchase Securities as principal
and continuing to and including the earlier of (i) the termination of
the trading restrictions for the Securities purchased thereunder, as
notified to the Company by such Agent and (ii) the related Time of
Delivery, the Company will not, without the prior written consent of
such Agent, which consent shall not be unreasonably withheld, offer,
sell, contract to sell or otherwise dispose of any debt securities of
the Company (other than debt securities under bank or other
institutional credit agreements in effect as of the date of any Terms
Agreement) which both mature more than 9 months after such Time of
Delivery and are substantially similar to the Securities;
(g) That each acceptance by the Company of an offer to
purchase Securities hereunder (including any purchase by such Agent as
principal not pursuant to a Terms Agreement), and each execution and
delivery by the Company of a Terms Agreement with such Agent, shall be
deemed to be an affirmation to such Agent that the
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representations and warranties of the Company contained in or made
pursuant to this Agreement are true and correct as of the date of such
acceptance or of such Terms Agreement, as the case may be, as though
made at and as of such date, and an undertaking that such
representations and warranties will be true and correct as of the
settlement date for the Securities relating to such acceptance or as of
the Time of Delivery relating to such sale, as the case may be, as
though made at and as of such date (except that such representations
and warranties shall be deemed to relate to the Registration Statement
and the Prospectus as amended and supplemented relating to such
Securities);
(h) That reasonably in advance of each time the Registration
Statement or the Prospectus shall be amended or supplemented (other
than by a Pricing Supplement) and each time a document filed under the
Act or the Exchange Act is incorporated by reference into the
Prospectus, and each time the Company sells Securities to such Agent as
principal pursuant to a Terms Agreement and such Terms Agreement
specifies the delivery of an opinion or opinions by ▇▇▇▇▇▇▇▇ &
▇▇▇▇▇▇▇▇, counsel to the Agents, as a condition to the purchase of
Securities pursuant to such Terms Agreement, the Company shall furnish
to such counsel such papers and information as they may reasonably
request to enable them to furnish to such Agent the opinion or opinions
referred to in Section 6(b) hereof;
(i) That each time the Registration Statement or the
Prospectus shall be amended or supplemented (other than by a Pricing
Supplement), each time a document filed under the Act or the Exchange
Act is incorporated by reference into the Prospectus and each time the
Company sells Securities to such Agent as principal pursuant to a Terms
Agreement and such Terms Agreement specifies the delivery of an opinion
under this Section 4(i) as a condition to the purchase of Securities
pursuant to such Terms Agreement, the Company shall furnish or cause to
be furnished forthwith to such Agent a written opinion of counsel for
the Company reasonably satisfactory to such Agent, dated the date of
such amendment, supplement, incorporation or Time of Delivery relating
to such sale, as the case may be, in form reasonably satisfactory to
such Agent, to the effect that such Agent may rely on the opinion of
such counsel referred
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to in Section 6(c) hereof which was last furnished to such Agent to the
same extent as though it were dated the date of such letter authorizing
reliance (except that the statements in such last opinion shall be
deemed to relate to the Registration Statement and the Prospectus as
amended and supplemented to such date) or, in lieu of such opinion, an
opinion of the same tenor as the opinion of such counsel referred to in
Section 6(c) hereof but modified to relate to the Registration
Statement and the Prospectus as amended and supplemented to such date;
(j) That each time the Registration Statement or the
Prospectus shall be amended or supplemented and each time that a
document filed under the Act or the Exchange Act is incorporated by
reference into the Prospectus, in either case to set forth financial
information included in or derived from the Company's consolidated
financial statements or accounting records, and each time the Company
sells Securities to such Agent as principal pursuant to a Terms
Agreement and such Terms Agreement specifies the delivery of a letter
under this Section 4(j) as a condition to the purchase of Securities
pursuant to such Terms Agreement, the Company shall cause the
independent certified public accountants who have certified the
financial statements of the Company and its subsidiaries included or
incorporated by reference in the Registration Statement forthwith to
furnish such Agent a letter, dated the date of such amendment,
supplement, incorporation or Time of Delivery relating to such sale, as
the case may be, in form reasonably satisfactory to such Agent, of the
same tenor as the letter referred to in Section 6(d) hereof but
modified to relate to the Registration Statement and the Prospectus as
amended or supplemented to the date of such letter, with such changes
as may be necessary to reflect changes in the financial statements and
other information derived from the accounting records of the Company,
to the extent such financial statements and other information are
available as of a date not more than five business days prior to the
date of such letter; provided, however, that, with respect to any
financial information or other matter, such letter may reconfirm as
true and correct at such date as though made at and as of such date,
rather than repeat, statements with respect to such financial
information or other matter made in the letter referred to in
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Section 6(d) hereof which was last furnished to such Agent;
(k) That each time the Registration Statement or the
Prospectus shall be amended or supplemented (other than by a Pricing
Supplement), each time a document filed under the Act or the Exchange
Act is incorporated by reference into the Prospectus, and each time the
Company sells Securities to such Agent as principal and the applicable
Terms Agreement specifies the delivery of a certificate under this
Section 4(k) as a condition to the purchase of Securities pursuant to
such Terms Agreement, the Company shall furnish or cause to be
furnished forthwith to such Agent a certificate, dated the date of such
supplement, amendment, incorporation or Time of Delivery relating to
such sale, as the case may be, in such form and executed by such
officers of the Company as shall be reasonably satisfactory to such
Agent, to the effect that the statements contained in the certificate
referred to in Section 6(g) hereof which was last furnished to such
Agent are true and correct at such date as though made at and as of
such date (except that such statements shall be deemed to relate to the
Registration Statement and the Prospectus as amended and supplemented
to such date), or, in lieu of such certificate, certificates of the
same tenor as the certificates referred to in said Section 6(g) but
modified to relate to the Registration Statement and the Prospectus as
amended and supplemented to such date; and
(l) To offer to any person who has agreed to purchase
Securities as the result of an offer to purchase solicited by such
Agent the right to refuse to purchase and pay for such Securities if,
on the related settlement date fixed pursuant to the Administrative
Procedure, any condition set forth in Section 6(a), 6(e) or 6(f) hereof
shall not have been satisfied (it being understood that the judgment of
such person with respect to the impracticability or inadvisability of
such purchase of Securities shall be substituted, for purposes of this
Section 4(1), for the respective judgments of an Agent with respect to
certain matters referred to in such Sections 6(a), 6(e) and 6(f), and
that such Agent shall have no duty or obligation whatsoever to exercise
the judgment permitted under such Sections 6(a), 6(e) and 6(f) on
behalf of any such person).
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5. The Company covenants and agrees with each Agent that the
Company will pay or cause to be paid the following: (i) the fees, disbursements
and expenses of the Company's counsel and accountants in connection with the
registration of the Securities under the Act and all other expenses in
connection with the registration of the Securities under the Act and all other
expenses in connection with the preparation, printing and filing of the
Registration Statement, any Preliminary Prospectus, the Prospectus and any
Pricing Supplements and all other amendments and supplements thereto and the
mailing and delivering of copies thereof to such Agent; (ii) the fees and
expenses of counsel for the Agents in connection with the establishment of the
program contemplated hereby, any opinions to be rendered by such counsel
hereunder and the transactions contemplated hereunder; (iii) the cost of
printing, preparing by word processor or reproducing this Agreement, any Terms
Agreement, any Indenture, any Blue Sky and Legal Investment Memoranda and any
other documents in connection with the offering, purchase, sale and delivery of
the Securities; (iv) all expenses in connection with the qualification of the
Securities for offering and sale under state securities laws as provided in
Section 4(b) hereof, including fees and disbursements of counsel for the Agents
in connection with such qualification and in connection with the Blue Sky and
legal investment surveys; (v) any fees charged by securities rating services for
rating the Securities; (vi) any filing fees incident to any required review by
the National Association of Securities Dealers, Inc. of the terms of the sale of
the Securities; (vii) the cost of preparing the Securities; (viii) the fees and
expenses of any Trustee and any agent of any Trustee and any transfer or paying
agent of the Company and the fees and disbursements of counsel for any Trustee
or such agent in connection with any Indenture and the Securities; (ix) any
advertising expenses connected with the solicitation of offers to purchase and
the sale of Securities so long as such advertising expenses have been approved
by the Company; and (x) all other costs and expenses incident to the performance
of the Company's obligations hereunder which are not otherwise specifically
provided for in this Section. Except as provided in this Section 5 and in
Sections 7 and 8 hereof, each Agent shall pay all other expenses it incurs.
6. The obligation of any Agent, as agent of the Company, at
any time ("Solicitation Time") to solicit offers to purchase the Securities and
the obligation of any Agent to purchase Securities as principal, pursuant to any
Terms Agreement or otherwise, shall in each case be subject, in
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such Agent's discretion, to the condition that all representations and
warranties and other statements of the Company herein (and, in the case of an
obligation of an Agent under a Terms Agreement, in or incorporated in such Terms
Agreement by reference) are true and correct at and as of the Commencement Date
and any applicable date referred to in Section 4(k) hereof that is prior to such
Solicitation Time or Time of Delivery, as the case may be, and at and as of such
Solicitation Time or Time of Delivery, as the case may be, the condition that
prior to such Solicitation Time or Time of Delivery, as the case may be, the
Company shall have performed in all material respects all of its obligations
hereunder theretofore to be performed, and the following additional conditions:
(a) (i) With respect to any Securities sold at or prior to
such Solicitation Time or Time of Delivery, as the case may be, the
Prospectus as amended or supplemented (including the Pricing
Supplement) with respect to such Securities shall have been filed with
the Commission pursuant to Rule 424(b) under the Act within the
applicable time period prescribed for such filing by the rules and
regulations under the Act and in accordance with Section 4(a) hereof;
(ii) no stop order suspending the effectiveness of the Registration
Statement or any part thereof shall have been issued and no proceeding
for that purpose shall have been initiated or threatened by the
Commission; and (iii) all requests for additional information on the
part of the Commission shall have been complied with to the reasonable
satisfaction of such Agent;
(b) ▇▇▇▇▇▇▇▇ & ▇▇▇▇▇▇▇▇, counsel to the Agents, shall have
furnished to such Agent (i) such opinion or opinions, dated the
Commencement Date, with respect to the incorporation of the Company,
the validity of the Indenture, the Securities, the Registration
Statement, the Prospectus as amended or supplemented and other related
matters as such Agent may reasonably request, and (ii) if and to the
extent requested by such Agent, with respect to each applicable date
referred to in Section 4(h) hereof that is on or prior to such
Solicitation Time or Time of Delivery, as the case may be, an opinion
or opinions, dated such applicable date, to the effect that such Agent
may rely on the opinion or opinions which were last furnished to such
Agent pursuant to this Section 6(b) to the same extent as though it or
they were dated the date of such letter authorizing reliance (except
that the statements in
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such last opinion or opinions shall be deemed to relate to the
Registration Statement and the Prospectus as amended and supplemented
to such date) or, in any case, in lieu of such an opinion or opinions,
an opinion or opinions of the same tenor as the opinion or opinions
referred to in clause (i) but modified to relate to the Registration
Statement and the Prospectus as amended and supplemented to such date;
and in each case such counsel shall have received such papers and
information as they may reasonably request to enable them to pass upon
such matters;
(c) Counsel to the Company reasonably satisfactory to the
Agents (it being understood that the Company's General Counsel, Deputy
General Counsel or Associate General Counsel is reasonably satisfactory
to the Agents) shall have furnished to such Agent its written opinions,
dated the Commencement Date and each applicable date referred to in
Section 4(i) hereof that is on or prior to such Solicitation Time or
Time of Delivery, as the case may be, in form and substance
satisfactory to such Agent, to the effect that:
(i) The Company has been duly incorporated and is
validly existing as a corporation in good standing under the
laws of the State of Delaware, with power and authority
(corporate and other) to own its properties and conduct its
business as it is now being conducted except where the failure
to have such power or authority would not individually or in
the aggregate have a material adverse effect on the financial
condition or operations of the Company and its subsidiaries,
taken as a whole;
(ii) The Company is an "air carrier" within the
meaning of the Federal Aviation Act of 1958, as amended, and
has been duly qualified as a foreign corporation for the
transaction of business and is in good standing under the laws
of each jurisdiction in the United States of America other
than that of its incorporation in which it has intrastate
routes or has a principal office or major overhaul facility
and where the failure to so qualify would have a material
adverse effect on the financial condition or operations of the
Company and its subsidiaries, taken as a whole (such counsel
being entitled to rely in respect of the opinion in this
clause upon opinions of local
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counsel and in respect of matters of fact upon certificates of
officers of the Company, provided that such counsel shall
state that such counsel believes that both such Agent and such
counsel are justified in relying upon such opinions and
certificates);
(iii) Each material subsidiary of the Company has
been duly incorporated and is validly existing as a
corporation in good standing under the laws of its
jurisdiction of incorporation; and all of the issued shares of
capital stock of each such subsidiary (except for directors'
qualifying shares) are owned directly or indirectly by the
Company, free and clear of all liens, encumbrances, equities
or claims (such counsel being entitled to rely in respect of
the opinion in this clause upon opinions of local counsel and
in respect of matters of fact upon certificates of officers of
the Company or its subsidiaries, provided that such counsel
shall state that such counsel believes that both such Agent
and such counsel are justified in relying upon such opinions
and certificates);
(iv) The Company has an authorized capital stock as
set forth in the Prospectus as amended or supplemented and all
of the issued shares of capital stock of the Company have been
duly and validly authorized and issued and are fully paid and
non-assessable;
(v) There are various legal or governmental
proceedings pending to which the Company or one of its
subsidiaries is a party or to which property of the Company or
one of its subsidiaries is subject. Although the ultimate
outcome of these proceedings cannot be predicted with
certainty and could have a material adverse effect on Delta's
consolidated financial condition, results of operations or
liquidity, to the best of such counsel's knowledge after
reasonable investigation, there are no legal or governmental
proceedings pending to which the Company or any of its
subsidiaries is a party or of which any property of the
Company or any of its subsidiaries is the subject which,
individually or in the aggregate, are likely to have a
material adverse effect on the consolidated financial
condition,
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results of operations or liquidity of the Company and its
subsidiaries, taken as a whole; and, to the best of such
counsel's knowledge, no such proceedings are threatened or
contemplated by governmental authorities or threatened by
others;
(vi) This Agreement and any applicable Terms
Agreement have been duly authorized, executed and delivered by
the Company;
(vii) The Securities have been duly authorized and,
when duly executed, authenticated, issued and delivered by the
Company, will constitute valid and legally binding obligations
of the Company, enforceable in accordance with their terms
(subject, as to enforcement, to bankruptcy, insolvency,
reorganization and other laws of general applicability
relating to or affecting creditors' rights and to general
equity principles), and will be entitled to the benefits
provided by the Indenture; and the Indenture conforms, and the
Securities will conform, in all material respects to the
descriptions thereof in the Prospectus as amended or
supplemented;
(viii) The Indenture has been duly authorized,
executed and delivered by the Company and constitutes a valid
and legally binding instrument, enforceable against the
Company in accordance with its terms, subject, as to
enforcement, to bankruptcy, insolvency, reorganization and
other laws of general applicability relating to or affecting
creditors' rights and to general equity principles; and the
Indenture has been duly qualified under the Trust Indenture
Act;
(ix) The issue and sale of the Securities, the
compliance by the Company with all of the provisions of the
Securities, the Indenture, this Agreement and any applicable
Terms Agreement and the consummation of the transactions
herein and therein contemplated will not conflict with or
result in a breach or violation of any of the terms or
provisions of, or constitute a default under, any indenture,
mortgage, deed of trust, loan agreement or other agreement or
instrument known to such counsel to which the Company or any
of its subsidiaries is a party or by which the
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Company or any of its subsidiaries is bound or to which any of
the property or assets of the Company or any of its
subsidiaries is subject (except for such conflicts, breaches,
violations and defaults that would not have a material adverse
effect on the financial condition or operations of the Company
and its subsidiaries taken as a whole and that would not
affect the validity of the Securities), nor will such actions
result in any violation of the provisions of the Certificate
of Incorporation, as amended, or By-Laws of the Company or any
statute or any order, rule or regulation known to such counsel
of any court or governmental agency or body having
jurisdiction over the Company or any of its subsidiaries or
any of their properties;
(x) To the best of such counsel's knowledge after
reasonable investigation, no consent, approval, authorization,
order, registration or qualification of or with any such court
or governmental agency or body is required for the
solicitation of offers to purchase Securities, the issue and
sale of the Securities or the consummation by the Company of
the other transactions contemplated by this Agreement, any
applicable Terms Agreement, or the Indenture, except such as
have been obtained under the Act and the Trust Indenture Act
and such consents, approvals, authorizations, registrations or
qualifications as may be required under state securities or
Blue Sky laws in connection with the solicitation by the
Agents of offers to purchase Securities from the Company and
with purchases of Securities by an Agent as principal, as the
case may be, in each case in the manner contemplated hereby;
(xi) The documents incorporated by reference in the
Prospectus as amended or supplemented (other than the
financial statements and related schedules and other financial
data therein derived from the Company's accounting records, as
to which such counsel need express no opinion), when they
became effective or were filed with the Commission, as the
case may be, complied as to form in all material respects with
the requirements of the Act or the Exchange Act, as
applicable, and the rules and regulations of the
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Commission thereunder; and such counsel has no reason to
believe that any of such documents, when they became effective
or were so filed, as the case may be, contained, in the case
of a registration statement which became effective under the
Act, an untrue statement of a material fact or omitted to
state a material fact required to be stated therein or
necessary to make the statements therein not misleading, and,
in the case of other documents which were filed under the Act
or the Exchange Act with the Commission, an untrue statement
of a material fact or omitted to state a material fact
necessary in order to make the statements therein, in the
light of the circumstances under which they were made when
such documents were so filed, not misleading; and
(xii) The Registration Statement and the Prospectus
as amended and supplemented and any further amendments and
supplements thereto made by the Company prior to the date of
such opinion (other than the financial statements and related
schedules and other financial data therein derived from the
Company's accounting records, as to which such counsel need
express no opinion) comply as to form in all material respects
with the requirements of the Act and the Trust Indenture Act
and the rules and regulations thereunder; such counsel has no
reason to believe that, as of the effective date of the
Registration Statement, either the Registration Statement or
the Prospectus (or, as of its date, any amendment or
supplement thereto made by the Company prior to the date of
such opinion), other than the financial statements and related
schedules and other financial data therein derived from the
Company's accounting records, as to which such counsel need
express no opinion, contained an untrue statement of a
material fact or omitted to state a material fact required to
be stated therein or necessary to make the statements therein
not misleading or that, as of the date of such opinion, either
the Registration Statement or the Prospectus (or any such
amendment or supplement thereto), other than the financial
statements and related schedules and other financial data
therein derived from the Company's accounting records, as to
which such counsel need express no opinion, contains an untrue
statement
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of a material fact or omits to state a material fact required
to be stated therein or necessary to make the statements
therein not misleading; the statements in the Prospectus as
amended or supplemented with respect to statutes,
administrative orders and regulations and legal and
governmental proceedings fairly and accurately present in all
material respects the information required to be set forth
therein and there are no statutes, administrative orders or
regulations required to be described in the Prospectus as
amended or supplemented which are not described as required;
the statements in the Prospectus as amended or supplemented as
to the route system which the Company presently operates or is
authorized to operate are correct in all material respects,
and no authorization of the Company to operate any such route
is the subject of any "show cause" or other order of, or any
proceeding before, or any investigation by, the Department of
Transportation (other than proceedings for the granting and
renewal of temporary certificates or exemption rights) which
in the opinion of such counsel is reasonably likely to result
in a final order impairing the validity of such authorization;
and such counsel does not know of any amendment to the
Registration Statement required to be filed or any contracts
or other documents of a character required to be filed as an
exhibit to the Registration Statement or required to be
incorporated by reference into the Prospectus as amended or
supplemented or required to be described in the Registration
Statement or the Prospectus as amended or supplemented which
are not filed or incorporated by reference or described as
required;
With respect to the opinions in clauses (vii) and (viii)
above, such counsel may rely as to all matters of New York law on the
opinion of ▇▇▇▇▇▇▇▇ & ▇▇▇▇▇▇▇▇ delivered pursuant to Section 6(b).
(d) Not later than 10:00 a.m., New York City time, on the
Commencement Date and on each applicable date referred to in Section
4(j) hereof that is on or prior to such Solicitation Time or Time of
Delivery, as the case may be, the Company's independent auditing firm,
▇▇▇▇▇▇ ▇▇▇▇▇▇▇▇ LLP, shall have furnished to such Agent a letter, dated
the Commencement Date or such
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applicable date, as the case may be, in form and substance satisfactory
to such Agent, to the effect set forth in Annex III hereto;
(e) There shall not have been (i) any change or decrease
specified in the letter or letters referred to in paragraph (d) of this
Section 6 or (ii) any change, or any development involving a
prospective change, in or affecting the business or properties of the
Company and its subsidiaries, taken as a whole, the effect of which, in
any such case described in clause (i) or (ii), is in the reasonable
judgment of such Agent so material and adverse as to make it
impracticable or inadvisable to proceed with the solicitation by such
Agent of offers to purchase Securities from the Company or the purchase
by such Agent of Securities from the Company as principal, as the case
may be, on the terms and in the manner contemplated in the Prospectus
as amended or supplemented;
(f) There shall not have occurred any of the following: (i) a
suspension of trading in the Company's common stock by the Commission
or the New York Stock Exchange or a suspension or material limitation
of trading in securities generally on the New York Stock Exchange or
the establishment of minimum prices on such Exchange; (ii) the
declaration of a banking moratorium either by Federal or New York State
authorities; or (iii) the occurrence of any material outbreak or
material escalation of hostilities or other calamity or crisis the
effect of which on the financial markets of the United States is such
as to make it, in the reasonable judgment of such Agent, impracticable
to proceed with the solicitation of offers to purchase Securities or
the purchase of Securities from the Company as principal, pursuant to
the applicable Terms Agreement or otherwise, as the case may be, on the
terms and in the manner contemplated in the Prospectus as amended or
supplemented; or (iv) (a) any downgrading in the rating accorded the
Company's unsecured debt securities or preferred stock by any
"nationally recognized statistical rating organization", as that term
is defined by the Commission for purposes of Rule 436(g)(2) under the
Act or (b) any such organization shall have publicly announced that it
has under surveillance or review, with possible negative implications,
its rating of any of the Company's unsecured debt securities or
preferred stock; and
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(g) The Company shall have furnished or caused to be furnished
to such Agent certificates of officers of the Company dated the
Commencement Date and each applicable date referred to in Section 4(k)
hereof that is on or prior to such Solicitation Time or Time of
Delivery, as the case may be, in such form and executed by such
officers of the Company as shall be satisfactory to such Agent, as to
the accuracy of the representations and warranties of the Company
herein at and as of the Commencement Date or such applicable date, as
the case may be, as to the performance by the Company in all material
respects of all of its obligations hereunder to be performed at or
prior to the Commencement Date or such applicable date, as the case may
be, as to the matters set forth in subsections (a) and (e) of this
Section 6, and as to such other matters as such Agent may reasonably
request.
7. (a) The Company agrees to indemnify and hold harmless each
Agent and each person who controls any Agent within the meaning of either the
Act or the Exchange Act against any and all losses, claims, damages or
liabilities, joint or several, to which they or any of them may become subject
under the Act, the Exchange Act or other Federal or state statutory law or
regulation, at common law or otherwise, insofar as such losses, claims, damages
or liabilities (or actions in respect thereof) arise out of or are based upon
any untrue statement or alleged untrue statement of a material fact contained in
the Registration Statement or in any amendment thereof, or in any Preliminary
Prospectus, preliminary prospectus supplement relating to the Securities or the
Prospectus, or in any amendment thereof or supplement thereto, or in any other
prospectus relating to the Securities, or arise out of or are based upon the
omission or alleged omission to state therein a material fact required to be
stated therein or necessary to make the statements therein not misleading, and
agrees to reimburse each such indemnified party, as incurred, for any legal or
other expenses reasonably incurred by them in connection with investigating or
defending any such loss, claim, damage, liability or action; provided, however,
that (i) the Company will not be liable in any such case to the extent that any
such loss, claim, damage or liability arises out of or is based upon any such
untrue statement or alleged untrue statement or omission or alleged omission
made therein in reliance upon and in conformity with written information
furnished to the Company by any Agent specifically for use in connection with
the preparation
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thereof, (ii) such indemnity with respect to any Preliminary Prospectus shall
not inure to the benefit of any Agent (or any person controlling such Agent) as
to whom it shall be established that the person asserting any such loss, claim,
damage or liability purchased the Securities which are the subject thereof if
such Agent did not send or deliver a copy of the Prospectus as amended or
supplemented at or prior to the confirmation of the sale of such Securities to
such person in any case where such delivery is required by the Act and the
untrue statement or omission of a material fact contained in such Preliminary
Prospectus was corrected in the Prospectus as amended or supplemented and (iii)
the Company will not be liable for any such loss, claim, damage or liability in
connection with any settlement of any pending or threatened litigation or any
pending or threatened governmental agency investigation or proceeding if that
settlement is effected without the prior written consent of the Company, which
consent shall not be unreasonably withheld. This indemnity agreement will be in
addition to any liability which the Company may otherwise have.
(b) Each Agent severally agrees to indemnify and hold harmless
the Company, each of its directors, each of its officers who signs the
Registration Statement, and each person who controls the Company within the
meaning of either the Act or the Exchange Act, to the same extent as the
foregoing indemnity from the Company to each Agent and agrees to reimburse each
such indemnified party, as incurred, for any legal or other expenses reasonably
incurred by them in connection with investigating or defending any loss, claim,
damage, liability or action, but only with reference to written information
furnished to the Company by such Agent specifically for inclusion in the
Registration Statement, any Preliminary Prospectus, any preliminary prospectus
supplement relating to the Securities, the Prospectus, or in any amendment
thereof or supplement thereto, or any other prospectus relating to the
Securities. This indemnity agreement will be in addition to any liability which
any Agent may otherwise have. The Company acknowledges that the second sentence
in the second paragraph under "Supplemental Plan of Distribution" in the
Prospectus Supplement, dated January 8, 1999, constitutes the only information
furnished in writing by the Agents or on the Agents' behalf for inclusion in the
Registration Statement, or any amendment thereof, any Preliminary Prospectus,
any preliminary prospectus supplement relating to the Securities, the
Prospectus, or in any amendment thereof or supplement thereto, or in any
prospectus relating
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to the Securities, and the Agents will confirm that such statement is correct.
(c) Promptly after receipt by an indemnified party under this
Section 7 of notice of the commencement of any action or proceeding (including
any governmental investigation), such indemnified party will, if a claim for
indemnification in respect thereof is to be made against the indemnifying party
under Section 7(a) or (b), notify the indemnifying party in writing of the
commencement thereof; but the omission so to notify the indemnifying party will
not relieve it from any liability which it may have to any indemnified party
otherwise than under Section 7(a) or (b) except to the extent that the
indemnifying party is prejudiced thereby. In case any such action or proceeding
is brought against any indemnified party, and it notifies the indemnifying party
of the commencement thereof, the indemnifying party will be entitled to
participate therein (jointly with any other indemnifying party similarly
notified), and to the extent that it may elect, by written notice, delivered to
such indemnified party promptly after receiving the aforesaid notice from such
indemnified party, to assume the defense thereof, with counsel reasonably
satisfactory to such indemnified party; provided, however, that if the
defendants in any such action include both the indemnified party and the
indemnifying party and the indemnified party shall have reasonably concluded
that there may be legal defenses available to it and/or other indemnified
parties which are different from or additional to those available to the
indemnifying party, the indemnified party or parties shall have the right to
select separate counsel to defend such action on behalf of such indemnified
party or parties. Upon receipt of notice from the indemnifying party to such
indemnified party of its election so to appoint counsel to defend such action
and approval by the indemnified party of such counsel, the indemnifying party
will not be liable to such indemnified party under this Section 7 for any legal
or other expenses subsequently incurred by such indemnified party in connection
with the defense thereof unless (i) the indemnified party shall have employed
separate counsel in accordance with the proviso to the next preceding sentence
(it being understood, however, that the indemnifying party shall not be liable
for the expenses of more than one separate counsel, approved by the Agent in the
case of paragraph (a) of this Section 7, representing the indemnified parties
under such paragraph (a) who are parties to such action), (ii) the indemnifying
party shall not have employed counsel reasonably satisfactory to the indemnified
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party to represent the indemnified party within a reasonable time after notice
of commencement of the action or (iii) the indemnifying party has authorized the
employment of counsel for the indemnified party at the expense of the
indemnifying party; and except that, if clause (i) or (iii) is applicable, such
liability shall be only in respect of the counsel referred to in such clause (i)
or (iii).
(d) In order to provide for just and equitable contribution in
circumstances in which the indemnification provided for in paragraph (a) or (b)
of this Section 7 is due in accordance with its terms but is for any reason held
by a court to be unavailable on grounds of policy or otherwise, the Company and
the Agent shall contribute to the aggregate losses, claims, damages and
liabilities (including legal or other expenses reasonably incurred in connection
with investigation or defending same) to which the Company and one or more of
the Agents may be subject in such proportion as is appropriate to reflect the
relative benefits received by the Company on the one hand and each Agent on the
other from the offering of the Securities to which such loss, claim, damage or
liability (or action in respect thereof) relates. If the allocation provided by
the immediately preceding sentence is not permitted by applicable law or if the
indemnified party failed to give the notice required under subsection (c) above,
then each indemnifying party shall contribute to such amount paid or payable to
such indemnified party in such proportion as is appropriate to reflect not only
such relative benefits but also the relative fault of the Company on the one
hand and each Agent on the other in connection with the statements or omissions
which resulted in such losses, claims, damages or liabilities (or actions in
respect thereof), as well as any other relevant equitable considerations. The
relative benefits received by the Company on the one hand and each Agent on the
other shall be deemed to be in the same proportion as the total net proceeds
from such offering (before deducting expenses) received by the Company bear to
the total discounts and commissions received by such Agent in respect thereof.
The relative fault shall be determined by reference to, among other things,
whether the untrue or alleged untrue statement of a material fact or the
omission or alleged omission to state a material fact relates to information
supplied by the Company or any Agent and the parties' relative intent,
knowledge, access to information and opportunity to correct or prevent such
statement or omission. The Company and each Agent agree that it would not be
just and equitable if contribution pursuant to this subsection (d) were
determined by pro rata allocation (even
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30
if all Agents were treated as one entity for such purpose) or by any other
method of allocation which does not take account of the equitable considerations
referred to above in this subsection (d). The amount paid or payable by an
indemnified party as a result of the losses, claims, damages or liabilities (or
actions in respect thereof) referred to above in this subsection (d) shall be
deemed to include any legal or other expenses reasonably incurred by such
indemnified party in connection with investigating or defending any such action
or claim. Notwithstanding the provisions of this subsection (d), no Agent shall
be required to contribute any amount in excess of the amount by which (i) the
total price at which the applicable Securities purchased by or through it were
sold exceeds (ii) the amount of any damages which such Agent has otherwise been
required to pay by reason of such untrue or alleged untrue statement or omission
or alleged omission. No person guilty of fraudulent misrepresentation (within
the meaning of Section 11(f) of the Act) shall be entitled to contribution from
any person who was not guilty of such fraudulent misrepresentation. The
obligations of each of the Agents under this subsection (d) to contribute are
several in proportion to the respective purchases made by or through it to which
such loss, claim, damage or liability (or action in respect thereof) relates and
are not joint. For purposes of this Section 7, each person who controls any
Agent within the meaning of the Act shall have the same rights to contribution
as any Agent, and each person who controls the Company within the meaning of
either the Act or the Exchange Act, each officer of the Company who shall have
signed the Registration Statement and each director of the Company shall have
the same rights to contribution as the Company, subject in each case to the
provisions of this paragraph (d).
8. Each Agent, in soliciting offers to purchase Securities
from the Company and in performing the other obligations of such Agent hereunder
(other than in respect to any purchase by an Agent as principal, pursuant to a
Terms Agreement or otherwise), is acting solely as agent for the Company and not
as principal. Each Agent will make reasonable efforts to assist the Company in
obtaining performance by each purchaser whose offer to purchase Securities from
the Company was solicited by such Agent and has been accepted by the Company,
but such Agent shall not have any liability to the Company in the event such
purchase is not consummated for any reason. If the Company shall default on its
obligation to deliver Securities to a purchaser whose offer it has accepted, the
Company shall
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31
(i) hold each Agent harmless against any loss, claim or damage arising from or
as a result of such default by the Company and (ii) notwithstanding such
default, pay to the Agent that solicited such offer any commission to which it
would be entitled in connection with such sale.
9. The respective indemnities, agreements, representations,
warranties and other statements by any Agent and the Company set forth in or
made pursuant to this Agreement shall remain in full force and effect regardless
of any investigation (or any statement as to the results thereof) made by or on
behalf of any Agent or any controlling person of any Agent, or the Company, or
any officer or director or any controlling person of the Company, and shall
survive each delivery of and payment for any of the Securities.
10. Notwithstanding the provisions of Section 2(a) hereof, the
provisions of this Agreement relating to the solicitation of offers to purchase
Securities from the Company may be suspended or terminated at any time by the
Company as to any Agent or by any Agent as to such Agent upon the giving of
written notice of such suspension or termination to such Agent or the Company,
as the case may be. In the event of such suspension or termination with respect
to any Agent, (x) this Agreement shall remain in full force and effect with
respect to any Agent as to which such suspension or termination has not
occurred, (y) this Agreement shall remain in full force and effect with respect
to the rights and obligations of any party which have previously accrued or
which relate to Securities which are already issued, agreed to be issued or the
subject of a pending offer at the time of such suspension or termination and (z)
in any event, this Agreement shall remain in full force and effect insofar as
the fourth paragraph of Section 2(a), Section 4(d), Section 4(e), Section 4(f),
Section 5, Section 7, Section 8 and Section 9 hereof are concerned.
11. Except as otherwise specifically provided herein or in the
Administrative Procedure, all statements, requests, notices and advices
hereunder shall be in writing, or by telephone if promptly confirmed in writing,
and if to ▇▇▇▇▇▇▇ ▇▇▇▇▇ Barney Inc. shall be sufficient in all respects when
delivered or sent by facsimile transmission or registered mail to Seven ▇▇▇▇▇
▇▇▇▇▇ ▇▇▇▇▇▇, ▇▇▇ ▇▇▇▇, ▇▇▇ ▇▇▇▇ ▇▇▇▇▇, Facsimile Transmission No. (212)
783-2274, Attention: Medium-Term Note Department, and if to ▇▇▇▇▇▇▇, ▇▇▇▇▇ & Co.
shall be sufficient in all respects when
-31-
32
delivered or sent by facsimile transmission or registered mail to ▇▇ ▇▇▇▇▇
▇▇▇▇▇▇, ▇▇▇ ▇▇▇▇, ▇▇▇ ▇▇▇▇ ▇▇▇▇▇, Facsimile Transmission No. (▇▇▇) ▇▇▇-▇▇▇▇,
Attention: Registration Department, and if to ▇▇▇▇▇▇▇ Lynch, Pierce, ▇▇▇▇▇▇ &
▇▇▇▇▇ Incorporated shall be sufficient in all respects when delivered or sent by
telex, facsimile transmission or registered mail to World Financial Center,
North Tower - 10th Floor, ▇▇▇ ▇▇▇▇▇ ▇▇▇▇▇▇, ▇▇▇ ▇▇▇▇, ▇▇▇ ▇▇▇▇ ▇▇▇▇▇- 1310,
Facsimile Transmission No. (▇▇▇) ▇▇▇-▇▇▇▇, Attention: MTN Product Management,
and if to ▇▇▇▇▇▇ ▇▇▇▇▇▇▇ & Co. Incorporated shall be sufficient in all respects
when delivered or sent by facsimile transmission or registered mail to ▇▇▇▇
▇▇▇▇▇▇▇▇, ▇▇▇ ▇▇▇▇▇, ▇▇▇ ▇▇▇▇, ▇▇▇ ▇▇▇▇ ▇▇▇▇▇, Facsimile Transmission No. (212)
761-0780, Attention: Manager - Continuously Offered Products, with a copy to
▇▇▇▇ ▇▇▇▇▇▇▇▇, ▇▇▇▇ ▇▇▇▇▇, ▇▇▇ ▇▇▇▇, ▇▇▇ ▇▇▇▇ ▇▇▇▇▇, Facsimile Transmission No.
(▇▇▇) ▇▇▇-▇▇▇▇, Attention: ▇▇▇▇▇ ▇▇▇▇▇▇, Investment Banking Information Center,
and if to the Company shall be sufficient in all respects when delivered or sent
by facsimile transmission or registered mail to the address of the Company set
forth in the Registration Statement, Attention: Treasurer with a copy to the
Company's General Counsel (provided that the failure to send a copy to the
General Counsel shall not affect the validity of the notice).
12. This Agreement and any Terms Agreement shall be binding
upon, and inure solely to the benefit of, each Agent and the Company, and to the
extent provided in Section 7 and Section 9 hereof, the officers and directors of
the Company and any person who controls any Agent or the Company, and their
respective personal representatives, successors and assigns, and no other person
shall acquire or have any right under or by virtue of this Agreement or any
Terms Agreement. No purchaser of any of the Securities through or from any Agent
hereunder shall be deemed a successor or assign by reason of such purchase.
13. Time shall be of the essence in this Agreement and any
Terms Agreement. As used herein, the term "business day" shall mean any day when
the office of the Commission in Washington, D.C. is normally open for business.
14. THIS AGREEMENT AND ANY TERMS AGREEMENT SHALL BE GOVERNED
BY AND CONSTRUED IN ACCORDANCE WITH THE LAWS OF THE STATE OF NEW YORK.
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33
15. This Agreement and any Terms Agreement may be executed by
any one or more of the parties hereto and thereto in any number of counterparts,
each of which shall be deemed to be an original, but all of such respective
counterparts shall together constitute one and the same instrument.
If the foregoing is in accordance with your understanding,
please sign and return to us five counterparts hereof, whereupon this letter and
the acceptance by you thereof shall constitute a binding agreement between the
Company and each of you in accordance with its terms.
Very truly yours,
DELTA AIR LINES, INC.
By:
-----------------------
Name:
Title:
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34
Accepted in New York, New York, as of the date hereof:
▇▇▇▇▇▇▇ ▇▇▇▇▇ ▇▇▇▇▇▇ INC.
By:
-----------------------------
Name:
Title:
--------------------------------
(▇▇▇▇▇▇▇, Sachs & Co.)
▇▇▇▇▇▇▇ ▇▇▇▇▇ & CO.
▇▇▇▇▇▇▇ LYNCH, PIERCE, ▇▇▇▇▇▇ & ▇▇▇▇▇
INCORPORATED
By:
-----------------------------
Name:
Title:
▇▇▇▇▇▇ ▇▇▇▇▇▇▇ & CO. INCORPORATED
By:
-----------------------------
Name:
Title:
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35
ANNEX I
DELTA AIR LINES, INC.
Medium-Term Notes,
Series B
Terms Agreement
____________________ , 19___
▇▇▇▇▇▇▇ ▇▇▇▇▇ Barney Inc.
Seven ▇▇▇▇▇ ▇▇▇▇▇ ▇▇▇▇▇▇
▇▇▇ ▇▇▇▇, ▇▇▇ ▇▇▇▇ ▇▇▇▇▇
▇▇▇▇▇▇▇, ▇▇▇▇▇ & Co.
▇▇ ▇▇▇▇▇ ▇▇▇▇▇▇
▇▇▇ ▇▇▇▇, ▇▇▇ ▇▇▇▇ ▇▇▇▇▇
▇▇▇▇▇▇▇ ▇▇▇▇▇ & Co.
▇▇▇▇▇▇▇ Lynch, Pierce, ▇▇▇▇▇▇ & ▇▇▇▇▇
Incorporated
▇▇▇▇▇▇▇ ▇▇▇▇▇ World Headquarters
World Financial Center
▇▇▇▇▇ ▇▇▇▇▇, ▇▇▇▇ ▇▇▇▇▇
▇▇▇ ▇▇▇▇, ▇▇▇ ▇▇▇▇ ▇▇▇▇▇
▇▇▇▇▇▇ ▇▇▇▇▇▇▇ & Co. Incorporated
▇▇▇▇ ▇▇▇▇▇▇▇▇
▇▇▇ ▇▇▇▇, ▇▇▇ ▇▇▇▇ ▇▇▇▇▇
Dear Sirs:
Delta Air Lines, Inc. (the "Company") proposes, subject to the
terms and conditions stated herein and in the Distribution Agreement, dated
January 8, 1999 (the "Distribution Agreement"), between the Company on the one
hand and ▇▇▇▇▇▇▇ ▇▇▇▇▇ Barney Inc. ("▇▇▇▇▇▇▇ ▇▇▇▇▇ ▇▇▇▇▇▇"), ▇▇▇▇▇▇▇, ▇▇▇▇▇ &
Co. ("▇▇▇▇▇▇▇, Sachs"), ▇▇▇▇▇▇▇ ▇▇▇▇▇ & Co., ▇▇▇▇▇▇▇ Lynch, Pierce, ▇▇▇▇▇▇ &
▇▇▇▇▇ Incorporated ("▇▇▇▇▇▇▇ ▇▇▇▇▇"), and ▇▇▇▇▇▇ ▇▇▇▇▇▇▇ & Co. Incorporated
("▇▇▇▇▇▇ ▇▇▇▇▇▇▇", and, collectively with ▇▇▇▇▇▇▇ ▇▇▇▇▇ Barney, Goldman, Sachs,
and ▇▇▇▇▇▇▇ ▇▇▇▇▇, the "Agents") on the other, to issue and sell to [▇▇▇▇▇▇▇
▇▇▇▇▇ Barney] [▇▇▇▇▇▇▇, ▇▇▇▇▇] [▇▇▇▇▇▇▇ ▇▇▇▇▇] [▇▇▇▇▇▇ ▇▇▇▇▇▇▇] the securities
specified in the Schedule hereto (the "Purchased
36
Securities"). Each of the provisions of the Distribution Agreement not
specifically related to the solicitation by the Agents, as agents of the
Company, of offers to purchase Securities is incorporated herein by reference in
its entirety, and shall be deemed to be part of this Terms Agreement to the same
extent as if such provisions had been set forth in full herein. Nothing
contained herein or in the Distribution Agreement shall make any party hereto an
agent of the Company or make such party subject to the provisions therein
relating to the solicitation of offers to purchase securities from the Company,
solely by virtue of its execution of this Terms Agreement. Each of the
representations and warranties set forth therein shall be deemed to have been
made at and as of the date of this Terms Agreement, except that each
representation and warranty in Section 1 of the Distribution Agreement which
makes reference to the Prospectus shall be deemed to be a representation and
warranty as of the date of the Distribution Agreement in relation to the
Prospectus (as therein defined), and also a representation and a warranty as of
the date of this Terms Agreement in relation to the Prospectus as amended and
supplemented to relate to the Purchased Securities.
An amendment to the Registration Statement, or a supplement to
the Prospectus, as the case may be, relating to the Purchased Securities, in the
form heretofore delivered to you is now proposed to be filed with the
Commission.
Subject to the terms and conditions set forth herein and in
the Distribution Agreement incorporated herein by reference, the Company agrees
to issue and sell to [▇▇▇▇▇▇▇ ▇▇▇▇▇ Barney] [▇▇▇▇▇▇▇, ▇▇▇▇▇] [▇▇▇▇▇▇▇ ▇▇▇▇▇]
[▇▇▇▇▇▇ ▇▇▇▇▇▇▇] and [▇▇▇▇▇▇▇ ▇▇▇▇▇ ▇▇▇▇▇▇] [▇▇▇▇▇▇▇, ▇▇▇▇▇] [▇▇▇▇▇▇▇ ▇▇▇▇▇]
[▇▇▇▇▇▇ ▇▇▇▇▇▇▇] agree[s] to purchase from the Company the Purchased Securities,
at the time and place, in the principal amount and at the purchase price set
forth in the Schedule hereto.
If the foregoing is in accordance with your understanding,
please sign and return to us four counterparts hereof, and upon acceptance
hereof by you this letter and such acceptance hereof, including those provisions
of the
I-2
37
Distribution Agreement incorporated herein by reference, shall constitute a
binding agreement between you and the Company.
DELTA AIR LINES, INC.
By:
-----------------------------
Name:
Title:
Accepted:
[▇▇▇▇▇▇▇ ▇▇▇▇▇ BARNEY INC.
By:
-------------------------------
Name:
Title:]
[
----------------------------------
(▇▇▇▇▇▇▇, ▇▇▇▇▇ & Co.)]
[▇▇▇▇▇▇▇ ▇▇▇▇▇ & CO.
▇▇▇▇▇▇▇ LYNCH, PIERCE, ▇▇▇▇▇▇ & ▇▇▇▇▇
INCORPORATED
By:
-------------------------------
Name:
Title:]
[▇▇▇▇▇▇ ▇▇▇▇▇▇▇ & CO. INCORPORATED
By:
-------------------------------
Name:
Title:]
I-3
38
Schedule to Annex I
Title of Purchased Securities:
[ %] Medium-Term Notes, Series C
Aggregate Principal Amount:
$
[Price to Public:]
Purchase Price by [▇▇▇▇▇▇▇ ▇▇▇▇▇ Barney Inc.] [▇▇▇▇▇▇▇, ▇▇▇▇▇ & Co.] [▇▇▇▇▇▇▇
▇▇▇▇▇ & Co.] [▇▇▇▇▇▇ ▇▇▇▇▇▇▇ & Co.
Incorporated]:
%, of the principal amount of the Purchased Securities [, plus
accrued interest from ____________ to _____________] [and accrued amortization,
if any, from ________________ to ________________]
Method of and Specified Funds for Payment of Purchase Price:
[By certified or official bank check or checks, payable to the order of
the Company, in [[New York] Clearing House] [immediately available] funds]
[By wire transfer to a bank account specified by the
Company in immediately available funds]
Indenture:
Indenture, dated as of May 1, 1991, between the Company and The Bank of
New York, successor to The Citizens and Southern National Bank of Florida, as
Trustee
Time of Delivery:
Closing Location:
Maturity:
Interest Rate:
[ %]
Interest Payment Dates:
[months and dates]
I-4
39
Documents to be Delivered:
The following documents referred to in the Distribution Agreement shall
be delivered as a condition to the Closing:
[(1) The opinion or opinions of counsel to the
Agents referred to in Section 4(h).]
[(2) The opinion of counsel to the Company
referred to in Section 4(i).]
[(3) The accountants' letter referred to in
Section 4(j).]
[(4) The officers' certificate referred to in
Section 4(k).]
Other Provisions (including Syndicate Provisions, if applicable:
I-5
40
ANNEX II
DELTA AIR LINES, INC.
Administrative Procedure
This Administrative Procedure relates to the Securities
defined in the Distribution Agreement, dated January 8, 1999 (the "Distribution
Agreement"), between Delta Air Lines, Inc. (the "Company") and ▇▇▇▇▇▇▇ ▇▇▇▇▇
▇▇▇▇▇▇ Inc., ▇▇▇▇▇▇▇, ▇▇▇▇▇ & Co., ▇▇▇▇▇▇▇ ▇▇▇▇▇ & Co., ▇▇▇▇▇▇▇ Lynch, Pierce,
▇▇▇▇▇▇ & ▇▇▇▇▇ Incorporated and ▇▇▇▇▇▇ ▇▇▇▇▇▇▇ & Co. Incorporated (the
"Agents"), to which this Administrative Procedure is attached as Annex II.
Defined terms used herein and not defined herein shall have the meanings given
such terms in the Distribution Agreement, the Prospectus as amended or
supplemented or the Indenture.
The procedures to be followed with respect to the settlement
of sales of Securities directly by the Company to purchasers solicited by an
Agent, as agent, are set forth below. The terms and settlement details related
to a purchase of Securities by an Agent, as principal, from the Company will be
set forth in a Terms Agreement pursuant to the Distribution Agreement, unless
the Company and such Agent otherwise agree as provided in Section 2(b) of the
Distribution Agreement, in which case the procedures to be followed in respect
of the settlement of such sale will be as set forth below. An Agent, in relation
to a purchase of a Security by a purchaser solicited by such Agent, is referred
to herein as the "Selling Agent" and, in relation to a purchase of a Security by
such Agent as principal other than pursuant to a Terms Agreement, as the
"Purchasing Agent".
The Company will advise each Agent in writing of those persons
with whom such Agent is to communicate regarding offers to purchase Securities
and the related settlement details.
Each Security will be issued only in fully registered form and
will be represented by either a global security (a "Global Security") delivered
to the Trustee, as agent for The Depository Trust Company (the "Depositary") and
recorded in the book-entry system maintained by the Depositary (a "Book-Entry
Security") or a certificate issued in definitive form (a "Certificated
Security") delivered to a person designated by an Agent, as set forth in the
applicable Pricing Supplement. An owner of a Book-Entry Security will not be
entitled to receive a certificate
41
representing such a Security, except as provided in the Indenture.
Certificated Securities will be issued in accordance with the
Administrative Procedure set forth in Part I hereof, and Book-Entry Securities
will be issued in accordance with the Administrative Procedure set forth in Part
II hereof.
Nothing herein shall be deemed to require the Trustee to risk
or expend its own funds in connection with any payment to the Company, the
Depositary, the Agents or the purchaser, it being understood by all parties that
payments made by the Trustee to the Company, the Depositary, the Agents or the
purchaser shall be made only to the extent that funds are provided to the
Trustee for such purpose.
PART I: ADMINISTRATIVE PROCEDURE FOR CERTIFICATED
SECURITIES
Posting Rates by Company:
The Company and the Agents will discuss from time to time the
rates of interest per annum to be borne by and the maturity of Certificated
Securities that may be sold as a result of the solicitation of offers by an
Agent. The Company may establish a fixed set of interest rates and maturities
for an offering period ("posting"). If the Company decides to change already
posted rates, it will promptly advise the Agents to suspend solicitation of
offers until the new posted rates have been established with the Agents.
Acceptance of Offers by Company:
Each Agent will promptly advise the Company by telephone or
other appropriate means of all reasonable offers to purchase Certificated
Securities, other than those rejected by such Agent. Each Agent may, in its
discretion reasonably exercised, reject any offer received by it in whole or in
part. Each Agent also may make offers to the Company to purchase Certificated
Securities as a Purchasing Agent. The Company will have the sole right to accept
offers to purchase Certificated Securities and may reject any such offer in
whole or in part.
The Company will promptly notify the Selling Agent or
Purchasing Agent, as the case may be, of its acceptance or rejection of an offer
to purchase Certificated Securities. If the Company accepts an offer to purchase
Certificated Securities, it will confirm such acceptance in
II-2
42
writing to the Selling Agent or Purchasing Agent, as the case may be, and the
Trustee.
Communication of Sale Information to Company by Selling Agent:
After the acceptance of an offer by the Company, the Selling
Agent or Purchasing Agent, as the case may be, will communicate the following
details of the terms of such offer (the "Sale Information") to the Company by
telephone (confirmed in writing) or by facsimile transmission or other
acceptable written means:
(1) Principal Amount of Certificated Securities
to be purchased;
(2) If a Fixed Rate Certificated Security, the interest
rate and the initial interest payment date;
(3) Trade Date;
(4) Settlement Date;
(5) Maturity Date;
(6) Issue Price;
(7) Selling Agent's commission or Purchasing
Agent's discount, as the case may be;
(8) Net Proceeds to the Company;
(9) If a redeemable Certificated Security, such of the
following as are applicable:
(i) Redemption Commencement Date,
(ii) Initial Redemption Price (% of par),
and
(iii) Amount (% of par) that the Redemption
Price shall decline (but not below
par) on each anniversary of the
Redemption Commencement Date;
(10) If a Floating Rate Certificated Security, such of the
following as are applicable:
(i) Interest Rate Basis,
(ii) Index Maturity,
II-3
43
(iii) Spread or Spread Multiplier,
(iv) Maximum Rate,
(v) Minimum Rate,
(vi) Initial Interest Rate,
(vii) Interest Reset Dates,
(viii) Calculation Dates,
(ix) Interest Determination Dates,
(x) Interest Payment Dates,
(xi) Regular Record Dates, and
(xii) Calculation Agent;
(11) Name, address and taxpayer identification
number of the registered owner(s);
(12) Denomination of certificates to be delivered
at settlement;
(13) Book-Entry Security or Certificated Security;
and
(14) Selling Agent or Purchasing Agent.
Preparation of Pricing Supplement by Company:
If the Company accepts an offer to purchase a Certificated
Security, it will prepare a Pricing Supplement reflecting the terms of such
Certificated Security and arrange to have delivered to the Selling Agent or
Purchasing Agent, as the case may be, at least ten copies of such Pricing
Supplement, not later than 5:00 p.m., New York City time, on the business day
following the Trade Date, or if the Company and the purchaser agree to
settlement on the date of acceptance of such offer, not later than noon, New
York City time, on such date. The Company will arrange to have the Pricing
Supplement filed with the Commission not later than the close of business of the
Commission on the fifth business day following the date on which such Pricing
Supplement is first used.
Delivery of Confirmation and Prospectus to Purchaser by Selling Agent:
The Selling Agent will deliver to the purchaser of a
Certificated Security a written confirmation of the sale and delivery and
payment instructions. In addition, the Selling Agent will deliver to such
purchaser or its agent the Prospectus as amended or supplemented (including the
Pricing Supplement) in relation to such Certificated Security prior to or
together with the earlier of the
II-4
44
delivery to such purchaser or its agent of (a) the confirmation of sale or (b)
the Certificated Security.
Date of Settlement:
All offers of Certificated Securities solicited by a Selling
Agent or made by a Purchasing Agent and accepted by the Company will be settled
on a date (the "Settlement Date") which is the third business day after the date
of acceptance of such offer, unless the Company and the purchaser agree to
settlement (a) on any other business day after the acceptance of such offer or
(b) with respect to an offer accepted by the Company prior to 10:00 a.m., New
York City time, on the date of such acceptance.
Instruction from Company to Trustee for Preparation of Certificated Securities:
After receiving the Sale Information from the Selling Agent or
Purchasing Agent, as the case may be, the Company will communicate such Sale
Information to the Trustee by telephone (confirmed in writing) or by facsimile
transmission or other acceptable written means on the sale date.
The Company will instruct the Trustee by facsimile
transmission or other acceptable written means to authenticate and deliver the
Certificated Securities no later than 2:15 p.m., New York City time, on the
Settlement Date. Such instruction will be given by the Company prior to 3:00
p.m., New York City time, on the business day immediately preceding the
Settlement Date unless the Settlement Date is the date of acceptance by the
Company of the offer to purchase Certificated Securities in which case such
instruction will be given by the Company by 11:00 a.m., New York City time.
Preparation and Delivery of Certificated Securities by Trustee and Receipt of
Payment Therefor:
The Trustee will prepare each Certificated Security and
appropriate receipts that will serve as the documentary control of the
transaction.
In the case of a sale of Certificated Securities to a
purchaser solicited by a Selling Agent, the Trustee will, by 2:15 p.m., New York
City time, on the Settlement Date, deliver the Certificated Securities to the
Selling Agent for the benefit of the purchaser of such Certificated Securities
against delivery by the Selling Agent of a
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receipt therefor. On the Settlement Date the Selling Agent will deliver payment
for such Certificated Securities in immediately available funds to the Company
in an amount equal to the issue price of the Certificated Securities less the
Selling Agent's commission; provided that the Selling Agent reserves the right
to withhold payment for which it has not received funds from the purchaser. The
Company shall not use any proceeds advanced by a Selling Agent to acquire
securities.
In the case of a sale of Certificated Securities to a
Purchasing Agent, the Trustee will, by 2:15 p.m., New York City time, on the
Settlement Date, deliver the Certificated Securities to the Purchasing Agent
against delivery of payment for such Certificated Securities in immediately
available funds to the Company in an amount equal to the issue price of the
Certificated Securities less the Purchasing Agent's discount.
Failure of Purchaser to Pay Selling Agent:
If a purchaser (other than a Purchasing Agent) fails to make
payment to the Selling Agent for a Certificated Security, the Selling Agent will
promptly notify the Trustee and the Company thereof by telephone (confirmed in
writing) or by facsimile transmission or other acceptable written means. The
Selling Agent will immediately return the Certificated Security to the Trustee.
Immediately upon receipt of such Certificated Security by the Trustee, the
Company will return to the Selling Agent an amount equal to the amount
previously paid to the Company in respect of such Certificated Security. The
Company will reimburse the Selling Agent on an equitable basis for its loss of
the use of funds during the period when they were credited to the account of the
Company.
The Trustee will cancel the Certificated Security in respect
of which the failure occurred, make appropriate entries in its records and,
unless otherwise instructed by the Company, destroy the Certificated Security.
PART II: ADMINISTRATIVE PROCEDURE FOR BOOK-ENTRY SECURITIES
In connection with the qualification of the Book- Entry
Securities for eligibility in the book-entry system maintained by the
Depositary, the Trustee will perform the custodial, document control and
administrative functions described below, in accordance with its respective
obligations under a Letter of Representation from the Company and the Trustee to
the Depositary, dated the date
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hereof, and a Medium-Term Note Certificate Agreement between the Trustee and the
Depositary, dated as of April 14, 1989, as amended (the "Certificate
Agreement"), and its obligations as a participant in the Depositary, including
the Depositary's Same-Day Funds Settlement System ("SDFS").
Posting Rates by the Company:
The Company and the Agents will discuss from time to time the
rates of interest per annum to be borne by and the maturity of Book-Entry
Securities that may be sold as a result of the solicitation of offers by an
Agent. The Company may establish a fixed set of interest rates and maturities
for an offering period ("posting"). If the Company decides to change already
posted rates, it will promptly advise the Agents to suspend solicitation of
offers until the new posted rates have been established with the Agents.
Acceptance of Offers by the Company:
Each Agent will promptly advise the Company by telephone or
other appropriate means of all reasonable offers to purchase Securities, other
than those rejected by such Agent. Each Agent may, in its discretion reasonably
exercised, reject any offer received by it in whole or in part. Each Agent also
may make offers to the Company to purchase Book-Entry Securities as a Purchasing
Agent. The Company will have the sole right to accept offers to purchase
Book-Entry Securities and may reject any such offer in whole or in part.
The Company will promptly notify the Selling Agent or
Purchasing Agent, as the case may be, of its acceptance or rejection of an offer
to purchase Book-Entry Securities. If the Company accepts an offer to purchase
Book-Entry Securities, it will confirm such acceptance in writing to the Selling
Agent or Purchasing Agent, as the case may be, and the Trustee.
Communication of Sale Information to the Company by Selling Agent and Settlement
Procedures:
A. After the acceptance of an offer by the Company, the
Selling Agent or Purchasing Agent, as the case may be, will communicate
promptly, but in no event later than the time set forth under "Settlement
Procedure Timetable" below, the following details of the terms of such offer
(the "Sale Information") to the Company by telephone
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(confirmed in writing) or by facsimile transmission or other acceptable written
means:
(1) Principal Amount of Book-Entry Securities to
be purchased;
(2) If a Fixed Rate Book-Entry Security, the interest
rate and initial interest payment date;
(3) Trade Date;
(4) Settlement Date;
(5) Maturity Date;
(6) Issue Price;
(7) Selling Agent's commission or Purchasing Agent's
discount or commission, as the case may be;
(8) Net Proceeds to the Company;
(9) If a redeemable Book-Entry Security, such of the
following as are applicable:
(i) Redemption Commencement Date,
(ii) Initial Redemption Price (% of par), and
(iii) Amount (% of par) that the Redemption Price
shall decline (but not below par) on each
anniversary of the Redemption Commencement
Date;
(10) If a Floating Rate Book-Entry Security, such of the
following as are applicable:
(i) Interest Rate Basis,
(ii) Index Maturity,
(iii) Spread or Spread Multiplier,
(iv) Maximum Rate,
(v) Minimum Rate,
(vi) Initial Interest Rate,
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(vii) Interest Reset Dates,
(viii) Calculation Dates,
(ix) Interest Determination Dates,
(x) Interest Payment Dates,
(xi) Regular Record Dates, and
(xii) Calculation Agent;
(11) Name, address and taxpayer identification
number of the registered owner(s);
(12) Denomination of certificates to be delivered
at settlement;
(13) Book-Entry Security or Certificated Security;
and
(14) Selling Agent or Purchasing Agent.
B. After receiving the Sale Information from the Selling Agent
or Purchasing Agent, as the case may be, the Company will communicate such Sale
Information to the Trustee by facsimile transmission or other acceptable written
means. The Trustee will assign a CUSIP number to the Global Security from a list
of CUSIP numbers previously delivered to the Trustee by the Company representing
such Book-Entry Security and then advise the Company and the Selling Agent or
Purchasing Agent, as the case may be, of such CUSIP number.
C. The Trustee will enter a pending deposit message through
the Depositary's Participant Terminal System, providing the following settlement
information to the Depositary, and the Depositary shall forward such information
to such Agent and Standard & Poor's Ratings Group:
(1) The applicable Sale Information;
(2) CUSIP number of the Global Security representing such
Book-Entry Security;
(3) Whether such Global Security will represent any other
Book-Entry Security (to the extent known at such
time);
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(4) Number of the participant account maintained by the
Depositary on behalf of the Selling Agent or
Purchasing Agent, as the case may be;
(5) The interest payment period; and
(6) Initial Interest Payment Date for such Book- Entry
Security, number of days by which such date succeeds
the record date for the Depositary's purposes (which,
in the case of Floating Rate Securities which reset
weekly, shall be the date five calendar days
immediately preceding the applicable Interest Payment
Date and in the case of all other Book-Entry
Securities shall be the Regular Record Date, as
defined in the Security) and, if calculable at that
time, the amount of interest payable on such Interest
Payment Date.
D. The Trustee will complete and authenticate the Global
Security previously delivered by the Company representing such Book-Entry
Security.
E. The Depositary will credit such Book-Entry Security to the
Trustee's participant account at the Depositary.
F. The Trustee will enter an SDFS deliver order through the
Depositary's Participant Terminal System instructing the Depositary to (i) debit
such Book-Entry Security to the Trustee's participant account and credit such
Book-Entry Security to such Agent's participant account and (ii) debit such
Agent's settlement account and credit the Trustee's settlement account for an
amount equal to the price of such Book-Entry Security less such Agent's
commission. The entry of such a deliver order shall constitute a representation
and warranty by the Trustee to the Depositary that (a) the Global Security
representing such Book-Entry Security has been issued and authenticated and (b)
the Trustee is holding such Global Security pursuant to the Certificate
Agreement.
G. Such Agent will enter an SDFS deliver order through the
Depositary's Participant Terminal System instructing the Depositary (i) to debit
such Book-Entry Security to such Agent's participant account and credit such
Book-Entry Security to the participant accounts of the participants with respect
to such Book-Entry Security and (ii) to debit the settlement accounts of such
participants
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and credit the settlement account of such Agent for an amount equal to the price
of such Book-Entry Security.
H. Transfers of funds in accordance with SDFS deliver orders
described in Settlement Procedures "F" and "G" will be settled in accordance
with SDFS operating procedures in effect on the settlement date.
I. Upon confirmation of receipt of funds, the Trustee will
transfer to the account of the Company maintained at The Bank of New York, New
York, New York, or such other account as the Company may have previously
specified to the Trustee, in funds available for immediate use in the amount
transferred to the Trustee in accordance with Settlement Procedure "F".
J. Upon request, the Trustee will send to the Company a
statement setting forth the principal amount of Book-Entry Securities
outstanding as of that date under the Indenture.
K. Such Agent will confirm the purchase of such Book-Entry
Security to the purchaser either by transmitting to the participants with
respect to such Book-Entry Security a confirmation order or orders through the
Depositary's institutional delivery system or by mailing a written confirmation
to such purchaser.
L. The Depositary will, at any time, upon request of the
Company or the Trustee, promptly furnish to the Company or the Trustee a list of
the names and addresses of the participants for whom the Depositary has credited
Book- Entry Securities.
Preparation of Pricing Supplement:
If the Company accepts an offer to purchase a Book-Entry
Security, it will prepare a Pricing Supplement reflecting the terms of such
Book-Entry Security and arrange to have delivered to the Selling Agent or
Purchasing Agent, as the case may be, at least ten copies of such Pricing
Supplement not later than 5:00 p.m., New York City time, on the business day
following the Trade Date (defined below), or if the Company and the purchaser
agree to settlement on the business day following the date of acceptance of such
offer, not later than noon, New York City time, on such date. The Company will
arrange to have the Pricing Supplement filed with the Commission not later than
the close of business of the Commission on the fifth business
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day following the date on which such Pricing Supplement is first used.
Delivery of Confirmation and Prospectus to Purchaser by Selling Agent:
The Selling Agent will deliver to the purchaser of a
Book-Entry Security a written confirmation of the sale and delivery and payment
instructions. In addition, the Selling Agent will deliver to such purchaser or
its agent the Prospectus as amended or supplemented (including the Pricing
Supplement) in relation to such Book-Entry Security.
Date of Settlement:
The receipt by the Company of immediately available funds in
payment for a Book-Entry Security and the authentication and issuance of the
Global Security representing such Book-Entry Security shall constitute
"settlement" with respect to such Book-Entry Security. All orders of Book-Entry
Securities, solicited by a Selling Agent or made by Purchasing Agent and
accepted by the Company on a particular date (the "Trade Date") will be settled
on a date (the "Settlement Date") which is the third business day after the
Trade Date pursuant to the "Settlement Procedure Timetable" set forth below,
unless the Company and the purchaser agree to settlement on another business day
which shall be no earlier than the next business day after the Trade Date.
Settlement Procedure Timetable:
For orders of Book-Entry Securities solicited by a Selling
Agent and accepted by the Company for settlement on the first business day after
the Trade Date, Settlement Procedures "A" through "I" set forth above shall be
completed as soon as possible but not later than the respective times (New York
City time) set forth below:
SETTLEMENT
PROCEDURE TIME
---------- ----
A 5:00 p.m. on the business day following the
Trade Date or 10:00 a.m. on the
business day prior to the
Settlement Date, whichever is
earlier
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B 12:00 noon on the second business day
immediately preceding the
Settlement Date
C 2:00 p.m. on the second business day
immediately preceding the Settlement
Date
D 9:00 a.m. on the Settlement Date
E 10:00 a.m. on the Settlement Date
F-G 2:00 p.m. on the Settlement Date
H 4:45 p.m. on the Settlement Date
I 5:00 p.m. on the Settlement Date
If the initial interest rate for a Floating Rate Book-Entry
Security has not been determined at the time that Settlement Procedure "A" is
completed, Settlement Procedures "B" and "C" shall be completed as soon as such
rate has been determined but no later than 2:00 p.m. on the second business day
immediately preceding the Settlement Date. Settlement Procedure "H" is subject
to extension in accordance with any extension of Fedwire closing deadlines and
in the other events specified in the SDFS operating procedures in effect on the
Settlement Date.
If settlement of a Book-Entry Security is rescheduled or
cancelled, the Trustee, upon obtaining knowledge thereof, will deliver to the
Depositary, through the Depositary's Participation Terminal System, a
cancellation message to such effect by no later than 2:00 p.m. on the business
day immediately preceding the scheduled Settlement Date.
Failure to Settle:
If the Trustee fails to enter an SDFS deliver order with
respect to a Book-Entry Security pursuant to Settlement Procedure "F", the
Trustee may deliver to the Depositary, through the Depositary's Participant
Terminal System, as soon as practicable, a withdrawal message instructing the
Depositary to debit such Book-Entry Security to the Trustee's participant
account, provided that the Trustee's participant account contains a principal
amount of the Global Security representing such Book-Entry Security that is at
least equal to the principal amount to be
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debited. If a withdrawal message is processed with respect to all of the
Book-Entry Securities represented by a Global Security, the Trustee will ▇▇▇▇
such Global Security "cancelled", make appropriate entries in the Trustee's
records and send such cancelled Global Security to the Company. The CUSIP number
assigned to such Global Security shall, in accordance with CUSIP Service Bureau
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
Securities represented by a Global Security, the Trustee will exchange such
Global Security for two Global Securities, one of which shall represent such
Book-Entry Security or Securities and shall be cancelled immediately after
issuance and the other of which shall represent the remaining Book-Entry
Securities previously represented by the surrendered Global Security and shall
bear the CUSIP number of the surrendered Global Security.
If the purchase price for any Book-Entry Security is not
timely paid to the participants with respect to such Book-Entry Security by the
beneficial purchaser thereof (or a person, including an indirect participant in
the Depositary, acting on behalf of such purchaser), such participants and, in
turn, the Agent for such Book-Entry Security may enter deliver orders through
the Depositary's Participant Terminal System debiting such Book-Entry Security
to such participant's account and crediting such Book-Entry Security to such
Agent's account and then debiting such Book-Entry Security to such Agent's
participant account and crediting such Book-Entry Security to the Trustee's
participant account and shall notify the Company and the Trustee thereof.
Thereafter, the Trustee will (i) immediately notify the Company of such order
and the Company shall transfer to such Agent funds available for immediate use
in an amount equal to the price of such Book- Entry Security which was credited
to the account of the Company maintained at the Trustee in accordance with
Settlement Procedure I, and (ii) deliver the withdrawal message and take the
related actions described in the preceding paragraph. If such failure shall have
occurred for any reason other than default by the applicable Agent to perform
its obligations hereunder or under the Distribution Agreement, the Company will
reimburse such Agent on an equitable basis for the loss of its use of funds
during the period when the funds were credited to the account of the Company.
Notwithstanding the foregoing, upon any failure to settle with
respect to a Book-Entry Security, the Depositary may take any actions in
accordance with its SDFS operating
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procedures then in effect. In the event of a failure to settle with respect to
one or more, but not all, of the Book-Entry Securities to have been represented
by a Global Security, the Trustee will provide, in accordance with Settlement
Procedure "D" for the authentication and issuance of a Global Security
representing the other Book-Entry Securities to have been represented by such
Global Security and will make appropriate entries in its records. The Company
will, from time to time, furnish the Trustee with a sufficient quantity of
Securities.
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ANNEX III
Accountants' Letter
Pursuant to Section 4(j) and Section 6(d), as the case may be,
of the Distribution Agreement, the Company's independent certified public
accountants shall furnish letters to the effect that:
(i) They are independent certified public accountants with
respect to the Company and its subsidiaries within the meaning of the
Act and the applicable rules and regulations adopted by the Securities
and Exchange Commission thereunder;
(ii) In their opinion, the consolidated financial statements
and any supplementary financial information and schedules audited
(and, if applicable, financial forecasts and/or pro forma financial
information) audited by them and included or incorporated by reference
in the Registration Statement or the Prospectus comply as to form in
all material respects with the applicable accounting requirements of
the Act or the Exchange Act and the related rules and regulations
adopted thereunder, as applicable, they have made a review in
accordance with standards established by the American Institute of
Certified Public Accountants of the consolidated interim financial
statements, selected financial data, pro forma financial information,
financial forecasts and/or condensed financial statements derived from
audited financial statements of the Company for the periods specified
in such letter, as indicated in their reports thereon, copies of which
have been furnished to the Agents;
(iii) They have performed the procedures specified by the
American Institute of Certified Public Accountants for a review of any
interim financial information included or incorporated by reference in
the Prospectus as described in Statement on Auditing Standard No. 71,
"Interim Financial Information," as indicated in their reports thereon;
and on the basis of specified procedures including inquiries of
officials of the Company who have responsibility for financial and
accounting matters regarding whether the unaudited condensed
consolidated financial statements referred to in paragraph (vi)(A)(i)
below comply as to form in all material respects with the applicable
accounting requirements of the Exchange Act as it applies to Form 10-Q
and the related rules and regulations adopted thereunder,
56
nothing came to their attention that caused them to believe that the
unaudited condensed consolidated financial statement do not comply as
to form in all material respects with the applicable accounting
requirements of the Act and the Exchange Act and the related rules and
regulations adopted thereunder;
(iv) They have compared the information in the Prospectus
under selected captions with the disclosure requirements of Regulation
S-K and on the basis of limited procedures specified in such letter
nothing came to their attention as a result of the foregoing procedures
that caused them to believe that this information does not conform in
all material respects with the disclosure requirements of Items 301,
302 and 503(d), respectively, of Regulation S-K;
(v) On the basis of limited procedures, not constituting an
audit in accordance with generally accepted auditing standards,
consisting of a reading of the unaudited financial statements and other
information referred to below, a reading of the latest available
interim financial statements of the Company and its subsidiaries,
inspection of the minute books of the Company and its subsidiaries
since the date of the latest audited financial statements included or
incorporated by reference in the Prospectus, inquiries of officials of
the Company and its subsidiaries responsible for financial and
accounting matters and such other inquiries and procedures as may be
specified in such letter, nothing came to their attention that caused
them to believe that:
(A) the latest available unaudited condensed
consolidated statements of operations, consolidated balance
sheets and consolidated statements of cash flows included in
the Prospectus and/or included or incorporated by reference in
the Company's Quarterly Reports on Form 10-Q incorporated by
reference in the Prospectus do not comply as to form in all
material respects with the applicable accounting requirements
of the Exchange Act and the related rules and regulations
adopted thereunder, or (ii) any material modifications should
be made to the unaudited condensed consolidated statements of
operations, consolidated balance sheets and
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consolidated statements of cash flows included in the
Prospectus or included in the Company's Quarterly Reports on
Form 10-Q incorporated by reference in the Prospectus for them
to be in conformity with generally accepted accounting
principles;
(B) any other unaudited income statement data and
balance sheet items included in the Prospectus do not agree
with the corresponding items in the unaudited financial
statements from which such data and items were derived, and
any such unaudited data and items were not determined on a
basis substantially consistent with the basis for the
corresponding amounts in the audited consolidated financial
statements included or incorporated by reference in the
Company's Annual Report on Form 10-K for the most recent
fiscal year;
(C) the unaudited financial statements which were not
included in the Prospectus but from which were derived the
unaudited condensed financial statements referred to in clause
(A) and any unaudited income statement data and balance sheet
items included in the Prospectus and referred to in clause (B)
were not determined on a basis substantially consistent with
the basis for the audited financial statements included or
incorporated by reference in the Company's Annual Report on
Form 10-K for the most recent fiscal year;
(D) any unaudited pro forma consolidated condensed
financial statements included or incorporated by reference in
the Prospectus do not comply as to form in all material
respects with the applicable accounting requirements of the
Act and the published rules and regulations thereunder or the
pro forma adjustments have not been properly applied to the
historical amounts in the compilation of those statements;
(E) as of a specified date not more than five days
prior to the date of such letter, there have been any changes
in the consolidated capital stock (other than issuances of
capital stock upon
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58
exercise of options and stock appreciation rights and upon
conversions of convertible securities, in each case which were
outstanding on the date of the latest balance sheet included
or incorporated by reference in the Prospectus) or any
increase in the consolidated long-term debt of the Company and
its subsidiaries, or any increases in consolidated net current
liabilities or decreases in shareowners' equity or other items
specified by the Agents, in each case as compared with amounts
shown in the latest balance sheet included or incorporated by
reference in the Prospectus except in each case for changes,
increases or decreases which the Prospectus discloses have
occurred or may occur or which are described in such letter;
and
(F) for the period from the date of the latest
financial statements included or incorporated by reference in
the Prospectus to the specified date referred to in clause (E)
there were any decreases in consolidated operating revenues or
operating income or the total or per share amounts of
consolidated net income available to common shareholders or
other items specified by the Agents, or any increases in any
items specified by the Agents, except in each case for
increases or decreases which the Prospectus discloses have
occurred or may occur or which are described in such letter;
and
(vii) In addition to the audit referred to in their report(s)
included or incorporated by reference in the Prospectus and the limited
procedures, inspection of minute books, inquiries and other procedures
referred to in paragraphs (iii) and (vi) above, they have carried out
certain specified procedures, not constituting an audit in accordance
with generally accepted auditing standards, with respect to certain
amounts, percentages and financial information specified by the Agents
which are derived from the general accounting records of the Company
and its subsidiaries, which appear in the Prospectus (excluding
documents incorporated by reference), or in Part II of, or in exhibits
and schedules to, the Registration Statement specified by the Agents,
and have compared certain of such amounts, percentages and financial
information with the accounting records of the Company
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and its subsidiaries and have found them to be in
agreement.
All references in this Annex III to the Prospectus shall be
deemed to refer to the Prospectus (including the documents incorporated by
reference therein) as defined in the Distribution Agreement as of the
Commencement Date referred to in Section 6(d) thereof and to the Prospectus as
amended or supplemented (including the documents incorporated by reference
therein) as of the date of the amendment, supplement, incorporation or the Time
of Delivery relating to the Terms Agreement requiring the delivery of such
letter under Section 4(j) thereof.
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