EXHIBIT 1.5
FORM OF DISTRIBUTION AGREEMENT - DEBT SECURITIES
THE ▇▇▇▇ DISNEY COMPANY
Medium-Term Notes
Due Nine Months or More from Date of Issue
DISTRIBUTION AGREEMENT
[Date]
[Investment Banks]
Dear Ladies and Gentlemen:
The ▇▇▇▇ Disney Company, a Delaware corporation (the "Company"),
confirms its agreement with each of [Investment Banks] (each an "Agent" and
collectively, the "Agents") with respect to the issue and sale by the Company
of its Medium-Term Notes (the "Notes"). The Notes are to be issued pursuant to
the Indenture, dated as of March 7, 1996 (the "Indenture"), between the
Company and Citibank, N.A., a national banking association, as trustee (the
"Trustee"). As of the date hereof, the Company has authorized the issuance
and sale of up to U.S. $5,000,000,000 aggregate initial offering price (or
its equivalent, based upon the applicable exchange rate at the time of
issuance, in such foreign currencies or composite currencies as the Company
shall designate in the Notes at the time of issuance) of Notes directly or
through the Agents pursuant to the terms of this Agreement. Such Notes are
in addition to other Medium Term Notes of the Company outstanding at the date
hereof. It is understood, however, that the Company may from time to time
authorize the issuance of additional Notes and that, at the option of the
Company, such Notes may be distributed through or sold to the Agents pursuant
to the terms of this Agreement, all as though the issuance of such Notes were
authorized as of the date hereof.
This Agreement provides both for the sale of Notes by the Company
directly to purchasers, in which case the Agents will act as agents of the
Company in soliciting Note purchasers, and (as may from time to time be agreed
to by the Company and one or more Agents) to such Agent or Agents as principal
for resale to purchasers.
The Company has filed with the Securities and Exchange Commission
(the "Commission") a registration statement on Form S-3 (No. 333- [ ]
) for the registration of debt securities and other securities, including the
Notes, under the Securities Act of 1933, as amended (the "1933 Act"), and the
offering thereof from time to time in accordance with Rule 415 of the rules
and regulations of the Commission under the 1933 Act (the "1933 Act
Regulations"). Such registration statement has been declared effective by the
Commission and the Indenture has been qualified under the Trust Indenture Act
of 1939, as amended (the "1939 Act"). Such registration statement (and any
further registration statements that may be filed by the Company for the
purpose of registering additional Notes and which the Company and the Agents
agree is to be covered by this Agreement) and the prospectus constituting a
part thereof, together with any prospectus supplement relating to the Notes,
including, in each case, all Incorporated Documents (as hereinafter defined),
as from time to time amended or supplemented by the filing of documents
pursuant to the Securities Exchange Act of 1934, as amended (the "1934 Act"),
or the 1933 Act or otherwise, are referred to herein as the "Registration
Statement" and the "Prospectus," respectively, except that, if any revised
prospectus shall be provided to the Agents by the Company for use in
connection with the offering of the Notes which is not required to be filed
by the Company pursuant to Rule 424(b) of the 1933 Act Regulations, the term
"Prospectus" shall refer to such revised prospectus from and after the time
it is first provided to the Agents for such use. The term "Prospectus" shall
also include any term sheet or abbreviated term sheet as such terms are used
in Rule 434 of the 1933 Act Regulations (each a "Terms Sheet"). The term
"Registration Statement" shall also include any related registration
statement filed pursuant to Rule 462(b) of the 1933 Act Regulations. In
addition, any reference herein to the Registration Statement or the
Prospectus shall be deemed to refer to and include the documents, financial
statements and schedules incorporated by reference therein pursuant to Item
12 of Form S-3 under the 1933 Act, and any reference to any amendment or
supplement to the Registration Statement or the Prospectus shall be deemed to
refer to and include any documents, financial statements and schedules filed
by the Company with the Commission under the 1934 Act after the date hereof,
and so incorporated by reference or deemed incorporated by reference(such
incorporated documents, financial statements and schedules being herein
called the "Incorporated Documents"). Notwithstanding the foregoing, for
purposes of this Agreement any prospectus or prospectus supplement or any
Term Sheets prepared or filed with respect to an offering pursuant to the
Registration Statement of securities other than the Notes shall not be deemed
to have supplemented the Prospectus.
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SECTION 1. REPRESENTATIONS AND WARRANTIES; ADDITIONAL CERTIFICATES
(a) REPRESENTATIONS AND WARRANTIES. The Company represents and
warrants to each Agent as of the date hereof, as of the date of each acceptance
by the Company of an offer for the purchase of Notes (whether through an Agent
as agent or from an Agent as principal), as of the date of each delivery of
Notes by the Company to the purchasers (the date of each such delivery to an
Agent as principal being hereafter referred to as a "Settlement Date"), and as
of the dates referred to in Section 6(a) hereof (each of the dates referenced
above being referred to hereafter as a "Representation Date"), as follows:
(i) The Incorporated Documents, when they became effective
or were filed (or, if an amendment with respect to any such Incorporated
Document was filed or became effective, when such amendment was filed or became
effective) with the Commission, as the case may be, complied in all material
respects with the requirements of the 1934 Act, and any Incorporated Documents
filed subsequent to the date hereof and prior to the termination of the offering
of the Notes, will, when they are filed with the Commission, comply in all
material respects with the requirements of the 1934 Act; no such Incorporated
Document, when it became effective or was filed (or, if an amendment with
respect to any such Incorporated Document was filed or became effective, when
such amendment was filed or became effective) with the Commission, contained,
and no Incorporated Document filed subsequent to the date hereof and prior to
the termination of the offering of the Notes will contain, an untrue statement
of a material fact or omitted, or will omit, to state a material fact required
to be stated therein or necessary to make the statements therein, in light of
the circumstances under which they were made, not misleading.
(ii) The Registration Statement, at the time it became
effective, complied in all material respects with the provisions of the 1933 Act
and the 1933 Act Regulations; at the applicable Representation Date, the
Registration Statement and the Prospectus, and any supplements or amendments
thereto, will comply in all material respects with the provisions of the 1933
Act and the 1933 Act Regulations; and the Registration Statement and the
Prospectus, and any such supplement or amendment thereto, at all such times did
not and will not contain an untrue statement of a material fact or omit to state
a material fact required to be stated therein or necessary to make the
statements therein, in light of the circumstances under which they were made,
not misleading; except that this representation and warranty does not apply to
statements or omissions in the Registration Statement, the Prospectus or any
preliminary prospectus, or any amendment or supplement thereto, made in reliance
upon information furnished to the Company in writing by or on behalf of the
Agents expressly for use therein or to those parts of the Registration Statement
which constitute the Trustee's Statement of Eligibility and Qualification on
Form T-1 under the 1939 Act (the
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"Form T-1"). There is no contract or document of a character required to be
described in the Registration Statement or the Prospectus or to be filed as an
exhibit to the Registration Statement which is not described or filed as
required.
(iii) This Agreement, the Indenture, the Notes and any
applicable Terms Agreement have been duly authorized by the Company and conform
in all material respects to the descriptions thereof in the Prospectus.
(iv) The Indenture (assuming due execution and delivery
thereof by the Trustee) is, and the Notes (when executed by the Company and
authenticated in accordance with the Indenture and delivered to and paid for by
the purchasers thereof) will be, the legal, valid and binding obligations of the
Company, enforceable against the Company in accordance with their respective
terms, except as such enforceability may be limited by (A) bankruptcy,
insolvency, reorganization, moratorium or other similar laws now or hereafter in
effect relating to or affecting the enforcement of creditors' rights generally,
(B) general principles of equity (regardless of whether such enforcement is
considered in a proceeding in equity or at law), (C) requirements that a claim
with respect to any Notes denominated other than in United States dollars (or a
judgment denominated other than in United States dollars in respect of such
claim) be converted into United States dollars at a rate of exchange prevailing
on a date determined pursuant to applicable law and (D) governmental authority
to limit, delay or prohibit the making of payments outside the United States or
in a foreign currency or composite currency. The Notes (when executed by the
Company and authenticated in accordance with the terms of the Indenture and
delivered to and paid for by the purchasers thereof) will be entitled to the
benefits of the Indenture (subject to the exceptions set forth in the preceding
sentence).
(v) The Company is a validly existing corporation in good
standing under the laws of its state of incorporation. The Company has full
corporate power and authority to own, lease and operate its properties and to
conduct its business as presently conducted and as described in the Prospectus;
and the Company is duly qualified as a foreign corporation to transact business
and is in good standing in each jurisdiction in which such qualification is
required whether by reason of the ownership or leasing of property or the
conduct of business, except where the failure to so qualify would not have a
material adverse effect on the consolidated financial condition or earnings of
the Company and its subsidiaries, considered as one enterprise.
(vi) Each of Disney Enterprises, Inc., ABC, Inc. and ▇▇▇▇
Disney World Co. (collectively, the "Significant Subsidiaries") is a validly
existing corporation in good standing under the laws of its state of
incorporation. Each of the Significant Subsidiaries has full corporate power
and authority to own,
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lease and operate its properties and to conduct its business as presently
conducted and as described in the Prospectus; and each of the Significant
Subsidiaries is duly qualified as a foreign corporation to transact business and
is in good standing in each United States jurisdiction in which such
qualification is required whether by reason of the ownership or leasing of
property or the conduct of business, except where a failure to so qualify would
not have a material adverse effect on the consolidated financial condition or
earnings of the Company and its subsidiaries, considered as one enterprise.
(vii) Except as contemplated in the Prospectus or reflected
therein by the filing of any amendment or supplement thereto or any Incorporated
Document, since the date of the most recent consolidated financial statements
included or incorporated by reference in the Registration Statement and the
Prospectus, unless the Company has notified the Agents as provided in Section
3(d) hereof, there has not been any material adverse change in the consolidated
financial condition or earnings of the Company and its subsidiaries, considered
as one enterprise.
(viii) The Company is not in violation of its Restated
Certificate of Incorporation or Bylaws, as amended. The execution and
delivery of this Agreement by the Company, the issuance and sale of the Notes
and the performance by the Company of its obligations under this Agreement,
the Indenture and any applicable Terms Agreement will not conflict with or
constitute a breach of or a default (with the passage of time or otherwise)
under (A) the Restated Certificate of Incorporation or Bylaws, as amended, of
the Company, (B) subject to the Company's compliance with any applicable
covenants pertaining to its incurrence of unsecured indebtedness contained
therein, any contract, indenture, mortgage, loan agreement, note, lease or
other instrument to which the Company is a party or by which it may be bound,
or to which any of the properties or assets of the Company is subject, which
breach or default would, singly or in the aggregate, have a material adverse
effect on the consolidated financial condition or earnings of the Company and
its subsidiaries, considered as one enterprise, or (C) any applicable law,
administrative regulation or administrative or court decree. Except for
orders, permits and similar authorizations required under or by the
securities or Blue Sky laws of certain jurisdictions, any securities exchange
on which any of the Notes might be listed or with respect to Notes which are
to be indexed or linked to any foreign currency, composite currency,
commodity, equity index or similar index, no consent, approval, authorization
or other order of any regulatory body, administrative agency or other
governmental body is legally required for the valid issuance and sale of the
Notes. As of the date of each acceptance by the Company of an offer for the
purchase of Notes and as of the date of each delivery of Notes by the
Company, the Company by such acceptance or delivery, as the case may be,
shall be deemed to represent and warrant to the
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Agents that, both immediately before and immediately after giving effect to such
acceptance or delivery, the Company shall be in compliance with the requirements
of any applicable covenants pertaining to its incurrence of unsecured
indebtedness contained in the agreements or instruments referred to in clause
(B) above.
(ix) To the best of the Company's knowledge, the
accountants who have audited and reported upon the financial statements filed
with the Commission as part of the Registration Statement and the Prospectus
are independent accountants as required by the 1933 Act. The historical
financial statements included in the Registration Statement or Prospectus or
incorporated therein by reference fairly present the consolidated financial
position and results of operations of the Company and its subsidiaries at the
respective dates and for the respective periods to which they apply. Such
historical financial statements have been prepared in accordance with
generally accepted accounting principles consistently applied, except as set
forth in the Registration Statement and Prospectus. The unaudited pro forma
financial statements, if any, together with the related notes and any
supporting schedules included or incorporated by reference in the
Registration Statements and the Prospectus, fairly present the information
shown therein and have been compiled on a basis substantially consistent with
the audited financial statements of Disney included or incorporated by
reference in the Registration Statement and the Prospectus; the assumptions
on which such unaudited pro forma financial statements have been prepared are
reasonable; and such unaudited pro forma financial statements have been
prepared, and the pro forma adjustments set forth therein have been applied,
in accordance with the applicable accounting requirements of the 1933 Act and
the 1933 Act Regulations (including, without limitation, Regulations S-X
promulgated by the Commission), and such pro forma adjustments have been
properly applied to the historical amounts in the compilation of such
statements.
(x) The Company has complied with, and is and will be in
compliance with, the provisions of that certain Florida act relating to
disclosure of doing business with Cuba, codified as Section 517.075 of the
Florida statutes, and the rules and regulations thereunder or is exempt
therefrom.
(b) ADDITIONAL CERTIFICATIONS. Any certificate signed by any officer
of the Company and delivered to an Agent or to counsel for the Agents in
connection with an offering of Notes shall be deemed a representation and
warranty by the Company to such Agent as to the matters covered thereby on the
date of such certificate.
SECTION 2. SOLICITATIONS AS AGENTS; PURCHASES AS PRINCIPALS
(a) SOLICITATIONS AS AGENTS. Subject to the terms and conditions
stated herein and subject to the reservation by the Company of the right to
sell Notes directly on its own behalf and to any person, to sell Notes
through others (provided that any other agent will execute an agreement with
the Company which contains substantially the same terms and conditions
contained herein), and to designate and select additional agents to become
party to this Agreement, the Company hereby (i) appoints each Agent as an
agent of the Company for the purpose of soliciting offers to purchase the
Notes from the Company by others and (ii) agrees that whenever the Company
determines to sell Notes directly to an Agent as principal for resale to
others, it will enter into a Terms Agreement relating to such sale in
accordance with the provisions of Section 2(b) hereof. Without the prior
written consent of the Company, the Agents are not authorized to appoint
sub-agents or to engage the services of any other broker or dealer in
connection with the offer or sale of the
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Notes; provided, that without the Company's consent, the Agents may solicit
offers to purchase the Notes from other brokers or dealers. In connection with
the solicitation of offers to purchase Notes, without the prior consent of the
Company, the Agents are not authorized to provide any written information
relating to the Company to any prospective purchaser other than the Prospectus
and the Incorporated Documents. Each Agent will make reasonable efforts to
assist the Company in obtaining performance by each purchaser whose offer to
purchase Notes from the Company has been solicited by such Agent, as agent, and
accepted by the Company, but such Agent shall not have any liability to the
Company in the event any such purchase is not consummated for any reason.
The Company reserves the right, in its sole discretion, to suspend the
solicitation of offers to purchase the Notes through the Agents commencing at
any time for any period of time or permanently. Upon receipt of instructions
from the Company, the Agents will, as soon as possible, suspend the solicitation
of offers to purchase the Notes from the Company until such time as the Company
has advised the Agents that such solicitation may be resumed.
The Company agrees to pay each Agent a commission, which such Agent is
hereby authorized to deduct from the sales proceeds of each Note sold by the
Company as a result of a solicitation made by such Agent, equal to the
applicable percentage of the principal amount of each such Note, as set forth in
Exhibit A hereto. Without the consent of the Company, no Agent, as an agent,
may reallow any portion of the commission payable pursuant hereto to dealers or
purchasers in connection with the offer and sale of any Notes.
As an agent, each Agent is authorized, except during periods of
suspension as provided in this Agreement, to solicit offers to purchase the
Notes. Each Agent shall communicate to the Company, orally or in writing, each
reasonable offer to purchase Notes received by such Agent, as agent. Each Agent
shall have the right in its discretion reasonably exercised to reject any offer
to purchase the Notes received by such Agent which it does not deem reasonable,
and any such rejection shall not be deemed a breach of such Agent's agreements
contained herein. The Company shall have the sole right to accept offers to
purchase the Notes and may reject any such offer in whole or in part, and any
such rejection shall not be deemed to be a breach of any agreement of the
Company contained herein. The purchase price, interest rate, maturity date and
other terms of the Notes agreed upon by the Company shall be set forth in a
pricing supplement to the Prospectus to be prepared following each acceptance by
the Company of an offer for the purchase of Notes (a "Pricing Supplement").
Except as may be otherwise provided in any Pricing Supplement, each Note will be
issued in the denomination of U.S. $1,000 or any amount in excess thereof which
is an integral multiple of U.S. $1,000. All Notes will be sold at 100% of their
principal
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amount unless otherwise agreed to by the Company. Each Agent acknowledges and
agrees that any funds which such Agent receives in respect of a purchase of
Notes, which purchase has been solicited by such Agent, as agent of the Company,
will be received, held and disposed of by such Agent, as agent of the Company,
subject to the right of such Agent to deduct from the sale proceeds the
applicable commission as set forth on Exhibit A hereto.
If requested by a prospective purchaser of Notes denominated in a
currency other than U.S. dollars, the Agent soliciting the offer to purchase
will use its reasonable efforts to arrange for the conversion of U.S. dollars
into such currency to enable the purchaser to pay for such Notes. Such requests
must be made on or before the third business day preceding the date of delivery
of the Notes, or by such other dates as determined by such Agent. Each such
conversion will be made by the relevant Agent on such terms and subject to such
conditions, limitations and charges as such Agent may from time to time
establish in accordance with its regular foreign exchange practice. All costs
of exchange will be borne by purchasers of the Notes.
(b) PURCHASES AS PRINCIPAL. Each sale of Notes to an Agent as
principal shall be made in accordance with the terms contained herein and
pursuant to a separate agreement which will provide for the sale of such Notes
to, and the purchase and any reoffering thereof by, such Agent. Each such
separate agreement (which may be an oral agreement if confirmed within 24 hours
thereafter by an exchange of any standard form of written telecommunication
(including facsimile transmission) between the Agent and the Company) is herein
referred to as a "Terms Agreement." Unless the context otherwise requires, each
reference contained herein to "this Agreement" shall be deemed to include any
applicable Terms Agreement between the Company and the Agent. Each such Terms
Agreement, whether oral (and confirmed in writing, which confirmation may be by
facsimile transmission) or in writing shall be with respect to such information
(as applicable) as is specified in Exhibit B hereto. An Agent's commitment to
purchase Notes pursuant to any Terms Agreement shall be deemed to have been made
on the basis of the representations and warranties of the Company herein
contained and shall be subject to the terms and conditions herein set forth.
The Agents may offer the Notes they have purchased as principal to other
dealers. The Agents may sell Notes to any dealer at a discount and, unless
otherwise specified in the applicable Terms Agreement, such discount allowed to
any dealer will not be in excess of the discount to be received by such Agent
from the Company. Unless otherwise specified in the applicable Terms Agreement,
any Notes sold to an Agent as principal will be purchased by such Agent at a
price equal to 100% of the principal amount thereof less a percentage equal to
the commission applicable to any agency sale of a Note of identical maturity.
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(c) ADMINISTRATIVE PROCEDURES. Administrative procedures with
respect to the sale of Notes shall be agreed upon from time to time by the
Agents and the Company (the "Procedures"). The Procedures initially agreed upon
shall be those set forth in Exhibit C hereto. The Agents and the Company agree
to perform the respective duties and obligations specifically provided to be
performed by the Agents and the Company herein and in the Procedures.
SECTION 3. COVENANTS OF THE COMPANY
The Company covenants with each Agent as follows:
(a) NOTICE OF CERTAIN EVENTS. The Company will notify the Agents
promptly of (i) the designation and selection of additional agents to become
party to this Agreement, (ii) the designation and selection of additional agents
for the sale of Notes pursuant to any agreement other than this Agreement, (iii)
the effectiveness of any post-effective amendment to the Registration Statement
(other than a post-effective amendment relating solely to an offering of debt
securities other than the Notes), (iv) the transmittal to the Commission for
filing of any supplement to the Prospectus (other than a Pricing Supplement or a
supplement relating solely to an offering of securities other than the Notes),
(v) the receipt of any comments from the Commission with respect to the
Registration Statement or the Prospectus (other than any comments relating
solely to an offering of securities other than the Notes), (vi) any request by
the Commission for any amendment to the Registration Statement or any amendment
or supplement to the Prospectus or for additional information (other than any
such request relating solely to an offering of securities other than the Notes)
and (vii) the issuance by the Commission of any stop order suspending the
effectiveness of the Registration Statement or the initiation of any proceedings
for that purpose. The Company will make every reasonable effort to prevent the
issuance of any such stop order and, if any such stop order is issued, to obtain
the lifting thereof at the earliest possible time unless the Company shall, in
its sole discretion, determine that it is not in its best interest to do so.
(b) NOTICE OF CERTAIN PROPOSED FILINGS. At or prior to the filing
thereof, the Company will give the Agents notice of its intention to file any
additional registration statement with respect to the registration of additional
Notes to be covered by this Agreement, any amendment to the Registration
Statement or any amendment or supplement to the Prospectus (other than a Pricing
Supplement or an amendment or supplement relating solely to an offering of debt
securities other than the Notes), whether by the filing of documents pursuant to
the 1934 Act, the 1933 Act or otherwise, and will furnish the Agents with copies
of any such amendment or supplement or other documents promptly after the filing
thereof.
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(c) COPIES OF THE REGISTRATION STATEMENT AND THE PROSPECTUS. The
Company will deliver to the Agents one signed and as many conformed copies of
the Registration Statement (as originally filed) and of each amendment thereto
(including the Incorporated Documents and any exhibits filed therewith or
incorporated by reference therein) as the Agents may reasonably request. The
Company will furnish to the Agents as many copies of the Prospectus (as amended
or supplemented) as the Agents shall reasonably request so long as the Agents
are required to deliver a Prospectus in connection with sales or solicitations
of offers to purchase the Notes.
(d) REVISIONS OF PROSPECTUS -- MATERIAL CHANGES. So long as the
Agents are required to deliver a Prospectus in connection with sales or
solicitations of offers to purchase the Notes, if any event shall occur or
condition exist as a result of which it is necessary, in the opinion of
counsel for the Company, after consultation with counsel for the Agents, to
further amend or supplement the Prospectus in order that the Prospectus will
not include an untrue statement of a material fact or omit to state any
material fact necessary in order to make the statements therein, in light of
the circumstances existing at the time it is delivered to a purchaser, not
misleading, or if it shall be necessary, in the opinion of such counsel for
the Company, to amend or supplement the Registration Statement or the
Prospectus in order to comply with the requirements of the 1933 Act or the
1933 Act Regulations, prompt notice shall be given, and confirmed in writing,
to the Agents to cease the solicitation of offers to purchase the Notes in
their capacity as agents and to cease sales of any Notes the Agents may then
own as principal. In addition, if any Agent holds Notes purchased for resale
pursuant to a Terms Agreement and the Company has given notice to the Agents
pursuant to this subsection (d) within 90 days after the date of execution of
such Terms Agreement, the Company will prepare and file as soon as
practicable an amendment or supplement to the Prospectus so that the
Prospectus, as amended or supplemented, will not include any untrue statement
of a material fact or omit to state any material fact necessary in order to
make the statements therein not misleading in light of the circumstances
existing at the time it is delivered to the Agents.
(e) COMPLIANCE WITH 1934 ACT; ACCOUNTANTS' CONSENTS. The Company
will (i) comply, in a timely manner, with all applicable requirements under the
1934 Act relating to the filing with the Commission of the Company's reports
pursuant to Section 13(a), 13(c) or 15(d) of the 1934 Act and, if then
applicable, of the Company's proxy statements pursuant to Section 14 of the 1934
Act and (ii) use its best efforts to obtain the written consent of the Company's
independent accountants as to the incorporation by reference in the Registration
Statement of the audited financial statements reported on by them and contained
in the Company's annual reports on Form 10-K under the 1934 Act.
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(f) EARNINGS STATEMENTS. The Company will make generally
available to its security holders, in each case as soon as practicable but in
any event not later than 15 months after the acceptance by the Company of an
offer to purchase Notes hereunder, a consolidated earnings statement (which
need not be audited) covering the twelve-month period beginning after the
latest of (i) the effective date of the Registration Statement, (ii) the
effective date of the most recent post-effective amendment to the
Registration Statement to become effective prior to the date of such
acceptance and (iii) the date of the Company's most recent annual report on
Form 10-K filed with the Commission prior to the date of such acceptance,
which earnings statement will satisfy the provisions of Section 11(a) of the
1933 Act (and, at the option of the Company, Rule 158 of the 1933 Act
Regulations). Nothing in this Section 3(f) shall require the Company to make
such earnings statement available more frequently than once in any period of
twelve months.
(g) BLUE SKY QUALIFICATIONS. The Company will endeavor, in
cooperation with the Agents, to qualify the Notes for offering and sale under
the applicable securities laws of such states and other jurisdictions of the
United States as the Agents may reasonably designate, and will maintain such
qualifications in effect for as long as may be required for the distribution
of the Notes; PROVIDED, HOWEVER, that the Company will promptly notify the
Agents of any suspension or termination of any such qualifications, and
PROVIDED, FURTHER, that the Company shall not be obligated to register or
qualify as a foreign corporation or take any action which would subject it to
general service of process in any jurisdiction where it is not now so subject.
(h) SUSPENSION OF CERTAIN OBLIGATIONS. The Company shall not be
required to comply with the provisions of subsections (b), (c), (d), (e) or
(g) of this Section 3 during any period from the time the Agents shall have
been notified to suspend the solicitation of offers to purchase the Notes in
their capacity as agents or resales of Notes purchased pursuant to a Terms
Agreement to the time the Company shall determine that the solicitation of
offers to purchase the Notes through any Agent or Agents or resales as
principal of Notes purchased pursuant to a Terms Agreement by any Agent or
Agents should be resumed. Notwithstanding the foregoing, if any Agent holds
Notes purchased for resale pursuant to a Terms Agreement the Company shall
comply with the provisions of subsections (b), (c), (d), (e) and (g) of this
Section 3 during the 90 day period from and including the date of execution
of such Terms Agreement; PROVIDED, HOWEVER, that the Company shall have the
right, in its reasonable business judgment, to suspend such compliance during
such 90 day period for an aggregate of up to 45 days, in which event such 90
day period shall be extended by the greater of (i) the number of days
included in any such period of suspension and (ii) 30 days.
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SECTION 4. PAYMENT OF EXPENSES
The Company will pay all expenses incident to the performance of its
obligations under this Agreement, including:
(a) The preparation and filing of the Registration
Statement and all amendments thereto and the Prospectus and any
amendments or supplements thereto and all Incorporated Documents;
(b) The preparation, filing and printing of this Agreement;
(c) The preparation, printing, issuance and delivery of the
Notes;
(d) The fees and disbursements of the Trustee and its
counsel, of any calculation agent or exchange rate agent and of The
Depository Trust Company;
(e) The reasonable fees and disbursements of counsel to
the Agents incurred in connection with the execution and delivery of
this Agreement and in connection with the review of subsequent
deliveries pursuant to this Agreement;
(f) The qualification of the Notes under securities laws in
accordance with the provisions of Section 3(g) hereof, including
filing fees and the reasonable fees and disbursements of counsel to
the Agents in connection therewith and in connection with the
preparation of any Blue Sky survey;
(g) The printing and delivery to the Agents in quantities
as hereinabove stated of copies of the Registration Statement and any
amendments thereto, and of the Prospectus and any amendments or
supplements thereto, and the delivery by the Agents of the Prospectus
and any amendments or supplements thereto in connection with
solicitations of offers to purchase, or confirmations of sales of, the
Notes;
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(h) Any fees charged by rating agencies for the rating of
the Notes;
(i) Any advertising and other out-of-pocket expenses of the
Agents incurred with the prior written approval of the Company; and
(j) Reasonable fees and disbursements in connection with
the subsequent delivery of legal opinions pursuant to Section 6(b)
hereof.
SECTION 5. CONDITIONS OF OBLIGATIONS
The obligations of any Agent to solicit offers to purchase the Notes
as agent of the Company and the obligations of any Agent to purchase Notes
pursuant to any Terms Agreement will be subject at all times to the accuracy, as
of the applicable Representation Date, of the representations and warranties on
the part of the Company herein and to the accuracy, as of the date made, of the
statements of the Company's officers made in any certificate furnished pursuant
to the provisions hereof, to the performance and observance by the Company of
all covenants and agreements herein contained on its part to be performed and
observed, and to the following additional conditions precedent:
(a) OPINION OF COUNSEL TO COMPANY. On the date hereof, the
Agents shall have received an opinion from O'Melveny & ▇▇▇▇▇ LLP, counsel to
the Company, dated as of the date hereof and in form and substance
satisfactory to counsel for the Agents to the effect that:
(i) The Company and each of the Significant Subsidiaries is
a corporation validly existing and in good standing under the laws of
its state of incorporation.
(ii) The Company has the corporate power and corporate
authority to enter into and perform its obligations under this
Agreement and the Indenture, to borrow money as contemplated in this
Agreement and the Indenture, and to issue, sell and deliver the Notes.
(iii) This Agreement has been duly authorized, executed and
delivered by the Company.
13
(iv) The Indenture has been duly authorized by all
necessary corporate action on the part of the Company and duly
executed and delivered by the Company and constitutes a valid and
binding agreement of the Company enforceable against the Company in
accordance with its terms, except (x) as may be limited by (A)
bankruptcy, insolvency, reorganization, moratorium or similar laws
relating to or affecting creditors' rights generally (including,
without limitation, fraudulent conveyance laws) and (B) general
principles of equity including, without limitation, concepts of
materiality, reasonableness, good faith and fair dealing and the
possible unavailability of specific performance or injunctive
relief, regardless of whether considered in a proceeding in equity
or at law and (y) counsel may state that no opinion is expressed
with respect to the enforceability or effect of the waiver
contained in Section 6.12 of the Indenture and may advise that the
provisions regarding jurisdiction contained in Section 12.9 of the
Indenture may not be honored by the courts included or excluded.
(v) No Governmental Approval is required in connection with
the issuance or sale of the Notes other than registration thereof
under the 1933 Act, qualification of the Indenture under the 1939 Act,
and such registrations or qualifications as may be necessary under the
securities or Blue Sky laws of the various United States jurisdictions
in which the Notes are to be offered or sold.
(vi) The Notes, when the final terms of a particular Note
and its issuance and sale have been established in accordance with
the provisions of the Indenture and when executed and authenticated
in accordance with the terms of the Indenture and delivered to and
paid for by the purchasers thereof in accordance with the terms of
the Distribution Agreement, will constitute valid and binding
obligations of the Company enforceable against the Company in
accordance with their terms, except (x) as may be limited by (A)
bankruptcy, insolvency, reorganization, moratorium or similar laws
relating to or affecting creditors' rights generally (including,
without limitation, fraudulent conveyance laws) and (B) general
principles of equity including, without limitation, concepts of
materiality, reasonableness, good faith and fair dealing and the
possible unavailability of specific performance or injunctive
relief, regardless of whether considered in a proceeding in equity
or at law and (y) counsel may state that no opinion is expressed
with respect to the enforceability or effect of the waiver
contained in Section 6.12 of the Indenture and may advise that the
provisions regarding jurisdiction contained in Section 12.9 of the
Indenture may not be honored by the courts included or excluded.
(vii) The Registration Statement has been
declared effective under the 1933 Act and the Indenture has been
qualified under the 1939 Act, and, to the best of such counsel's
knowledge, no stop order suspending the effectiveness of the
Registration Statement has been issued and no proceedings for that
purpose have been instituted or are pending or contemplated.
14
(viii) The execution and delivery of this Agreement and the
Indenture by the Company, the issuance and sale of the Notes and
the performance by the Company of its obligations under this
Agreement and the Indenture will not (A) violate the Restated
Certificate of Incorporation or Bylaws, as amended, of the Company,
(B) violate any Applicable Laws or (C) breach or otherwise violate
any obligation of or restriction on the Company under any judgment,
decree or order, known to such counsel, of any court or
Governmental Authority entered in any proceeding to which the
Company was or is now a party or by which it is bound; provided,
that such counsel may state that no opinion is expressed as to the
securities or Blue Sky laws of the various jurisdictions in which
the Notes are to be offered.
(ix) The Registration Statement, as of its effective
date, and the Prospectus, as of its date, appeared on their face to
comply in all material respects with the requirements as to form
for registration statements on Form S-3 and the related rules and
regulations then in effect, except that in each case such counsel
need not express an opinion as to (i) the Incorporated Documents,
(ii) the financial statements, schedules and other financial data
included or incorporated by reference therein or excluded therefrom
or (iii) the exhibits to the Registration Statement, including the
Form T-1.
(x) The statements in the Prospectus under the captions
"Description of the Debt Securities" and "Description of the Notes,"
insofar as they purport to summarize certain provisions of documents
specifically referred to therein, fairly present the information
required by Form S-3.
In rendering the opinions set forth above, such counsel may state that
(1) with respect to paragraphs (iv) and (vi), such enforcement may be limited by
(i) requirements that a claim with respect to any Notes denominated other than
in United States dollars (or a judgment denominated other than in United States
dollars in respect of such claim) be converted into United States dollars at a
rate of exchange prevailing on a date determined pursuant to applicable law and
(ii) governmental authority to limit, delay or prohibit the making of payments
outside the United States or in foreign currency or composite currency; and (2)
with respect to paragraphs (iv), (v),(vi) and (viii), no opinion is expressed
thereto with
15
respect to any Notes that are to be indexed or linked to any foreign currency or
composite currency, commodity, equity index or similar index.
In rendering the opinion set forth in paragraph (v) and clause (B)
and (C) of paragraph (viii) above, the term "Applicable Laws" shall mean the
Delaware General Corporation Law and those laws, rules and regulations of the
States of California and New York and of the United States of America which
such counsel has, in the exercise of customary diligence, recognized as
applicable to the Company or the transactions of the type contemplated by
this Agreement, the term "Governmental Authority" shall mean any California,
New York, Delaware or federal executive, legislative, judicial,
administrative or regulatory body and the term "Governmental Approval" shall
mean any order, consent, permit or approval of any Governmental Authority
pursuant to Applicable Laws.
In addition such counsel may state that, in connection with such
counsel's participation in conferences in connection with the preparation of
the Registration Statement and Prospectus, such counsel has not independently
verified the accuracy, completeness or fairness of the statements contained
therein, and the limitation inherent in such examination made by such counsel
and the knowledge available to such counsel are such that such counsel is
unable to assume, and does not assume, and responsibility for such accuracy,
completeness or fairness (except as otherwise specifically stated in clause
(x) above). However, such counsel shall state that, on the basis of such
counsel's review and participation in conferences in connection with the
preparation of the Registration Statement and the Prospectus, such counsel
does not believe that the Registration Statement (excluding the Incorporated
Documents) at its effective date contained an untrue statement of a material
fact or omitted to state a material fact required to be stated therein or
necessary in order to make the statements therein not misleading, and such
counsel shall state that such counsel does not believe that the Prospectus
(excluding the Incorporated Documents) as of the date of this Agreement (and,
if the opinion is being given pursuant to Section 6(b) hereof as a result of
the Company having entered into a Terms Agreement, as of the Settlement Date
with respect to such Terms Agreement) contained an untrue statement of a
material fact or omitted to state a material fact necessary in order to make
the statements therein, in light of the circumstances under which they were
made, not misleading, except that such counsel need express no opinion with
respect to (i) the Incorporated Documents, (ii) the financial statements,
schedules and other financial data included or incorporated by reference
therein or excluded therefrom or (iii) the exhibits to the Registration
Statement, including the Form T-1.
(b) OPINION OF COUNSEL EMPLOYED BY COMPANY. On the date hereof, the
Agents shall have received an opinion from ▇▇▇▇▇ ▇. ▇▇▇▇▇▇▇▇, Senior Vice
President-Assistant General Counsel or from other counsel employed
16
by the Company (provided that such counsel is at least a Vice President of the
Company), dated as of the date hereof and in form and substance satisfactory to
counsel for the Agents, to the effect that:
(i) Except as set forth in the Prospectus (including the
Incorporated Documents), there is not pending or, to the best of such
counsel's knowledge, after reasonable inquiry, threatened any action,
suit or proceeding against the Company or any of its subsidiaries
before or by any court or governmental agency or body, which is likely
(to the extent not covered by insurance) to have a material adverse
effect on the consolidated financial condition or earnings of the
Company and its subsidiaries, considered as one enterprise.
(ii) To the best of such counsel's knowledge, after
reasonable inquiry, there is no contract or document of a character
required to be described in the Registration Statement or the
Prospectus or to be filed as an exhibit to the Registration Statement
which is not described or filed as required.
(iii) To the best of such counsel's knowledge, after
reasonable inquiry, the Company is not in violation of its Restated
Certificate of Incorporation or Bylaws, as amended.
(iv) To the best of such counsel's knowledge, after
reasonable inquiry, (x) the execution and delivery and (y) the
performance of this Agreement and the Indenture will not conflict
with or constitute a breach of, or default (with the passage of
time or otherwise) under, any material contract, indenture,
mortgage, loan agreement, note, lease or other instrument to which
the Company is a party or by which it may be bound, or to which any
of the property or assets of the Company or any of its subsidiaries
is subject.
(v) The Incorporated Documents, as of the date of this
Agreement, comply as to form in all material respects with the
requirements of the 1934 Act, except that in each case such counsel
need not express an opinion as to the financial statements, schedules
and other financial data included or incorporated by reference therein
or excluded therefrom.
In addition, such counsel shall state that nothing has come to such
counsel's attention that leads him to believe that either the Registration
Statement (including the Incorporated Documents) at the time such Registration
Statement
17
became effective 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 the Prospectus (including the Incorporated
Documents) as of the date of this Agreement (and, if the opinion is being given
pursuant to Section 6(b) hereof as a result of the Company having entered into a
Terms Agreement, as of the Settlement Date with respect to such Terms Agreement)
contained an untrue statement of a material fact or omitted to state a material
fact required to be stated therein or necessary to make the statements therein,
in light of the circumstances under which they were made, not misleading, except
that such counsel need express no opinion with respect to the financial
statements, schedules and other financial data included or incorporated by
reference therein or excluded therefrom or the exhibits to the Registration
Statement, including the Form T-1.
(c) OPINION OF AGENTS' COUNSEL. On the date hereof, the Agents
shall have received an opinion from counsel to the Agents, dated as of the
date hereof and in form and substance satisfactory to the Agents.
(d) OFFICER'S CERTIFICATE. On the date hereof (and, if this
certificate is being delivered pursuant to a Terms Agreement, as of the
Settlement Date with respect to such Terms Agreement), the Agents shall have
received a certificate signed by an officer of the Company, substantially in the
form of Appendix I hereto and dated the date hereof, to the effect that (i) the
representations and warranties of the Company contained in Section 1(a) hereof
(other than Section 1(a)(vii)) are true and correct in all material respects
with the same force and effect as though expressly made at and as of the date of
such certificate, (ii) the Company has complied with all agreements and
satisfied all conditions required by this Agreement or the Indenture on its part
to be performed or satisfied at or prior to the date of such certificate, and
(iii) no stop order suspending the effectiveness of the Registration Statement
has been issued and no proceedings for that purpose have been initiated or, to
the best of such officer's knowledge, threatened by the Commission. The
officer's certificate shall further state that except as contemplated in the
Prospectus or reflected therein by the filing of any amendment or supplement
thereto or any Incorporated Document, at the date hereof and at each Settlement
Date with respect to any Terms Agreement, there has not been, since the date of
the most recent consolidated financial statements included or incorporated by
reference in the Prospectus, any material adverse change in the consolidated
financial condition or earnings of the Company and its subsidiaries, considered
as one enterprise.
(e) COMFORT LETTER. On the date hereof, the Agents shall have
received a letter from the Company's independent certified public accountants,
18
dated as of the date hereof and in form and substance satisfactory to the
Agents, to the effect that:
(i) They are independent public accountants with respect to
the Company and its subsidiaries within the meaning of the 1933 Act
and the 1933 Act Regulations.
(ii) In their opinion, the consolidated financial statements
and supporting schedule(s) of the Company and its subsidiaries audited
and reported upon by them and incorporated by reference in the
Registration Statement comply as to form in all material respects with
the applicable accounting requirements of the 1933 Act and the 1933
Act Regulations with respect to registration statements on Form S-3
and the 1934 Act and the published rules and regulations thereunder.
(iii) They have performed specified procedures, not
constituting an audit, including a reading of the latest available
interim consolidated financial statements of the Company, a reading of
the minute books of the Company since the end of the most recent
fiscal year with respect to which an audit report has been issued,
inquiries of and discussions with certain officials of the Company and
certain of its subsidiaries responsible for financial and accounting
matters with respect to the latest available interim unaudited
consolidated financial statements of the Company, and such other
inquiries and procedures as may be specified in such letter, and on
the basis of such inquiries and procedures nothing came to their
attention that caused them to believe that: (A) the latest available
unaudited consolidated financial statements of the Company were not
fairly presented in conformity with generally accepted accounting
principles in the United States applied on a basis substantially
consistent with that of the audited financial statements incorporated
by reference therein, or (B) at a specified date not more than five
days prior to the date of such letter, there was any change in the
outstanding capital stock of the Company or any increase in
consolidated long-term debt of the Company or any decrease in the
stockholders' equity of the Company, in each case as compared with
the amounts shown on the most recent consolidated balance sheet of
the Company incorporated by reference in the Registration Statement
and Prospectus or, during the period from the date of such balance
sheet to a specified date not more than five days prior to the date
of such letter, there were any decreases, as compared with the
corresponding period in the preceding year, in consolidated
revenues or net income of the Company, except in each such case as
set forth in or contemplated by the Registration Statement and
Prospectus or except for such exceptions enumerated in such letter
as shall have been agreed to by the Agents and the Company.
(iv) In addition to the examination referred to in their
report included or incorporated by reference in the Registration
Statement and the Prospectus, and the limited procedures referred to
in clause (iii) above, they have carried out certain other specified
procedures, not constituting an audit, with respect to certain
financial information which is included or incorporated by reference
in the Registration Statement and Prospectus, which would normally be
covered under auditing procedures and which are specified by the
Agents, and have found such financial information to be in
19
agreement with the relevant accounting, financial and other records of
the Company identified in such letter.
(f) OTHER DOCUMENTS. On the date hereof and on each Settlement Date
with respect to any applicable Terms Agreement, counsel to the Agents shall have
been furnished with such documents and opinions as such counsel may reasonably
require for the purpose of enabling such counsel to pass upon the issuance and
sale of Notes as herein contemplated and related proceedings, or in order to
evidence the accuracy and completeness of any of the representations and
warranties or the fulfillment of any of the conditions herein contained.
If any condition specified in this Section 5 shall not have been
fulfilled when and as required to be fulfilled, this Agreement may be terminated
by any of the Agents (as to itself only) and any Terms Agreement may be
terminated by the Agent party to such Terms Agreement by notice to the Company
at any time and any such termination shall be without liability of any party to
any other party, except that the covenants set forth in Section 3(f) hereof, the
provisions of Section 4 hereof, the indemnity and contribution agreement set
forth in Sections 7 and 8 hereof, and the provisions of Sections 9 and 13 hereof
shall remain in effect.
SECTION 6. SUBSEQUENT DOCUMENTATION REQUIREMENT OF THE COMPANY
The Company covenants and agrees that so long as Notes are authorized
for sale pursuant to this Agreement and unless the sale of Notes has been
suspended as provided in this Agreement:
(a) SUBSEQUENT DELIVERY OF CERTIFICATES. Each time that the
Registration Statement or the Prospectus shall be amended or supplemented
(other than by (i) a Pricing Supplement or an amendment or other supplement
providing solely for a change in the interest rates of the Notes or changes
in other terms of the Notes or (ii) an amendment or supplement which relates
exclusively to an offering of securities other than the Notes) or there is
filed with the Commission any document (other than a Current Report on Form
8-K unless delivery of a certificate is reasonably requested by the Agents
with respect to such filing) incorporated by reference into the Prospectus or
the Company sells Notes to an Agent pursuant to a Terms Agreement, the terms
of which so require, the Company shall use its best efforts to furnish or
cause to be furnished to the Agents or to the Agent party to the Terms
Agreement, as the case may be, promptly following such amendment, supplement
or filing or on the Settlement Date with respect to such Terms Agreement, as
the case may be, a certificate in form satisfactory to counsel for the Agents
to the effect that the statements contained in the certificate referred to in
Section 5(d) hereof, which was last furnished to the Agents, are true and
correct at the time of such amendment, supplement, filing or sale, as the
case may be, as
20
though made at and as of such time (except that such statements shall be deemed
to relate to the Registration Statement and the Prospectus as amended and
supplemented to such time) or, in lieu of such certificate, a certificate of the
same tenor as the certificate referred to in said Section 5(d), modified as
necessary to relate to the Registration Statement and the Prospectus as amended
and supplemented to the time of delivery of such certificate; PROVIDED, HOWEVER,
that in the case of any such amendment or supplement that relates to Notes which
are indexed or linked to any foreign currency, composite currency, commodity,
equity index or similar index, such certificate shall state that, for purposes
of such certificate, the phrase "or with respect to Notes which are to be
indexed or linked to any currency, composite currency, commodity, equity index
or similar index" appearing in the second sentence of Section 1(a)(viii) hereof
shall be deemed not to apply with respect to such Notes.
(b) SUBSEQUENT DELIVERY OF LEGAL OPINIONS. Each time that the
Registration Statement or the Prospectus shall be amended or supplemented (other
than by (i) a Pricing Supplement or an amendment or other supplement providing
solely for a change in the interest rates of the Notes or changes in other terms
of the Notes or (ii) an amendment or supplement providing primarily for the
inclusion of additional financial information, or (iii) an amendment or
supplement which relates exclusively to an offering of securities other than the
Notes) or there is filed with the Commission any document incorporated by
reference into the Prospectus (other than any Annual Report on Form 10-K,
Current Report on Form 8-K or Quarterly Report on Form 10-Q relating primarily
to financial statements or other financial information as of and for any fiscal
quarter) or the Company sells Notes to an Agent pursuant to a Terms Agreement,
the terms of which so require, the Company shall use its best efforts to furnish
or cause to be furnished promptly following such amendment, supplement or filing
or on the Settlement Date with respect to such Terms Agreement, as the case may
be, to the Agents or to the Agent party to the Terms Agreement, as the case may
be (with a copy to counsel to the Agents or counsel to such Agent, as the case
may be), letters substantially in the form of Appendix II hereto (modified, as
necessary, in the case of a Terms Agreement) from the counsel last furnishing
the opinions referred to in Sections 5(a) and 5(b) hereof or, in lieu of such
letters, letters from other counsel reasonably satisfactory to the Agents
(which, in the case of the opinions referred to in such Section 5(b), shall
include ▇▇▇▇▇ ▇. ▇▇▇▇▇▇▇▇, Senior Vice President - Assistant General Counsel of
the Company), dated the date of delivery of such letter and in form satisfactory
to counsel for the Agents, of the same tenor as the opinions referred to in
Sections 5(a) and 5(b) (other than, in the case of the opinion delivered
pursuant to Section 5(b) hereof, the matters covered by Sections 5(b)(i) and
5(b)(iv)(x)) hereof, but modified, as necessary, to relate to the Registration
Statement and the Prospectus as amended and supplemented to the time of delivery
of such opinion; PROVIDED, HOWEVER, that (i) in the case of any such amendment
or
21
supplement that relates to Notes which are indexed or linked to any foreign
currency, composite currency, commodity, equity index or similar index, the
opinions referred to in Section 5(a) hereof shall not include the exceptions
set forth in such Section 5(a) as to Notes which are to be indexed or linked
to any foreign currency, composite currency, commodity, equity index or
similar index and (ii) if reasonably requested by the Agents, the counsel
delivering such opinion shall expand the opinion rendered pursuant to Section
5(a)(i) to include any other subsidiary of the Company that, as a result of
actions or events occurring after the date of this Agreement is of
substantially similar materiality to the Company, on a consolidated basis, as
each of the Significant Subsidiaries are as of the date of this Agreement.
The Company shall use its best efforts to furnish or cause to be furnished to
the Agents, promptly following each filing by the Company of a Quarterly
Report on Form 10-Q or an Annual Report on Form 10-K, a letter from the
counsel last furnishing the opinion referred to in Section 5(b) hereof, or
from other counsel reasonably satisfactory to the Agents, dated the date of
delivery of such letter and in form satisfactory to counsel for the Agents,
of the same tenor as the opinion referred to in Section 5(b)(i) hereof, but
modified, as necessary, to relate to the Registration Statement and
Prospectus as amended and supplemented to the time of delivery of such letter.
(c) SUBSEQUENT DELIVERY OF COMFORT LETTERS. Each time that the
Registration Statement or the Prospectus shall be amended or supplemented to
include additional financial information or there is filed with the
Commission any document incorporated by reference into the Prospectus which
contains additional financial statement information relating to the Company
or the Company sells Notes pursuant to a Terms Agreement, the terms of which
so require, the Company shall use its best efforts to cause the Company's
independent public accountants promptly following such amendment, supplement
or filing or on the Settlement Date with respect to such Terms Agreement, as
the case may be, to furnish the Agents or to the Agent party to the Terms
Agreement, as the case may be, a letter, dated the date of filing of such
amendment, supplement or document with the Commission, or such Settlement
Date, as the case may be, in form satisfactory to counsel for the Agents (or
such Agent), of the same tenor as the portions of the letter referred to in
clauses (i) and (ii) of Section 5(e) hereof but modified, as necessary, to
relate to the Registration Statement and Prospectus, as amended and
supplemented to the date of such letter, and of the same general tenor as the
portions of the letter referred to in clause (iii) (other than the
information required by clause (B) thereof, except in the case of a Terms
Agreement, the terms of which so require) and clause (iv) of said Section
5(e) with such changes as may be necessary to reflect changes in the
financial statements and other information derived from the accounting
records of the Company; PROVIDED, HOWEVER, that if the Registration Statement
or the Prospectus is amended or supplemented primarily to include financial
information as of and for a fiscal quarter, the Company's independent
certified public accountants may
22
limit the scope of such letter to the unaudited financial statements included in
such amendment or supplement.
SECTION 7. INDEMNIFICATION
(a) INDEMNIFICATION OF THE AGENTS. The Company agrees to indemnify
and hold harmless each Agent and each person, if any, who controls an Agent
within the meaning of Section 15 of the 1933 Act as follows:
(i) against any and all loss, liability, claim, damage and
expense whatsoever (including, subject to the limitations set forth in
subsection (c) below, the reasonable fees and disbursements of counsel
chosen by the Agents), as incurred, insofar as such loss, liability,
claim, damage or expense arises out of any untrue statement or alleged
untrue statement of a material fact contained in the Registration
Statement or the omission or alleged omission therefrom of a material
fact required to be stated therein or necessary to make the statements
therein not misleading, or arises out of any untrue statement or
alleged untrue statement of a material fact contained in the
Prospectus or the omission or alleged omission therefrom of a material
fact necessary in order to make the statements therein, in light of
the circumstances under which they were made, not misleading;
(ii) against any and all loss, liability, claim, damage and
expense whatsoever (including, subject to the limitations set forth in
subsection (c) below, the reasonable fees and disbursements of counsel
chosen by the Agents), as incurred, to the extent of the aggregate
amount paid in settlement of any litigation, or investigation or
proceeding by any governmental agency or body, commenced or
threatened, or of any claim whatsoever insofar as such loss,
liability, claim, damage or expense arises out of any such untrue
statement or omission, or any such alleged untrue statement or
omission, if such settlement is effected with the written consent of
the Company; and
(iii) against any and all expense whatsoever (including,
subject to the limitations set forth in subsection (c) below, the
reasonable fees and disbursements of counsel chosen by the Agents), as
incurred, reasonably incurred in investigating, preparing or defending
against any litigation, or investigation or proceeding by any
governmental agency or body, commenced or threatened, or any
23
claim whatsoever, based upon any such untrue statement or omission, or
any such alleged untrue statement or omission;
PROVIDED, HOWEVER, that this indemnity shall not apply to any loss,
liability, claim, damage or expense (A) to the extent arising out of or based
upon any untrue statement or omission or alleged untrue statement or omission
made in reliance upon the Form T-1; or (B) to the extent arising out of any
untrue statement or omission or alleged untrue statement or omission in the
Prospectus if such untrue statement or alleged untrue statement or omission
or alleged omission is corrected in all material respects in an amendment or
supplement to the Prospectus and if, having previously been furnished by or
on behalf of the Company with copies of the Prospectus, as so amended or
supplemented, such Agent thereafter failed to deliver such Prospectus, as so
amended or supplemented, prior to or concurrently with the sale of a Note or
Notes to the person asserting such loss, liability, claim, damage or expense
who purchased such Note or Notes which are the subject thereof from such
Agent; or (C) as to which such Agent may be required to indemnify the Company
pursuant to the provisions of subsection (b) of this Section 7.
(b) INDEMNIFICATION OF THE COMPANY. Each Agent agrees to
indemnify and hold harmless the Company, its directors, each of its officers
who signed the Registration Statement, and each person, if any, who controls
the Company within the meaning of Section 15 of the 1933 Act against any and
all loss, liability, claim, damage and expense described in the indemnity
contained in subsection (a) of this Section 7, as incurred, but only with
respect to untrue statements or omissions, or alleged untrue statements or
omissions, made in the Registration Statement or the Prospectus in reliance
upon and in conformity with written information furnished to the Company by
or on behalf of such Agent expressly for use in the Registration Statement or
the Prospectus.
(c) GENERAL.
(i) In case any action, suit or proceeding (including any
governmental or regulatory investigation or proceeding) shall be
brought against any Agent or any person controlling such Agent,
based upon the Registration Statement or the Prospectus and with
respect to which indemnity may be sought against the Company
pursuant to this Section 7, such Agent or controlling person shall
promptly notify the Company in writing, and the Company shall
assume the defense thereof, including the employment of counsel
(such counsel to be reasonably acceptable to such Agent) and
payment of all expenses. Any such Agent or any such controlling
person shall have the right to employ separate counsel in any such
action, suit or proceeding and to participate in the defense
thereof, but the fees and expenses of such separate counsel shall
be at the expense of such Agent or such controlling person unless
(A) the employment of such counsel shall have been specifically
authorized in writing by the Company,
24
(B) the Company shall have failed to assume the defense and employ
counsel or (C) the named parties to any such action, suit or
proceeding (including any impleaded parties) shall include both
such Agent or such controlling person and the Company, and such
Agent or such controlling person shall have been advised by counsel
that there may be one or more legal defenses available to it which
are different from, or additional to, those available to the
Company (in which case, if such Agent or such controlling person
notifies the Company in writing that it elects to employ separate
counsel at the expense of the Company, the Company shall not have
the right to assume the defense of such action, suit or proceeding
on behalf of such Agent or such controlling person, it being
understood, however, that the Company shall not, in connection with
any one such action or separate but substantially similar or
related actions in the same jurisdiction arising out of the same
general allegations or circumstances, be liable for the reasonable
fees and expenses of more than one separate firm of attorneys (in
addition to any local counsel) for all such Agents and such
controlling persons, which firm shall be designated in writing by a
majority of all such Agents, on behalf of all of such Agents and
such controlling persons).
(ii) In case any action, suit or proceeding (including
any governmental or regulatory investigation or proceeding) shall
be brought against the Company, any of the Company's directors or
officers, or any person controlling the Company, with respect to
which indemnity may be sought against any Agent pursuant to this
Section 7, such Agent shall have the rights and duties given to the
Company by subsection (c)(i) of this Section 7, and the Company,
the Company's directors and officers and any such controlling
person shall have the rights and duties given to the Agents by
subsection (c)(i) of this Section 7.
SECTION 8. CONTRIBUTION
In order to provide for just and equitable contribution in
circumstances in which the indemnity agreement provided for in Section 7 hereof
is for any reason held to be unenforceable with respect to the indemnified
parties although applicable in accordance with its terms, the Company and each
Agent shall contribute to the aggregate losses, liabilities, claims, damages and
expenses of the nature contemplated by said indemnity agreement incurred by the
Company and the Agents, as incurred, in such proportion as is appropriate to
reflect the relative benefits received by the Company on the one hand and each
of the Agents participating in the offering that gave rise to such losses,
liabilities, claims, damages and expenses (a "Relevant Agent") on the other hand
from the offering of such Notes. If however, the allocation provided by the
immediately preceding sentence is not permitted by applicable law or if the
indemnified party failed to give the notice required pursuant to Section 7(c)
hereof or pursuant to the last sentence of this Section 8, then the Company and
each Agent shall contribute to
25
such aggregate losses, liabilities, claims, damages and expenses incurred by the
Company and the Agents, as incurred, 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 Relevant Agent on the other in connection with
the statements or omissions which resulted in such losses, liabilities, claims,
damages or expenses, as well as any other relevant equitable considerations.
The relative benefits received by the Company on the one hand and each Relevant
Agent on the other hand in connection with the offering of such Notes shall be
deemed to be in the same proportion as the total net proceeds from the sale of
such Notes by such Relevant Agent received by the Company (before deducting
expenses) bear to the total commissions or other compensation or remuneration
received by such Relevant 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 such Relevant
Agent and the parties' relative intent, knowledge, access to information and
opportunity to correct or prevent such statement or omission. If more than one
Agent is a Relevant Agent in respect of a proceeding, each Relevant Agent's
obligation to contribute pursuant to this Section 8 shall be several and not
joint, and shall be in the proportion that the principal amount of the Notes
that are the subject of such proceeding and that were offered and sold through
such Relevant Agent bears to the aggregate principal amount of the Notes that
are the subject of such proceeding. Notwithstanding the provisions of this
Section 8, no Agent shall be required to contribute any amount in excess of the
amount by which the total price at which the Notes purchased by or through it
were sold exceeds the amount of any damages which such Agent has otherwise been
required to pay by reason of such untrue or alleged untrue statement or omission
or alleged omission. No person guilty of fraudulent misrepresentation (within
the meaning of Section 11(f) of the 1933 Act) shall be entitled to contribution
from any person who was not guilty of such fraudulent misrepresentation. For
purposes of this Section 8, each person, if any, who controls an Agent within
the meaning of Section 15 of the 1933 Act shall have the same rights to
contribution as such Agent, and each director of the Company, each officer of
the Company who signed the Registration Statement, and each person, if any, who
controls the Company within the meaning of Section 15 of the 1933 Act shall have
the same rights to contribution as the Company. Any party entitled to
contribution pursuant to the first sentence of this Section 8 will, promptly
after receipt of notice of commencement of any action, suit or proceeding
against such party in respect of which a claim for contribution may be made
against another party or parties under this Section 8, notify such party or
parties from whom contribution may be sought, but the omission to so notify such
party or parties shall not relieve the party or parties from whom contribution
may be sought, from any other obligation it or they may have otherwise than
under this Section 8; PROVIDED, HOWEVER, that such notice need not be given if
such party entitled to
26
contribution ▇▇▇▇▇▇▇▇▇ has previously given notice pursuant to Section 7(c)
hereof with respect to the same action, suit or proceeding.
SECTION 9. REPRESENTATIONS, WARRANTIES AND AGREEMENTS TO SURVIVE DELIVERY
All representations, warranties and agreements contained in this
Agreement or any Terms Agreement, or contained in certificates of officers of
the Company submitted pursuant hereto, shall remain operative and in full force
and effect, regardless of any investigation made by or on behalf of any Agent or
any controlling person as defined in Section 15 of the 1933 Act of any Agent, or
by or on behalf of the Company, and shall survive each delivery of and payment
for any of the Notes.
SECTION 10. TERMINATION
(a) TERMINATION OF THIS AGREEMENT. This Agreement (excluding any
Terms Agreement) may be terminated by the Company (i) for any reason at any time
with respect to any Agent or Agents upon the giving of 2 business days' written
notice of such termination to each other party hereto or (ii) at any time upon
notice to each other party hereto if no Notes then remain authorized for sale
pursuant hereto. This Agreement may be terminated by any Agent (as to itself
only) either (x) upon the giving of 2 business days' written notice of such
termination to each other party hereto or (y) at any time upon notice to the
Company if the Company shall have failed to furnish or cause to be furnished the
certificates, opinions or letters referred to in Section 5 or 6 hereof or if no
Notes then remain authorized for sale pursuant hereto.
(b) TERMINATION OF A TERMS AGREEMENT. An Agent party to a Terms
Agreement may terminate such Terms Agreement (as to itself only) immediately
upon notice to the Company, at any time prior to the Settlement Date relating
thereto if (i) there has been, between the date of such Terms Agreement and the
related Settlement Date, any material adverse change in the consolidated
financial condition or earnings of the Company and its subsidiaries,
considered as one enterprise, (ii) there has occurred any material adverse
change in the financial markets in the United States or any outbreak or
escalation of hostilities or other calamity or crisis, the effect of which is
such as to make it, in the reasonable judgment of such Agent, impracticable
to market the Notes or to enforce contracts for the sale of the Notes, (iii)
trading in any securities of the Company has been suspended (other than
pursuant to a request by the Company with respect to an announcement by the
Company of certain information not constituting a material adverse change,
since the date of such Terms Agreement,
27
in the consolidated financial condition or earnings of the Company and its
subsidiaries, considered as one enterprise), the effect of which is such as
to make it, in the reasonable judgment of such Agent, impracticable to market
the Notes or to enforce contracts for the sale of the Notes, (iv) trading
generally on the New York Stock Exchange has been suspended, or minimum or
maximum prices for trading have been fixed, or maximum ranges for prices for
securities shall have been required, by such exchange or by order of the
Commission or any other governmental authority, or if a banking moratorium
has been declared by either Federal or New York authorities or if a banking
moratorium has been declared by the relevant authorities in the country or
countries of origin of any foreign currency or currencies in which the Notes
are denominated or payable or (v) after the date of such Terms Agreement the
rating assigned by any nationally recognized securities rating agency to any
debt securities of the Company as of the date of such Terms Agreement shall
have been lowered or any such rating agency shall have publicly announced
that it has placed any debt securities of the Company on what is commonly
termed a "watch list" with negative implications.
(c) GENERAL. In the event of any such termination, no party will
have any liability to any other party hereto, except that (i) a terminating
Agent shall be entitled to any commissions earned in accordance with the
third paragraph of Section 2(a) hereof, (ii) if at the time of termination
(A) a terminating Agent and the Company shall have entered into a Terms
Agreement and the Settlement Date with respect thereto shall not yet have
occurred or (B) an offer to purchase any of the Notes has been accepted by
the Company but the time of delivery to the purchaser or his agent of the
Note or Notes relating thereto has not occurred, the covenants set forth in
Sections 3 (subject to the provisions of Section 3(h)) and 6 hereof shall
remain in effect until such Settlement Date or until such Notes are so
delivered, as the case may be, and (iii) the covenant set forth in Section
3(f) hereof, the provisions of Section 4 hereof, the indemnity and
contribution agreements set forth in Sections 7 and 8 hereof, and the
provisions of Sections 9 and 13 hereof shall remain in effect.
28
SECTION 11. NOTICES
All notices and other communications hereunder shall be in writing and
shall be deemed to have been duly given if mailed or transmitted by any standard
form of telecommunication. Notices to the Agents shall be directed, as the case
may be, to: [ ]
Notices to the Company shall be directed to it at:
▇▇▇ ▇▇▇▇▇ ▇▇▇▇▇ ▇▇▇▇▇ ▇▇▇▇▇▇
▇▇▇▇▇▇▇, ▇▇▇▇▇▇▇▇▇▇ ▇▇▇▇▇
Attention: Legal Department
SECTION 12. PARTIES
This Agreement shall inure to the benefit of and be binding upon the
Agents (and, in the case of a Terms Agreement, the Agent or Agents party
thereto) and the Company and their respective successors. Nothing expressed or
mentioned in this Agreement is intended or shall be construed to give any
person, firm or corporation, other than the parties hereto and their respective
successors and the controlling persons and officers and directors referred to in
Sections 7 and 8 hereof and their heirs and legal representatives, any legal or
equitable right, remedy or claim under or in respect of this Agreement or any
provisions herein contained. This Agreement and all conditions and provisions
hereof are intended to be for the sole and exclusive benefit of the parties
hereto and their respective successors and said controlling persons and officers
and directors and their heirs and legal representatives, and for the benefit of
no other person, firm or corporation. No purchaser of Notes shall be deemed to
be a successor by reason merely of such purchase.
SECTION 13. GOVERNING LAWS
THIS AGREEMENT AND THE RIGHTS AND OBLIGATIONS OF THE PARTIES CREATED
HEREBY SHALL BE GOVERNED BY AND CONSTRUED IN ACCORDANCE WITH THE LAWS OF THE
STATE OF NEW YORK, INCLUDING WITHOUT LIMITATION, Sections 5-1401, 5-1402 AND
NYCPLR 327(b).
If the foregoing is in accordance with your understanding of our
agreement, please sign and return to the Company a counterpart hereof, whereupon
this instrument along with all counterparts will become a binding agreement
between the Agents and the Company in accordance with its terms.
Very truly yours,
THE ▇▇▇▇ DISNEY COMPANY
By
-------------------------------
Name:
Title:
CONFIRMED AND ACCEPTED,
as of the date first above written:
[ ]
By
---------------------------------
Name:
Title:
EXHIBIT A
Commission
Term (1) Rate (2)
-------- --------
More than 9 months but less than 1 year. . . . . . . . . . . . . . . .
From 1 year but less than 18 months. . . . . . . . . . . . . . . . . .
From 18 months but less than 2 years . . . . . . . . . . . . . . . ..
From 2 years but less than 3 years . . . . . . . . . . . . . . . . . .
From 3 years but less than 4 years . . . . . . . . . . . . . . . . . .
From 4 years but less than 5 years . . . . . . . . . . . . . . . . . .
From 5 years but less than 6 years . . . . . . . . . . . . . . . . . .
From 6 years but less than 7 years . . . . . . . . . . . . . . . . . .
From 7 years but less than 10 years. . . . . . . . . . . . . . . . . .
From 10 years but less than 15 years . . . . . . . . . . . . . . . . .
From 15 years but less than 20 years . . . . . . . . . . . . . . . . .
From 20 years but less than 30 years . . . . . . . . . . . . . . . . .
From 30 years. . . . . . . . . . . . . . . . . . . . . . . . . . . . .
--------------------
(1) With respect to each Note that is subject to purchase by the Company
at the option of the holder thereof (a "Put Note"), the word "Term" as
used in this Exhibit A refers to the earliest purchase date specified
in the applicable Put Note.
(2) WITH RESPECT TO EACH NOTE THAT IS A DISCOUNT SECURITY (AS DEFINED IN
THE INDENTURE), THE COMMISSION PAYABLE TO EACH AGENT WITH RESPECT TO
EACH SUCH NOTE SOLD AS A RESULT OF A SOLICITATION MADE BY SUCH AGENT
SHALL BE BASED ON THE PURCHASE PRICE OF SUCH NOTE.
EXHIBIT B
The following terms, if applicable, shall be agreed to by each Agent
and the Company pursuant to each Terms Agreement:
Principal Amount: $__________
(or principal amount of
foreign currency or
composite currency)
Interest Rate
If Fixed Rate Note, Interest Rate:
If Floating Rate Note:
Base Rate or Rates:
Initial Interest Rate:
Spread or Spread Multiplier, if any:
Interest Reset Dates:
Interest Payment Dates:
Index Maturity:
CMT Maturity Index, if any:
Interest Determination Dates:
Maximum Interest Rate, if any:
Minimum Interest Rate, if any:
Interest Reset Period:
Interest Payment Period:
Calculation Agent (if other than the
Trustee):
If Redeemable:
Earliest Redemption Date:
Redemption Price:
Stated Maturity:
Final Maturity (for Renewable Notes):
Initial Maturity (for Renewable Notes):
Purchase Price: __%
Settlement Date and Time:
Currency of Denomination (if currency is other
than U.S. dollar):
Currency of Payment (if currency is other than
U.S. dollar):
Denominations:
Additional Terms:
Also, agreement(3) as to whether the following will be required:
Officer's Certificate pursuant to Section 6(a) of the Distribution
Agreement.
Legal Opinion pursuant to Section 6(b) of the Distribution Agreement.
Comfort Letter pursuant to Section 6(c) of the Distribution Agreement.
Any restriction on the ability of the Company to sell senior debt
securities with an identical or substantially similar maturity between
the date of the Terms Agreement and the applicable Settlement Date.
Payment by the Company of legal expenses of counsel to Agent(s).
--------------------
(3) The following generally will not be required in connection with a sale
of less than $50,000,000 aggregate principal amount of Notes.
EXHIBIT C
THE ▇▇▇▇ DISNEY COMPANY
MEDIUM TERM NOTES
ADMINISTRATIVE PROCEDURES
_______________
[ ]
The administrative procedures and specific terms of the offering of
Medium-Term Notes (the "Notes") on a continuing basis by The ▇▇▇▇ Disney Company
(the "Issuer") pursuant to the Distribution Agreement, dated [ ] (as
amended, modified or supplemented from time to time, the "Distribution
Agreement"), between the Issuer and each of [the investment banks] (each an
"Agent" and collectively, the "Agents") are explained below. In the
Distribution Agreement, the Agents have agreed to act as agents of the Issuer to
solicit offers to purchase the Notes. Each Agent, as principal, may purchase
Notes for its own account pursuant to the terms and settlement details of a
terms agreement entered into between the Issuer and such Agent, as contemplated
by the Distribution Agreement. In the Distribution Agreement, the Issuer
reserves the right to sell Notes directly on its own behalf and to or through
others.
Each Note will be issued under an indenture between the Issuer and
Citibank, N.A., as trustee (the "Trustee"), dated as of March 7, 1996 (the
"Indenture"), relating to senior debt securities of the Issuer. Notes will bear
interest at either fixed rates ("Fixed Rate Notes") or floating rates ("Floating
Rate Notes"). Each Note will be represented by either a Global Security (as
defined hereinafter) delivered to the Trustee, as agent for The Depository Trust
Company ("DTC"), and recorded in the book-entry system maintained by DTC (a
"Book-Entry Note") or a certificate delivered to the Holder thereof or a Person
designated by such Holder (a "Certificated Note"). Owners of beneficial
interests in a Global Security will be entitled to physical delivery of
Certificated Notes equal in principal amount to their respective beneficial
interests only under certain limited circumstances.
The Trustee will act as Paying Agent for the payment of principal of
and interest on the Notes and will perform, as Paying Agent, unless otherwise
specified in the Notes, the Indenture or herein, the other duties specified
herein. Book-Entry Notes will be issued in accordance with the administrative
procedures
set forth in Part I hereof, and Certificated Notes will be issued in accordance
with the administrative procedures set forth in Part II hereof. Any
administrative responsibilities, document control and record-keeping functions
to be performed by the Issuer will be performed by its Treasury Department. To
the extent that the procedures set forth herein conflict with any provision of
the Notes (which, in the case of Book-Entry Notes shall be the related Global
Security), the Indenture or the Distribution Agreement, the relevant provisions
of the Notes, the Indenture or the Distribution Agreement shall be controlling.
Unless otherwise defined herein, terms defined in the Indenture, the Officers'
Certificate establishing the Notes pursuant to Section 2.3(a) of the Indenture
or the Notes shall be used herein as therein defined.
PART I: ADMINISTRATIVE PROCEDURES FOR BOOK ENTRY NOTES
In connection with the qualification of the Book-Entry Notes for
eligibility in the book-entry system maintained by DTC, the Trustee will perform
the custodial, document control and administrative functions described below, in
accordance with its respective obligations under a Letter of Representations
from the Issuer and the Trustee to DTC, dated [ ], and a Medium-Term
Note Certificate Agreement between the Trustee and DTC, dated [ ], and
its obligations as a participant in DTC, including DTC's Same-Day Funds
Settlement System ("SDFS").
ISSUANCE: On any date of settlement (as defined under
"Settlement" below) for one or more Book-Entry Notes,
the Issuer will issue a single global security in fully
registered form without coupons (a "Global Security")
representing up to $200,000,000 principal amount of all
such Notes that have the same Stated Maturity and Final
Maturity, Earliest Redemption Date, Redemption Price
and other redemption provisions, if any, Interest
Payment Dates, Regular Record Dates, Interest Payment
Period, original issue discount, if any, and,
additionally, in the case of Fixed Rate Notes, interest
rate and, in the case of Floating Rate Notes, Initial
Interest Rate, Base Rate or Rates, Index Maturity,
Interest Reset Period, Interest Reset Dates, Spread or
Spread Multiplier, if any, Minimum Interest Rate, if
any, and Maximum Interest Rate, if
2
any (collectively, the "Terms"). Each Global Security
will be dated and issued as of the date of its
authentication by the Trustee. Each Global Security
will bear interest from the later of the Original Issue
Date specified therein or from the most recent Interest
Payment Date with respect to such Global Security (or
Predecessor Security) to which interest has been paid
or duly provided for (such later date being herein
referred to as a "Global Interest Accrual Date").
Book-Entry Notes may only be denominated and payable in
U.S. dollars. No Global Security will represent any
Certificated Note.
IDENTIFICATION NUMBERS: The Issuer has arranged with the CUSIP Service Bureau
of Standard & Poor's Corporation (the "CUSIP Service
Bureau") for the reservation of a series of CUSIP
numbers (including tranche numbers), which series
consists of approximately [900] CUSIP numbers (of which
[900] remained unassigned as of the date hereof) and
relates to Global Securities representing the
Book-Entry Notes. The Issuer has obtained from the
CUSIP Service Bureau a written list of such series of
reserved CUSIP numbers and has delivered to the Trustee
and DTC such written list of such CUSIP numbers. The
Trustee will assign CUSIP numbers to Global Securities
as described under Settlement Procedure "B" below. DTC
will notify the CUSIP Service Bureau periodically of
the CUSIP numbers that the Trustee has assigned to
Global Securities. At any time when fewer than 100 of
the reserved CUSIP numbers of a series remain
unassigned to Global Securities, the Trustee, if it
deems necessary, will reserve additional CUSIP numbers
for assignment to Global Securities representing
Book-Entry Notes. Upon obtaining such additional CUSIP
numbers, the Trustee shall deliver a list of such
additional CUSIP numbers to the Issuer and DTC.
3
REGISTRATION: Each Global Security will be registered in the name of
Cede & Co., as nominee for DTC, on the register of
Securities maintained under the Indenture. The
beneficial owner of a Book-Entry Note (or one or more
indirect participants in DTC designated by such owner)
will designate one or more participants in DTC (with
respect to such Note, the "Participants") to act as
agent or agents for such owner in connection with the
book-entry system maintained by DTC, and DTC will
record in book-entry form, in accordance with
instructions provided by such Participants, a credit
balance with respect to such Note in the account of
such Participants. The ownership interest of such
beneficial owner in such Note will be recorded through
the records of such Participants or through the
separate records of such Participants and one or more
indirect participants in DTC.
TRANSFERS: Transfers of a Book-Entry Note will be accomplished by
book entries made by DTC and, in turn, by Participants
(and in certain cases, one or more indirect
participants in DTC) acting on behalf of beneficial
transferors and transferees of such Note.
EXCHANGES: At the request of the Issuer, the Trustee shall deliver
to DTC and the CUSIP Service Bureau at any time a
written notice of consolidation specifying (i) the
CUSIP numbers of two or more Outstanding Global
Securities that represent Book-Entry Notes having the
same Terms and for which interest has been paid to the
same date, (ii) a date, occurring at least 30 days
after such written notice is delivered and at least 30
days before the next Interest Payment Date for such
Book-Entry Notes, on which such Global Securities shall
be exchanged for a single replacement Global Security
and (iii) a new CUSIP number, obtained from the Issuer,
to be assigned to such replacement Global Security.
Upon receipt of such a notice, DTC will send to its
Participants (including the Trustee) a written
4
reorganization notice to the effect that such exchange
will occur on such date. Prior to the specified
exchange date, the Trustee will deliver to the CUSIP
Service Bureau a written notice setting forth such
exchange date and the new CUSIP number and stating
that, as of such exchange date, the CUSIP numbers of
the Global Securities to be exchanged will no longer be
valid. On the specified exchange date, the Trustee
will exchange such Global Securities for a single
Global Security bearing the new CUSIP number, and the
CUSIP numbers of the exchanged Global Securities will,
in accordance with CUSIP Service Bureau customary
procedures, be cancelled and not immediately
reassigned. Notwithstanding the foregoing, if the
Global Securities to be exchanged exceed $200,000,000
in aggregate principal amount, one Global Security will
be authenticated and issued to represent each
$200,000,000 of principal amount of the exchanged
Global Securities and an additional Global Security
will be authenticated and issued to represent any
remaining principal amount of such Global Securities
(see "Denominations" below).
MATURITIES: Each Book-Entry Note will mature on a date nine months
or more after the settlement date for such Note.
NOTICE OF REDEMPTION
DATES: In the case of a full redemption of all Book-Entry
Notes represented by a single Global Security, the
Trustee will notify DTC, not more than 60 but not less
than 30 days prior to the Redemption Date with respect
to such Global Security, of the CUSIP number of such
Global Security, the Redemption Date and the Redemption
Price. In the case of a redemption of less than all
Book-Entry Notes represented by a single Global
Security, the Trustee will notify DTC not more than 2
Business Days before 60 days, but not less than 2
Business Days before 30 days, prior to the Redemption
Date with respect to such Global Security,
5
of the CUSIP number of such Global Security, the
Redemption Date and the Redemption Price.
DENOMINATIONS: Book-Entry Notes will be sold in denominations of
$1,000 and any amount in excess thereof that is an
integral multiple of $1,000. Global Securities will be
issued in denominations of $1,000 and any amount in
excess thereof that is an integral multiple of $1,000,
up to a maximum denomination of $200,000,000. If one
or more Book-Entry Notes having an aggregate principal
amount in excess of $200,000,000 would, but for the
preceding sentence, be represented by a single Global
Security, then one Global Security will be issued to
represent each $200,000,000 principal amount of such
Book-Entry Note or Notes and an additional Global
Security will be issued to represent any remaining
principal amount of such Book-Entry Note or Notes. In
such a case, each of the Global Securities representing
such Book-Entry Note or Notes shall be assigned the
same CUSIP number.
INTEREST: GENERAL. Interest on each Book-Entry Note will accrue
from the Global Interest Accrual Date with respect to
the Global Security representing such Note and will be
paid on the Interest Payment Dates of the Global
Security representing such Book-Entry Note. In the
case of a Global Security originally issued between a
Regular Record Date and the related Interest Payment
Date or on an Interest Payment Date, the first interest
payment will be made on the Interest Payment Date
immediately following the next Regular Record Date.
Each payment of interest on a Global Security will
include interest accrued to but excluding the Interest
Payment Date or Maturity. See "Calculation of
Interest" below. Interest payable at the Maturity of a
Book-Entry Note will be payable to the Person to whom
the principal of such Note is payable. Standard &
Poor's Corporation will use the information received in
the pending deposit message described under
6
Settlement Procedure "C" below in order to include the
amount of any interest payable and certain other
information regarding any Global Security in the
appropriate weekly supplement to the Corporate
Registered Bond Interest Record published by Standard &
Poor's Corporation.
REGULAR RECORD DATES. Except as otherwise provided
with respect to any Book-Entry Note as specified in the
related Global Security, the Regular Record Date with
respect to any Interest Payment Date for Fixed Rate
Book-Entry Notes shall be the January 15 or July 15, as
the case may be, next preceding the applicable Interest
Payment Date. Except as otherwise provided with
respect to any Book-Entry Note as specified in the
related Global Security, the Regular Record Date with
respect to any Interest Payment Date for Floating Rate
Book-Entry Notes shall be the fifteenth day (whether or
not a Business Day) next preceding such Interest
Payment Date.
FIXED RATE BOOK-ENTRY NOTES. Except as otherwise
provided with respect to any Book-Entry Note as
specified in the related Global Security, interest
payments on Fixed Rate Book-Entry Notes will be made
semiannually on February 1 and August 1 of each year,
as specified in the related Global Security, and at
Stated Maturity, subject to the exceptions specified in
"Payments of Principal and Interest" below.
FLOATING RATE BOOK-ENTRY NOTES. Except as otherwise
provided with respect to any Book-Entry Note as
specified in the related Global Security, interest
payments on Floating Rate Book-Entry Notes will be made
monthly, quarterly, semiannually or annually of each
year, as specified in the related Global Security, and
at Stated Maturity. Except as otherwise provided with
respect to any Book-Entry Note as specified in the
7
related Global Security, subject to the exceptions
specified in "Payments of Principal and Interest"
below, interest will be payable, in the case of
Floating Rate Book-Entry Notes which pay interest (i)
monthly, on the third Wednesday of each month; (ii)
quarterly, on the third Wednesday of each March, June,
September and December of each year; (iii)
semiannually, on the third Wednesday of each of the two
months specified in the Global Security representing
the applicable Book-Entry Note; and (iv) annually, on
the third Wednesday of the month specified in the
Global Security representing the applicable Book-Entry
Note.
NOTICE OF INTEREST PAYMENT AND REGULAR RECORD DATES.
On the first Business Day of January, April, July and
October of each year, the Trustee will deliver to the
Issuer and DTC a written list of Regular Record Dates
and Interest Payment Dates (to the extent then
determinable by the Trustee) that will occur with
respect to each Global Security during the six-month
period beginning on such first Business Day. Promptly
after each Interest Determination Date for Floating
Rate Notes, the calculation agent (the "Calculation
Agent") will notify Standard & Poor's Corporation of
the interest rates determined on such Interest
Determination Date.
CALCULATION OF
INTEREST: FIXED RATE BOOK-ENTRY NOTES. Interest on Fixed Rate
Book-Entry Notes (including interest for partial
periods) will be calculated on the basis of a 360-day
year of twelve 30-day months.
FLOATING RATE BOOK-ENTRY NOTES. Interest rates on
Floating Rate Book-Entry Notes will be determined as
set forth in the Global Security representing the
applicable Floating Rate Book-Entry Notes. Interest
will be calculated in the case of (a) Commercial Paper
8
Rate Notes, LIBOR Notes, CD Rate Notes, Federal Funds
Rate Notes and Prime Rate Notes, on the basis of the
actual number of days in the interest period and a
360-day year; and (b) Treasury Rate Notes and CMT Rate
Notes, on the basis of the actual number of days in the
interest period and the actual number of days in the
year.
PAYMENTS OF PRINCIPAL
AND INTEREST PAYMENTS OF INTEREST ONLY. Promptly after each Regular
Record Date, the Trustee will deliver to the Issuer and
DTC a written notice specifying by CUSIP number the
amount of interest to be paid on each Global Security
on the following Interest Payment Date (other than an
Interest Payment Date coinciding with Stated Maturity)
and the total of such amounts. DTC will check the
amount payable on each Global Security on such Interest
Payment Date as shown in the appropriate weekly
supplements to the Corporate Registered Bond Interest
Record published by Standard & Poor's Corporation. On
such Interest Payment Date, the Issuer will pay to the
Trustee the total amount of interest due on such
Interest Payment Date (other than at Stated Maturity),
and the Trustee will pay such amount to DTC at the
times and in the manner set forth below under "Manner
of Payment."
If any Interest Payment Date for a Fixed Rate
Book-Entry Note is scheduled to occur on a day that is
not a Business Day with respect to such Fixed Rate
Book-Entry Note, the payment due on such Interest
Payment Date will be made on the following day that is
a Business Day with respect to such Fixed Rate
Book-Entry Note, and no interest shall accrue on the
amount payable on such Interest Payment Date for the
period from and after such Interest Payment Date to
such following day that is a Business Day.
9
If any Interest Payment Date for a Floating Rate
Book-Entry Note is scheduled to occur on a day that is
not a Business Day with respect to such Floating Rate
Book-Entry Note, the payment due on such Interest
Payment Date will be made on the following day that is
a Business Day with respect to such Floating Rate
Book-Entry Note, and no interest shall accrue on the
amount payable on such Interest Payment Date for the
period from and after such Interest Payment Date to
such following day that is a Business Day, except that
in the case of a Floating Rate Book-Entry Note that is
a LIBOR Note (or a Floating Rate Book-Entry Note for
which LIBOR is the applicable Base Rate), if such
Business Day is in the next succeeding calendar month,
the payment due on such Interest Payment Date will be
made on the immediately preceding day that is a
Business Day.
PAYMENTS AT MATURITY. On or about the first Business
Day of each month, the Trustee will deliver to the
Issuer and DTC a written list of principal and interest
to be paid on each Global Security maturing either at
Stated Maturity or on a Redemption Date occurring in
the following month (to the extent then determinable by
the Trustee). The Issuer, the Trustee and DTC will
confirm the amounts of such principal and interest
payments with respect to each such Global Security on
or about the fifth Business Day preceding the Maturity
of such Global Security. The Issuer will pay to
Citibank, N.A., as the Paying Agent, the principal
amount of such Global Security, together with interest
due at such Maturity. Citibank, N.A. will pay such
amounts to DTC at the times and in the manner set forth
under "Manner of Payment" below. If any Maturity of a
Global Security representing Book-Entry Notes is not a
Business Day, the payment due on such day shall be made
on the next succeeding Business Day and no interest
shall accrue on such payment for the period from and
after such Maturity. Promptly
10
after payment to DTC of the principal and interest due
at the Stated Maturity of such Global Security, the
Trustee will cancel such Global Security in accordance
with the terms of the Indenture, deliver to the Issuer
an appropriate debit advice and a certificate of
destruction relating to all such cancelled Global
Securities. On the first Business Day of each month,
the Trustee will deliver to the Issuer by facsimile
transmission a written statement, indicating the total
principal amount of Outstanding Global Securities for
which it serves as trustee as of the immediately
preceding Business Day.
MANNER OF PAYMENT. The total amount of any principal
and interest due on Global Securities on any Interest
Payment Date or at Maturity shall be debited from an
account of the Issuer maintained at the Trustee with
funds available for immediate use in the amount
required for such payment. The Trustee will pay by
separate wire transfer (using Fedwire message entry
instructions in a form previously specified by DTC) to
an account at the Federal Reserve Bank of New York
previously specified by DTC, in funds available for
immediate use by DTC, each payment of interest and
principal due on a Global Security on such date. On
each Interest Payment Date, interest payments shall be
made to DTC in same day funds in accordance with
existing arrangements between the Trustee and DTC.
Thereafter on each such date, DTC will pay, in
accordance with its SDFS operating procedures then in
effect, such amounts in funds available for immediate
use to the respective Participants in whose names the
Book-Entry Notes represented by such Global Securities
are recorded in the book-entry system maintained by
DTC. Neither the Issuer (either as Issuer or as Paying
Agent) nor the Trustee shall have any responsibility or
liability for the payment by DTC to such Participants
of the principal of and interest on the Book-Entry
Notes.
11
WITHHOLDING TAXES. The amount of any taxes required
under applicable law to be withheld from any interest
payment on a Book-Entry Note will be determined and
withheld by the Participant, indirect participant in
DTC or other Person responsible for forwarding payments
and materials directly to the beneficial owner of such
Note.
ACCEPTANCE AND
REJECTION OF OFFERS: The Issuer has the sole right to accept offers to
purchase Book-Entry Notes and may reject any such offer
in whole or in part. Each Agent may, in its discretion
reasonably exercised, reject any offer to purchase
Book-Entry Notes received by it in whole or in part.
Each Agent will advise the Issuer promptly by telephone
or by facsimile transmission of all offers to purchase
Book-Entry Notes received by such Agent, other than
those rejected by it.
SETTLEMENT: The receipt by the Issuer of immediately available
funds in payment for a Book-Entry Note and the
authentication and issuance of the Global Security
representing such Note shall constitute "settlement"
with respect to such Note. Each offer accepted by the
Issuer will be settled on the third Business Day (or,
if acceptance by the Issuer occurs after 4:30 p.m.,
New York time, on the fourth Business Day) following
acceptance of such offer pursuant to the timetable for
settlement set forth below, unless the Issuer and the
purchaser agree to settlement on another day which
shall be no earlier than the Business Day following
acceptance of such offer.
SETTLEMENT PROCEDURES: In the event of a purchase of Book-Entry Notes by one
or more of the Agents, as principal, appropriate
settlement details, if different from those set forth
below, will be set forth in an applicable Terms
Agreement to be entered into between such Agent or
Agents and the Issuer pursuant to the Distribution
12
Agreement. Settlement Procedures with regard to each
Book-Entry Note sold by the Issuer through an Agent, as
agent, shall be as follows:
▇. ▇▇▇▇ Agent will advise the Issuer by facsimile
transmission or orally (if confirmed within 24
hours by written telecommunication) of the
following settlement information:
1. Principal amount.
2. Stated Maturity.
3. If such Note is a Fixed Rate Note, the
interest rate. If such Note is a Floating
Rate Note, the following:
a. Base Rate or Base Rates;
b. Initial Interest Rate;
c. Spread or Spread Multiplier, if any;
d. Interest Reset Dates;
e. Interest Reset Period;
f. Interest Payment Dates;
g. Index Maturity;
h. Interest Payment Period;
i. Calculation Agent (if other than
Citibank, N.A.;
j. Maximum Interest Rate, if any;
k. Minimum Interest Rate, if any;
13
l. Interest Determination Dates; and
m. Index Currency, if applicable.
4. Earliest Redemption Date, Redemption Price
and other redemption provisions, if any.
5. Settlement date.
6. Original Issue Price.
7. Original issue discount, if any.
8. Agent's commission, determined as provided in
Section 2 of the Distribution Agreement
between the Issuer and such Agent.
9. Additional terms or provisions of such Note,
if any.
10. Net Proceeds to the Issuer.
11. Commission.
12. Discount.
13. Initial Maturity Date (for Renewable Notes).
14. Final Maturity Date (for Renewable Notes).
B. The Issuer will advise the Trustee by telephone
(confirmed in writing signed by an authorized
person at any time on the same date) or facsimile
transmission signed by an authorized person of the
information set forth in
14
Settlement Procedure "A" above and the name of
such Agent.
C. The Trustee will assign a CUSIP number to the
Global Security representing such Note. The
Trustee will notify the Issuer and the Agent of
such CUSIP number by telephone as soon as
practicable.
D. The Trustee will enter a pending deposit message
through DTC's Participant Terminal System,
providing the following settlement information to
DTC, such Agent, and Standard & Poor's
Corporation.
1. The information set forth in Settlement
Procedure "A" above.
2. Numbers of the participant accounts
maintained by DTC on behalf of the Trustee
and the Agent.
3. Identification as a Fixed Rate Book-Entry
Note or a Floating Rate Book-Entry Note.
4. Initial Interest Payment Date for such Note,
Regular Record Date and amount of interest
payable on such Interest Payment Date.
5. Interest Payment Period.
6. CUSIP number of the Global Security
representing such Note.
7. Whether such Global Security will represent
any other Book-Entry Note (to the extent
known at such time).
15
E. The Issuer will deliver to the Trustee a
pre-printed Global Security to represent such
Note, in a form that has been approved by the
Issuer, the Agents and the Trustee.
F. The Trustee will complete and authenticate the
Global Security representing such Note.
G. DTC will credit such Note to the Trustee's
participant account at DTC.
H. The Trustee will enter an SDFS deliver order
through DTC's Participant Terminal System
instructing DTC to (i) debit such Note to the
Trustee's participant account and credit such
Note to such Agent's participant account and (ii)
debit such Agent's settlement account and credit
the Trustee's settlement account for an amount
equal to the price of such Note less such Agent's
commission. The entry of such a deliver order
shall constitute a representation and warranty by
the Trustee to DTC that (i) the Global Security
representing such Book-Entry Note has been issued
and authenticated and (ii) the Trustee is holding
such Global Security pursuant to the Medium-Term
Note Certificate Agreement between the Trustee and
DTC.
I. Such Agent will enter an SDFS deliver order
through DTC's Participant Terminal System
instructing DTC (i) to debit such Note to such
Agent's participant account and credit such Note
to the participant accounts of the Participants
with respect to such Note and (ii) to debit the
settlement accounts of such Participants and
credit the settlement account of such Agent for
any amount equal to the price of such Note.
16
J. Transfers of funds in accordance with SDFS deliver
orders described in Settlement Procedures "G" and
"H" above will be settled in accordance with SDFS
operating procedures in effect on the settlement
date.
K. The Trustee will credit to an account of the
Issuer maintained at the Trustee funds available
for immediate use in the amount transferred to the
Trustee in accordance with Settlement Procedure
"G" above.
L. The Trustee will retain the Global Security
representing such Note and will send a photocopy
thereof to the Issuer by first-class mail. The
Trustee will send to the Issuer, at the request of
the Issuer, a written statement setting forth (i)
the principal amount of Notes Outstanding under
the Indenture as of the date of such report, (ii)
a brief description of any sales of which the
Issuer has advised the Trustee but which have not
yet been settled and (iii) a description of
issuances and retirements of, payment on and other
activity relating to the Notes during the related
month.
▇. ▇▇▇▇ Agent will confirm the purchase of such Note
to the purchaser either by transmitting to the
Participants with respect to such Note a
confirmation order or orders through DTC's
institution delivery system or by mailing a
written confirmation to such purchaser.
SETTLEMENT PROCEDURES
TIMETABLE: For orders of Book-Entry Notes solicited by an Agent,
as agent, and accepted by the Issuer for settlement on
the first Business Day after the sale date, Settlement
Procedure "A" through "L" above shall be completed
17
as soon as possible but not later than the respective
times (New York City time) set forth below:
SETTLEMENT
PROCEDURE TIME
--------- ----
A . . . . . . . 11:00 a.m. on the sale date
B . . . . . . . 12:00 noon on the sale date
C . . . . . . . 2:00 p.m. on the sale date
D . . . . . . . 3:00 p.m. on the sale date
E . . . . . . . 9:00 a.m. on settlement date
F . . . . . . . 10:00 a.m. on settlement date
G-I . . . . . . 2:00 p.m. on settlement date
▇-▇ . . . . . . 5:00 p.m. on settlement date
If a sale is to be settled more than one Business Day
after the sale date, Settlement Procedure "A" shall be
completed as soon as practicable but no later than
11:00 a.m. on the first Business Day after the sale
date and Settlement Procedures "B" and "C" shall be
completed as soon as practicable but no later than
12:00 noon and 2:00 p.m., respectively, on the first
Business Day after the sale date. If the Initial
Interest Rate for a Floating Rate Book-Entry Note has
not been determined at the time that Settlement
Procedure "A" is completed, Settlement Procedures "B"
and "C" shall be completed as soon as such rate has
been determined but no later than 12:00 noon and 2:00
p.m., respectively, on the second Business Day before
the settlement date. Settlement Procedures "D" through
"L" shall be completed as soon as possible thereafter
but not later than the respective times (New York City
time) set forth in the preceding table, except that
Settlement Procedures "I" through "L" are subject to
extension in accordance with any extension of Fedwire
closing deadlines and in the other events specified in
the SDFS operating procedures in effect on the
settlement date.
18
If settlement of a Book-Entry Note is rescheduled or
cancelled, the Trustee will deliver to DTC, through
DTC's Participant Terminal System, a cancellation
message to such effect by no later than 2:00 p.m. on
the Business Day immediately preceding the scheduled
settlement date.
FAILURE TO SETTLE: If the Trustee fails to enter an SDFS deliver order
with respect to a Book-Entry Note pursuant to
Settlement Procedure "G," the Trustee may deliver to
DTC, through DTC's Participant Terminal System, as soon
as practicable, a withdrawal message instructing DTC to
debit such Note to the Trustee's participant account.
DTC will process the withdrawal message, provided that
the Trustee's participant account contains a principal
amount of the Global Security representing such Note
that is at least equal to the principal amount to be
debited. If a withdrawal message is processed with
respect to all the Book-Entry Notes represented by a
Global Security, the Trustee will mark such Global
Security "cancelled," make appropriate entries in the
Trustee's records and send such cancelled Global
Security to the Issuer. The CUSIP number assigned to
such Global Security shall, in accordance with CUSIP
Service Bureau customary procedures, be cancelled and
not immediately reassigned. If a withdrawal message is
processed with respect to one or more, but not all, of
the Book-Entry Notes represented by a Global Security,
the Trustee will exchange the Global Security for two
Global Securities, one of which shall represent such
Book-Entry Note or Notes for which such withdrawal
message has been processed and shall be cancelled
immediately after issuance and the other of which shall
represent the remaining Book-Entry Notes previously
represented by the surrendered Global Security and
shall bear the CUSIP number of the surrendered Global
Security.
19
If the purchase price for any Book-Entry Note is not
timely paid to the applicable Participants with respect
to such Note by the beneficial purchaser thereof (or a
Person, including an indirect participant in DTC,
acting on behalf of such purchaser), such Participants
and, in turn, the Agent for such Note, may enter SDFS
deliver orders through DTC's Participant Terminal
System reversing the orders entered pursuant to
Settlement Procedures "H" and "G," respectively.
Thereafter, the Trustee will deliver the withdrawal
message and take the related actions described in the
preceding paragraph. If such failure shall have
occurred for any reason other than default by the
applicable Agent in the performance of its obligations
hereunder or under the Distribution Agreement, the
Issuer will pay to such Agent an amount equal to the
interest earned by the Issuer with respect to such
funds during the period when the funds were credited to
the account of the Issuer.
Notwithstanding the foregoing, upon any failure to
settle with respect to a Book-Entry Note, DTC may take
such actions as it deems appropriate in accordance with
its SDFS operating procedures then in effect in order
to reverse the orders entered into DTC's Participant
Terminal System pursuant to Settlement Procedures "H"
and "G," respectively. In the event of a failure to
settle with respect to one or more, but not all, of the
Book-Entry Notes to have been represented by a Global
Security, the Trustee will provide, in accordance with
Settlement Procedures "D" and "E," for the
authentication and issuance of a Global Security
representing the other Book-Entry Notes to have been
represented by such Global Security and will make
appropriate entries in its records.
PROCEDURE FOR POSTINGS: The Issuer will periodically contact one or more Agents
for recommended interest rates, coupons or spreads
("postings") with respect to Notes being offered. When
the Issuer has determined or changed its postings with
20
respect to Notes being offered, it will promptly advise
the Agents. At such times as the Issuer is not
posting, the Agents will not solicit firm offers but
may record "indications of interest" only.
PRICING SUPPLEMENTS: Within five Business Days after any sale of Notes, the
Issuer will file or transmit for filing with the
Securities and Exchange Commission (the "Commission"),
in compliance with Rule 424(b)(3) of the rules and
regulations of the Commission promulgated under the
Securities Act of 1933, as amended, a copy of a pricing
supplement to the Prospectus (as defined in the
Distribution Agreement) relating to such Notes that
reflects the applicable interest rates and other terms
(the "Pricing Supplement") and will deliver a copy of
such Pricing Supplement to each of the Agents and to
the Trustee.
SUSPENSION OF
SOLICITATION,
AMENDMENT OR
SUPPLEMENT: The Issuer may instruct the Agents to suspend
solicitation of offers to purchase Book-Entry Notes at
any time. Upon receipt of such instructions, each
Agent will as soon as possible suspend such
solicitations until such time as it has been advised by
the Issuer that such solicitations may be resumed. The
Issuer will, consistent with its obligations under the
Distribution Agreement, promptly advise each Agent and
the Trustee whether orders outstanding at the time such
Agent suspends solicitation may be settled and whether
copies of the Prospectus, as in effect at the time of
the suspension, together with the appropriate Pricing
Supplement, may be delivered in connection with the
settlement of such orders. The Issuer will have the
sole responsibility for such decision and for any
arrangements that may be made in the event that the
Issuer determines that such orders may not be settled
or
21
that copies of such Prospectus and Pricing Supplement
may not be so delivered.
DELIVERY OF PROSPECTUS: A copy of the most recent Prospectus and of the
applicable Pricing Supplement, if any, must be provided
to a purchaser by the applicable Agent prior to or at
the time of the earlier of (a) the written confirmation
of a sale sent to a purchaser of Book-Entry Notes or
his Agent, and (b) the date of settlement of any such
Book-Entry Notes (see "Settlement Procedures").
ADVERTISING COSTS: The Issuer will determine with the Agents the amount
and nature of advertising that may be appropriate in
offering the Notes. Advertising expenses approved in
writing by the Issuer in connection with the
solicitation of purchases of the Notes from the Issuer
will be paid by the Issuer.
PART II: ADMINISTRATIVE PROCEDURES FOR CERTIFICATED NOTES
The Trustee will serve as Registrar in connection with the
Certificated Notes.
ISSUANCE: Each Certificated Note will be dated and issued as of
the date of its authentication by the Trustee. Each
Certificated Note will bear interest from the later of
the Original Issue Date specified therein or from the
most recent Interest Payment Date with respect to such
Certificated Note (or Predecessor Security) to which
interest has been paid or duly provided for (such later
date being herein referred to as a "Certificated
Interest Accrual Date").
REGISTRATION: Certificated Notes will be issued only in fully registered form
without coupons.
TRANSFERS AND
22
EXCHANGES: A Certificated Note may be presented for transfer or
exchange at the Corporate Trust office of the Trustee.
Certificated Notes will be exchangeable for other
Certificated Notes having identical terms but different
denominations without service charge. Certificated
Notes will not be exchangeable for Book-Entry Notes.
MATURITIES: Each Certificated Note will mature on a date nine
months or more from the settlement date for such Note.
DENOMINATIONS: Certificated Notes will be issued in denominations of
$1,000 or any amount in excess thereof that is an
integral multiple of $1,000.
INTEREST: GENERAL. Interest on each Certificated Note will
accrue from the Certificated Interest Accrual Date of
such Note. In the case of a Certificated Note
originally issued between a Regular Record Date and the
related Interest Payment Date or on an Interest Payment
Date, the first interest payment will be made on the
Interest Payment Date following the next Regular Record
Date. Each payment of interest on a Certificated Note
will include interest accrued to but excluding the
Interest Payment Date or Maturity. See "Calculation of
Interest" below. Interest will be payable to the
person in whose name a Certificated Note is registered
on the register of Securities at the close of business
on the Regular Record Date next preceding the
applicable Interest Payment Date; PROVIDED, HOWEVER,
interest payable at Maturity will be payable to the
Person to whom principal of such Certificated Note is
payable.
REGULAR RECORD DATE. The Regular Record Date with
respect to Fixed Rate Certificated Notes shall be the
January 15 or July 15, as the case may be, next
preceding the applicable Interest Payment Date. The
Regular Record Date with respect to any Interest
Payment Date for Floating Rate Certificated Notes shall
23
be the fifteenth day (whether or not a Business Day)
next preceding such Interest Payment Date.
FIXED RATE CERTIFICATED NOTES. Interest payments on
Fixed Rate Certificated Notes will be made semiannually
on February 1 and August 1 of each year and at
Maturity, subject to the exceptions specified in
"Payments of Principal and Interest" below.
FLOATING RATE CERTIFICATED NOTES. Interest payments
will be made on Floating Rate Certificated Notes
monthly, quarterly, semiannually or annually of each
year, as specified in the related Note, and at
maturity. Subject to the exceptions specified in
"Payments of Principal and Interest" below, interest
will be payable, in the case of Floating Rate
Certificated Notes which pay interest (i) monthly, on
the third Wednesday of each month; (ii) quarterly, on
the third Wednesday of March, June, September and
December of each year; (iii) semiannually, on the third
Wednesday of each of the two months specified in the
applicable Certificated Note; and (iv) annually, on the
third Wednesday of the month specified in the
applicable Certificated Note.
CALCULATION OF
INTEREST: FIXED RATE CERTIFICATED NOTES. Interest on Fixed Rate
Certificated Notes (including interest for partial
periods) will be calculated on the basis of a 360-day
year of twelve 30-day months.
FLOATING RATE CERTIFICATED NOTES. Interest rates on
Floating Rate Certificated Notes will be determined as
set forth in the applicable Notes. The Issuer and the
Trustee will confirm the amount of the initial interest
payment due on any Floating Rate Certificated Note for
which the initial Interest Period is shorter or longer
than the Index Maturity. Promptly after each Interest
Determination Date for Floating Rate Certificated
Notes, the Calculation Agent will notify Standard &
24
Poor's Corporation of the interest rates determined on
such Interest Determination Date. Interest will be
calculated in the case of (a) Commercial Paper Rate
Notes, LIBOR Notes, CD Rate Notes, Federal Funds Rate
Notes and Prime Rate Notes on the basis of the actual
number of days in the interest period and a 360-day
year; and (b) Treasury Rate Notes and CMT Rate Notes,
on the basis of the actual number of days in the
interest period and the actual number of days in the
year.
PAYMENTS OF PRINCIPAL
AND INTEREST: The Trustee will pay the principal amount of each
Certificated Note at Maturity upon presentation of such
Note to the Trustee. Such payment, together with
payment of interest due at Maturity of such Note, will
be made in funds available for immediate use by the
Holder of such Note. Certificated Notes presented to
the Trustee at Maturity for payment will be cancelled
by the Trustee in accordance with the terms of the
Indenture and returned to the Issuer. All interest
payments on a Certificated Note (other than interest
due at Maturity) will be made by check drawn on the
Trustee (or another Person appointed by the Trustee)
and mailed by the Trustee to the Person entitled
thereto as provided in such Note. Following each
Regular Record Date and Special Record Date, the
Trustee will furnish the Issuer with a list of interest
payments to be made on the following Interest Payment
Date for each Certificated Note and in total for all
Certificated Notes. Interest at Maturity will be
payable to the Person to whom the payment of principal
is payable. The Trustee will provide monthly to the
Issuer lists of principal and interest to be paid on
Certificated Notes maturing in the next month. The
Trustee will be responsible for withholding taxes on
interest paid on Certificated Notes as required by
applicable law. On the first Business Day of each
month, the Trustee will deliver to the Issuer by
facsimile transmission a written statement,
25
indicating the total principal amount of Outstanding
Certificated Notes for which it serves as trustee as of
the immediately preceding Business Day.
If any Interest Payment Date for a Fixed Rate
Certificated Note is scheduled to occur on a day that
is not a Business Day with respect to such Fixed Rate
Certificated Note, the payment due on such Interest
Payment Date will be made on the following day that is
a Business Day with respect to such Fixed Rate
Certificated Note, and no interest shall accrue on the
amount payable on such Interest Payment Date for the
period from and after such Interest Payment Date to
such following day that is a Business Day.
If any Interest Payment Date for a Floating Rate
Certificated Note is scheduled to occur on a day that
is not a Business Day with respect to such Floating
Rate Certificated Note, such Interest Payment Date will
be the following day that is a Business Day with
respect to such Floating Rate Certificated Note;
PROVIDED, HOWEVER, that in the case of a Floating Rate
Certificated Note that is a LIBOR Note (or a Floating
Rate Certificated Note for which LIBOR is the
applicable Base Rate), if such Business Day is in the
next succeeding calendar month, such Interest Payment
Date will be the immediately preceding day that is a
Business Day.
If the date of Maturity of a Certificated Note is
scheduled to occur on a day that is not a Business Day
with respect to such Certificated Note, the payment due
at Maturity will be made on the following day that is a
Business Day with respect to such Certificated Note,
and no interest shall accrue on the amount payable at
Maturity for the period from and after the date of
Maturity.
26
ACCEPTANCE AND
REJECTION OF OFFERS: The Issuer has the sole right to accept offers to
purchase Certificated Notes and may reject any offer in
whole or in part. Each Agent may, in its discretion
reasonably exercised, reject any offer to purchase
Certificated Notes received by it in whole or part.
Each Agent will advise the Issuer promptly by telephone
or facsimile transmission of all offers to purchase
Certificated Notes received by such Agent, other than
those rejected by it.
SETTLEMENT: The receipt by the Issuer of immediately available
funds in exchange for an authenticated Certificated
Note delivered to the selling Agent and such Agent's
delivery of such Note against receipt of immediately
available funds shall constitute "settlement" with
respect to such Note. Each offer accepted by the
Issuer will be settled on the third Business Day (or,
if acceptance by the Issuer occurs after 4:30 p.m., New
York time, on the fourth Business Day) following
acceptance of such offer pursuant to the timetable for
settlement set forth below, unless the Issuer and the
purchaser agree to settlement on another day; PROVIDED,
HOWEVER, that the Issuer will notify the Trustee at
least twenty-four hours prior to the time of
settlement.
SETTLEMENT PROCEDURES: In the event of a purchase of Certificated Notes by one
or more of the Agents, as principal, appropriate
settlement details, if different from those set forth
below, will be set forth in an applicable Terms
Agreement to be entered into between such Agent or
Agents and the Issuer pursuant to the Distribution
Agreement.
Settlement Procedures with regard to each Certificated
Note sold by the Issuer through an Agent, as agent,
shall be as follows:
27
▇. ▇▇▇▇ Agent will advise the Issuer by
facsimile transmission or orally (if
confirmed within 24 hours by written
telecommunication) of the following
settlement information:
1. Name in which such Note is to be
registered (the "Registered Owner").
2. Address of the Registered Owner and
address for payment of principal and
interest.
3. Taxpayer identification or Social
Security number of the Registered Owner
(if available).
4. Principal amount.
5. Stated Maturity.
6. If such Note is Fixed Rate Note, the
interest rate.
If such Note is a Floating Rate Note,
the following:
a. Base Rate or Base Rates;
b. Initial Interest Rate;
c. Spread or Spread Multiplier, if
any;
d. Interest Reset Dates;
e. Interest Reset Period;
f. Interest Payment Dates;
g. Index Maturity;
28
h. Interest Payment Period;
i. Calculation Agent (if other than
Citibank, N.A.;
j. Maximum Interest Rate, if any;
k. Minimum Interest Rate, if any;
l. Interest Determination Dates; and
m. Index Currency, if applicable.
7. Earliest Redemption Date, Redemption
Price and other redemption provisions,
if any.
8. Settlement date.
9. Original Issue Price.
10. Original issue discount, if any.
11. Agent's commission, determined as
provided in Section 2 of the
Distribution Agreement between the
Issuer and such Agent.
12. Additional terms or provisions of such
Note, if any.
13. Net Proceeds to the Issuer.
14. Commission.
15. Discount.
16. Initial Maturity Date (for Renewable
Notes).
29
17. Final Maturity Date (for Renewable
Notes).
B. The Issuer will advise the Trustee by
telephone (confirmed in writing signed by an
authorized person at any time on the same
date) or facsimile transmission signed by an
authorized person of the information set
forth in Settlement Procedure "A" above and
the name of such Agent.
C. The Issuer will deliver (if not previously
delivered) to the Trustee a preprinted
four-ply packet for such Note, which packet
will contain the following documents in forms
that have been approved by the Issuer, the
Agents and the Trustee:
1. Note with customer confirmation.
2. Stub One - for the Trustee.
3. Stub Two - for the Agent.
4. Stub Three - for the Issuer.
D. The Trustee will complete and authenticate
such Note and deliver it (with the
confirmation) and Stubs One and Two to such
Agent, and such Agent will acknowledge
receipt of the Note by stamping or otherwise
marking Stub One and returning it to the
Trustee. Such delivery will be made only
against such acknowledgment of receipt and
evidence that instructions have been given by
such Agent for payment to the account of the
Issuer at the Trustee, in funds available for
immediate use, of an amount equal to the
price of such note less Agent's commission.
In the event that the instructions given by
such
30
Agent for payment to the account of the
Issuer are revoked, the Issuer will, as
promptly as possible, wire transfer to the
account of such Agent an amount of
immediately available funds equal to the
amount of such payment and such Agent will
return such Note to the Trustee.
E. Such Agent will deliver such Note (with
confirmation) to the customer against payment
in immediately available funds. Such Agent
will obtain the acknowledgment of receipt of
such Note by retaining Stub Two.
F. The Trustee will retain Stub One and will
send Stub Three to the Issuer by first-class
mail. Monthly, the Trustee will send to the
Issuer a written statement, setting forth (i)
the principal amount of the Notes Outstanding
under the Indenture as of the date of such
report, (ii) a brief description of any sales
of which the Issuer has advised the Trustee
but which have not yet been settled and (iii)
a description of issuances and retirements
of, payments on and other activity relating
to the Notes during the related month.
SETTLEMENT PROCEDURES
TIMETABLE: For offers of Certificated Notes solicited by an
Agent, as agent, and accepted by the Issuer,
Settlement Procedures "A" through "F" set forth
above shall be completed on or before the
respective times (New York City time) set forth
below:
SETTLEMENT
PROCEDURE TIME
--------- ----
A . . . 3:00 p.m. on day before settlement
date
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B . . . 4:00 p.m. on day before settlement
date
C-D . . 2:15 p.m. on settlement date
E . . . 3:00 p.m. on settlement date
F . . . 5:00 p.m. on settlement date
FAILURE TO SETTLE: If a purchaser fails to accept delivery of and
make payment for any Certificated Note, the
selling Agent will notify the Issuer and the
Trustee by telephone and return such Note to the
Trustee. Upon receipt of such Note, the Issuer
will immediately wire transfer to the account of
the Agent an amount equal to the amount previously
credited thereto in respect of such Note. Such
wire transfer will be made on the settlement date,
if possible, and in any event not later than the
day following the settlement date. If the failure
shall have occurred for any reason other than a
default by the applicable Agent in the performance
of its obligations hereunder and under the
Distribution Agreement, the Issuer will pay to
such Agent an amount equal to the interest earned
by the Issuer with respect to such funds during
the period when they were credited to the account
of the Issuer. Immediately upon receipt of the
Certificated Note in respect of which such failure
occurred, the Trustee will mark such Note
"cancelled," make appropriate entries in the
Trustee's records and send such cancelled Note to
the Issuer.
PROCEDURE FOR POSTINGS: The Issuer will periodically contact one or more
Agents for recommended postings with respect to
Certificated Notes being offered. When the Issuer
has determined or changed its postings with
respect to Certificated Notes being offered, it
will promptly advise the Agents. At such times as
the Issuer is not posting, the Agents will not
solicit firm offers but may record "indications of
interest" only.
PRICING SUPPLEMENTS: Within five Business Days after any sale of
Certificated Notes, the Issuer will file or
transmit for filing with the
32
Commission in compliance with Rule 424(b)(3) of
the rules and regulations of the Commission
promulgated under the Securities Act of 1933, as
amended, a copy of a Pricing Supplement to the
Prospectus relating to such Notes that reflects
the applicable interest rates and other terms and
will deliver a copy of such Pricing Supplement to
each of the Agents and the Trustee.
SUSPENSION OF
SOLICITATION,
AMENDMENT OR
SUPPLEMENT: The Issuer may instruct the Agents to suspend
solicitation of offers to purchase Certificated
Notes at any time. Upon receipt of such
instructions, each Agent will as soon as possible
suspend such solicitations until such time as it
has been advised by the Issuer that such
solicitations may be resumed. The Issuer will,
consistent with its obligations under the
Distribution Agreement, promptly advise each Agent
and the Trustee whether orders outstanding at the
time such Agent suspends solicitation may be
settled and whether copies of the Prospectus, as
in effect at the time of the suspension, together
with the appropriate Pricing Supplement, may be
delivered in connection with the settlement of
such orders. The Issuer will have the sole
responsibility for such decision and for any
arrangements that may be made in the event that
the Issuer determines that such orders may not be
settled or that copies of such Prospectus and
Pricing Supplement may not be so delivered.
DELIVERY OF PROSPECTUS: A copy of the most recent Prospectus and of the
applicable Pricing Supplement, if any, must be
provided to a purchaser by the applicable Agent
prior to or at the time of the earlier of (a) the
written confirmation of a sale sent to a purchaser
of Certificated Notes or his agent and (b) the
delivery of any such Certificated Notes to a
purchaser or his agent (see Settlement
Procedures).
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ADVERTISING COSTS: The Issuer will determine with the Agents the
amount and nature of advertising that may be
appropriate in offering the Certificated Notes.
Advertising expenses approved in writing by the
Issuer in connection with the solicitation of
purchases of Certificated Notes from the Issuer
will be paid by the Issuer.
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Appendix I
FORM OF OFFICER'S CERTIFICATE
THE ▇▇▇▇ DISNEY COMPANY
I, [Name], [Title] of The ▇▇▇▇ Disney Company, a Delaware
corporation (the "Company"), pursuant to Section 5(d) of the Distribution
Agreement, dated [____________] (the "Distribution Agreement"), among the
Company and [____________] (collectively, the "Agents"), relating to the
offering from time to time by the Company directly or through the Agents of
up to $5,000,000,000 aggregate principal amount of Medium-Term Notes of the
Company, hereby certify on behalf of the Company that:
1. Except as contemplated in the Prospectus or reflected therein
by the filing of any amendment or supplement thereto or any Incorporated
Document, since the date of the most recent consolidated financial statements
included or incorporated by reference in the Prospectus, there has not been
any material adverse change in the consolidated financial condition or
earnings of the Company and its subsidiaries, considered as one enterprise.
2. The representations and warranties of the Company contained in
Section 1(a) of the Distribution Agreement (other than Section 1(a)(vii)
thereof) are true and correct in all material respects with the same force and
effect as though expressly made at and as of the date hereof.
3. The Company has complied with all agreements and satisfied all
conditions required by the Distribution Agreement or the Indenture on its
part to be performed or satisfied at or prior to the date hereof.
4. No stop order suspending the effectiveness of the Registration
Statement has been issued and no proceedings for that purpose have been
initiated or, to the best of my knowledge, threatened by the Securities and
Exchange Commission.
Capitalized terms used but not defined herein have the meaning
given in the Distribution Agreement.
IN WITNESS WHEREOF, I have hereunto signed my name this ____ day of
_________.
By:
--------------------------------------
Name:
Title:
Appendix II
FORM OF RELIANCE LETTER OF COUNSEL
[Date]
[Investment Banks]
Re: The ▇▇▇▇ Disney Company Medium-Term Notes
-----------------------------------------
Dear Sirs:
[We] [I] have delivered an opinion to you dated ___________ as
counsel to The ▇▇▇▇ Disney Company (the "Company"), pursuant to Section [5(a)]
[5(b)] of the Distribution Agreement, dated as of ___________ (the
"Distribution Agreement"), among the Company and [the investment banks]. You
may continue to rely upon such opinion [(other than, in the case of the opinion
delivered pursuant to Section 5(b) of the Distribution Agreement, the matters
covered by Section 5(b)(i) and 5(b)(iv)(x) thereof, as to which no opinion is
expressed)] as if it were dated as of this date, except that all statements
and opinions contained therein shall be deemed to relate to the Registration
Statement and Prospectus (as such terms are defined in the Distribution
Agreement) as amended and supplemented to this date.
This letter is delivered to you pursuant to Section 6(b) of the
Distribution Agreement.
Very truly yours,